--- page 1 ---
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and
Joint Lead Manager s
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
(A joint stock company established in the People’s Republic of China with limited liability)
Stock code : 1333
GLOBAL OFFERINGGLOBAL OFFERINGGLOBAL OFFERING
Joint Lead Manager


--- page 2 ---
IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain professional independent advice.
Breton Technology Co., Ltd.
博 雷 頓 科 技 股 份 公 司
(A joint stock company established in the Peopl e’s Republic of China with limited liability)
Global Offering
Number of Offer Shares under the Global Offering : 13,000,000 H Shares (subject to the Over-allotment
Option)
Number of Hong Kong Offer Shares : 1,300,000 H Shares (subject to reallocation)
Number of International Offer Shares : 11,700,000 H Shares (subject to reallocation and the
Over-allotment Option)
Offer Price : HK$18.0 per H Share, plus brokerage of 1.0%, AFRC
transaction levy of 0.00015%, SFC transaction levy
of 0.0027% and 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 : 1333
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and
Joint Lead Managers
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers Joint Lead Manager
Hong Kong Exchanges and Clearing Limi ted, The Stock Exchange of Hong Kong Li mited and Hong Kong Securities Clearing Company Limited take no responsib ility for the
contents of this prospectus, make no representation as to its accuracy or co mpleteness and expressly disclaim any liability whatsoever for any loss h owsoever arising from or in
reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified i n‘ ‘ D o c u m e n t sD e l i v e r e dt ot h eR e g i s trar of Companies and Available on Di splay’’ in Appendix VII
to this prospectus, has been registered by the Registrar of Companies in Hon g 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 and the Registrar of Companies in Hong Kong take no responsibili ty as to the
contents of this prospectus or any other documents referred to above.
Applicants for Hong Kong Offer Shares may be required to pay, on applicatio n (subject to application channels), the Offer Price will be HK$18.0 for eac h Hong Kong Offer
Share together with a brokerage fee of 1%, a SFC transaction levy of 0.0027%, an AFRC transaction levy of 0.00015% and a Stock Exchange trading fee of 0.0 0565%.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where considered appropriate and with our consent, reduce the numbe ro fO f f e rS h a r e sb e i n g
offered under the Global Offering and/or the Offer Price below that stated in this prospectus at any time on or prior to the morning of the last day for lod ging applications under the
Hong Kong Public Offering. In such a case, an announcement will be published on the websites of the Stock Exchange at www.hkexnews.hk and the Company at www.breton.top as
soon as practicable following such decision to make such reduction, and in any event not later than the morning of the day which is the last day for lodgin g applications under the
Hong Kong Public Offering. For more information, see ‘‘Structure of the Global Offering’’ and ‘‘How to Apply for Hong Kong Offer Shares.’’
The obligations of the Hong Kong Underwriters unde r the Hong Kong Underwriting Agreement are subject to termination by the Joint Sponsors and the Over all Coordinators
(for themselves and on behalf of the Hong Kong Underwriters) if certain even ts occur prior to 8 : 00 a.m. on the Listi ng Date. For more information, see ‘‘ Underwriting.’’
Prior to making an investment decision, prospectiv e investors should consider carefully all of the information set out in this prospectus, includin g the risk factors set out in
‘‘Risk Factors.’’
The Offer Shares have not been and will not be registered under the U.S. Secu rities Act or any state securities law in the United States and may not be offe red, sold, pledged or
transferred within the United States or to, or for the account or benefit of U.S . persons (as defined in Regulation S), except pursuant to an exemption f rom, or in a transaction
not subject to, the registration requirements of th e U.S. Securities Act. The Offer Shares may be offere d, sold or delivered outside the United States in offshore transactions in
reliance on Regulation S.
ATTENTION
We have adopted a fully electronic application pro cess for the Hong Kong Public Offering. We will not pr ovide printed copies of this prospectus to the p ublic in relation to
t h eH o n gK o n gP u b l i cO f f e r i n g .
This prospectus is available on the websites of the Stock Exchange (www.hkexnews.hk ) and our Company ( www.breton.top) . If you require a printed copy of this prospectus,
you may download and print from the website addresses above.
April 25, 2025
IMPORTANT


--- page 3 ---
IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering.
We will not provide any printed copies of this prospectus to the public in relation to the Hong
Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the ‘‘HKEXnews > New Listings > New Listing Information ’’ section, and our website at
www.breton.top. 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 through the HK eIPO White Form service at
www.hkeipo.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian who
is a HKSCC Participant to give electronic application instructions via HKSCC’s
FINI system to apply for the Hong Kong Offer Shares on your behalf.
We will not provide any physical channel s to accept any application for the Hong Kong
Offer Shares by the public. The contents of the electronic version of this prospectus are
identical to the printed prospectus as regist ered with the Registrar of Companies in Hong
Kong pursuant to section 342C of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong).
If you are an intermediary , broker or agent ,p l e a s er e m i n dy o u rc u s t o m e r s ,c l i e n t so r
principals, as applicable, that this prospect us is available online at the website addresses
above.
For more information on the procedures through which you can apply for the Hong
Kong Offer Shares electronically, see ‘‘How to Apply for Hong Kong Offer Shares.’’
IMPORTANT
–i–


--- page 4 ---
Your application through the HK eIPO White Form service or the HKSCC EIPO channel
must be for a minimum of 200 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 Shares you have selected. You must pay the
respective amount payable on application in full upon application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, you are required to pre-fund your
application based on the amount specified by your broker or custodian, as determined based on
the applicable laws and regulations in Hong Kong.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
200 3,636.31 4,000 72,726.12 20, 000 363,630.60 160,000 2,909,044.80
400 7,272.61 5,000 90,907.66 30, 000 545,445.90 180,000 3,272,675.40
600 10,908.92 6,000 109,089.18 40, 000 727,261.20 200,000 3,636,306.00
800 14,545.22 7,000 127,270.71 50, 000 909,076.50 300,000 5,454,459.00
1,000 18,181.54 8,000 145,452.25 60, 000 1,090,891.80 400,000 7,272,612.00
1,200 21,817.83 9,000 163,633.76 70, 000 1,272,707.10 500,000 9,090,765.00
1,400 25,454.14 10,000 181,815.30 80,000 1,454,522.40 650,000 (1) 11,817,994.50
1,600 29,090.45 12,000 218,178. 35 90,000 1,636,337.70
1,800 32,726.75 14,000 254,541. 42 100,000 1,818,153.00
2,000 36,363.05 16,000 290,904. 48 120,000 2,181,783.60
3,000 54,544.59 18,000 327,267. 55 140,000 2,545,414.20
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong Offer
Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and
AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for
applications made through the application channel of the HK eIPO White Form Service Provider) while
the SFC 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.
No application for any other number of the Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
–i i–


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If there is any change in the following expected timetable of the Hong Kong Public
Offering, we will issue an announcement in Hon g Kong to be published on the websites of the
Stock Exchange at www.hkexnews.hk and our Company at www.breton.top .
H o n gK o n gP u b l i cO f f e r i n gc o m m e n c e s ............................9 : 0 0a . m .o n
Friday, April 25, 2025
Latest time for completing electronic applications under
the HK eIPO White Form service through the
designated website at www.hkeipo.hk (2) ........................... 1 1 : 3 0a . m .o n
Wednesday, April 30, 2025
Application lists for the Hong Kong Public Offering
open (3) .................................................. 1 1 : 4 5a . m .o n
Wednesday, April 30, 2025
Latest time for (a) completing payment for the HK eIPO
White Form applications by effecting internet banking
transfer(s) or PPS payment transfer(s) and (b) giving
electronic application instructions to HKSCC (4) .....................1 2 : 0 0n o o no n
Wednesday, April 30, 2025
If you are 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, you are advised to contact your broker or custodian for the earliest and
latest time for giving such instructions which may be different from the latest time as stated
above.
Application lists close (3) ......................................1 2 : 0 0n o o no n
Wednesday, April 30, 2025
Announcement of the Offer Price, the level of indications
of interest in the Internati onal 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.breton.top and the website of the Stock Exchange
at www.hkexnews.hk on or before (5) ........................T u e s d a y ,M a y6 ,2 0 2 5
Results of allocations in the Hong Kong Public Offering
to be available through a variety of channels as
described in the section headed ‘‘How to Apply for
Hong Kong Offer Shares — B. Publication of Results’’
i nt h i sp r o s p e c t u sf r o m ................................T u e s d a y ,M a y6 ,2 0 2 5
EXPECTED TIMETABLE (1)
– iii –


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Results of allocations in the Hong Kong Public Offering
to be available the ‘‘Allotment Results’’ page at
www.hkeipo.hk/IPOResult (or
www.tricor.com.hk/ipo/result ) with a ‘‘search by ID’’
function from (5) ........................................... 1 1 : 0 0p . m .o n
Tuesday, May 6, 2025
to 12 : 00 midnight on
Monday, May 12, 2025
Telephone enquiry line for the results of allocations in the
Hong Kong Public Offering by calling +852 3691 8488
b e t w e e n9 : 0 0a . m .a n d6 : 0 0p . m .f r o m.................W e d n e s d a y ,M a y7 ,2 0 2 5t o
Monday, May 12, 2025
(expect Saturday, Sunday and
public holidays in Hong Kong)
For those applying through HKSCC EIPO channel,
you may also check with your broker or
c u s t o d i a nf r o m............................................6 : 0 0p . m .o n
Friday, May 2, 2025
Despatch of H Share certificates or deposit of the H Share
certificates into CCASS in respect of wholly or partially
successful applications pursuant to the Hong Kong
Public Offering on or before (6)(7) ..........................T u e s d a y ,M a y6 ,2 0 2 5
Despatch of HK eIPO White Form e-Auto Refund
payment instructions/refund checks in respect of
wholly or partially successful applications (if
applicable) or unsuccessful applications pursuant to the
Hong Kong Public Offering on or before
(6) ................W e d n e s d a y ,M a y7 ,2 0 2 5
Dealings in the H Shares on the Stock Exchange expected
t oc o m m e n c ea t ............................................. 9 : 0 0a . m .o n
Wednesday, May 7, 2025
Notes:
(1) All dates and times refer to Hong Kong dates and times.
(2) You will not be permitted to submit your application under the HK eIPO White Form service through 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 applic ation reference number from the designated website
prior to 11 : 30 a.m., you will be permitted to continue the application process (by completing payment of the
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 signal, a tropical cyclone warning signal number 8 or above and/or
Extreme Conditions in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Wednesday, April
30, 2025, the application lists will not open and close on that day. See ‘‘How to Apply for Hong Kong Offer
Shares’’ in this prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC via
HKSCC’s FINI system should refer to the section headed ‘‘How to Apply for Hong Kong Offer Shares — A.
Application for Hong Kong Offer Shares’’ in this prospectus.
EXPECTED TIMETABLE (1)
–i v–


--- page 7 ---
(5) None of the websites or any of the information contained on the websites forms part of this prospectus.
(6) The H Share certificates will only become valid evidence of title at 8 : 00 a.m. on the Listing Date, which is
expected to be Wednesday, May 7, 2025, provided that the Global Offering has become unconditional in all
respects at or before that time. Investors who trade H Shares on the basis of publicly available allocation details
or prior to the receipt of the H Share certificates or prior to the H Share certificates becoming valid do so
entirely at their own risk.
(7) e-Auto Refund payment instructions/refund checks w ill be issued in respect of wholly or partially unsuccessful
applications pursuant to the Hong Kong Public Offering.
The above expected timetable is a summary only. For details of the structure of the Global
Offering, including its conditions, and the procedures for applications for Hong Kong Offer
Shares, see the sections headed ‘‘Structure of th e Global Offering’’ and ‘‘How to Apply for Hong
Kong Offer Shares’’, respectively.
If the Global Offering does not become unconditional or is terminated in accordance with its
terms, the Global Offering will not proceed. In such a case, our Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE (1)
–v–


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IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by our Company solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares a nd 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 t a k e nt op e r m i tap u b l i coffering 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 r estrictions and may not be made
except as permitted under the applicable securities laws of such jurisdictions pursuant to
registration with or authorization by the rel evant securities regulatory authorities or an
exemption therefrom.
You 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 representatio n not contained nor made in this prospectus must
not be relied on by you as having been authorized by our Company, the Joint Sponsors, the
Overall Coordinators, the Joint Global Coordi nators, the Joint Bookrunners, the Joint Lead
Managers, any of the Underwriters and the Capital Market Intermediaries, any of our or their
respective directors, officers, employees, age nts, or representatives of any of them or any other
parties involved in the Global Offering. Information contained on our website (
www.breton.top )
does not form part of this prospectus.
Page
Expected Timetable ............................................................... i i i
Contents ......................................................................... v i
Summary ........................................................................ 1
Definitions ....................................................................... 3 0
Glossary of Technical Terms ...................................................... 4 0
Forward-looking Statements ....................................................... 4 5
Risk Factors ..................................................................... 4 7
Waivers from Strict Compliance with the Listing Rules ............................. 9 4
CONTENTS
–v i–


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


--- page 10 ---
This summary aims to give you an overview of the information contained in this document.
As this is a summary, it does not contain all the information that may be important to you.
Moreover, there are risks associated with an y investment. Some of the particular risks in
investing in the Offer Shares are set out in the section headed ‘‘Risk Factors.’’ You should read
the entire document carefully before you decide to invest in the Offer Shares.
OVERVIEW
We are a China-based provider of electric- powered engineering machinery. We design,
develop and commercialize battery-electric engineering machinery with autonomous capabilities
and provide intelligent operation services . According to CIC, we ranked third and seventh
among all manufacturers of new energy wide-body dump trucks and loaders in China, with a
market share of 18.3% and 3.8% in terms of shipments in 2024, respectively, being the only
pure-play manufacturer among the top manufacturers of these two types of new energy
engineering machinery. In 2024, we achieved a market share of 3.2% in the wide-body dump
truck market and 1.3% in the loader market in China in terms of revenue, with both markets
including new energy and fuel-powered machine ry. We also design and develop e-powertrain
kits for battery-electric tractor trucks and colla borate with manufacturers to bring these vehicles
to market.
We are a fast-growing manufacturer of bat tery-electric wide-body dump trucks and
loaders. From 2022 to 2024, our shipments of battery-electric wide-body dump trucks grew from
59 to 307 units, and shipments of battery-elect ric loaders increased from 326 to 450 units,
achieving a CAGR of 128.1% and 17.5%, respectively. According to CIC, we ranked first in
shipments of battery-electric wide-body dump tru cks with battery capacities exceeding 650 kWh
for three consecutive years from 2022 to 2024.
Our design and engineering process begin s with a detailed analysis of customer
requirements and intended use scenarios, which informs our performance-oriented product
designs and precise engineerin g practices. We use different manufacturing arrangements for
each product type, leveraging the strengt hs of both in-house production and external
partnerships. Following this strategy, we initially launched the BRT951EV, a five-tonne
battery-electric loader model, in December 2019, followed by the introduction of the BRT90E, a
90-tonne battery-electric wide-body dump truck model, in May 2020. As of the Latest
Practicable Date, our lineup predominantly featured battery-electric models, including
battery-electric loaders with payloads ranging from three to seven tonnes, and battery-electric
wide-body dump trucks covering tonnages from 90 to 135 tonnes.
Our business thrives on the strength of advan ced technological cap abilities. We have been
continuously advancing e-powertr ain design, electrical and electr onic architecture and machine
intelligence. We have introduced a charging circuit design for our battery-electric wide-body
dump trucks, incorporating four-branch parallel c harging circuits that allow four connectors to
simultaneously charge a single truck. This innovation makes us the first in the market to enable
a 700-kWh battery to be fully charged within approximately 70 minutes under standard working
conditions, according to CIC. We are also the f irst in China to develop and commercialize a
dual-motor design for engineering machinery, according to the same source, which resolves the
technical issue of mutual inte rference and power diversion b etween the drive and working
motors, thereby significantly reducing energy consumption and lowering repair and
SUMMARY
–1–


--- page 11 ---
maintenance costs. Moreover, we are the first manufacturer in China to bring autonomous
battery-electric wide-body dump trucks and remo te-operate battery-electric loaders to the
market, according to CIC. Our proprietary suite of remote and autonomous operation
technologies enhances the intelligence, safety and efficiency of our loaders and wide-body dump
trucks, especially on jobsites where direct human operation is unsafe or impractical due to
extreme temperatures or hazardous conditions. These capabilities set us apart from
manufacturers that rely heavily on outsour ced software for their remote and autonomous
operations.
Our technological achievements have earned us significant industry recognition. We are a
‘‘Key Little Giant’’ enterprise designated by the MIIT in 2022, a select category within the
national ‘‘Little Giant’’ program that honors novel, high-performing small and medium-sized
enterprises in specialized fields. Our e-pow ertrain kit was recognized as one of the top ten
commercialized high-tech achievements of 2022 by the Shanghai Science and Technology
Committee. We also play an active role in shapin g crucial standards for new energy engineering
machinery in China. For instance, we contributed as drafters to the national safety technical
specifications for earth-moving machinery, and to the industry standards for technical
conditions and testing method s for battery-electric wheeled loaders and battery-electric
wide-body dump trucks.
Our Loss-Making Position
In 2022, 2023 and 2024, our net loss was RMB178.1 million, RMB229.4 million and
RMB274.5 million, respectively. While our sales efforts to capture market opportunities
effectively boosted revenue and sustained a positive gross profit margin throughout the Track
Record Period, our net loss widened, primarily due to (i) our substantial upfront investments in
product development and commercialization, (ii) our penetration pricing strategy to increase
market penetration and capitalize on early-stage market opportunities, (iii) the increase in raw
material and components costs, such as LFP batte ries, particularly in 2022 and 2023, and (iv)
our efforts to accelerate the clearance of inventori es of battery-electric tractor trucks because of
the strategic shift in our product focus to battery -electric wide-body dump trucks and loaders.
Although we recorded gross profit of RMB36.8 million, the net loss widened in 2024,
primarily attributable to (i) an increase in imp airment loss on trade an d other receivables,
contract assets and financial guarantee issue d of RMB44.9 million, mainly due to increases in
trade receivables balances and the average aging of overdue trade receivabl es; (ii) an increase in
administrative expenses of RMB20.8 million, in relation to listing expenses incurred in 2024;
and (iii) an increase in research and development expenses of RMB13.1 million, driven by
increased staff costs and material consumption.
In 2022, 2023 and 2024, we had gross loss for ba ttery-electric loaders of RMB12.0 million,
RMB11.8 million and RMB15.8 million, representing a gross loss margin of 6.5%, 4.2% and
7.1%, respectively. The gross loss was mainly due to (i) the increased costs of pre-stocked
lithium iron phosphate power batteries, or LFP batteries, following a surge in prices of LFP
batteries in 2022, and (ii) the lower average se lling prices. In 2023, we reduced the average
selling price of our loaders from RMB623 thousand in 2022 to RMB581 thousand, contributing
to a significant increase in the sales volume from 295 units in 2022 to 484 units in 2023.
However, the average selling price of our loader s further declined to RMB559 thousand in 2024,
SUMMARY
–2–


--- page 12 ---
primarily due to the intense market competition, especially from market players with established
positions in traditional fuel-powered loader industry, which led to the higher gross loss margin
in 2024.
We recorded gross loss of RMB4.7 million and RMB1.6 million for battery-electric tractor
trucks in 2023 and 2024, representing a gross loss margin of 16.4% and 23.1%, respectively,
primarily because we reduced the selling pri ces of our battery-elect ric tractor trucks to
accelerate the clearance of inventories, as w e strategically shifted our primary focus to
battery-electric loaders and wide-body dump trucks since 2021.
Our Revenue Model
During the Track Record Period, we generated most of our revenue from sales of products,
including battery-electric loaders, wide-body dump trucks and tractor trucks, as well as sales of
spare parts and accessori es (primarily e-powertrains and charging piles, as well as add-on
e-powertrains we sold under our energy transition solutions). Starting in 2024, we began
generating revenue through the sale of battery-electric engineering machinery with autonomous
capabilities. We also generate rental income by leasing our loaders, dump trucks and tractor
trucks to lessees that prefer to use our products without purchasing them.
Apart from product sales and leasing, we offer a wide range of repair and maintenance
services adapting to our customer needs. To introduce prospective customers to the economic
and operational benefits of our products, we provi de trial uses and, on a case-by-case basis, may
charge trial-use fees. As we began commercializing our remote and autonomous operation
technologies in 2023, we also generate servic e fees from providing a utonomy solutions.
The following table sets forth a breakdown of our revenue by business line for the years
indicated.
For the Year Ended December 31,
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Sales of products:
Battery-electric wide-body dump
trucks 76,290 21.2 126,456 27.3 364,588 57.4
Battery-electric loaders 183,730 51.0 281,154 60.6 224,197 35.3
Battery-electric tractor trucks 77,940 21.6 28,551 6.1 7,035 1.1
Spare parts and accessories 15,311 4.3 19,372 4.2 25,687 4.0
Subtotal 353,271 98.1 455,533 98.2 621,507 97.8
Rendering of services 485 0.1 2,794 0.6 3,187 0.5
Rental income 6,350 1.8 5,411 1.2 10,763 1.7
Total revenue 360,106 100.0 463,738 100.0 635,457 100.0
SUMMARY
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--- page 13 ---
Sales of Products by Product Type
Battery-electric Wide-body Dump Trucks
In 2022, 2023 and 2024, our revenue from sales o f battery-electric wide-body dump trucks
amounted to RMB76.3 million, RMB126.5 million and RMB364.6 million, respectively,
accounting for 21.2%, 27.3% and 57.4% of ou r total revenue for the corresponding years.
The table below sets forth the key metrics for the sales of battery-ele ctric wide-body dump
trucks for the years indicated.
For the Year Ended December 31,
2022 2023 2024
Sales volume (unit) 59 88 281
Average selling price
(RMB in thousands) 1,293 1,437 1,297
Revenue (RMB in thousands) 76,290 126,456 364,588
Gross profit margin (1) 13.8% 12.4% 13.7%
Note:
(1) Represents gross profit of sales of battery-electric wide-body dump trucks divided by the revenue from
sales of battery-electric wide-body dump trucks.
The increase in revenue from battery-electric wide-body dump trucks was driven by an
increase in its sales volume. The sales volume of battery-electric wide-body dump trucks
increased from 59 units in 2022 to 88 units in 2023, and further to 281 units in 2024, primarily
attributable to (i) our intensified sales efforts to expand our customer base, (ii) the introduction
of new products with improved functions, and (iii) our increased research and development
efforts to continually improve the performance, adaptability and reliability of our dump trucks.
In August 2022, we launched the 105-tonne model BRT105E, which enabled heavy-load uphill
operations. In the second half of 2024, we launched the 120-tonne model BRT120E with a
greater payload and the 135-tonne range-exte nded model BRT135EZ. The introduction of these
product models catered to the unmet needs of a broader market.
The average selling price of our battery-electric wide-body dump trucks increased from
RMB1.3 million in 2022 to RMB1.4 million in 2023, primarily due to the higher proportion of
sales from new models in 2023, which commanded higher prices due to their larger payload and
battery capacities. The average selling price of our dump trucks decreased from RMB1.4 million
in 2023 to RMB1.3 million in 2024, primarily due to the decrease of average cost of sales, which
allowed us to strategically adjust the selling p rices to offer greater value to our customers.
The gross profit margin of battery-electric wide-body dump trucks slightly decreased from
13.8% in 2022 to 12.4% in 2023, mainly due to the i ncreased impairment loss on battery-electric
wide-body dump truck inventory in 2023 associat ed with increased inventory balance by the end
of 2023. In addition, we recorded impairment lo ss that was associated with certain dump trucks
SUMMARY
–4–


--- page 14 ---
previously used for trials, which had been rema ined in our inventory for an extended period
following the conclusion of the trial use. The gro ss profit margin for battery-electric wide-body
dump trucks remained relatively stable at 13.7% in 2024.
Battery-electric Loaders
In 2022, 2023 and 2024, our revenue from sales of battery-electric loaders amounted to
RMB183.7 million, RMB281.2 million and RMB224.2 million, respectively, accounting for
51.0%, 60.6% and 35.3% of our total revenue for the corresponding years.
The table below sets forth the key metrics for the sales of battery-electric loaders for the
years indicated.
For the Year Ended December 31,
2022 2023 2024
Sales volume (unit) 295 484 401
Average selling price
(RMB in thousands) 623 581 559
Revenue (RMB in thousands) 183,730 281,154 224,197
Gross loss margin
(1) (6.5)% (4.2)% (7.1)%
Note:
(1) Represents gross loss of sales of battery-electric loaders divided by the revenue from sales of
battery-electric loaders.
The increase in revenue from battery-electric loaders from 2022 to 2023 was primarily
driven by an increase in the sales volume of our loaders from 295 units in 2022 to 484 units in
2023, attributable to (i) our intensified sales e fforts, (ii) increased customer acceptance of
battery-electric loaders, and (iii) our incr eased research and development efforts that
contributed to improvements in the performance, adaptability and reliability of our loaders.
The increase in revenue was negatively affected by a decrease in the average selling price of our
loaders, which decreased from RMB623 thousand in 2022 to RMB581 thousand in 2023. The
decrease in average selling price from 2022 to 2023 resulted primarily from our strategic decision
t ol o w e rl o a d e rp r i c e st oc a p t u r ee a r l y - s t a g eopportunities in the new energy engineering
machinery market, along with fluctuations in raw material costs. The revenue from
battery-electric loaders decreased from 2023 to 2024, primarily due to the decrease in sales
volume and average selling price of our loaders. The sales volume of our loaders decreased from
484 units in 2023 to 401 units in 2024, and the ave rage selling price of our loaders decreased
from RMB581 thousand in 2023 to RMB559 thou sand in 2024, primarily due to the intense
market competition, especially from market playe rs with established positions in traditional
fuel-powered loader industry.
Our gross loss margin slightly decreased from 6.5% in 2022 to 4.2% in 2023, primarily due
to the decrease in impairment loss on battery-elect ric loaders during the same years, attributable
to our efforts to boost sales and manage inventory level. Our gross loss margin of loaders
increased from 4.2% in 2023 to 7.1% in 2024, prima rily due to the reduced average selling price
of our loaders.
SUMMARY
–5–


--- page 15 ---
Battery-electric Tractor Trucks
In 2022, 2023 and 2024, our revenue from sales of battery-electric tractor trucks amounted
to RMB77.9 million, RMB28.6 million and RMB7.0 million, respectively, accounting for
21.6%, 6.1% and 1.1% of our total revenue for the corresponding years.
The table below sets forth the sales volume an d average selling price of our tractor trucks,
as well as revenue and gross profit margin for the sales of battery-electric tractor trucks for the
years indicated.
For the Year Ended December 31,
2022 2023 2024
Sales volume (unit) 148 66 27
Average selling price
(RMB in thousands) 527 433 261
Revenue (RMB in thousands) 77,940 28,551 7,035
Gross profit/(loss) margin
(1) 3.1% (16.4)% (23.1)%
Note:
(1) Represents gross profit or loss of sales of battery-electric tractor trucks divided by the revenue from sales
of battery-electric tractor trucks.
The decrease in revenue from battery-electri c tractor trucks was primarily due to (i) a
decrease in sales volume as we strategically shifted our primary focus and allocated most of our
sales and research and development resources to battery-electric loaders and wide-body dump
trucks, and (ii) a decrease in the average selling p rices of battery-electric tractor trucks, which
resulted from our strategy to accelerate inven tory sales. We recorded gross profit margin of
3.1% in 2022 and gross loss margin of 16.4% an d 23.1% in 2023 and 2024, respectively. Such
decrease in the profitability of battery-electri c tractor trucks was primarily because we reduced
the selling prices of our battery-electric tractor tr ucks to accelerate the clearance of inventories,
as we strategically shifted our primary focus to battery-electric loaders and wide-body dump
trucks since 2021.
Spare Parts and Accessories
The spare parts and accessories we sell mainly include e-powertrains an d charging piles. In
2022, 2023 and 2024, our revenue from sales of spare parts and accessories amounted to
RMB15.3 million, RMB19.4 million and RMB25.7 million, respectively, accounting for 4.3%,
4.2% and 4.0% of our total revenue for the corresponding years. The increase in revenue from
sales of spare parts and accessories from RMB1 5.3 million in 2022 to RM B19.4 million in 2023
and further to RMB25.7 million in 2024 was primar ily driven by the increased sales of charging
piles. In addition, exports of add-on e-powertrains contributed to the growth from 2022 to 2023.
The gross profit margin of spare parts and a ccessories was 11.0%, 15.8% and 3.1% in 2022,
2023 and 2024, respectively. The gross profit m argin of spare parts and accessories decreased
from 15.8% in 2023 to 3.1% in 2024, primarily due to the export of add-on e-powertrains to a
trucking company based in North America in 2 023, which recorded relatively higher profit
margin as compared to charging piles.
SUMMARY
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--- page 16 ---
Sales of Products by Sales Channel
We utilize both direct sales and distribution channels to market our products and engage
with customers. The table below sets forth a breakdown of our revenue, gross profit and gross
profit margin for sales of products by sales channel for the years indicated.
For the Year Ended December 31,
2022 2023 2024
Revenue
Gross
Profit
Gross
Profit
Margin
(%) Revenue
Gross
Profit
Gross
Profit
Margin
(%) Revenue
Gross
Profit
Gross
Profit
Margin
(%)
(RMB in thousands, except for percentages)
Sale of products
Direct sales (1) 156,709 12,138 7.7 271,759 19,471 7.2 387,230 42,660 11.0
Sales through
distributors (2) 196,562 16,144 8.2 183,774 3,688 2.0 234,277 8,113 3.5
Subtotal 353,271 28,282 8.0 455,533 23,159 5.1 621,507 50,773 8.2
Impairment loss on
inventory (25,650) (20,879) (17,432)
Total 2,632 0.7 2,280 0.5 33,341 5.4
Notes:
(1) Represents the revenue from sales of products that are purchased by (i) end customers who use our
products in their operations, such as power generation, mining and infrastructure construction, and (ii)
distributors who purchase our products to lease them to their clients or to provide machinery operation
services.
(2) Represents the revenue from sales of products that are purchased by distributors who contractually resell,
or are reasonably expected to resell, our products.
The impairment loss on inventory in 2024 was primarily due to an increase in impairment
loss on inventory of battery-electric loaders from RMB9.4 million in 2023 to RMB12.5 million
in 2024. The increase was mainly attributable to a the lower net realizable value of our loaders,
driven by a decline in their average sellin g price and the relatively high volume of
battery-electric loaders for trial use. The impairment loss on inventory of our battery-electric
wide-body dump trucks declined significantly from RMB9.0 million in 2023 to RMB3.3 million
in 2024.
SUMMARY
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--- page 17 ---
Industry Opportunities
Engineering machinery, indispensable to operations in mining and quarrying, energy and
utilities, logistics and transportation, manufa cturing and industrial production, construction
and infrastructure as well as agriculture, is und ergoing a pivotal shift to wards new energy. This
transition is propelled by the urgent need to addr ess climate concerns, economic benefits and
expanding market demand.
. Climate change imperatives. Machinery with internal combustion engines is a major
contributor to air pollution, emitting large quantities of greenhouse gases,
hydrocarbons, nitrogen oxides and particulate matter. According to CIC, the
number of engineering machines in operation in 2022 is less than 3% of the number
of registered cars. However, the engineerin g machinery industry emits substantially
higher levels of pollutants compared to the automobile industry. Specifically, in
China, emissions of carbon dioxide, nitrogen oxide and particulate matter from
engineering machinery in 2022 are equi valent to 13%, 20% and 109% of those from
automobiles, respectively, according to CIC.
. Economic benefits. The shift toward new energy engineering machinery is not only
environmentally driven but also economica lly advantageous. These machines reduce
costs related to energy consumption and ma intenance over their lifecycle and are
compatible with advanced technologies such as artificial intellig ence and telematics,
which further enhance their value by lowering operational and labor costs more
efficiently than traditional fuel-powered machinery. The economic edge has spurred
the adoption of new energy engineering machinery in the market, outpacing the early
adoption rates of new energy passenger veh icles. According to CIC, while new energy
passenger vehicles took eight years to reach a 5.5% market penetration rate from a
negligible base, new energy loaders and wide-body dump trucks achieved the same in
less than six years.
. Growing market demand. Driven by the pressing need for decarbonization and
effective climate action, new energy engi neering machinery is gaining preference
worldwide. There has been a significant rise in both international and domestic
demand for new energy engineering machinery. In China, the adoption of favorable
policies further accelerates this trend, such as the Notice on Further Strengthening the
Construction of Green Mines ( 《關於進一步加強綠色礦山建設的通知》) issued by the
Ministry of Natural Resources in April 2024, fueling the growth of market demand
for new energy solutions in the industry.
The Breton Solutions
Our exploration into the new energy field b egins with the research and development of
e-powertrain kits customized for first-generatio n battery-electric tractor trucks. We have further
extended our technological capab ilities into the field of engineering machinery, a market that
has vast and unserved demand for new energy products and solutions.
SUMMARY
–8–


--- page 18 ---
The following diagram illustrates our key development milestones:
Launch of 5-tonne
battery-electric
loader
Launch of 90-tonne
battery-electric
wide-body
dump truck
Introduction of 700 kWh
105-tonne wide-body
dump trucks with four
inter-branch paralleling
design
Debut of self-
developed
powertrain
Delivery of
autonomous wide-
body dump truck
Successive introduction
of battery-electric
loaders of various
tonnage
Delivery of
remote-operate
loader
2019
2020
2021
2022
2023
Trial operation of
photovoltaic energy
system
Inauguration of
Zaozhuang plant
Launch of the first
hydrogen-fueled
loader
2024
Inauguration of
Wuhan plant
Bulk delivery of
autonomous battery-
electric wide-body
dump trucks
Our engineering machinery exhibits the following key competitive advantages:
. Green enhancement. Our engineering machinery, pow ered exclusively by non-fossil
fuel sources, achieves zero exhaust emissi ons. Our battery-electric loaders and
wide-body dump trucks are designed to significantly reduce carbon emissions
compared to similar fuel-powered models, making them a greener alternative to
traditional machinery. For instance, over a five-year service lifespan, our five-tonne
battery-electric loaders are estimated to reduce carbon emissions by approximately
342.0 tonnes per unit. Likewise, our 105-tonne battery-electric wide-body dump
trucks are projected to lower carbon emissions by approximately 490.4 tonnes per
unit 　during heavy-load uphill operations (tasks that involve transporting heavy
loads up inclines, which typically consume more energy) and by approximately 624.6
tonnes per unit during heavy-load downhill operations (where the trucks carry heavy
loads down slope) over the same period. Furthermore, these machines operate at
lower noise levels, with our battery-electric loaders and wide-body dump trucks
averaging 70 decibels and 74 decibels, respect ively, substantially quieter than the 86
decibels and 82 decibels typically produced by their fuel-powered counterparts,
according to CIC.
. Cost efficiency. Despite higher initial purchase cost, our battery-electric loaders and
wide-body dump trucks offer long-term savings over their operational lifetime due to
lower energy consumption and maintenance expenses. Over a five-year lifespan, our
five-tonne battery-electric loaders can y ield total net savings of approximately
RMB1.2 million per unit, and our 105-tonne battery-electric wide-body dump trucks
can save approximately RMB2.2 million per unit on heavy-load uphill operations,
and approximately RMB1.2 million per unit on heavy-load downhill operations. The
integration of remote and autonomous operation technologies further reduces the
need for large on-site crews, leading t o substantial savings in staffing costs.
SUMMARY
–9–


--- page 19 ---
. Adaptability. Our machinery lineup, featuring diverse payload and battery capacities,
has found widespread applications in mining, logistics, industrial production, port
operations and infrastructure construction. According to CIC, the BRT105E model, a
105-tonne battery-electric wide-body dump truck with a 700-kWh battery, is the first
in China capable of performing uphill tasks for over 5.5 hours continuously on a
single charge. This breakthrough expands th e versatility of battery-electric wide-body
dump trucks, enabling them to meet a broader range of operational demands. Our
knowledge in thermal management and e-powertrain design ensures that our products
perform reliably under extreme conditions, such as the intense temperatures of
Xinjiang, Inner Mongolia and Shanxi, the dusty and stormy environments of tunnel
construction and coking coal operations, and the high-altitude regions of Xinjiang
and Qinghai.
. Operator experience and safety. Across all our human-operated products, we
incorporate a smart cockpit that enhanc es the operating experience through
advanced ergonomic designs and intuitive controls. Operators enjoy the benefits of
a real-time overview of e quipment status and gain access to comprehensive data
analytics facilitated by interconnected sensors and algorithm-powered software. For
increased safety, our intelligent safety intervention system proactively manages
braking and steering during emergencies, whi ch improves overall reliability in critical
situations. Our products are also equipped with panoramic detection capabilities,
identifying blind spots and offering timely alerts for operators, pedestrians and
passing vehicles.
. Intelligent operations. Our remote and autonomous operation technologies transform
mundane, hazardous and labor-intensive tasks into efficient, safe and unmanned
operations. These advancements not only enhance machine uptime and overall
productivity by eliminating human errors, but also create a safe working environment
by enabling operators to manage machine s remotely and securely, especially in
hazardous conditions and extreme weather. With predictive analytics and adaptive
algorithms, operators can exploit autonomo us features for smooth navigation across
rugged terrains, supervise multiple machine s simultaneously, and increase operational
efficiency without being physically present.
Expanding beyond our range of engineering machinery, we went further to provide
autonomy and energy transition solutions catering to diverse customer needs across
geographies, jobsites and working conditions. These solutions are intended to complement
our product sales by creating additional, sustainable revenue streams through service fees and
software licensing. We anticipate that diversify ing our offerings will drive long-term growth,
achieve economies of scale, and further strengt hen our market position and financial health.
. Autonomy solutions. We offer intelligent mining solutions and autonomous scheduling
software to automate operations, facilitate remote control of machinery and manage
multiple fleets simultaneously. Our technologies are engineered to integrate with an
expanding range of engineering machinery across diverse operational scenarios, which
allows businesses to achieve real-time, synchronous control over their entire fleet and
minimize labor costs by reducing the need for human intervention in routine,
high-risk or complex tasks.
SUMMARY
–1 0–


--- page 20 ---
. Energy transition solutions. Our energy transition solutions are designed to convert
traditional fuel-powered vehicles into hybrids that can operate on both fuel and
battery power. We achieve this by designing, engineering and manufacturing add-on
e-powertrains that work in conjunction with existing internal combustion engines. We
believe our energy transition solutions promote sustainability and provide a
cost-effective pathway for decarbonization across various industries.
. Photovoltaic energy system. We are developing a direct current photovoltaic energy
system that integrates solar panels, inverters, storage batteries and charging stations
for energy generation, storage and chargi ng. The direct-circuited-only design
enhances efficiency, reduces heat loss an d improves stability, making it ideal for
regions without grid infrastructure. In December 2022, we launched a pilot system in
Panzhihua, Sichuan, which supports unmanned operation and is compatible with
various electric vehicles and machinery. We are also expanding our photovoltaic
energy business in internati onal markets and expect to complete a new project in 2025
that will generate electricity to support operations.
OUR STRENGTHS
We believe the following competitive strengths have contributed to our success and
differentiate us from our competitors.
. Pioneer in China’s new energy en gineering machinery industry;
. Advanced technology and engineering capab ilities driving product excellence;
. Green solutions adapting to diverse customer needs;
. Vast sales and service network cultivating broad customer base;
. Robust supplier relationships building cost-saving and resilient supply chain;
. Strong manufacturing expertise ensuring high-quality standards; and
. Visionary leadership and technology experts leading industry standards.
See ‘‘Business — Our Strengths.’’
OUR STRATEGIES
We intend to pursue the following strategies to further grow our business.
. Advance our technological innovations and engineering capabilities;
. Expand offerings of products and solutions;
. Expand our presence in international and domestic markets;
SUMMARY
–1 1–


--- page 21 ---
. Continue to strengthen manufacturing capabilities; and
. Pursue strategic alliances and investments.
See ‘‘Business — Our Strategies.’’
RISK FACTORS
Investing in the Offer Shares involves certain risks as set out in ‘‘Risk Factors’’ in this
prospectus, which could be categorized into (i) r isks relating to our business and industry, (ii)
risks relating to our doing business in China, and (iii) risks relating to the Global Offering.
Some of the major risks we are exposed to are as follows:
. Our future growth is dependent on the demand for, and customers’ willingness to
adopt engineering machinery powered by new energy sources;
. We had net loss and net cash used in operat ing activities during the Track Record
Period, and may have net loss and net cash used in operating activities in the future;
. We recorded thin gross margins du ring the Track Record Period;
. The prices of our products are subject to fluctuations, which may adversely affect our
business, prospects, results of operations and financial condition;
. The new energy engineering machinery indu stry is highly competitive, and we cannot
guarantee success in competi ng within these industries;
. The industry we operate in is characteri zed by rapid technological changes and
advancements. Adoption of any alternative energy sources, including hydrogen
power, may adversely affect our business, prospects, results of operations and
financial condition;
. Our business plans demand a significant amount of capital. To meet our future capital
requirements, we may need to seek equity or debt financings, which could dilute our
shareholders and introduce covenants imposing restrictions on our operations or
dividend payments. However, the availability of such funding may not be timely, on
acceptable terms, or secured at all, potentially forcing us to curtail or discontinue our
operations;
. O u rl i m i t e do p e r a t i n gh i s t o r ym a k e si td i f f i c u l tf o ru st oe v a l u a t eo u rf u t u r e
prospects;
. During the Track Record Period and for the foreseeable future, our revenue primarily
depended and will continue to depend on a limited number of models; and
. Our products might not meet customers’ performance expectations and could
potentially contain defects.
SUMMARY
–1 2–


--- page 22 ---
Additionally, as certain portion of H Shares to be converted upon conversion of Unlisted
Shares into H Shares or to be issued to Cornersto ne Investors will be subject to a lock-up period
from the Listing Date, the liquidity and trade volume of our H shares may be significantly
affected in the short term following the Global O ffering. For details, see ‘‘Risk Factors — Risks
Relating to the Global Offering — There has been no prior public market for our H Shares. An
active trading market may not develop, especial ly taking into account that certain existing
Shareholders may be subject to a lock-up period, and the liquidity of our H shares may be
limited, and the price and trading volume of our H Shares may be volatile.’’
OUR CUSTOMERS AND SUPPLIERS
Our customers comprise direct sales customers and distributors of our products primarily
located in China. In 2022, 2023 and 2024, the reve nue attributable to our five largest customers
f o re a c hy e a ro ft h eT r a c kR e c o r dP e r i o da m o u n t e dt oR M B 1 2 5 . 6m i l l i o n ,R M B 2 0 1 . 4m i l l i o n
and RMB276.2 million, respect ively, representing 34.9%, 43.4% and 43.5% of our total revenue
for the corresponding years. Revenue attributab le to our single largest customer amounted to
RMB27.2 million, RMB47.4 million and RMB86.9 million for the same years, accounting for
7.6%, 10.2% and 13.7% of our total revenue, respectively.
Our suppliers are primarily manufacturers of raw materials and components for our
products, including motors, batteries, controll ers, gearboxes, thermal management parts,
chassis and cabins. We purchase all of our raw materials and components from suppliers in
China. Aside from these manufacturers, we als o purchase all of our software and IT services
from technology companies in China. In 2022, 2023 and 2024, the aggregate purchases
attributable to our five largest suppliers for each year of the Track Record Period amounted to
RMB336.7 million, RMB318.7 million and RMB347.4 million, respectively, representing
68.5%, 66.3% and 56.7% of our total purchases for the corresponding years. Purchases
attributable to our single largest supplier amounted to RMB174.1 million, RMB189.0 million
and RMB152.9 million for the same years, accounting for 35.4%, 39.4% and 24.9% of our total
purchases, respectively.
OUR MANUFACTURING
We employ different manufacturing methods for each product type, all of which combine
the benefits of both in-house production and e xternal collaboration to balance our core
manufacturing competencies with economic efficiency.
We manufacture e-powertrains and undertake the complete assembly of battery-electric
loaders at our own manufacturing plants. In addition, we outsource the production of structural
components for our loaders, which typically involves routine and labor-intensive tasks such as
material cutting, shaping, welding, machining, and coating, to third-party manufacturers to
achieve optimal cost-efficiency in our manufacturing process. We conduct on-site quality
inspections at every critical stage of the outsour ced manufacturing process, ensuring third-party
manufacturers adhere to the tec hnical standards and specifications defined by our design and
engineering teams.
SUMMARY
–1 3–


--- page 23 ---
We manufacture e-powertrain kits for battery-electric wide-body dump trucks in-house
and outsource the production of structural and other components such as battery frames,
chassis, cabins and cargo beds, as well as the a ssembly process to third-party manufacturers.
Such arrangement allows us to focus on our strengths in the design and development of
complete machinery and the manufacturing of core components, while leveraging the specialized
expertise of third-party manufacturers for cost-efficient production and assembly.
We manufacture e-powertrain kits for battery -electric tractor trucks in-house. We supply
e-powertrain kits to a state-owned independent catalog company with the requisite vehicle
manufacturing qualification. Such catalog comp any integrates our e-powertrain kits with their
chassis and other critical components to assemble complete tractor trucks. Upon completion of
the assembly process, we procure these fully assembled trucks from the catalog company and
include them in our inventory for sale to downstream customers. Our collaboration agreement
with the catalog company expired in November 2024 and we have decided not to renew the
agreement as we shifted our focus towards new energy engineering machinery and solutions.
We currently operate three specialized manufacturing plants. We manufacture our loaders
at our Zaozhuang plant, which began operation in August 2020 and is situated in a leased
facility in Zaozhuang, Shandong. The annual d esign capacity of our Zaozhuang plant is 600
units. At this facility, we use an integrated ma nufacturing system to s treamline production
processes. Additionally, we h ave implemented heavy-duty automated guided vehicles for
simplifying product assembly and logistic autom ated guided vehicles for efficient delivery of
components and raw materials. In anticipation of increasing demand for battery-electric loaders
in the next five years, we constructed our second loader manufacturing plant in Wuhan, Hubei,
which commenced operations in August 2024, wi th an annual design capacity of 5,000 units.
We previously manufactured e-powertrain kit s for battery-electric wide-body dump trucks
and tractor trucks at our manufacturing plant located in Shanghai until our lease expired in
September 2022. Starting from October 2022, we relocated the manufacturing of these
e-powertrain kits to our Yuyao plant. The annual design capacity of our Yuyao plant is 200 sets
and the capacity utilization rate of the plant exceeded 100% in 2024.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary financial data from our consolidated financial
information for the Track Record Period, ext racted from the Accountants’ Report set out in
Appendix I to this prospectus. The summary consol idated financial data set forth below should
be read together with, and is qualified in its enti rety by reference to, the Accountants’ Report set
out in Appendix I to this prospectus, including the related notes. Our consolidated financial
information was prepared in accordance with In ternational Financial Reporting Standards
(‘‘IFRS’’).
SUMMARY
–1 4–


--- page 24 ---
Summary of Consolidated Statements of Profit or Loss
The following table sets forth a summary of our consolidated statements of profit or loss
for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
Revenue RMB
%o f
Revenue RMB
%o f
Revenue
(in thousands, except for percentages)
Revenue 360,106 100.0 463,738 100.0 635,457 100.0
Cost of sales (351,934) (97.7) (454,459) (98.0) (598,618) (94.2)
Gross profit 8,172 2.3 9,279 2.0 36,839 5.8
Other net gain 121 0.1 4,500 1.0 24,617 3.9
Selling expenses (46,925) (13.0) (58,016) (12.5) (59,720) (9.4)
Administrative expenses (59,447) (16.5) (88,444) (19.1) (109,263) (17.2)
Research and development costs (44,855) (12.5) (68,562) (14.8) (81,707) (12.9)
Impairment loss on trade and other
receivables, contract assets and
financial guarantee issued
(1) (26,863) (7.5) (38,176) (8.2) (83,098) (13.1)
Loss from operations (169,797) (47.1) (239,419) (51.6) (272,332) (42.9)
Finance income 6,447 1.8 16,335 3.5 10,547 1.7
Finance costs (13,733) (3.8) (6,919) (1.5) (9,187) (1.4)
Share of results of associates (388) (0.1) 590 0.1 (3,485) (0.5)
Loss before taxation (177,471) (49.2) (229,413) (49.5) (274,457) (43.2)
Income tax (630) (0.2) (1) (0.0) (90) (0.0)
Loss for the year (178,101) (49.4) (229,414) (49.5) (274,547) (43.2)
Note:
(1) Represents the loss in the estimated amounts owing from trade and other receivables and financial
guarantee issued that might be uncollectible.
Our impairment loss on trade and other receivabl es, contract assets and financial guarantee
issued increased from RMB38.2 million in 20 23 to RMB83.1 million in 2024, mainly due to
increases in trade receivables balances and th e average aging of overdue trade receivables.
Non-IFRS Measures
To supplement our consolidated financial statements which are presented under IFRS, we
also use adjusted net loss (a non-IFRS measure) as an additional financial metric. This
non-IFRS measure, which is neith er required by nor presented in accordance with IFRS, allows
for comparisons of operating performance from period to period and with other companies by
eliminating potential impact of certain items. We believe this measure provides useful
information to investors and others for understanding and evaluating our consolidated results
of operations in the same manner as they help our management. However, our presentation of
the adjusted net loss (a non-IFRS measure) may not be comparable to similarly titled measures
presented by other companies. As an analytic al tool, the non-IFRS measure has inherent
limitations and should not be considered in isolation from, or as a substitute for analysis of, our
results of operations or financial condition as reported under IFRS.
SUMMARY
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We define adjusted net loss (a non-IFRS measure) as loss for the year adjusted for (i)
equity-settled share-based payment expenses, (ii ) listing expenses, and (iii) interest expenses on
financial instruments issued to investors. Equity -settled share-based payment expenses consist
of non-cash expenses arising from granting restricted shares to eligible individuals under
employee restricted share plans. See Note 27 to the Accountants’ Report in Appendix I to this
prospectus for details. Listing expenses mainly include professional fees incurred in relation to
the Listing and the Global Offering. Interest e xpenses on financial instruments issued to
investors relate to the interest expenses incurre d after the issuance of our financial instruments
through which we granted preferred rights to cer tain investors to redeem their paid-in capital
for cash upon specified events. All our financial instruments had been converted into equity or
terminated during the Track Record Period as disclosed in Note 25 to the Accountants’ Report
in Appendix I to this prospectus.
The following table sets forth a reconciliation of our loss for the year to adjusted net loss (a
non-IFRS measure) for the years indicated.
For the Year Ended December 31,
2022 2023 2024
(RMB in thousands)
Loss for the year (178,101) (229,414) (274,547)
Adjusted for:
Equity-settled share-based payment
expenses 29,054 29,659 33,478
Listing expense — 9,686 23,463
Interest expenses on financial instruments
issued to investors 6,464 272 —
Non-IFRS measure:
Adjusted net loss for the year (142,583) (189,797) (217,606)
In 2022, 2023 and 2024, our adjusted net loss (a non-IFRS measure) was RMB142.6
million, RMB189.8 million and RMB217.6 million, respectively. The widening adjusted net loss
(a non-IFRS measure) is in line with our rapid revenue growth, mainly due to ongoing
investments to capitalize on market opportunities as we expand our business. Our adjusted net
loss margin (a non-IFRS measure), representing adjusted net loss (a non-IFRS measure) as a
percentage of revenue, was 39.6%, 40.9% and 34.2% in 2022, 2023 and 2024, respectively,
showing a decreasing trend primarily as a res ult of a decrease of operating expenses as a
percentage of revenue and an increase in our gross profit margin as we began realizing
economies of scale.
We recorded net loss since our inception. We had accumulated loss of RMB237.0 million as
of January 1, 2022, mainly due to (i) the relatively low customer acceptance of new energy
engineering machinery, as the overall marke t remains in its early stage, with the combined
market size of new energy loaders and wide-body dump trucks being RMB1.0 billion in revenue
in 2021; (ii) our short operation history with only a few commercialized products before 2022;
and (iii) substantial upfront investments i n developing products, promoting research and
development capabilities, establishing our sales system and growing our business.
SUMMARY
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During the Track Record Period, we recorded relatively modest gross profit margins,
primarily due to significant impairment losse s on inventories. Howev er, with the increasing
trend of gross profit margin from 2.0% in 2023 to 5.8% in 2024 which showed an improvement
in profitability, we expect a continued growth in our gross profit margin in the future, as we
reduce impairment losses on inventory through enhanced inventory management and optimize
inventory level.
Summary of Consolidated State ments of Financial Position
The following table sets forth our consolidated statements of financial position as of the
dates indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
ASSETS
Non-current assets
Property, plant and equipment 17,562 97,301 165,303
Other investments 18,939 19,093 41,735
Right-of-use assets 11,479 86,096 106,559
Intangible assets 1,032 2,044 2,961
Interest in associates 3,716 23,259 28,482
Other non-current assets 46,908 62,565 73,660
Total non-current assets 99,636 290,358 418,700
Current assets
Inventories 294,544 268,675 259,023
Contract assets 860 342 1,322
Trade and other receivables 257,817 435,089 555,833
Pledged bank deposits 4,700 5,278 4,208
Cash and cash equivalents 270,260 422,072 199,254
Total current assets 828,181 1,131,456 1,019,640
Total assets 927,817 1,421,814 1,438,340
SUMMARY
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As of December 31,
2022 2023 2024
(RMB in thousands)
LIABILITIES
Current liabilities
Loans and borrowings 94,727 99,233 267,197
Financial instruments issued to investors 28,870 — —
Trade and other payables 156,975 294,908 374,539
Income tax payables 488 — —
Provision 7,549 12,257 16,472
Contract liabilities 15,197 13,740 3,655
Lease liabilities 2,383 7,037 3,222
Total current liabilities 306,189 427,175 665,085
Non-current liabilities
Loans and borrowings 56,648 53,994 85,116
Lease liabilities 8,300 15,444 2,606
Deferred tax liabilities 2,744 2,902 3,252
Total non-current liabilities 67,692 72,340 90,974
Total liabilities 373,881 499,515 756,059
Net current assets 521,992 704,281 354,555
Net assets 553,936 922,299 682,281
We recorded net current assets of RMB522.0 million, RMB704.3 million and RMB354.6
million as of December 31, 2022, 2023 and 2024, re spectively. Our net current assets decreased
from RMB704.3 million as of December 31, 2023 to RMB354.6 million as of December 31, 2024,
primarily due to an increase of our current liabilities, mainly resulting from (i) an increase in our
current loans and borrowings of RMB168.0 million, and (ii) an increase of RMB79.6 million in
trade and other payables.
Our net current assets increased from RM B522.0 million as of December 31, 2022 to
RMB704.3 million as of December 31, 2023, due to an increase in our current assets. Our
current assets increased from RMB828.2 milli on as of December 31, 2022 to RMB1.1 billion as
of December 31, 2023, primarily due to (i) an i ncrease of RMB177.3 million in trade and other
receivables, (ii) an increase of RMB151.8 milli on in cash and cash equivalents, and (iii) an
increase of RMB578 thousand in pledged bank deposits.
SUMMARY
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Our net assets increased from RMB553. 9 million as of December 31, 2022 to RMB922.3
million as of December 31, 2023, primarily due to the issuance of ordinary shares (net of
transaction cost) of RMB567.6 million. Our net assets decreased from RMB922.3 million as of
December 31, 2023 to RMB682.3 million as of December 31, 2024, primarily due to (i) a
decrease in our cash and cash equivalents of R MB222.8 million, (ii) an increase in our current
loans and borrowings of RMB168.0 million, and (iii) an increase in our trade and other payables
of RMB79.6 million.
Summary of Consolidated Statement of Cash Flows
The following table sets forth our selected cash flow data for the years indicated:
As of December 31,
2022 2023 2024
(RMB in thousands)
Net cash used in operating activities (290,421) (193,686) (269,951)
Net cash used in investing activities (22,628) (185,427) (135,705)
Net cash generated from financing activities 522,011 530,925 182,838
Net increase/(decrease) in cash and
cash equivalents 208,962 151,812 (222,818)
Cash and cash equivalents at the beginning
of the year 61,298 270,260 422,072
Cash and cash equivalents at the end of
the year 270,260 422,072 199,254
The net cash used in operating activities was RMB290.4 million, RMB193.7 million and
RMB270.0 million in 2022, 2023 and 2024, respectively.
We had net cash used in operating activities o f RMB270.0 million in 2024. The changes in
working capital in 2024 reflected primarily a n increase in trade and other receivables of
RMB131.7 million in line with our increased sal es, partially offset by an increase in trade and
other payables of RMB91.2 million, primarily due to an increase in trade payables due to third
party suppliers in line with our expansion of business scale.
We had net cash used in operating activities o f RMB193.7 million in 2023. The changes in
working capital in 2023 reflected primarily a n increase in trade and other receivables of
RMB161.6 million in line with our increased sal es, partially offset by an increase in trade and
other payables of RMB121.2 million, primarily due to an increase in trade payables due to
third-party suppliers in line with our expansion of business scale.
We had net cash used in operating activities o f RMB290.4 million in 2022. The changes in
working capital in 2022 reflected primarily (i) an increase in trade and other receivables of
RMB124.0 million due to our increased sales, and (ii) an increase in inventories of RMB76.0
million, primarily because we increased our production based on our estimates of market
demand for our products.
SUMMARY
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Key Financial Ratios
The following table sets forth our selected financial indicators for the years and as of the
dates indicated.
For the Year Ended/As of December 31,
2022 2023 2024
Profitability indicators
Gross profit margin (1) 2.3% 2.0% 5.8%
Liquidity indicators
Current liquidity ratio (2) 270.5% 264.9% 153.3%
Gearing ratio (3) 67.5% 54.2% 110.8%
Inventories turnover days (4) 266 226 161
Trade receivables turnover days (5) 176 239 236
Trade payables turnover days (6) 91 113 139
Notes:
(1) Gross profit margin equals gross profit divided by revenue from continuing businesses for the year.
(2) Current liquidity ratio equals to current assets as of the last day of the year divided by current liabilities as
of the last day of the year.
(3) Gearing ratio equals to total liabilities (including current and non-current liabilities) divided by total
equity as of the last day of the year.
(4) Average turnover days of inventories is equal to the average of the beginning and ending net inventory
balances of a year divided by cost of sales for that year and multiplied by the number of days in that year.
(5) Average turnover days of trade receivables is equal to the average of the beginning and ending net trade
receivable balances of a year divided by revenue for that year and multiplied by the number of days in that
period.
(6) Average turnover days of trade payables is equal to the average of the beginning and ending gross trade
payable balances of a year divided by cost of sales for that year and multiplied by the number of days in
that year.
See ‘‘Financial Information’’ for further details.
BUSINESS SUSTAINABILITY
Background
With the rapid development of the new energy engineering machinery industry, we had
experienced solid revenue growth during the Tra ck Record Period, demonstrating our ability to
successfully commercialize our products and s ervices. Our revenue increased from RMB360.1
million in 2022 to RMB463.7 million in 2023, and further increased to RMB635.5 million in
2024, representing a CAGR of 32.8% from 2022 to 2024.
SUMMARY
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Despite our rapid growth, our net loss widened during the Track Record Period. In 2022,
2023 and 2024, we recorded net loss of RMB178 .1 million, RMB229.4 million and RMB274.5
million, respectively, primarily a ttributable to the following factors:
. Substantial upfront investments . We are still in the early stage of product development
and commercialization, requiring continued substantial investments in these areas. In
addition, due to our limited commercialized product portfolio and the initial phase of
scaling operations, our revenue has not ye t reached a level sufficient to offset high
costs and expenses associated with the upfront investments, particularly research and
development expenses.
. Increased expenses during the Track Record Period. Despite the growth in revenue and
gross profit, our relatively thin gross profit margin is insufficient to fully offset rising
expenses. As we are proactively expanding our business operation, we incurred higher
administrative expenses and selling expenses. In addition, impairment loss on trade
and other receivables, contract assets an d financial guarantee issued continued to
increase from 2022 to 2024, in line with our business expansion.
. Early-stage market dynamics . The new energy engineering machinery remains in its
early stage of development and faces relatively low customer acceptance, as reflected
in the combined market size of new energy loaders and wide-body dump trucks being
RMB1.0 billion in terms of revenue in 2021. Competition in the new energy
engineering machinery market is intense. Existing industry players widely recognize
this market’s vast potential and rapid growth trajectory, driving aggressive efforts to
gain early market share, establish brand recognition and build competitive
advantages. To increase market penetr ation and capitalize on early-stage
opportunities, we implemented a penetration pricing strategy with lower
competitive price to boost sales and build a stronger market presence.
. Rising raw material costs . The average price of an LFP battery increased from
RMB0.6 per watt-hour in 2021 to RMB0.9 per watt-hour in 2022, and then decreased
to RMB0.8 per watt-hour and RMB0.5 pe r watt-hour in 2023 and 2024, according to
CIC. We pre-stocked LFP batteries as th eir price surged in 2022, resulting in a
relatively higher average procurement cos t of LFP batteries during the Track Record
Period. Our cost of LFP batteries increased from RMB141.3 million in 2022 to
RMB163.2 million in 2023 and RMB229.8 million in 2024. As most of the pre-stocked
LFP batteries were utilized in 2022 and 2023, their impact on our cost of sales and
gross profit was mitigated in 2024. Howev er, we cannot assure that there will be no
material fluctuations in the procureme nt prices of LFP batteries and other raw
materials and components in the future, which might further widen our net loss
margin.
. Strategic product focus . We strategically shifted our pr imary focus to battery-electric
loaders and wide-body dump trucks, to which we allocated most of our sales and
research and development resources. To a ccelerate inventory clearance of battery
electric tractor trucks and to respond to the i ntensified competition, we reduced their
average selling price, which adversely impacted our financial performance during the
Track Record Period.
SUMMARY
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Going forward, we strive to achieve profitab ility and improve our operating cash flows by
(i) improving our sales performance, (ii) imp roving gross profit margin, (iii) enhancing
operational efficiency, and (iv) improving the management of trade receivables. We expect to
record net profit and net operating cash inflow in the near future.
Strategies to Improve Our Sales Performance
Industry Growth and Market Opportunities
China’s new energy engineering machinery in dustry has been evolving and is expected to
grow rapidly in the next few years. Accordin g to CIC, the market size of major new energy
engineering machinery categories in China in t erms of revenue increased from RMB23.5 billion
in 2020 to RMB54.0 billion in 2024, representin g a CAGR of 23.2%, and is expected to increase
to RMB124.2 billion in 2029, representing a CAGR of 18.1%.
As a player in the new energy engineering machinery industry, our performance is closely
aligned with our industry’s upward trend and we believe we are well-positioned to capture the
opportunities in the rapid development of our industry. With a strong base of customer orders
and strategic cooperations with select key custom ers, we are assured of a stable customer base in
the short term, which enables us to expand reach , deliver products and services to a broader
range of customers across diverse applications, and achieve a continual increase in product sales
and an increased market share.
Increasing Downstream Demands
As new energy technology advances and custo mer acceptance grows, downstream demands
for new energy engineering machinery are expected to grow in the future. According to CIC, the
market size of major new energy engineering machinery categories in China’s mining, logistics
and ports, industrial and manufacturing, and c onstruction industries reached RMB5.6 billion,
RMB13.0 billion, RMB15.7 billion and RMB4.7 bil lion in 2024, respectively, expected to reach
RMB25.4 billion, RMB23.8 billion, RMB27.6 billion and RMB18.2 billion in 2029, at a CAGR
of 35.5%, 12.8%, 11.9% and 31.3%, respectiv ely. As one of the leading players in these
markets, we will leverage our leading position to capture newly emerged demands, ensuring we
remain a preferred choice in the increasing new energy engineering machinery market.
Our Sales Strategies
Our sales strategies focus on retaining exis ting customers and maximizing the value of
existing customer relationships. We are dedicat ed to driving existing c ustomers to repurchase
our products from us or our distributors, mainta ining deepened customer relationships while
driving incremental revenue growth.
During the Track Record Period, we strategic ally employed a targeted market expansion
initiative to facilitate broader market coverage across China. From 2018 to 2020, we began by
engaging with select mining and industrial cus tomers in Inner Mongolia , followed by market
expansion into Shanxi and Shaanxi.
SUMMARY
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Our Sales Channels
Our sales model combines direct sales and distribution channels, which allows us not only
to establish high-touch customer interactions w ith customers across major industry verticals,
but also to penetrate both nationwide and regional markets swiftly.
We plan to grow and expand our customer base, covering both our distributors and end
customers, by (i) establishing regional servi ce hubs in first-tier cities across China to support
product displays, business devel opment, sales, training and warehousing, (ii) strengthening
regional marketing and expanding direct customer reach by participating in industry
conferences and exhibitions, (iii) expanding our distributor network to between 70 and 80
distributors, including approximately 20 associated distributors, and (iv) enhancing our sales,
marketing and customer service teams by recruiting additional personnel and providing them
with comprehensive trainings.
These sales efforts will enhance our sales performance and drive sustainable growth by
improving customer access, increasing market pe netration and fostering stronger customer
relationship.
See ‘‘Financial Information — Business Sustainability — Strategies to Improve Our
Performance.’’
Strategies to Improve Our Gross Profit Margin
Broaden and Refine Our Product Lineup
During the Track Record Period, we expanded our product lineup by introducing
battery-electric loaders and wide-body dump trucks that feature increased payload and battery
capacities or extended operational times. Additionally, we introduced engineering machinery
equipped with remote and autonomous operation c apabilities, which can navigate and perform
its tasks with reduced manual intervention. To further optimize our product portfolio, we plan
to focus on developing, manufactu ring and selling premium, technol ogically-advanced products
with strong profit margin potential, which we believe will raise both the average selling price
and gross profit margin across our portfolio. We will strategically focus on increasing sales of
our large-payload, high-capacity battery mode ls, launching battery-electric wide-body dump
trucks with higher-capacity batteries and loaders with increased payloads and continuously
upgrading our products and services to better meet our customers’ evolving needs and achieve
greater satisfaction.
Advance Technology Development and Diversify Service Offerings
During the Track Record Period and up to t he Latest Practicable Date, we have made
advancements in the research, development and commercialization of remote and autonomous
operation technologies.
Building on these achievements, we plan to increase our investment in remote-control
systems, autonomy solutions, as well as autonomous scheduling and collaborative operation
technologies. We are exploring an increasing number of applications for remote-control and
SUMMARY
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autonomous operating technologies, focusing primarily on harsh work environments that
present risks to operators’ physical and mental w ell-being, such as mining sites with high dust
exposure and extreme noise levels.
Reduce Procurement and Production Costs
We plan to increase our gross profit margin by ( i) managing raw material costs effectively,
(ii) improving manufacturing efficiency, (iii) enhancing inventory management, and (iv)
reducing warranty expenses. We anticipate that the prices of materials related to our
products, including lithium carbonate used in ba tteries, structural materials, and other core
components such as gearboxes and electric motor controls, will remain stable over the next year.
For the next five years, according to CIC, lithi um carbonate prices are expected to gradually
decline and steel prices to remain stable, while costs for key components such as gearboxes and
electric motor controls are projected to decrease, provided that supply-demand dynamics and
logistic costs remain steady. This downward tre nd in raw materials costs is expected to further
improve our gross profit margins in the futur e. Enhancing and enriching our products and
services will also contribute to the improvement of our gross profit margin.
See ‘‘Financial Information — Business Sustainability — Improve Gross Profit Margin.’’
Enhance Operational Efficiency and Improve the Management of Trade Receivables
Our ability to manage and control our operating expenses is critical to the success of our
business and our profitability. As our operations scale, we plan to enhance operational
efficiency by carefully managing our selling e xpenses and administrative expenses. By
optimizing resource allocati on and streamlining processes, we aim to foster sustainable
growth. Additionally, we intend to improve the management of trade receivables by
implementing multi-layer credit risk monitoring strategies, which will help reduce the
impairment loss on trade and other receivables.
See ‘‘Financial Information — Business Sustainability — Enhance Operational Efficiency’’
and ‘‘Financial Information — Business Sust ainability — Improve the Management of Trade
Receivables.’’
WORKING CAPITAL SUFFICIENCY
We had negative operating cash flows during the Track Record Period. We may continue
to record negative cash flows from operating acti vities in the future, in which case our working
capital may be limited and our business, financial condition, results of operations and prospects
may be materially and adversely affected. See ‘‘Risk Factors — Risks Relating to Our Business
and Industry — We had net loss and net cash used in operating activities during the Track
Record Period, and may have net loss and net cash used in operating activities in the future.’’
Based on the cash and cash equivalents on hand, our operating cash flows, the available
financing facilities, and the estimated net pro ceeds available to us from the Global Offering, our
Directors are of the view, and the Joint Sponsors concur, that we have sufficient working capital
for our present requirements and for at least the next 12 months from the date of this
prospectus.
SUMMARY
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IMPACT OF COVID-19 ON OUR OPERATIONS
The COVID-19 pandemic affected the global e conomy, new energy engineering machinery
industry and our business operations. The outbrea k resulted in nationwide restrictions on travel
and public transport, and the implementation of social distancing measures. While we faced
challenges, we had been able to ma nage these disruptions effectively due to strategic planning
and cooperation.
The outbreak led to restrictions that affected various aspects of business operations. The
operations of our Zaozhuang plant were halted for 16 days in October and November 2022. Due
to our adequate inventory reserves, this tempor ary shutdown did not significantly disrupt our
overall sales and delivery processes. During th e pandemic, we also shi fted to a work-from-home
model for two months in 2022. The remote work setup posed temporary challenges, particularly
impacting cross-regional communications and sales visit activities. With the help of the
government initiatives such as dedicated routes, the COVID-19 pandemic had little impact on
our logistics operations. The outbreak had a suppressive effect on customer demand for our
products; however, the overall new energy engineering machinery market had continued to show
a growth trend during the COVID-19 pandemic. While the COVID-19 pandemic presented
substantial challenges, our strat egic preparations helped mitigate its impacts on our operations.
Despite the temporary disruption caused by the COVID-19 pandemic, we were able to achieve
significant growth. Our revenue increase d by 28.8% from RMB360.1 million in 2022 to
RMB463.7 million in 2023, and further increa sed by 37.0% to RMB635.5 million in 2024. See
‘‘Risk Factors — Risks Relating to Our Business and Industry — We face risks related to health
epidemics, natural disaster, terrorist activities, political unrest, financial or economic crisis and
other force majeure events, which could significantly disrupt our operations’’ and ‘‘Financial
Information — Impact of COVID-19 on Our Operations.’’
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Chen, Shanghai Fangao, Cloud Tribe Yijin, Cloud
Tribe Management, Shanghai Yijin, Yijin Venture Capital Management and Shanghai Yijin
Management constituted a group of Controlling Shareholders and were able to exercise
approximately 32.18% of the voting rights in our Company. Immediately after completion of
the Global Offering (assuming that the Over-allot ment Option is not exercised), our Controlling
Shareholders will be able to exercise approximately 31.07% of the aggregate voting power of
our enlarged share capital. For details, see ‘‘Relationship with our Controlling Shareholders.’’
PRE-IPO INVESTORS
We have attracted certain Pre-IPO Investors and completed four rounds of investments
from them since our establishment to raise funds for the development of our business. For
further details of the identity and background of the Pre-IPO Investors, and the amount raised
and the usage of proceeds, see ‘‘History, Dev elopment and Corporate Structure — Pre-IPO
Investments.’’
SUMMARY
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DIVIDEND
We did not declare or pay any dividend dur ing the Track Record Period. Any future
determination to pay dividends will be made at the discretion of our Directors and may be based
on a number of factors, including our future operations and earnings, capital requirements and
surplus, general financial condition, contractual restrictions and other factors that our
Directors may deem relevant. We do not have a pre-determined dividend payout ratio.
Regulations in the PRC currently permit payment of dividends of a PRC company only out of
accumulated distributable after-tax profi ts less any recovery of accumulated losses and
appropriations to statutory and other reserves t hat we are required to make, as determined in
accordance with its articles of association and the accounting standards and regulations in
China. As a result, we may not have sufficient or any distributable profits to make dividend
contributions to our Shareholder s, even if we become profitable.
PREVIOUS PLAN FOR A-SHARE LISTING
In February 2023, we filed a notice of pre-listing tutoring for A-share listing application
(上市輔導備案申請) in relation to our previous plan to list on the Science and Technology
Innovation Board of Shanghai Stock Exchange, and then submitted four tutoring progress
reports ( 輔導進展報告) during April 2023 and January 2024 with the Shanghai office of CSRC.
Having considered the then overall market conditions and our business development needs, and
to provide further capital for the development and expansion of our business, raise our profile
and market awareness of our brand, and present us with an opportunity to further expand our
investor base and global presence, we decided to pursue an H-share listing on the Stock
Exchange. In April 2024, we terminated the preliminary tutoring process. We have not
submitted any listing application for the A-share listing to the CSRC or any stock exchange in
the PRC. For further details, see ‘‘History, De velopment and Corporate Structure — Previous
Plan for A-Share Listing.’’
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We are applying for the Listing under Rule 8.05(3) of the Listing Rules and satisfy the
market capitalization/revenue test, among other things, with reference to (i) our revenue for the
financial year ended December 31, 2024, bei ng RMB635.5 million, which is over HK$500
million as required by Rule 8.05(3) of the Listing Rules; and (ii) our expected market
capitalization at the time of the Listing, which, based on the Offer Price of HK$18.0 per Offer
Share, exceeds HK$4 billion as required b y Rule 8.05(3) of the Listing Rules.
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 (subject to reallocation and the
Over-allotment Option):
. the Hong Kong Public Offering of 1,300,000 H Shares (subject to adjustment as
mentioned below) for subscription by the public in Hong Kong as described in
‘‘Structure of the Global Offering — The Hong Kong Public Offering’’; and
SUMMARY
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. the International Offering of 11,700,000 H Shares (subject to reallocation and the
Over-allotment Option as mentioned below) outside the United States (including to
professional and institutional investors within Hong Kong) in offshore transactions in
reliance on Regulation S or any other available exemption from registration under the
U.S. Securities Act as described in ‘‘ Structure of the Global Offering — The
International Offering.’’
Investors may apply for the Hong Kong Offer Shares under the Hong Kong Public
Offering or indicate an interest, if qualified to do so, for the International Offer Shares under
the International Offering, but may not do both.
The Offer Shares will represent approximatel y 3.4% of the enlarged issued share capital of
our Company immediately after completion of the Global Offering without taking into account
the exercise of the Over-allotment Option. If the Over-allotment Option is exercised in full, the
Offer Shares will represent approximately 3.9% of the total enlarged issued share capital
immediately after the completion of the Global O ffering and the exercise of the Over-allotment
Option as set out in ‘‘Structure of the Global Offering — The International Offering —
Over-allotment Option.’’
OFFERING STATISTICS
All statistics in the following table are based on the assumptions that (i) the Global
Offering has been completed and 13,000,000 H Shares are issued pursuant to the Global
Offering; (ii) the Over-allotment Option is not exercised; and (iii) 379,651,762 Shares in issue
following the completion of the Global Offering.
B a s e do na nO f f e r
Price of HK$18.00
per Offer Share
Market capitalization followin g the completion of the Global
Offering
(1) HK$6,833.7 million
Unaudited pro forma adjusted consolidated net tangible assets
attributable to Shareholders of our Company per Share (2) HK$2.51
Notes:
(1) The calculation of market capitalization is based on 379,651,762 Shares expected to be in issue upon
completion of the Global Offering (assuming that the Over-allotment Option is not exercised at all).
(2) The unaudited pro forma adjusted consolidated net tangible assets of our Group attributable to
Shareholders per Share is arrived at by dividing the unaudited pro forma adjusted net tangible assets
attributable to Shareholders of our Company by 364,709,265 Shares, being the number of shares expected
following the completion of the Global Offering (exc luding 14,942,497 shares held for restricted shares
scheme as shown in Note 28(f)(iv) to the Accountants’ Report set out in Appendix I to this document),
and does not take into any shares which may be issued upon the exercise of the Over-allotment Option or
pursuant to the restricted shares scheme.
SUMMARY
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LISTING EXPENSES
Listing expenses represent professional f ees, underwriting commissions, and other fees
incurred in connection with the Global Offering. The estimated total listing expenses (based on
the Offer Price of HK$18.0 per Offer Share and a ssuming that the Over-allotment Option is not
exercised) for the Global Offering are approximately RMB80.1 million (equivalent to
approximately HK$86.2 million), accounting for approxim ately 36.8% of our gross proceeds.
The estimated total listing expenses consist of (i) underwriting-related expenses (including but
not limited to commissions and fees) of appro ximately RMB33.9 million (approximately
HK$36.5 million), and (ii) non-underwriting related expenses of approximately RMB46.2
million (approximately HK$49.7 million), which consist of fees and expenses of legal advisors
and Reporting Accountants of approximately RMB26.2 million (approximately HK$28.2
million), and other fees and expenses of appr oximately RMB20.0 million (approximately
HK$21.5 million). During the Track Record Peri od, RMB33.1 million (equivalent to HK$35.6
million) of the incurred listing expenses were charged to the consolidated statements of profit or
loss and other comprehensive income and RMB1.8 million (equivalent to HK$1.9 million) of the
incurred expenses were recognized to our consolidated statements of financial position. We
expect to incur additional listing expenses of approximately RMB10.8 million (equivalent to
approximately HK$11.7 million) which is expected to be charged in profit or loss subsequent to
the Track Record Period. Approximately RMB34.4 million (equivalent to HK$37.0 million) of
the estimated listing expenses is directly attr ibutable to the issue of Offer Shares and will be
recognized as a deduction in equity directly u pon the Listing. This calculation is subject to
adjustment based on the actual amount incurred or to be incurred.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$147.8 million, after deducting estimated u nderwriting commissions, fees and expenses
payable by us in connection with the Global Offering, assuming an Offer Price of HK$18.0 per
Offer Share, and assuming the Over-allotment Option is not exercised.
We currently intend to apply the net proceeds f rom the Global Offering for the following
purposes:
. Approximately 40% of the net proceeds, or HK$59.1 million, is expected to be
invested in technology advancement and the development of new products and
services;
. Approximately 40% of the net proceeds, or HK$59.1 million, is expected to be used
for the establishment of manufacturing plants and the procurement of essential
machinery to enhance our manufacturing capabilities;
. Approximately 10% of the net proceeds, or HK$14.8 million, is expected to expand
our sales and services network and enhance our brand awareness; and
. Approximately 10% of the net proceeds, or HK$14.8 million, is expected to be used
for working capital and ge neral corporate purposes.
See ‘‘Future Plans and Use of Proceeds’’ for further details.
SUMMARY
–2 8–


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RECENT DEVELOPMENT
According to CIC, in some overseas mining operations, underdeveloped power
infrastructure has historically limited the adopt ion of electrified machinery. The regions with
unreliable grid connectivity or insufficient energy storage capacity face challenges in deploying
high-voltage charging systems for battery-electric machinery. As a result, these areas have
continued to rely on high-emission diesel-pow ered equipment, which leads to increased carbon
footprints and operational inefficiencies. To tackle this issue, we are applying our technology to
provide electric and intelligent engineering machinery along with photovoltaic energy solutions,
offering services for green and efficient minin g to our overseas customers. We are currently
implementing an energy storage solution in Za mbia to provide scalable renewable energy
services, with completion expected by 2025. Once in service, this infrastructure will power the
customer’s production line and support the charging requirements of our battery-electric
products. Additionally, we are supplying a customer with battery-electric wide-body dump
trucks for its transport operations to advance its goal of achieving a sustainable, green mining
operations.
As of the Latest Practicable Date, we had order backlogs of approximately RMB209.4
million. For the three months ended March 31, 2025, the sales volume of our battery-electric
wide-body dump trucks and battery-electric l oaders was 61 and 40, respectively. Despite
increasing revenue, we expect to incur net loss in 2025, due to (i) our relatively early stage of
development, where our gross profit are insufficient to cover operating expenses, (ii) our
planned significant investments in research and development and sales team expansion, and (iii)
our increased finance costs.
NO MATERIAL ADVERSE CHANGE
Our Directors have confirmed that there has been no material adverse change in our
financial or trading position or prospects since December 31, 2024, being the end date of our
latest consolidated financial statements as set out in the Accountants’ Report included in
Appendix I to this prospectus, and up to the date of this prospectus.
SUMMARY
–2 9–


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In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the mean ings set out below. Certain other terms are explained in
‘‘Glossary of Technical Terms.’’
‘‘%’’ per cent
‘‘Accountants’ Report’’ the accountants’ report of our Company, the text of which is set out
in Appendix I to this prospectus
‘‘affiliate(s)’’ with respect to any speci fied person, any other person, directly or
indirectly, controlling or controlled by or under direct or indirect
common control with such specified person
‘‘AFRC’’ Accounting and Financial Reporting Council of Hong Kong
‘‘Articles of Association’’
or ‘‘Articles’’
the articles of association of our Company adopted by special
resolution on April 2, 2024 with e ffect from the Listing Date, as
amended, supplemented or otherwi se modified from time to time, a
summary of which is set out in ‘‘Appendix V — Summary of Articles
of Association’’
‘‘associate(s)’’ has the meaning ascribed to it 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
‘‘Capital Market
Intermediary(ies)’’
the capital market intermediaries participating in the Global
Offering and has the meaning ascr ibed thereto under the Listing
Rules
‘‘CCASS’’ Central Clearing and Settlement System established and operated by
HKSCC
‘‘China’’ or ‘‘PRC’’ the People’s Republic of China and for the purpose of this
prospectus only, unless the context otherwise requires, excludes
Hong Kong, the Macau Special Administrative Region of the
People’s Republic of China and Taiwan
‘‘CIC’’ or ‘‘Industry
Consultant’’
China Insights Industry Consultancy Limited, our industry
consultant, an independent market research and consulting
company
‘‘close associate(s)’’ has the meaning ascribed to it under the Listing Rules
DEFINITIONS
–3 0–


--- page 40 ---
‘‘Cloud Tribe
Management’’
Shanghai Cloud Tribe Yijin Venture Capital Management Co., Ltd.
(上海雲部落易津創業投資管理有限公司), a limited liability
company established under the Laws of the PRC on May 17, 2017
and one of our Controlling Shareholders
‘‘Cloud Tribe Yijin’’ Shanghai Cloud Tribe Yijin Venture Capital Center (limited
Partnership) （上海雲部落易津創業投資中心（有限合夥）), a limited
partnership established under the Laws of the PRC on June 13, 2017
and one of our Controlling Shareholders
‘‘Companies
(Winding Up and
Miscellaneous
Provisions)
Ordinance’’
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
‘‘Companies Ordinance’’ Companies Ordinan ce (Chapter 622 of the Laws of Hong Kong), as
amended, supplemented or other wise modified from time to time
‘‘Company,’’ ‘‘our
Company’’ or ‘‘the
Company’’
Breton Technology Co., Ltd. ( 博雷頓科技股份公司), a limited
liability company established under the laws of the PRC on
November 28, 2016 and converted into a joint stock company
with limited liability on November 23, 2022
‘‘connected person(s)’’ has the meaning ascribed to it under the Listing Rules
‘‘connected
transaction(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘Controlling
Shareholder(s)’’
has the meaning ascribed to it under the Listing Rules and unless the
context otherwise requires, refers to Mr. Chen, Shanghai Fangao,
Cloud Tribe Yijin, Cloud Tribe Management, Shanghai Yijin, Yijin
Venture Capital Management, and Shanghai Yijin Management,
further details of which are set out in ‘‘Relationship with our
Controlling Shareholders’’
‘‘core connected
person(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘Corporate Governance
Code’’
the Corporate Governance Code set out in Appendix C1 to the
Listing Rules
‘‘CSDC’’ China Securities Depositar y and Clearing Corporation Limited ( 中
國證券登記結算
有限責任公司)
‘‘CSRC’’ China Securities Regulatory Commission ( 中國證券監督管理委員
會)
DEFINITIONS
–3 1–


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‘‘Director(s)’’ or ‘‘our
Director(s)’’
the director(s) of our Company
‘‘Domestic Share(s)’’ ordinary share(s) in the share capital of our Company with a
nominal value of RMB1.00 each, w hich is/are subscribed for and
paid up in Renminbi and not listed or traded on any stock exchange
‘‘EIT’’ PRC enterprise income tax
‘‘Exchange Participant’’ a person (a) who, in accordance with the Rules of the Stock
Exchange, may trade on or through the Stock Exchange; and (b)
whose name is entered in a list, register or roll kept by the Stock
Exchange as a person who may trade on or through the Stock
Exchange
‘‘Extreme Conditions’’ the occurrence of ‘‘extreme conditions’’ as announced by any
government authority of Hong Kong due to serious disruption of
public transport services , extensive flooding, major landslides,
large-scale power outage or any other adverse conditions before
Typhoon Signal No. 8 or above is replaced with Typhoon Signal
No. 3 or below
‘‘FINI’’ Fast Interface for New Issua nce, a software platform developed by
HKSCC to manage the Hong Kong public offering settlement
process
‘‘General Rules of
HKSCC’’
General Rules of HKSCC published by the Stock Exchange and as
a m e n d e df r o mt i m et ot i m e
‘‘Global Offering’’ the Hong Kong Public Offering and the International Offering
‘‘Group,’’ ‘‘our Group,’’
‘‘we’’ or ‘‘us’’
our Company and our subsidiaries from time to time
‘‘Guide for New Listing
Applicants’’
the Guide for New Listing Applicants issued by the Stock Exchange,
as amended, supplemented or other wise modified from time to time
‘‘H Share Registrar’’ Trico r Investor Services Limited
‘‘H Share(s)’’ ordinary share(s) in the share capital of our Company with a
nominal value of RMB1.00 each, which will be subscribed for and
traded in Hong Kong dollars and listed on the Stock Exchange
‘‘HK$’’ or ‘‘Hong Kong
dollars’’
Hong Kong dollars, 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 by submitting applications online through the
designated website at
www.hkeipo.hk
DEFINITIONS
–3 2–


--- page 42 ---
‘‘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 Cleari ng 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
HKSCC Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer Shares on
your behalf
‘‘HKSCC Nominees’’ HKSCC Nominees Limi ted, a wholly-owned subsidiary of HKSCC
‘‘HKSCC Operational
Procedures’’
the Operational Procedures of HKSCC in relation to CCASS
containing the practices, procedures and administrative
requirements relating to operations and functions of CCASS, as
from time to time in force
‘‘HKSCC Participant’’ a participant admitte d to participate in CCASS as a direct clearing
participant, a general clearing part icipant or a custodian participant
‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC
‘‘Hong Kong Offer
Shares’’
1,300,000 H Shares (subject to reallocation as described in
‘‘Structure of the Global Offering’’) initially offered by our
Company for subscription at the Offer Price pursuant to the Hong
Kong Public Offering
‘‘Hong Kong Public
Offering’’
the offering of the Hong Kong Offer Shares for subscription by the
public in Hong Kong at the Offer Price, on and subject to the terms
and conditions described in ‘‘Structure of the Global Offering —
The Hong Kong Public Offering’’
‘‘Hong Kong
Underwriters’’
the underwriters listed in ‘‘Underwriting — Hong Kong
Underwriters,’’ being the underwriters of the Hong Kong Public
Offering
‘‘Hong Kong
Underwriting
Agreement’’
the underwriting agreement dated April 24, 2025 relating to the
Hong Kong Public Offering entered into by, among others, our
Company, the Joint Sponsors, the Overall Coordinators and the
Hong Kong Underwriters, as further described in ‘‘Underwriting —
Hong Kong Underwriting Arrangements’’
DEFINITIONS
–3 3–


--- page 43 ---
‘‘IFRS’’ International Financial Reporting Standards, which include
standards, amendments and interpretations promulgated by the
International Accounting Standards Board
‘‘Independent Third
Party(ies)’’
entity(ies) or person(s) who is/are not connected person(s) of our
Company or its subsidiaries
‘‘International Offer
Shares’’
11,700,000 H Shares (subject to reallocation and the exercise of the
Over-allotment Option as described in ‘‘Structure of the Global
Offering’’) initially offered by our Company pursuant to the
International Offering
‘‘International Offering’’ the conditional placing of the International Offer Shares at the
Offer Price in offshore transacti ons outside the United States in
reliance on Regulation S or any other available exemption from the
registration requirement under the U.S. Securities Act, as set out in
‘‘Structure of the Global Offering — The International Offering’’
‘‘International
Underwriters’’
the international underwriters who are expected to enter into the
International Underwriting Agreement to underwrite the
International Offering
‘‘International
Underwriting
Agreement’’
the underwriting agreement relating to the International Offering
expected to be entered into on or around May 2, 2025 by, among
others, our Company, the Overall Coordinators and the
International Underwriters, as further described in ‘‘Underwriting
— International Offering’’
‘‘Joint Bookrunners’’ the joint bookrunners as named in ‘‘Directors, Supervisors and
Parties Involved in the Global Offering’’
‘‘Joint Global
Coordinators’’
the joint global coordinators as named in ‘‘Directors, Supervisors
and Parties Involved in the Global Offering’’
‘‘Joint Lead Managers’’ the joint lead manage rs as named in ‘‘Directors, Supervisors and
Parties Involved in the Global Offering’’
‘‘Joint Sponsors’’ the joint sponsors as named in ‘‘Directors, Supervisors and Parties
Involved in the Global Offering’’
‘‘Latest Practicable
Date’’
April 17, 2025, being the latest practicable date for the purpose of
ascertaining certain information c ontained in this prospectus prior
to its publication
‘‘Listing’’ the listing of the H Shares on the Main Board
‘‘Listing Date’’ the date expected to be on or about Wednesday, May 7, 2025, on
which the H Shares are listed and from which dealings therein are
permitted to take place on the Main Board
DEFINITIONS
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--- page 44 ---
‘‘Listing Rules’’ the Rules Governin g the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended, supplemented or
otherwise modified from time to time
‘‘Main Board’’ the stock exchange (excluding the option market) operated by the
Stock Exchange which is independent from and operated in parallel
with the GEM of the Stock Exchange
‘‘MEE’’ Ministry of Ecology and Environment of the PRC ( 中華人民共和國
生態環境部)
‘‘MIIT’’ Ministry of Industry and Information Technology of the PRC ( 中華
人民共和國工業和信息化部) (formerly known as the Ministry of
Information Industry)
‘‘Mr. Chen’’ Mr. Chen Fangming ( 陳方明), our founder, chairman of our Board,
executive Director, general ma nager of our Company, and one of
our Controlling Shareholders
‘‘NEA’’ National Energy Administration of the PRC ( 中華人民共和國國家
能源局)
‘‘Nomination
Committee’’
the nomination committee of our Board
‘‘Offer Price’’ the final price per Offe r Share in Hong Kong dollars (exclusive of
brokerage of 1.0%, AFRC trans action levy of 0.00015%, SFC
transaction levy of 0.0027% an d Stock Exchange trading fee of
0.00565%) at which the Offer Shares are to be subscribed for or
purchased pursuant to the Global Offering, to be determined as
described in ‘‘Structure of the G lobal Offering — Pricing of the
Global Offering’’
‘‘Offer Share(s)’’ the Hong Kong Offer Share(s) and/or the International Offer
Share(s), as the context may require
‘‘Overall Coordinators’’ the overall coordina tors as named in ‘‘Directors, Supervisors and
Parties Involved in the Global Offering’’
‘‘Over-allotment Option’’ the option granted by our Company to the International
Underwriters, exercisable by the Overall Coordinators (for
themselves and on behalf of the International Underwriters)
pursuant to the International Underwriting Agreement, to require
our Company to allot and issue up to an aggregate of 1,950,000
additional H Shares at the Offer Price, representing 15.0% of the
Offer Shares initially available under the Global Offering, to cover,
among other things, over-allocations in the International Offering,
if any, the details of which are described in ‘‘Structure of the Global
Offering — Over-allotment Option’’
DEFINITIONS
–3 5–


--- page 45 ---
‘‘PBOC’’ the People’s Bank of China ( 中國人民銀行), the central bank of the
PRC
‘‘PRC AoA Guidelines’’ Guidelines for the Ar ticles of Association of Listed Companies ( 《上
市公司章程指引》), as amended, supplemented or otherwise modified
from time to time
‘‘PRC Company Law’’ Company Law of the PRC ( 《中華人民共和國公司法》), as amended,
supplemented or otherwise modified from time to time
‘‘PRC Legal Advisor’’ AllBright Law Offices, our legal advisor as to PRC law
‘‘Pre-IPO Investment(s)’’ the investment(s ) in our Company undertaken by the Pre-IPO
Investors, the details of which are set out in ‘‘History, Development
and Corporate Structure’’
‘‘Pre-IPO Investor(s)’’ the Pre-IPO investor (s) described in ‘‘History, Development and
Corporate Structure’’
‘‘prospectus’’ this prospectus being issued in connection with the Hong Kong
Public Offering
‘‘Regulation S’’ Regulation S under the U.S. Securities Act
‘‘Remuneration and
Appraisal Committee’’
the remuneration and appraisal committee of our Board
‘‘RMB’’ or ‘‘Renminbi’’ Renminbi, the lawful currency of the PRC
‘‘SAFE’’ State Administration of Foreign Exchange of the PRC ( 中華人民共
和國國家外匯管理局)
‘‘SFC’’ Securities and Futures Commission of Hong Kong
‘‘SFO’’ Securities and Futures Ordinance (Chapter 571 of the Laws of Hong
Kong), as amended, supplemented o r otherwise modified from time
to time
‘‘Shanghai Fangao’’ Shanghai Fangao Busin ess Consulting Partnership (Limited
Partnership) ( 上海方翱商務諮詢合夥企業（有限合夥）), a limited
partnership established under the Laws of the PRC on September
11, 2018 and one of our Controlling Shareholders
‘‘Shanghai Fangzhanbo’’ Shanghai Fangzhanb o Business Consulting Partnership (Limited
Partnership) ( 上海方展博商
務諮詢合夥企業（有限合夥）), a limited
partnership established under the Laws of the PRC on August 26,
2022
DEFINITIONS
–3 6–


--- page 46 ---
‘‘Shanghai Jifang’’ Shanghai Jifang Bus iness Consulting Partnership (Limited
Partnership) ( 上海驥方商務諮詢合夥企業（有限合夥）), a limited
partnership established under the Laws of the PRC on January
14, 2022, formerly known as Ningbo Breton Enterprise
Management Consulting Partnership (Limited Partnership) ( 寧波
博雷頓企業管理諮詢合夥企業（有限合夥）)
‘‘Shanghai Yijin’’ Shanghai Yijin Investment Co., Ltd. ( 上海易津投資股份有限公司), a
joint stock company established under the Laws of the PRC on
October 9, 2008 and one of our Controlling Shareholders, formerly
known as Shanghai Ruiqing Investment Management Co., Ltd. ( 上
海睿卿投資管理有限公司) and Shanghai Yijin Investment Limited
(上海易津投資有限公司)
‘‘Shanghai Yijin
Management’’
Shanghai Yijin Investment Management Firm (Limited Partnership)
(上海易津投資管理事務所（有
限合夥）), a limited partnership
established under the Laws of the PRC on December 7, 2009 and
one of our Controlling Shareholders, formerly known as Shanghai
Yijin Investment Management Firm (General Partnership) ( 上海易
津投資管理事務所（普通合夥）)
‘‘Shanghai-Hong Kong
Stock Connect’’
a securities trading and clearing links program developed by the
Stock Exchange, Shanghai Stock Exchange, HKSCC and CSDC for
mutual market access between Hong Kong and Shanghai
‘‘Share(s)’’ ordinary share(s) in the share capital of our Company with a
nominal value of RMB1.00 each, comprising Unlisted Share(s) and
HS h a r e ( s )
‘‘Shareholder(s)’’ holder(s) of the Share(s)
‘‘Shenzhen-Hong Kong
Stock Connect’’
a securities trading and clearing links program to be developed by
the Stock Exchange, Shenzhen Stock Exchange, HKSCC and CSDC
for mutual market access between Hong Kong and Shenzhen
‘‘Sponsor-Overall
Coordinators’’
the sponsor-overall coordinators as named in ‘‘Directors,
Supervisors and Parties Involved in the Global Offering’’
‘‘Stabilizing Manager’’ China International Capital Corporation Hong Kong Securities
Limited
‘‘State Council’’ State Council of the PRC ( 中華人民共和國國務院)
‘‘Stock Exchange’’ or
‘‘Hong Kong Stock
Exchange’’
The Stock Exchange of Hong Kong Limited, a wholly owned
subsidiary of Hong Kong Exchanges and Clearing Limited
DEFINITIONS
–3 7–


--- page 47 ---
‘‘Strategy Committee’’ the stra tegy committee of our Board
‘‘subsidiary(ies)’’ has the meaning ascribed to it under the Listing Rules
‘‘substantial
Shareholder(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘Supervisor(s)’’ member(s) of our Supervisory Committee
‘‘Supervisory
Committee’’
the supervisory committee of our Company
‘‘Takeovers Code’’ the Codes on Takeovers and Mergers and Share Buy-backs issued
by the SFC, as amended, supplemented or otherwise modified from
time to time
‘‘Track Record Period’’ the financial years ended December 31, 2022, 2023 and 2024
‘‘Trial Measures’’ Trial Administrative Me asures of Overseas Securities Offering and
L i s t i n gb yD o m e s t i cC o m p a n i e s(《境內企業境外發行證券和上市管
理試行辦法》), as amended, supplemented or otherwise modified
from time to time
‘‘U.S.’’ or ‘‘United
States’’
the United States of America, its territories and possessions, any
State of the United States, and the District of Columbia
‘‘U.S. dollar’’ or ‘‘US$’’ United States dollar, the lawful currency of the United States
‘‘U.S. Securities Act’’ United States Securit ies Act of 1933 and the rules and regulations
promulgated thereunder, as amended, supplemented or otherwise
modified from time to time
‘‘Underwriters’’ the Hong Kong Underwri ters and the International Underwriters
‘‘Underwriting
Agreements’’
the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
‘‘Unlisted Foreign
Share(s)’’
ordinary share(s) issued by our Company with a nominal value of
RMB1.00 each which is/are subscr ibed for and paid for in currency
other than RMB by foreign investors and not listed on any stock
exchange
‘‘Unlisted Share(s)’’ Domestic Shares and Unlisted Foreign Shares
‘‘Yijin Venture Capital
Management’’
Shanghai Yijin Venture Capital Management Co., Ltd. ( 上海易津創
業投資管理有限公司), a limited liability company established under
the Laws of the PRC on October 1, 2015 and one of our Controlling
Shareholders
DEFINITIONS
–3 8–


--- page 48 ---
For ease of reference, the names of Chinese law s and regulations, governmental authorities,
institutions, natural persons or other entities ( including certain of our subsidiaries) have been
included in this prospectus in both the Chinese and English languages and in the event of any
inconsistency, the Chinese versions shall prevail.
Certain amounts and percentage figures included in this prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures preceding them. Any d iscrepancies in any table or chart between the
total shown and the sum of the amounts listed are due to rounding.
DEFINITIONS
–3 9–


--- page 49 ---
This glossary contains definitions of certa in technical terms used in this prospectus in
connection with us and our business. These may not correspond to standard industry definitions
and may not be comparable to similarly terms adopted by other companies.
‘‘add-on e-powertrain’’ an independent elect ric power unit installed between a tractor and
trailer that automatically foll ows the tractor’s movements,
providing extra power to reduce fuel consumption
‘‘AGV’’ automated guided vehicle, a sel f-guided automated vehicle designed
to autonomously transport materia ls in industrial manufacturing
‘‘autonomy solution’’ a type of services that enable remote and autonomous operations of
engineering machinery, such as intelligent mining solutions and
autonomous scheduling software
‘‘battery capacity’’ the total amount of e lectrical energy a battery can store, which
impacts the duration the engineering machinery can operate
‘‘battery thermal
management system’’
a system that regulates the temperature dynamics of battery,
maintaining optimal temperature for battery operation
‘‘battery-electric loader’’ a ca tegory of loaders partially or fully powered by electricity stored
in batteries
‘‘battery-electric tractor
truck’’
a category of tractor trucks partially or fully powered by electricity
stored in batteries
‘‘battery-electric
wide-body dump
truck’’
a category of wide-body dump trucks partially or fully powered by
electricity stored in batteries
‘‘cabin’’ the enclosed space in the en gineering machinery where operators
operate the machinery
‘‘CAGR’’ compound annual growth rate
‘‘carbon footprint’’ a calculated index of the total amount of greenhouse gases that an
activity emits
‘‘catalog company’’ a company possessing requ isite vehicle manufacturing qualification
that we collaborate with for the manufacturing of battery-electric
tractor trucks
‘‘charging time’’ the time required to c harge a battery within a standard battery
power range, usually from 20% to 100%
‘‘chassis’’ the structural part of an engineering machinery designed to mount
the body of the machinery that provide load-bearing and
transportation capabilities
GLOSSARY OF TECHNICAL TERMS
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‘‘CFD’’ computational fluid dynamics, a fluid mechanics analysis method
that uses numerical analysis and data structures to solve problems
involving fluid flows
‘‘direct current’’ the one-directional flow o f electric charge from high electron density
area to low electron density area
‘‘drive motor’’ a type of electric motor us ed to create motion, converting electrical
energy into mechanical energy, dr iving engineering machinery to
move
‘‘driving range’’ the distance or duratio n of operating time that an engineering
machine can travel on a single full charge within a standard battery
power range, usually from 20% to 100%
‘‘dual-motor design’’ a design of a battery-electric loader that contains both a drive motor
and a working motor, or a design of a battery-electric wide-body
dump truck that contains two drive motors
‘‘electrical and electronic
architecture’’
the technical design of an engineeri ng machine which includes all the
hardware, software, sensors, actuat ors, and electronic and electrical
distribution systems on the engineering machinery, and integrates
these components together using system integration tools
‘‘energy density’’ the amount of energy a battery contains per unit weight, measured
in Wh/kg
‘‘engineering machinery’’ a category of machines, tools, and vehicles employed in engineering
applications, encompassing loaders, wide-body dump trucks,
forklifts, excavators, aerial work platforms, cranes, and other
similar equipment types
‘‘e-powertrain’’ the electric drive sys tem that powers engineering machinery or
tractor trucks, including the moto r, motor controller, transmission,
and transmission control unit
‘‘e-powertrain kit’’ a set of critical comp onents for battery-electric engineering
machinery or tractor trucks, whi ch includes e-powertrain, battery
system, integrated multi-functional unit, thermal management
system, and control system
‘‘finance lease’’ a type of commercial lease in which a finance company legally owns
an asset, and the lessee rents the asset for an agreed-upon period of
time
‘ ‘ f o r w a r dd e s i g na n d
engineering’’
an approach to product design and development that begins with a
comprehension of end goals and requirements before commencing
any actual development work
GLOSSARY OF TECHNICAL TERMS
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‘‘four-branch parallel
charging circuits’’
a charging design which allo ws four charging connectors
simultaneously to charge a singl e electric engineering machinery
‘‘gear shifting’’ the act of changing th e gear ratio in an engineering machine’s
transmission, which adjusts the balance between speed and torque
‘‘gearbox’’ a transmission mechanical device used in engineering machinery to
adjust the speed and torque based on road conditions and operator
requirements by shifting gears
‘‘greenhouse gas’’ any gas that has the property of absorbing infrared radiation
emitted from earth’s surface and reradiating it back to earth, thus
contributing to the greenhouse effect
‘‘hydraulic cycle time’’ the total duration covering the loader’s boom lifting, bucket
unloading, and boom lowering actions
‘‘hydrocarbon’’ an organic compound composed of hydrogen and carbon atoms
‘‘internal combustion
engine’’
a heat engine where the combustio n of a fuel occurs with an oxidizer
in a combustion chamber to convert the chemical energy stored in
fuel into mechanical energy or power
‘‘LFP battery’’ lithium iron phosphate powe r battery, a type of lithium-ion battery
that uses lithium iron phosphate as the cathode material, which
demonstrates low cost, stable performance, safety and long cycle life
‘‘loader’’ the self-propelled tracke d or wheeled machinery equipped with a
front-end working device primarily used for loading operations with
a bucket, carrying out loading or excavation tasks through its
forward movement
‘‘machinery operation
services’’
services that encompass both the provision of machinery and the
supply of operators to execute contracting tasks
‘‘maximum breakout
force’’
the maximum vertical force generated by the lifting hydraulic
cylinder or the bucket hydraulic cylinder of a loader in an upward
direction
‘‘maximum power
output’’
the highest level of engine power that an engineering machine can
produce under its specified operating conditions
‘‘modular approach’’ a method in product development where technologies are
deconstructed into independent components or modules that are
designed to be interchangeable and compatible
‘‘new energy’’ energy derived from clean sources, such electricity, solar power,
wind energy, hydroelectric power, and other sustainable resources
‘‘nitrogen oxides’’ a mixture of nitric oxide and nitrogen dioxide
GLOSSARY OF TECHNICAL TERMS
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‘‘OTA’’ over-the-air, the remote so ftware updating through cloud networks
‘‘particulate matter’’ a mixture of microscopic solids and liquid droplets in the air
‘‘payload’’ the maximum permissible weight that an engineering machinery can
safely transport in addition to its own unloaded weight
‘‘peak traction force’’ the maximum force a loader can exert in the forward direction to
overcome all opposing forces
‘‘perception fusion
algorithm’’
a type of sensor fusion algorithm that combines sensory data from
multiple sources
‘‘photovoltaic energy
system’’
an energy system that combines photovoltaic power generation with
energy storage and charging facilities
‘‘pure-play new energy
engineering machinery
company’’
an engineering machinery company that focuses primarily on the
development of new energy engineer ing machinery, generating more
than 80% of its revenue from sales of new energy engineering
machinery
‘‘range-extended
wide-body dump
truck’’
a type of wide-body dump trucks that are equipped with an
auxiliary engine to boost its driving range and/or operational time
‘‘real-time video
stitching’’
a process that combines multiple videos with overlapping fields of
view to produce a segmented panorama video in real time
‘‘recurring customer’’ customers who made two or more purchases of our battery-electric
engineering machinery during the Track Record Period
‘‘regenerative braking
system’’
the braking system featuring regenerative braking with motor
feedback and mechanical brakin g, supplemented by an emergency
brake system for added redundancy
‘‘remote operation’’ the ability of an engineering machine to be operated from a
distance, enabled by advanced technologies such as intelligent
sensing, real-time video stitchi ng algorithms, optimized video
streaming strategies and three-dimensional mapping
‘‘repurchase guarantee’’ a commitment made b y the seller of an asset to buy back the asset
from the buyer under certain circumstances
‘‘sensor’’ a device designed to detect events or changes in its environment and
transmit the information to other electronics, often to a computer
processor
GLOSSARY OF TECHNICAL TERMS
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‘‘structural components’’ fundamental parts forming the structure of an engineering
machinery, such as chassis, frame and cabin, which provide
support and ensure structural integrity of such engineering
machinery
‘‘telematics’’ an interdisciplinary fie ld that combines telecommunications and
informatics for application in engineering machinery and vehicles
‘‘thermal management
system’’
a system that manages and maintains the temperature across
machinery or vehicles, which inc ludes regulating temperatures
within various components such as the cabin, battery, motor,
motor controller, and other relevant parts
‘‘tier center turning
radius’’
the distance from the center of a loader to the outermost edge of its
turning circle
‘‘torque’’ the rotational or torsional force exerted on rotating equipment, a
mechanical parameter used to measure the driving force applied
‘‘tractor truck’’ a type of heavy-duty commercial vehicles designed to pull trailers
for loading cargo
‘‘VCU’’ vehicle control unit, a central domain controller located within a
machine, which receives signals f rom various sensors dispersed
throughout the machine, including those linked to the brakes,
accelerator pedal, battery system, and charging connections
‘‘warranty’’ the guarantee a manufacturer provides to the customer regarding
the quality of their product
‘‘wheelbase’’ the distance between the center of the front wheel and the center of
the rear wheel of an engineering machine
‘‘wide-body dump truck’’ a type of heavy-duty vehicles used for transporting large volumes of
loose materials, which are chara cterized by their wide width,
enabling easy maneuverabilit y in off-highway operations and
facilitating navigation through narrow spaces
‘‘working motor’’ an electric device that t ransforms electric power into mechanical
power
GLOSSARY OF TECHNICAL TERMS
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This prospectus contains forward-looking statements that relate to our current
expectations and views of future events. These forward-looking statements are contained
principally in ‘‘Summary,’’ ‘‘Risk Factors,’’ ‘‘I ndustry Overview,’’ ‘‘Business,’’ ‘‘Financial
Information’’ and ‘‘Future Plans and Use of Proc eeds.’’ These statements relate to events that
involve known and unknown risks, uncertainties and other factors, incl uding those listed in
‘‘Risk Factors,’’ which may cause our actual results, performance or achievements to be
materially different from any future results, per formance or achievements expressed or implied
by the forward-looking statements.
In some cases, these forward-looking stateme nts can be identified by words or phrases such
as ‘‘may,’’ ‘‘will,’’ ‘‘expect,’’ ‘‘anticipate,’’ ‘‘aim,’’ ‘‘estimate,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘believe,’’
‘‘potential,’’ ‘‘continue,’’ ‘‘is/are likely to’’ or other similar expressions. These forward-looking
statements include, among other things, statements relating to:
. our operations and business prospects;
. our financial condition and performance;
. our capital expenditure plan;
. our ability to maintain good relationships with our business partners;
. future developments, trends and conditions in the industries and markets in which we
operate or plan to operate;
. changes to the regulatory environment in the industries and markets in which we
operate;
. the actions and developme nts of our competitors;
. 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; and
. capital market developments.
These forward-looking statements are subjec t to risks, uncertainties and assumptions,
some of which are beyond our control. In addition, these forward-looking statements reflect our
current views with respect to future events an d are not a guarantee of future performance.
Actual outcomes may differ materially from the information contained in the forward-looking
statements as a result of a number of factors, including, without limitation, the risk factors set
out in ‘‘Risk Factors.’’
FORWARD-LOOKING STATEMENTS
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The forward-looking statements made in this prospectus relate only to events or
information as of the date on which the statem ents are made in this prospectus. Except as
required by law, we undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new informatio n, future events or otherwise, after the date on
which the statements are made or to reflect the occurrence of unanticipated events. You should
read this prospectus completely and with the understanding that our actual future results or
performance may be materially different from what we expect.
In this prospectus, statements of, or references to, our intentions or those of any of our
Directors are made as of the date of this prospectus. Any of these intentions may change in light
of future development.
FORWARD-LOOKING STATEMENTS
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An investment in our H Shares involves a high de gree of risk. You should carefully consider
the following information about risks, togeth er with the other information contained in this
prospectus, including our consolidated financia l statements and related notes, before you decide
to buy our H Shares. If any of the circumstances or events described below actually arises or
occurs, our business, results of operations, financ ial condition and prospects would likely suffer.
In any such case, the market price of our H Shares could decline and you may lose all or part of
your investment. This prospectus also contains fo rward-looking informati on that involves risks
and uncertainties. Our actual results could di ffer materially from those anticipated in these
forward-looking statements as a result of many factors, including the risks described below.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
Our future growth is dependent on the demand for, and customers’ willingness to adopt engineering
machinery powered by new energy sources.
Our future growth relies on the demand for, and upon customers’ willingness to adopt,
engineering machinery powered by new energy so urces. The new energy engineering machinery
industry is characterized by rapidl y developing technologies, intense price competition, evolving
government regulations and industry standards, and shifting customer demands and behaviors.
Both the acceptance of clean energy solutions and their integration into the engineering
machinery may encounter delays or progress at a slow pace. As a result, the adoption of
engineering machinery and tractor trucks powered by new energy sources might not progress as
rapidly as originally anticipated.
Other factors that may influence the adoption of engineering machinery powered by new
energy sources include:
. the environmental consciousness of our existing and potential customers, as well as
the general public;
. perceptions about the cost, quality, design, safety, performance and lifespan of new
energy engineering machinery and tractor trucks, in particular the higher purchase
prices of new energy engineering machinery and tractor trucks, despite lower ongoing
operating and maintenance costs, compar ed to their traditi onal fuel-powered
counterparts;
. the market penetration of new energy engineering machinery and tractor trucks;
. the accessibility of repair and maintenance se rvices, electricity and alternative power
sources, and charging stations for new en ergy engineering machinery and tractor
trucks;
. government favorable policies for new energy engineering machinery or tractor trucks
or potential future regulations mandating increased use of non-polluting engineering
machinery or tractor trucks;
RISK FACTORS
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. the fluctuations of oil prices and the demand for traditional fuel-powered engineering
machinery and tractor trucks;
. perceived and actual costs associated with fossil fuels;
. the decrease in actual operating time of new energy engineering machinery and tractor
trucks due to battery deterioration, limited working time on a single battery charge
and/or low charging speed;
. the occurrence of negative incidents, or the perception of such incidents, involving our
or our competitors’ new energy engineering machinery or tractor trucks, leading to
adverse publicity and affecting customer perceptions of the industries; and
. macroeconomic factors.
A downturn in the key industries we serve, such as mining, logistics, industrial production,
port operations, and infrastructure construction, could significantly impact the demand for our
products. Factors such as econom ic recessions, changes in gove rnment policies, or shifts in
global supply chains may lead to d ecreased sales, adversely affect ing our financial performance.
If any of these industries experiences prolonged d eclines, we could face challenges such as excess
inventory, reduced production volumes, and increased pressure to lower prices. Furthermore, it
is difficult to predict the demand for our curr ent and future products, and fluctuations in
demand could reduce unit sales, thereby exerting downward pressure on prices.
If any of the factors mentioned above, either in dividually or collectively, lead to a decrease
in demand for our products or hinder the overall progress of the new energy engineering
machinery industry, we may fail to retain our existing customers and attract potential
customers, which would have a material adverse effect on our business, prospects, results of
operations, and financial condition.
We had net loss and net cash used in operating activities during the Track Record Period, and may
have net loss and net cash used in ope rating activities in the future.
We recorded net loss since our inception. In 2022, 2023 and 2024, our net loss was
RMB178.1 million, RMB229.4 million and RMB274.5 million, respectively. The net cash used
in operating activities was RMB290.4 million , RMB193.7 million and RMB270.0 million in
2022, 2023 and 2024, respectively. We may incur net loss and net operating cash outflow in the
future. A net loss position can expose us to the ris k of shortfalls in liquidity, in which case our
ability to raise funds, obtain bank loans and declare and pay dividends will be materially and
adversely affected.
RISK FACTORS
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Our profitability and liquidity position is dependent on, among other factors, our ability to
grow our customer base, expand product and service offerings, implement effective pricing
strategies, manage raw material costs, execute sales and market ing in a cost-efficient manner,
and increase operational efficiency. Additi onally, unforeseen trends of customer demand,
substantial changes in the industry landscape, increased competition, or opportunities for
investments, acquisitions, and capital expendi tures could result in decreases in revenues, and
significant increases in costs and expenses. If we are unable to generate adequate revenue to
offset the associated costs and expenses or eff ectively manage our cost and expense structure, we
may fail to attain expected gross p rofit margins, continue to incur significant loss and fail to
improve liquidity position. Our failure to generate sufficient revenue and incur losses and net
operating cash outflow would materially and ad versely impact the value of your investment.
We recorded thin gross profit margins during the Track Record Period.
We recorded thin gross profit margins duri ng the Track Record Period. In 2022, 2023 and
2024, our gross profit margin was 2.3%, 2.0% and 5.8%, respectively. Our thin gross profit
margin was primarily due to (i) our penetration pricing strategies to boost sales and build a
stronger market presence with lower competiti ve price, and (ii) the rising costs of our key raw
materials and components, particularly in 2 022 and 2023. Our cost of sales increased from
RMB351.9 million in 2022 to RMB454.5 millio n in 2023, and further to RMB598.6 million in
2024, despite the continuous increase in our revenue in the corresponding years. For the details
of the fluctuations of the gross profit and gross profit margin during the Track Record Period,
see ‘‘Financial Information — Description of Major Components of Our Results of Operations
— Gross Profit and Gross Profit Margin.’’
In the event that the costs do increase in th e future, we may not be able to transfer the
increase to our customers through pricing stra tegy. In addition, our gross profit margin may
decline to a material extent for other reasons, including increasing competition and changes in
general economic conditions which are, to a large extent, beyond our control. If we are unable
to improve our gross profit margin, our business, prospect, results of operations and financial
condition could be ad versely affected.
The prices of our products are subject to fluctuat ions, which may adversely affect our business,
prospects, results of operations and financial condition.
The market prices of our products are influenced by various factors, including component
costs, technological advancements, supply and demand fluctuations, and market competition,
many of which are beyond our control. In particular, we anticipate gradual price reductions for
our current loader and wide-body dump truck models due to potential decreases in the cost of
battery cells and other components. While lowe r component costs can reduce our cost of sales,
they also necessitate lowering our selling prices to maintain market competitiveness, which
could result in reduced revenue per unit sold, p otentially impacting our overall financial
performance if cost savings do not adequately offset the price reductions. If we cannot
compensate for lower selling prices through cos t reductions or increased sales volumes, our
business prospects, operational results, and financial condition could be adversely affected.
RISK FACTORS
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The new energy engineering machinery industr y is highly competitive, and we cannot guarantee
success in competing within these industries.
China’s engineering machinery industry is large in size yet highly competitive, and we have
focused on offering clean energy alternatives to traditional fuel-powered engineering machinery
and tractor trucks. We currently compete wit h (i) traditional engineering machinery
manufacturers expanding to the new energy se ctor that possess more substantial financial
resources, more renowned brand recognition and broader sales channels than we do, and (ii)
existing pure-play new energy engineering machinery manufacturers. Potential new entrants to
the market will also add to the competitiveness of these industries. Our current and potential
competitors may have the capabilities to inves t more financial, technical, manufacturing,
marketing and other resources in designing, manufacturing and marketing their products. They
may also be able to offer products or services at lower prices, with more advanced technological
innovations or design features, which would adversely affect our business, prospects, results of
operations, and financial condition.
The introduction of new energy engineer ing machinery and tractor trucks by our
competitors with superior quality and perform ance, or more satisfactory services, may have
an adverse impact on our ability to retain a promising market share. Our failure to compete
successfully may cause lower unit sales, increased inventory and marketing costs, which would
adversely affect our business, prospects, resu lts of operations, and financial condition.
The industry we operate in is characterized by r apid technological changes and advancements.
Adoption of any alternative energy sources, including hydrogen power, may adversely affect our
business, prospects, results of operations and financial condition.
The new energy engineering machinery industry is emerging and fast-evolving industries
characterized by continuous t echnological advancements. We may fail to keep up with
advancements in new energy technologies or compete with other engineering machinery
manufacturers who adopt alternative energy so urces. The emergence of alternative energy
technologies, such as advanced diesel, hydrogen, ethanol, fuel cells, or c ompressed natural gas,
along with enhancements in inte rnal combustion engine fuel ef ficiency and fluctuations in
gasoline costs, may materially and adversely affect our business, prospects, results of
operations, and financial condition.
While we strive to integrate the latest technologies into our products, our research and
development efforts may not yield the expected results to adapt to shifts in new energy
technologies. The introduction and integration of these new technologies into our products may
demand additional time, resources, and increased capital expenditures for production and
manufacturing. Any failure to develop or enhance technologies, or respond to alterations in
existing ones, may lead to substantial delays in i ntroducing new products with improved quality,
which could result in the loss of competitivenes s of our products, decreased revenue and a loss
of market share to competitors. If we are unable to apply these technologies or adjust our
manufacturing operations in a cost-effective manner, it would have a material adverse effect on
our business, prospects, results of operations, and financial condition.
RISK FACTORS
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Our business plans demand a significant amount of capital. To meet our future capital
requirements, we may need to seek equity or debt financings, which could dilute our
shareholders and introduce covenants imposin g restrictions on our operations or dividend
payments. However, the availa bility of such funding may not be timely, on acceptable terms, or
secured at all, potentially forcing us to curtail or discontinue our operations.
To execute our growth strateg ies, a substantial portion of capital must be allocated to
various aspects, including research and developme nt, expanding production capacity, scaling up
our sales and service network, and expanding our international reach. As we expand our
business, we expect incurring significant capital expenditures and operating costs, including cost
of sales, selling expenses, administrative expenses, research and development costs, and finance
costs.
We intend to continue making investments to support our business and may require
additional funds. However, there is no guarantee that such financing will be available on
favorable terms, in a timely ma nner, or at all. In 2023 and 2024, we did not fulfill certain
non-financial covenants under our bank loan facility agreements, which require us to promptly
notify the lending banks of qualified related pa rty transactions. Failure to do so entitles the
banks to request early payment of the relevant loans. As of the Latest Practicable Date, we had
not received any demand notices for early repayment in connection with these breaches. If such
repayment is demanded, we will settle with our financial resources including unutilized banking
facilities. However, we cannot assure you that any early repayment would not have a material
and adverse effect on our liquidity or financial condition. In addition, any future
non-compliance with financial or non-financia l covenants may adversely affect our ability to
raise capital. See ‘‘Financial Information — Indebtedness — Loans and Borrowings’’ for further
details. Failure to secure additional financing on terms that are acceptable to us would have a
material adverse effect on our business, financial condition and prospects.
Our ability to secure the required financi ng to execute our business plans is subject to
various factors, including our current financial position (such as liquidity, debt levels,
profitability, and cash flows), investor recep tion to our business plans, general market
conditions, the regulatory environment and macroeconomic factors. These factors could render
the timing, amount, terms and conditions of su ch financing unattractive or unavailable.
Financial institutions and investors will conduct thorough evaluations of our fiscal and business
standing before granting any loans or investments, as they aim to ensure that we can meet our
financial obligations and yield a return on their investments. Any disruptions in the financial
markets and economic volatility, in particular, may affect our ability to raise capital. In the
event we cannot raise sufficient funds, we may need to significantly curta il our expenditures or
delay or cancel planned activities.
The issuance of additional equity or equity-linked securities carries the potential for
dilution to our existing shareholders. The issuance of debt securities and incurrence of
additional indebtedness would result in increased debt service obligations. Holders of any debt
securities or preferred shares wou ld possess preferential rights and privileges senior to those of
holders of our ordinary shares in the event of liquidation. Any financial or other restrictive
covenants associated with debt securities could constrain our operations or hinder our ability to
pay dividends to our shareholders.
RISK FACTORS
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Our limited operating history makes it difficult for us to evaluate our future prospects.
We have a relatively limited operating history. Our ability to anticipate the future demand
of our products, develop innovative technologies a nd consistently deliver exceptional products
remains uncertain given our limited historica l data. We have focused on offering new energy
solutions as substitutes for traditional fuel-powered engineering machinery and tractor trucks.
However, we cannot guarantee s uccess in competing within our industries, especially against
traditional engineering machinery compani es expanding into the new energy sector. These
competitors may possess more substantial financial resources, greater brand recognition, and
broader sales channels than we do.
Our business and prospects face various challenges as a result of the foregoing, including
but not limited to our ability to:
. design and manufacture safe, reliable and high-quality engineering machinery and
e-powertrain kits of battery-elect ric tractor trucks continuously;
. build and cultivate a well-reco gnized and respected brand;
. establish and expand our customer base and sales and service network;
. successfully market our products while providing superior post-sale and ancillary
services;
. properly price our products and services;
. improve and maintain our operational efficiency;
. maintain a reliable, high-p erformance and scalable technology infrastructure;
. attract, nurture, retain and motivate our talent;
. anticipate and adapt to changing market conditions, including technological
advancements and changes in competitive landscape; and
. navigate an evolving and complex regulatory environment.
Failure to address any or all of these challenges could have a material adverse effect on our
business, prospects, results of operations, and financial condition.
During the Track Record Period and for the fores eeable future, our revenue primarily depended
and will continue to depend on a limited number of models.
We are a fast-growing manufacturer of new energy engineering machinery. Starting with
our first model, the five-tonne battery-electri c loader model, the BRT951EV, in December 2019,
we have expanded our loader lineup to include a fleet of three-tonne to seven-tonne
battery-electric loaders. Our current wide-body dump truck lineup includes three main
models, the BRT90E, the BRT105E and BRT 120E, which are designed for heavy-load
downhill and/or uphill operations.
RISK FACTORS
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We anticipate that our revenue will continue to depend primarily on our current product
offerings. If our current product offerings and future pipelines do not meet customer
expectations or if we fail to deliver them within our projected timelines, budget and volume
targets, our future sales may decline. Since our business will rely on a limited number of models
for the foreseeable future, any delays or negativ e market reception issues to a particular model
could have a material adverse effect on our sales volume, business, prospects, results of
operations, and financial condition.
Our products might not meet customers’ performa nce expectations and could potentially contain
defects.
Our products may not meet customers’ performance expectations, and we cannot
guarantee that they will be free from defects or operate without issues during their use. For
example, customers may have specific expectatio ns regarding the duration of battery life for our
products. If the actual battery life falls short of expectations, it may lead to dissatisfaction,
particularly if it impacts the overall operational time and efficiency of the engineering
machinery or tractor trucks. Moreover, the sta bility and robustness of our products might be
influenced by various factors, including the operating skills of the operators, the duration of
usage, the length of time for which the product is used continuously, and the conditions under
which it operates, such as extreme weather and rug ged terrains. If our products exhibit a higher
failure rate influenced by factors beyond our control, our customers may become dissatisfied.
Any product defects or deviations from expected performance could lead to reputation damage,
negative publicity, revenue loss, delivery delays, product recalls, product liability claims, and
significant expenses such as warranty costs, w hich could materially and adversely affect our
business, prospects, results of operations, and financial condition.
The design and manufacturing processes fo r our products are complex and may contain
latent defects and errors that can lead to subpar performance or cause property damage or
personal injuries. Furthermore, the quality of raw materials and components sourced from third
p a r t i e sm a yh a v ed e f e c t so rq u a l i t yi s s u e st h a tcan substantially affect the overall mechanical
structure and functionality of our products. Due to the complexities associated with advanced
and emerging technologies, defects and errors may emerge over time. We have limited control
over the ongoing consistent performance of mac hinery components and third-party services,
which may not align with our expectations. Although we conduct internal testing before product
delivery, our ability to assess the long-term performance of our products is constrained by a
limited historical perspective. There is no assur ance that we will be able to identify and rectify
product defects in a timely manner or at all.
Furthermore, we possess limited experience in testing, delivering, and servicing our
products. At each stage of testing, delivering, and servicing of our products where manual
operations are required, there exists the possibility of human errors, negligence, or
non-compliance with protocols by our employees or third parties. Such human errors could
result in our products failing to perform or operate as expected. We cannot assure you that we
will be able to entirely eliminate h uman errors from our operations.
RISK FACTORS
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Our long-term results hinge on our ability to successfully introduce and market new products and
execute our planned business initiatives. H owever, this endeavor may expose us to new and
increased challenges and risks.
The success of our business expansion and su stained growth depends on our ability to
broaden our range of product offerings, set competitive pricing for our products, and secure a
substantial market share while maintaining co st efficiency in our design and manufacturing
processes. Moreover, it is essential to advance our technological capabilities in areas such as
remote and autonomous operation systems, e-power train, electrical and electronic architecture,
vehicle control units (VCU), thermal managemen t, and battery systems. However, there is no
guarantee that our introduction of new products or enhancements to existing models will attain
the anticipated level of market acceptance or market share, if any. We cannot assure you that we
will not encounter significant delays when entering new markets or launching new products in
the future .
Furthermore, our reliance on our suppliers for raw materials and key components
introduces potential delays in meeting our production and commercialization timelines. There is
no assurance that we will be able to do so without encountering substantial delays and cost
overruns. Factors beyond our control, such as s upplier and vendor issues, may exacerbate these
difficulties, potentially impeding our ability to meet product commercialization schedules and
customer requirements.
Delays in delivering new products or models, or their failure to perform as expected or
their poor reception in the market, could result in negative publi city regarding our research and
development capabilities or product offerings, which could have a material adverse effect on our
growth prospects, potentially hindering our efforts to establish or expand our market share. As
part of our strategy to introduce new products and refine existing ones, we expect to allocate a
substantial amount of capital towards research and development, product refinement, and sales
and marketing. Failure to successfully execute our long-term growth strategy could materially
and adversely affect our business, prospects, results of operations, financial condition, and cash
flows.
Since 2023, we have initiated several new business ventures, leveraging our technological
and engineering expertise to provide customers with autonomy solution s, energy transition
solutions, and photovoltaic energy system. However, we have limited history in executing these
initiatives. If we are not able to successfully execute thes e initiatives as planned, or if they do not
yield the positive results as expected, our busines s, financial condition, results of operations,
cash flows, and prospects would be ma terially and adversely impacted.
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Our historical growth rate may not be indicative of our future performance. If we fail to scale our
business operations or manage our future growth e ffectively while attempting to rapidly expand,
our results of operation could be adversely affected.
We have experienced significant growth in the past several years. Our revenues increased
significantly from RMB360.1 million in 202 2 to RMB463.7 million in 2023 and further to
RMB635.5 million in 2024. We plan to further scale our business operations by, among other
things, investing in advanced technologies, enriching our product offerings, strengthening our
brand recognition, expanding our sales and marketing network, and executing our new business
initiatives. Our future operating results will depend to a large extent on our ability to manage
our expansion and growth successfully.
However, we cannot assure you that we will be able to manage our future growth
effectively and sustain our historical growth rates due to numerous risks associated with our
business expansion efforts, including but not limited to:
. successfully executing our growth strategies and business initiatives, including our
autonomy solutions, energy transition solutions, and photovoltaic energy system;
. managing the increased complexity of a l arger and expanding organization with a
greater number of employees across diverse functions;
. controlling expenses and investments to accommodate the expected growth in
operations in a cost-effective manner;
. establishing or expanding our design, manufacturing, as well as sales and service
facilities; and
. enhancing our administrative infras tructure, systems and processes.
Any failure to manage our growth effectively could materia lly and adversely affect our
business, prospects, results of operations, financial condition, and cash flows.
We may encounter cost increases or disruptions in the supply of raw materials or other components
used in our products.
We incur substantial cost of sal es associated with the procurement of raw materials and
components necessary for manufacturing and ass embling our products. The prices of these raw
materials and components are subject to fluctuations and influenced by factors beyond our
control, including market conditions, inflati on, supply chain shortages, and global demand for
these materials and components, all of which coul d adversely affect our business and operating
results.
Specifically, fluctuations in the price of LF P batteries significantly affected our cost of
sales during the Track Record Period. The principal raw materials and components that we use
in the production of our products are batteries. We incurred costs of RMB141.3 million,
RMB163.2 million and RMB229.8 million in pro curement of LFP batteries in 2022, 2023, and
2024, accounting for 39.2%, 35.2% and 36.2% of our total revenue during the corresponding
years.
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The average price of LFP battery experienced a decrease from 2018 to 2021, and an
increase in 2022, and a decrease si nce 2023. These fluctuations reflected the market demands for
LFP batteries. The average price of LFP battery is expected to maintain a decrease trend in the
near future, according to CIC.
In 2022, we pre-stocked LFP batteries as their p rice surged, leading to a relatively higher
cost of raw materials recorded in 2022 and 2023. The average procurement price of LFP
batteries in 2024 declined by 41% compared to that in 2022, reflecting our improvement in cost
efficiency.
Our operations are particularly dependent on a stable supply of high-quality battery cells.
We are exposed to multiple risks related to the availability and cost of batteries, including but
not limited to:
. the potential failure or reluctance of batte ry manufacturers to scale up production or
establish facilities that can deliver the required quantities and specific chemistries of
batteries;
. disruption in the battery supply due to ma nufacturing defects or recalls by battery
manufacturers; and
. rising cost or reduced availability of raw materials such as lithium, nickel, and cobalt,
which are critical for battery production.
Furthermore, currency fluctuations, tariffs, or fluctuations in petroleum supply, along with
other economic or political conditions, may lead to significant increases in shipping costs and
the prices of raw materials or components. Any substantial increase in these costs would raise
our operating expenses and could potentially reduce our profit margins.
The potential unavailability, reduction, or elim ination of favorable government policies could
materially impair our position in the new en ergy engineering machinery industry.
The industries in which we operate have significantly benefited from various governmental
policies aimed at promoting the adoption of new energy solutions, including tax rebates, grants,
subsidies, preferential regulations, and dir ect encouragement from local governments. The
decision of our customers to adopt battery-electric engineering machinery and tractor trucks is
largely influenced by government policies.
To date, the PRC governments have promulgated a series of policies to strengthen the
supervision over traditional fuel-powered en gineering machinery and tractor trucks and
encourage the promotion and application of new energy engineering machinery and tractor
trucks. For example, in October 2021, the Sta te Council promulgated the Action Plan for
Carbon Dioxide Peaking Before 2030 ( 《2030 年前碳達峰行動方案》) ,w h i c hp r o p o s e dt oa c t i v e l y
expand the application of new and clean energy in transportation. The Xi’ an Motor Vehicle and
Off-Highway Mobile Machinery Pol lution Prevention Regulations ( 《西安市機動車和非道路移
動機械排氣污染防治條例》), enacted in January 2021, propose an information sharing
mechanism to prevent pollution from off-hig hway mobile machinery and motor vehicles,
supporting the elimination of high-emission machinery and vehicles. Similarly, the 14th
Five-Year Plan for Air Quality Improvement in Zhejiang Province ( 《浙江省空氣質量改善「十
四
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五」規劃》), implemented in May 2021, emphasizes the p romotion of new energy and clean energy
off-highway mobile machinery, as well as the elimi nation, replacement, or clean transformation
of high-energy-consumption and high-pollution non-road mobile machinery. Furthermore, the
Announcement on the Areas Prohibited fro m Using High-Emission Off-Highway Mobile
Machinery by the People’s Government of Beijing ( 《北京市人民政府關於劃定禁止使用高排放非
道路移動機械區域的通告》), published in July 2021, stipulates that certain areas of Beijing
prohibit the use of high-emission off-highway m obile machinery. In addi tion, the Air Pollution
Prevention and Control Work Action Plan for 2023 in Chengdu, Sichuan ( 《成都市2023 年大氣污
染防治工作行動方案》), enacted in March 2023, proposes measures to control vehicle numbers
and reduce fossil fuel consumption, formulating detailed strategies for replacing
non-commercial vehicles that meet or are b elow the National IV emission standards ( 國四排
放標準) with new energy vehicles.
However, if these incentives were unexpectedly reduced or withdrawn, it could dissuade
potential customers from adopting new energy solutions, especially the perception of high initial
investment costs, despite the long-term benefits of lower energy consumption and maintenance
expenses. Given the crucial role these incenti ves play in our industries, any adverse changes
might materially and adversely affect our busines s, prospects, results of operations, financial
condition, and cash flows.
Our products utilize battery cells, which, if not appropriately managed and controlled, have the
potential to catch fire or vent smoke and flame. Battery deterioration may negatively influence the
decision of potential customers regarding whether to purchase our products.
Our products utilize battery cells, which in rare instances can rapidly release stored energy,
generating significant heat, smoke and flames. Such incidents may ignite nearby materials and
additional battery cells. Our inability to effectively manage and mitigate the risk of property
damage and personal injuries stemming from battery fires may lead to a loss of brand reputation
and market share. Despite our efforts and investments in battery safety enhancements, there is
no assurance that we can completely prevent failures in the field or during testing, which could
expose us to lawsuits, product recalls or redesign efforts, all of which would be
resource-intensive and costly. Furthermore, negative public perceptions regarding the
suitability of battery cells for engineering machinery or tractor trucks or any incidents
involving these cells, including those not related to our products, could significantly impact our
business.
In addition, we maintain a substantial inventory of battery cells at our manufacturing
plants, where mishandling of battery cells may disrupt our manufacturing operations. While we
have implemented safety protocols for cell ha ndling, any related safety issues or fires could
disrupt our operations, potentially requiring safety recalls and leading to adverse publicity.
Failures in competitors’ products that use similar battery technologies may indirectly lead to
negative publicity for us, which would have a material adverse effect on our business, prospects,
results of operations, financial condition, and cash flows.
Furthermore, the operation time of our products on a single charge diminishes primarily
due to usage, the passage of time and chargin g patterns. For example, frequent usage and
charging can accelerate the deterioration of a battery’s capacity to hold a charge, thereby
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reducing operational time and potentially dissuading potential customers. We cannot assure
ongoing improvements in the cycle performance of our battery packs, which could impact our
marketing and sales efforts.
Our products are subject to mandatory standards, and any failure to meet such standards would
have a material adverse effect on our business, pro spects, results of operations, and financial
condition.
We are required to comply with various mandatory standards and technical norms during
the manufacturing of our products in connection with, among others, technical requirements,
safety and noise limits. Non-compliance with these mandatory standards could disrupt or
restrict our operations, diminish our competitiv e standing, and result in substantial compliance
expenses, which would have a material adverse e ffect on our business, prospects, results of
operations, and financial condition.
Our business success depends to a great extent on our research and development capabilities. Any
underperformance in our technology and researc h and development endeavors may adversely affect
our competitiveness and profitability.
Our business success depends to a great extent on our research and development
capabilities. We have strategi cally conducted the majority o f our research and development
in-house, covering areas such as remote and autonomous operation systems, e-powertrain,
electrical and electronic architecture, VCU, the rmal management and battery systems. We have
made substantial investments in our research an d development efforts. In 2022, 2023 and 2024,
our research and development costs amounted to RMB44.9 million, RMB68.6 million, and
RMB81.7 million, respectively, accounting for 12.5%, 14.8%, and 12.9% of our total revenues,
respectively.
The industries in which we operate are characterized by high technical complexity and
rapid evolution, requiring significant resources to enhance our research and development
capabilities to lead in technological innovation s and sustain our competitiveness. Therefore, we
expect that our research and development c osts will continue to be significant.
Furthermore, research and development activ ities inherently involve uncertainties. The
direction of our research and development efforts may not always align with market needs,
technological advancements, or industry trend s. There can be no assurance that our endeavors
in research and development will yield viable outcomes. Failures could arise from shifts in
market demand, technological challenges, or unf oreseen trends in technological development.
As a result, our significant investments in research and development may not always yield
expected returns or contribute proportionally to our business growth.
In the event of underperformances in our t echnology and research and development
initiatives, our competitive standing could be compromised, resulting in material adverse effects
on our business, reputation, results of operations and prospects.
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Any issues or delays in scaling and maintaining ope rations at our existing manufacturing plants or
establishing new manufacturing plants could negatively affect the production of our products.
We manage e-powertrain manufacturing and complete assemblies of our loaders at our
own manufacturing plants in Zaozhuang, Shandong and Wuhan, Hubei. We undertake the
manufacturing of the e-powertrain kits for battery-electric wide-body dump trucks and
battery-electric tractor trucks in Wuhan. Additionally, we plan to build another loader
manufacturing plant in Lanxi, Zhejiang, whi ch is expected to commence operations in 2025,
with a design capacity of 5,000 units of battery-e lectric loaders. We are currently in the process
of establishing a wide-body dump truck manuf acturing plant in Xiangtan, Hunan, which is
expected to commence operations in 2025, with a design capacity of 2,000 units of
battery-electric wide-body dump trucks.
Maintaining and expanding our manufacturing plants, as well as establishing new ones,
will require substantial capital resources. There is no guarantee that we can complete these
constructions in a cost-effective manner or rec oup these investments through our production
and sales. Any construction delays or budget o verruns could adversely affect our financial
condition, production capacity, and results of operations.
The current leases for our plant in the Zaozhuang plant will expire in July 2026. If we fail
to renegotiate and renew these leases before they expire, it could disrupt our production and
operations, which would have a material advers e effect on our manufacturing capabilities.
Our manufacturing plants, filled with engineering machinery, raw materials and
components, expose both employees and visitors to heightened risks of bodily injury. These
risks arise from interactions with heavy equipment, the complex nature of mechanical
operations, and potential exposure to hazardous materials. Moreover, the conditions within
these plants can lead to accidents unless safety p rotocols are strictly enforced and updated on a
regular basis. Any resulting bodily injuries at o ur manufacturing plants, regardless of our fault,
could have a material adverse effect on our business and financial operations.
Additionally, in accordance with PRC laws and regulations, construction projects are
subject to extensive government oversight and a pproval processes, including but not limited to
project approvals and filings, approvals for construction land and project planning,
environmental protection permits, pollution discharge licenses, drainage permits, work safety
approvals, fire protection clearances, and inspections and acceptance by relevant authorities.
Entities operating these construction projects may face administrative uncertainties, fines or
project use suspensions, any of which would materially and adversely affect our business
operations.
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We depend on third-party manufacturers for the p roduction of components and the assembly of our
battery-electric wide-body dump trucks. If thes e manufacturers become unwilling or unable to
deliver these services, fail to fulfill their respons ibilities, or do not comply with applicable laws and
regulations, we may not be able to find altern ative manufacturers in a timely manner or on
favorable terms, which could a dversely impact our business.
We currently outsource the manufacturing of certain components and the assembly of our
battery-electric wide-body dump trucks to third -party manufacturers. T his arrangement allows
us to focus on product design, research and development, and manufacturing core components,
while leveraging the expertise and manufacturing capacities of these third -party manufacturers
in other machinery components and assembling processes to ensure cost efficiency and
production quality aligned with our designs and specifications. We may consider similar
outsourcing arrangements for other products or components in the future.
However, outsourcing exposes us to various risks beyond our control, including
manufacturing delays if third-party manufacturers fail to meet agreed timelines or experience
capacity limitations. We could also face disput es with third-party manufacturers and may be
affected by adverse publicity related to third-party manufacturers, whether or not it directly
pertains to our collaboration. Furthermore, the perception of the quality of products and
components manufactured by thir d-party manufacturers could negatively impact our ability to
position ourselves as a premium brand. Despite our involvement in the supply chain and
manufacturing process, we cannot assure that t hird-party manufacturers can always meet our
quality standards, specifications or regulatory requirements.
Furthermore, we may be unable to enter into ne w agreements or renew existing agreements
with third-party manufacturers on terms and conditions acceptable to us, which could disrupt
our operations. If our existing manufacturing partners fail to provide adequate and qualified
services, we may need to seek new partnerships or significantly expand our in-house production
capacity to compensate for the reduction in production capability. However, there is no
assurance that we would be able to successfully establish new agreemen ts with alternative
manufacturers or expand our own production c apacity in a timely or acceptable manner, if at
all. The costs and time required to complete such transitions and ensure that products
manufactured by new third-party manufacturers meet our quality standards, specification and
regulatory requirements may be higher than anticipated. Any of the foregoing could adversely
affect our business, results of operations, financial condition and prospects.
We depend on our suppliers to provide raw materials and components necessary for our products.
Suppliers may fail to deliver the required materials and components according to our schedule and
at prices, quality levels and volumes that meet our standards.
We rely on our suppliers for raw materials and components essential for our products. Our
supply chain is exposed to various risks, including potential delivery failures or shortages of raw
materials and components from multiple sources. Although we strive to mitigate these risks by
diversifying our suppliers, we from time to time are required to purchase specific components
from a limited number of sources. Failure to secu re the necessary materials or components in
accordance with our specifications, such as schedu le, price, quality, and volume, would result in
a loss of production capability, thus materially an d adversely affecting our business, prospects,
results of operations, financial condition, and cash flows.
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As we have limited control over our suppliers and their business practices, we cannot
assure the consistent quality of the raw materi als and components they provide. Any defects or
quality issues with these raw materials and components, as well as noncompliance incidents
involving our third-party suppliers, could lead to quality problems and negative publicity
associated with our products, potentially dam aging our brand image and affecting our business,
prospects, results of operations, financial condition, and cash flows. In addition, we cannot
guarantee that our suppliers adhere to ethical business practices, including environmental
responsibilities, fair wage practices, and compliance with child labor laws, among others.
Failure to demonstrate compliance might compel us to seek alternative suppliers, which could
increase our costs and result in delayed produc t delivery, product shortages or disruptions in
our operations.
Furthermore, identifying alternative su ppliers for raw materials or developing
replacements for highly customized components can be time-consuming and costly. Any
disruption in the supply of raw materials or components, whether from single or multiple
sources, could temporarily halt production until we qualify a new supplier or secure the required
material or component. There is no assurance th at we would successfully secure alternative
supplies in a timely or acceptable manner, or at all. Changes in business conditions, force
majeure events, government changes or other unforeseen factors beyond our control could also
impact our suppliers’ ability to deliver raw materials and components in a timely manner.
Moreover, if we experience a significant increase in demand or need to replace our existing
suppliers, we cannot assure you that additional s upplies will be readily available on favorable
terms or at all, or that any supplier will allocate sufficient supplies to meet our requirements or
fulfill our orders in a timely manner. Any of the foregoing could materially and adversely affect
our business, financial condition, results of operations, and prospects.
Our supplier concentration exposes us to supply chai n risks, particularly concerning components of
our products.
During the Track Record Period, we procured a substantial portion of our purchases from
major suppliers. In 2022, 2023 and 2024, purchases from our top five suppliers in each year
accounted for 68.5%, 66.3% and 56.7% of our tota l purchasers for the respective years, and
purchases from our largest supplier accounted for 35.4%, 39.4% and 24.9% of our total
purchases for the respective years. These purchases are primarily associated with components
for our products, including motors, batteries, controllers, gearboxes, thermal management
parts, chassis and cabins. This high dependency o n major suppliers exposes us to concentration
risks.
We expect to continue procuring components from these suppliers. In particular, we
require a consistent supply of high-energy density battery cells from reputable suppliers. Any
difficulties in procuring these b attery cells, may impact our ability to promptly deliver products
to our customers, which could lead to a loss of our competitive advantage and existing customer
base.
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While we expect to maintain stable relationships with these suppliers, we cannot guarantee
that we will be able to secure a consistent, high-quality supply from these suppliers. If any of our
major suppliers decides to terminate our business r elationships, we may encounter difficulties in
finding a replacement capable of providing materials or components of equivalent quality at a
similar price. If we fail to secure new suppli ers under similar commercial terms within a
reasonable timeframe, or at all, it could adversely affect our business, financial condition,
results of operations and profitability.
If we fail to effectively manage our inventory, our results of operations and financial condition may
be materially and adversely affected.
We are exposed to significant inventory risks due to various factors such as heightened
competition, new product launches, potential product defects, changes in customer demand and
shifts in customer spending patterns. Effective business operation requires maintaining optimal
inventory levels to ensure timely deliverie s and mitigate risks associated with excess or
insufficient stock.
To manage our inventory effect ively, we implement inventory control policies and use an
inventory software system to manage our inventory and orders. See ‘‘Business — Inventory.’’
However, demand forecasting is inherently uncertain, and significant changes in demand can
occur after orders are placed but before deliv ery. Incorrect demand forecasts can lead to
inventory obsolescence and shortages, resultin g in inventory write-downs or sales at reduced
prices, which would adversely impact our profitability. We recognized impairment loss on
inventory of RMB25.7 million, RMB20.9 milli on, and RMB17.4 million in 2022, 2023 and 2024,
respectively. Moreover, underestimating pr oduct demand may cause production delays if
manufacturers cannot scale up production qui ckly, potentially causing delays in product
delivery and damaging our reputation.
Any of the foregoing could materially and adversely affect our results of operations and
financial condition. As we plan to expand our product lineups, we may continue to face
challenges in effectivel y managing our inventory.
Our financial results may fluctuate due to changes i n the fair value of our financial assets measured
at fair value through other comprehensive income (‘‘FVOCI’’).
Our financial assets measured at FVOCI rep resent our equity investment in unlisted
companies. Our financial asse ts measured at FVOCI amounted to RMB18.9 million, RMB19.1
million and RMB41.7 million as of December 31, 2022, 2023 and 2024, respectively.
The fair value of our equity investments in unlisted companies is influenced by market
fluctuations and factors beyond our control, including the performance of the investee
companies, economic conditions, and industry trends. Any change in these factors can lead to
significant volatility in the fair value of our FVOCI financial assets, which may result in
substantial gains or losses being recognized in o ther comprehensive income, thereby affecting
the overall results of our operation.
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We have been and may become subject to product liability claims, which could harm our financial
condition if we are not able to successf ully defend against such claims.
The industries in which we operate are still in the early stage and emerging technologies
used in our products subject us to risks of product liability claims. Defects or poor performance
can arise due to design flaws, defects in raw materials or components, and degradation or
manufacturing difficulties, which can affect the quality and performance of our products.
Although we implement a quality control system covering product design and development,
supply chain management and production pro cess, we cannot assure you that our quality
control measures will be as effective as we expect. Any failure in our quality control would lead
to product defects, and in turn, could cause our customers to file product liability claims against
us. Any actual or perceived defects, or poor performance of our products could result in the
replacement or return of our products, shipment delays, increases in customer service and
support costs and damage to our reputation, all of which could have a material adverse effect on
our business. During the Track Record Period, we had been subject to one litigation in
connection with product liability in which we refunded the total purchase price of RMB2.9
million to the customer and compensated the customer in an amount of RMB180,000 for
property damages caused to a third party. This case involved a collision caused by one of our
battery-electric wide-body dump trucks due to reduced braking power of such dump truck
causing the customer’s compensation for third-party property damages of RMB180,000. This
litigation has not had a material impact on our bus iness operations or financial performance.
Defending against product liability claims is costly and can impose a significant burden on
our management and resources. Further, ther e is no guarantee that we can obtain favorable
final outcomes in all cases. If we fail to defend ou rselves in such product l iability claims, we may
be subject to substantial monetary compensation, which may adversely affect our results of
operations and financial condition. Whether we successfully defend against a product liability
claim or not, such claim could generate significant negative publicity about our products and
business, potentially hindering or preventing the commercialization of our future products,
which would have a material adverse effect on our brand, prospects, financial condition, and
operational results.
We are exposed to risks associated with produc tr e t u r n s ,r e f u n d so rr e p l a c e m e n t sa sw e l la s
products we provided to our customers for trial use purposes. We or our suppliers may, voluntarily
or involuntarily, initiate product recalls or take other similar actions.
We are exposed to risks associated with product returns, refunds, or replacements due to
potential defects, non-compliance with specifi cations, major component failures or safety
concerns. Depreciation in the re turned products typically redu ces their resale value. Managing
returns or replacements can lead to increased inventory levels, complicating inventory
management and raising associated costs. Furthermore, a high rate of returns or frequent
replacements can harm customer satisfaction over our products and our reputation.
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As part of our marketing strategy, we offer trial use of our engineering machinery at
minimal or low cost to allow customers to evaluate the economic and operational benefits of our
products. However, the decision of customers to purchase after a trial depends on various
factors such as product functionality and operat ional costs, and there is no guarantee that trials
will convert into sales. Customers may opt to reduce the quantity of products they acquire or
abstain from purchasing after assessing their sp ecific needs. Any dissatisf action arising from the
trial process may have adverse effects on our customer base and potential market share.
Products returned from trials typically have a reduced resale value and exert pressure on our
inventory management, which may adversely affect our results of operations and financial
condition.
Moreover, potential future recalls of our products, whether due to our own findings or
regulatory requirements, could lead to adverse publicity, damage to our brand, and imposition
of the financial liability for the associated co sts. During the Track Record Period and up to the
Latest Practicable Date, we did not experience any material product recalls that adversely
affected our business. However, future instances might be necessary if any of our products,
including any raw materials or components sourced from our suppliers, are found to be
defective or noncompliant with applicable laws and regulations. Whether these recalls are
voluntary or involuntary or are a result of raw materials or components engineered or
manufactured by us or our suppliers, they could result in substantial expenses and have an
adverse impact on our brand image, business, pr ospects, results of operations, financial
condition, and cash flows.
We depend in part on our distributor network for the sale of our products. We may encounter
challenges in efficiently expanding our distr ibutor network. Our limited control over our
distributors exposes us to significant risks.
We distribute our products through various ch annels, including distributors. In 2022, 2023
and 2024, our revenue generated from sales through distributors amounted to RMB196.6
million, RMB183.8 million and RMB234.3 milli on, respectively, contributing to 55.6%, 40.3%
and 37.7% of our total revenue from sales of products, respectively.
We rely on the extensive market reach and establ ished relationships that our distributors
have with end users. Furthermore, we cannot assure the successful establishment of partnerships
with new distributors and the renewal of contracts with our existing distributors upon their
expiration.
We maintain limited control over the actions and business plans of our distributors,
especially independent distributors. These parties may engage in various forms of misconduct,
even if we prohibit them from doing so in our agreements with them, including but not limited
to:
. breaching our agreements, such as unauthorized sales of products or distribution into
regions that violate exclusive distribution rights;
. unauthorized or improper use of our brand name;
. inadequate promotion of our products;
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. failing to provide adequate trai ning and services to end users; and
. violating the anti-corruption laws in the PRC and other jurisdictions where we
operate.
Any misconduct by our distributors could have a material adverse effect on our results of
operations, reputation, brand recognition and market position.
Failure of our distributors to comply with our agreements or relevant legal and regulatory
requirements could tarnish our brand image and disrupt our sales. If we become aware of any
distributor not fulfilling its obligations under our agreements or violating laws, regulations or
standards, to the extent that we are involv ed in negative publicity, legal actions or
administrative penalties, our ability to effectively market and sell our products may be
adversely affected.
Ineffective management of risks associated with o ur finance lease program, particularly concerning
the repurchase guarantee, could hav e adverse effects on our business.
To alleviate the substantial capital expenditures our customers face when purchasing new
energy engineering machi nery and tractor trucks, we have strategically partnered with finance
lease companies to provide our customers with alter native financing solutions, facilitating their
access to necessary capital.
As our business continues to grow, we anticipate an increase in the volume of finance leases
utilized by our customers. If the finance lease companies we partner with fail to adequately fund
these arrangements, our customers might t urn to competitors who offer more attractive
financing options or terms, resulting in the erosion of our existing customer base and impede
our future business growth.
Additionally, the repurchase guarantees incl uded in our finance lease agreements expose us
to heightened credit default risks. We follow i ndustry norms by providing repurchase guarantees
to finance lease companies, under which we are o bligated to make paymen ts to the finance lease
companies for the outstanding amounts due from the customers and repossess our products
from these finance lease companies if our customers default on their payments. During the
Track Record Period and up to the Latest Pra cticable Date, we had not encountered any
instances requiring the fulfillment of guaran tee obligations. As of December 31, 2022, 2023 and
2024, our maximum exposure to such guarantees was RMB17.4 million, RMB121.1 million and
RMB344.1 million, respectively. Failure to co ntrol and manage these risks may result in
substantial costs related to product repurchases, which would subject us to financial pressure
and have a material adverse effect on our business.
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Our product sales rely in part on affordable interest rates and the availability of credit and finance
lease services. A significant incr ease in interest rates and lease r ates could have a material adverse
effect on our business, prospects, result s of operations, and financial condition.
The sales of our products rely in part on our cust omers’ access to favorable interest rates
and readily available credit and finance lease services. Any increase in interest rates, including
those applied to installment payments for our products, and the tightening of lending criteria in
financing services, may render our products less affordable to customers. This could potentially
divert prospective customers toward more cos t-effective alternatives, leading to reduced
profitability for us and adversely affecting our business, prospects, financial condition, results
of operations, and cash flows.
We are exposed to credit risk from our custome rs, and any failure to collect our trade and other
receivables in a timely manner may adversely a ffect our financial condition and results of
operations.
Our trade and other receivables consist pri marily of amounts due from our customers in
the ordinary course of our business. As of D ecember 31, 2022, 2023 a nd 2024, our trade and
other receivables amounted to RMB257.8 milli on, RMB435.1 million and RMB555.8 million,
respectively. Despite our efforts to assess the creditworthiness of our customers, we cannot
assure you that our customers will fulfill their obligations to us in the future.
Various factors beyond our control, such as economic downturns and customer insolvency,
may hinder or prevent us from collecting our trade and other receivables in a timely manner or
at all. In 2022, 2023 and 2024, we incurred impai rment loss on trade and other receivables,
contract assets and financial guarantee iss ued, amounting to RMB26.9 million, RMB38.2
million, and RMB83.1 million, respectively.
Failure to effectively manage the credit risk a ssociated with our trade and other receivables
and collect payments in a timely manner would have material and adverse effects on our
business, prospects, financial condition, results of operations, and cash flows.
We are subject to the risks associated with third-party payments.
In 2022, 2023 and 2024, the number of customers and distributors who settled payments
through third-party channels was nine, eight a nd 15, respectively. We have ceased to accept any
third-party payment starting from November 1, 2024. See ‘‘Business — Third-party Payment
Arrangement.’’ We are subject to the risks relating to such third-party payments, including (i)
potential claims from third-party payors seeking reimbursement of funds as they may not have
been contractually obligated to us, and possib le claims from liquidators representing these
third-party payers; and (ii) potential money laundering risks as we have limited knowledge
about the source and purpose of the funds utilized by the third-party payers. In the event of any
claims or legal actions, whether civil or criminal, initiated against us by third-party payers or
their liquidators regarding third-party payments or for violation or noncompliance of laws and
regulations, we would need to allocate signific ant financial and managerial resources to defend
ourselves, and we may be forced to comply with the court ruling and return the payment for the
products that we sold and services that we provided, and our business, prospects, financial
condition, results of operations, and cash flows may be adversely affected.
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We may not be able to accurately estimate the supply and demand for our products, which could
result in various inefficiencies in our supply cha in, manufacturing and inventory management and
may adversely affect our business, prospects, fina ncial condition, results of operations, and cash
flows.
We need to forecast and pre-order essential raw materials or components from our
suppliers ahead of the planned delivery to our cust omers. Our operating history provides limited
historical data to guide these forecasts. Overes timating or underestimating our requirements can
result in either excess or insufficient inventory, u ltimately affecting our manufacturing efficiency
and financial results adversely.
Furthermore, if we fail to place orders for adequate quantities of raw materials or
components in a timely manner, it would lead to delays in product delivery to our customers,
thereby adversely impacting our business, prospe cts, financial condition, results of operations,
and cash flows.
Our business depends substantially on the efforts of our key employees and qualified personnel.
Should they be unable to allocate sufficient time a nd resources to our business, or if we encounter
challenges in attracting, retaining and hiring key management, technical and engineering
personnel, our competitive position could be adversely affected.
Our success depends substantially on the continued efforts of our key employees and
qualified personnel. If one or more of our key employees and qualified personnel fail to devote
sufficient time and resources in support of our operation and continued growth, or if they
terminate his or her services with us, we might not be able to replace them easily, in a timely
manner, or at all. The departure of these key personnel could cause disruption to our business
and would incur additional expenses to recruit, train and retain qualified personnel to replace
them.
Professionals with sufficient training in t he development and marketing of new energy
engineering machinery or tractor trucks may be difficult to hire, and we will need to expend
significant time and expenses training our exist ing and prospective employees. Furthermore, as
we have a relatively limited operating history, our ability to train and integrate new employees
into our operations may not meet the growing demands of our business, which may materially
and adversely affect our ability to grow our business and our results of operations.
The industries in which we operate are characterized by high demand and intense
competition for top talent. In recent years, the aver age labor cost, particula rly for highly skilled
and experienced personnel, has been rising steadily. We cannot assure you that there will be no
significant increase in our labor cost, especially as we continue to expand our business and
operations. Despite an increa se in labor costs, we may still not be able to attract or retain
qualified staff or other highly skilled employees. As our brand gains prominence, the risk of
competitors or other companies attempting to recr uit our talent increases. Each of our executive
officers and key employees has entered into an employment agreement and a non-compete
agreement with us. However, we may be subject to le gal proceedings arising from disputes over
non-compete provisions. If any of our key management, technical and engineering personnel
joins a competitor or forms a competing company, we may lose customers, know-how and key
professionals and staff members, which will ad versely and materially impact our competitive
position.
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We may not succeed in establishing, maintaining and strengthening our brand, which would
materially and adversely affect customer acceptance of our products, business, prospects, financial
condition, results of operations, and cash flows.
Our business and prospects rely on our abilit y to establish, maintain and strengthen our
brand. Failure to project a positive brand image c ould result in losing opportunities to cultivate
a growing and loyal customer base. The success of our branding efforts depends on our ability
to consistently deliver high-quality products and services. If we fail to meet customer
expectations with our products or services, our brand recognit ion and market acceptance will
be eroded. Additionally, incidents involvi ng our products and services, particularly those
involving safety issues or defects, whether or n ot attributable to us, could generate adverse
publicity. In China, where social media is extensiv ely utilized, any negative publicity, regardless
of its accuracy, has the potential to rapidly sprea d, thereby undermining customer perceptions
and confidence in our brand.
Our ability to build and strengthen our brand also relies on the effectiveness of our sales
and marketing strategies, including leveraging word-of-mouth referrals, offering trial services to
prospective customers, and implementing cross- selling initiatives. See ‘‘Business — Marketing
Strategy.’’ While we seek to improve resource all ocation through careful selection of sales and
marketing channels, these efforts m ay not achieve the desired results.
We may expand into international markets in the future, which would expose us to various risks,
including adverse regulatory, political, currenc y, tax and labor conditions, which could harm our
business, prospects, results of operations, and financial condition.
As part of our growth strategy, we plan to expand into international markets. Successful
entry into these markets exposes our business operations to a variety of risks, including
unfavorable regulatory environments, political instability, currency fluctuations, taxation
challenges and labor conditions, which could materially and adversely affect our business,
prospects, results of operations, and financial condition. Operating in international markets
requires the compliance with diverse legal, political, regulatory, and societal requirements, as
well as adapting to varying economic conditions within these jurisdictions.
Moreover, international expansion demands extensive coordination across various
jurisdictions and time zones, placing significant requirements on our management resources.
We will be subject to numerous risks associated with international business activities that may
increase costs, affect our capacity to market an d lease our products, and require substantial
managerial attention, including but not limited to:
. ensuring that our products and services meet evolving international regulatory
requirements;
. incurring expenses related to legal actions and liabilities in foreign jurisdictions;
. managing complexities related t o staffing and foreign operations;
. establishing and maintaining relationships with international suppliers and managing
potential supply chain disruptions;
. attracting customers in new international markets;
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. complying with foreign government tax, regulatory, and permit requirements,
including foreign taxes that may not be offset against taxes imposed on us in the
PRC, as well as foreign tax and other laws li miting our ability to repatriate funds to
the PRC;
. managing fluctuations in foreign curre ncy exchange rates and interest rates;
. complying with trade restrictions, tariffs, and price or exchange controls imposed by
both the PRC and foreign governments;
. adapting to foreign labor laws, regulations, and restrictions;
. adjusting to changes in diplomatic and trade relationships;
. operating within legal frameworks and business practices that may favor local
companies over international competitors;
. protecting or procuring intellectual property rights internationally;
. addressing geopolitical factors, natural d isasters, conflicts, terrorism, health
epidemics, and their potential impacts; and
. evaluating the resilience o f international economies.
If we fail to effectively mitigate these risks, our business, prospects, financial condition,
results of operations, and cash flows could be materially impacted.
We are subject to risks associated with s trategic alliances or acquisitions.
We have engaged in and may continue to form str ategic alliances such as joint ventures or
minority equity investments with third parti es to advance our business strategies. These
alliances expose us to various risks, including the sharing of proprietary information, the
possibility of non-performance by third parties, an di n c r e a s e dc o s t sa s s o c i a t e dw i t he s t a b l i s h i n g
new strategic partnerships, any of which may mate rially and adversely affect our business. Our
ability to monitor or control the actions of these third parties may be limited. Negative publicity
or reputational damage affecting any of these strat egic partners could, by association, harm our
own reputation.
In addition, we may pursue acquisitions of assets, technologies, or businesses that
complement our existing operations. These acquisitions often require shareholder approval and
may need licenses and approvals f rom relevant government aut horities in compliance with
applicable PRC laws and regulations, which could lead to delays and increased costs and
potentially disrupt our business strategies if not successfully executed. The integration of new
assets and businesses demands significant attention from our management and could divert
resources away from our existing business, which in turn could have a material adverse effect on
our operations.
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Moreover, acquired assets or businesses may not generate the anticipated financial results.
Acquisitions could result in the use of substantial cash resources, potenti ally result in dilutive
issuances of equity securities, t rigger significant charges related to goodwill impairment and
amortization expenses for other intangible assets, as well as expose us to potential unknown
liabilities of the acquired business. These fac tors would materially and adversely affect our
business, prospects, financial condition, results of operations, and cash flows.
Our operations may be materially and adversely affected if we fail to obtain, maintain and update
licenses, approvals, qualification and certifications that are material to our operations.
The industries in which we operate are highly regulated. Our business operations in China
are regulated by a number of PRC authorities, which jointly and severally regulate major
aspects of our industries in China. We are also required to obtain and maintain the requisite
licenses and approvals required in other jurisdictions where we have business operations.
We have obtained all the licenses and approvals from competent governmental authorities
in all material aspects that are crucial to our operations in China. However, we cannot assure
you that we can successfully renew current licenses required for our business in a timely manner
or that these licenses are sufficient to conduct all of current or future business. As the
interpretation and implementation of existing and future legislations, regulations and policies
governing our business activiti es are evolving, we cannot assure you that we will not be found in
violation of any future legislations, regulations and policies nor any of the legislations,
regulations and policies in effect. If we fail to obtain, renew or maintain any of the requisite
l i c e n s e so ra p p r o v a l so rm a k en e c e s s a r ya n da p p r o priate filings in any of the jurisdictions where
we have business operations, we may be subject to various penalties, including fines,
discontinuation or restriction of our business operations. Any such penalties may damage our
reputation, disrupt our business operations and even terminate our business operations in those
jurisdictions. As such, our results of operations, financial conditions and business prospects
could be materially and adversely affected.
Our products rely on highly technical and complex software and hardware. If these systems contain
errors, bugs, vulnerabilities, or d esign defects, or if we are unsuccessf ul in developing or integrating
such systems or mitigating technical limitation s in such systems, our business could be adversely
affected.
Our products rely on technical and complex software and hardware that may require
ongoing modifications and updates throughout the ir lifecycle. In addition, our products rely on
the capability of this software and hardware to e fficiently store, retrieve, process and manage
data. Our software and hardware may contain errors , bugs, vulnerabilities or design defects, and
may be subject to certain technical limitations . Some of these issues may be difficult to detect
and might only become apparent after the code has been released for external or internal use.
Although we endeavor to promptly and effect ively address any issues we identify in our
products, there is no guarantee that our efforts will be timely, and they may disrupt production
or may not meet the satisfaction of our customers.
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In the design, development and production of our products, we utilize third-party software
and hardware, some of which are licensed to us through licensing agreements, while others are
acquired from experienced business partners through technology transfer transactions.
Integrating these technologies into our produc ts and ensuring the smooth interoperability of
different components are inherently complex and require close coordination with our business
partners, vendors and suppliers. We may fail to detect defects and errors that only surface later
in third-party software and hardware, and we may have limited control over their performance.
The occurrence of software or hardware issues or other challenges related to our
technology or other systems can have a negative i mpact on the customer experience and lead to
dissatisfaction among our customers. If we are unable to prevent or effectively address errors,
bugs, vulnerabilities or defects in our software and hardware, or if we fail to implement software
updates properly or meet customer expectations , it could harm our reputation, lead to customer
attrition, result in revenue loss or expose us to liability for damages, which could have adverse
effects on our business, prospects, financial con dition, results of operations, and cash flows.
Non-compliance with data privacy and protection laws and regulations, whether actual or alleged,
could damage our reputation and discourage customers from purchasing our products.
We are subject to various data privacy and protection laws and regulations in China,
including the PRC Cyber Security Law ( 《中華人民共和國網絡安全法》), which requires service
providers to obtain user consent to collect person al information, because we collect essential
contact information when potential customers interact with us, and operational data related to
our products, which enables us to monitor product performance, detect current or potential
faults, and support our after-sales services. W e have adopted stringent information security
policies and utilize various technologies to safeguard the data we collected. See ‘‘Business —
Data Privacy and Protection.’’
The collection, utilization, and transmiss ion of customer data may impose regulatory and
legislative obligations in China and other jurisdictions, including data breach notifications,
limitations on data use and potential obstacles to acquiring new customer so rs e r v i n ge x i s t i n g
ones. Any violation of customers’ data privacy rights could lead to administrative
investigations, disciplinary actions , civil claims and reputational damage.
Compliance with data privacy, data security, and consumer protection laws, industry
standards and contractual obligations, might in cur significant expenses. Issues arising from
third-party access to and misuse of customer pe rsonal information may require substantial
resources to resolve.
The interpretation and application of persona l information protection laws, regulations
and standards remain uncertain and subject to evolution. We cannot assure you that
governmental authorities wil l not interpret or implement these laws or regulations in ways
that adversely impact our operations. We might become subject to new or additional laws and
regulations concerning personal information protection that could affect our data collection,
analysis, storage, and usage practices. Custome r attitudes toward data privacy are also evolving,
with growing concerns about the extent of data collection, potentially affecting our ability to
access data and enhance our techno logies, products and services.
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Furthermore, the integrity of our data pro tection measures may be compromised due to
system failures, security breaches or cyberatta cks. Failure to comply with applicable laws and
regulations or effectively address data privacy and protection concerns, whether actual or
alleged, could damage our reputation, discourage customers from purchasing our products and
subject us to significant legal liabilities.
Inadequate access to charging infrastructure or incompatibility with the local power systems for
our products may negatively impact the sales of our products.
Demand for our products depends on the availability and quality of charging
infrastructure in the areas where our customers plan to deploy our products. The accessibility
of charging stations may face challenges such as:
. delays or disruptions in the provision of charging services at these stations;
. incompatibility and unavailability of the electrical power grid infrastructure to
support the establishment and operation of charging infrastructure;
. successful incorporation of our products into the charging station networks;
. need for necessary permits, land use rights and regulatory filings to access the
charging infrastructure; and
. the risk of discontinuation of government support for charging infrastructure.
The limited availability of charging infrastr ucture may dissuade pot ential customers from
purchasing our products, and as a result, our business, prospects, financial condition, results of
operations, and cash flows may be ma terially and adversely affected.
If either we or our distributors are unable to adequa tely service our products, or if future warranty
claims arise, it could have a material adverse effect on our business, prospects, financial condition,
results of operations, and cash flows.
We aim to offer our customers a compelling pos t-sale service experience, facilitated by an
extensive range of technical support services. S ervicing and repairing new energy engineering
machinery and tractor trucks di ffer from servicing tr aditional fuel-powered counterparts and
demand specialized skills, including high-voltage training and servicing techniques. There is no
guarantee that our post-sale service arrangements will fully meet our customers’ requirements
and satisfaction.
As we continue to expand, our post-sale ser vice team may face additional pressure,
potentially making it challenging to respond promptly to short-term increases in customer
demand for technical support. Customer behavior and usage patterns may result in
higher-than-anticipated maintenance and repair costs, which could adversely affect our
business, prospects, financial condition, results of operations, and cash flows. We may also
struggle to adapt our technical support offerings to compete with changes in the support services
provided by our competitors. Adjusting to heightened customer support needs without a
commensurate increase in revenue could escalat e expenses, potentially exerting an adverse
impact on our operational outcomes. Failure to address our customers’ service requirements
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adequately or failing to establish a market perception of high-quality support may lead to claims
from customers, including revenue loss or damages, and our business, prospects, financial
condition, results of operations, and cash flows may be materially and adversely affected.
Moreover, expanding into international markets introduces additional risks associated
with providing maintenance and repair services gl obally. Dispatching specialized technicians or
shipping spare parts across borders can escalate costs and introduce delays. Cultural, linguistic
and legal differences can complicate customer s ervice interactions, increasing the risk of
misunderstandings and potential legal reper cussions, and damaging our brand reputation.
Failure to adapt our services to these international complexities may result in reduced customer
satisfaction and increased costs, thereby mat erially and adversely a ffecting our business,
prospects, results of operations, and financial condition.
We accrue warranty expenses for potential claims in connection with repair and
replacement of our products under the warranties we provide based on the sales volume and
the expected unit costs required for warrant y services, which includes the best estimate of
expected settlement amounts under our sales agreements in respect of the sold products that
remain within the warranty peri od. The expected unit costs for warranty services are estimated
based on the frequency of future claims and average costs for each claim. Given our relatively
short history of engineering machinery manufacturing and sales and changes to the historical or
projected warranty experience, we leveraged our industry experience in the estimation of the
frequency of future claims. In 2022, 2023 and 2024, our warranty expenses amounted to
RMB10.3 million, RMB13.4 million, and RMB18.6 million, respectively, representing 2.9%,
2.9%, and 2.9% of the total revenue, respectively.
There is no assurance that these reserves wil l be sufficient to cover future claims. In the
future, we may face significant unexpected warran ty claims, resulting in substantial expenses
that could in turn materially and adversely affect our business, prospects, financial condition,
results of operations, and cash flows.
If our customers alter or modify our products with aftermarket products, or attempt to modify our
products’ charging systems, the products may not op erate properly or compromise operator safety,
which may create negative publicit y and could harm brand and business.
Our customers may opt to alter or modify our p roducts by incorporating aftermarket
components, which may compromise operator safety. Our policy expressly prohibits customers
from making any alterations or modifications to our products, but it is not always possible for
us to prevent our customers from doing so. In addition, the use of improper external cabling or
unsafe charging outlets can expose our customer s to the dangers associated with high-voltage
electricity. These unauthorized alterations an d modifications could diminish the safety of our
products, and any injuries resulting from such changes may generate unfavorable media
coverage, which would negatively affect our bran d and harm our business, prospects, financial
condition and results of operations.
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We have incurred a significant amount of debt and may, in the future, incur additional
indebtedness. Our payment obligations under suc h indebtedness may limit the funds available to us,
and the terms of our current or future debt agreeme nts include or will include restrictive covenants
limiting our shareholding structure, business, and operational flexibility.
As of December 31, 2024, our total loans and borrowings amounted to RMB352.3 million,
consisting primarily of loans from commercial banks in China. We may choose to satisfy,
repurchase, or refinance these liabilities through either public or private equity or debt
financings if we deem such financings available on favorable terms. The fulfillment of these debt
obligations could adversely affect the funds available to us and the amount or timing of any
distributions to our shareholders. If we do not have sufficient cash or are unable to secure
additional financing, or if our use of cash is cons trained by applicable laws, regulations or
agreements governing our existing or future indebtedness, we may not be able to fulfill our
repayment obligations, which may constitute an event of default under the respective
transaction documents. Such an event of default could, in turn, lead to defaults under other
agreements governing our current and future indebtedness, leaving us with insufficient funds to
meet these obligations.
Our borrowings under the short-term loans curre ntly accrue interest at variable rates based
on loan prime rate. As a result, interest rates o n our short-term loans or other variable rate debt
obligations could be higher or lower than current levels. If interest rates increase, our debt
obligations on existing or any future indebtedness would rise, even if the borrowed amount
remains unchanged, resulting in a correspon ding decrease in our net income and cash flows,
including the cash available for servicing our debt.
Furthermore, our current bank borrowings contain specific financial covenants that may
impose restrictions on our operations. Future borrowings may also include similar restrictive
covenants limiting our shareholding structure, business and operational flexibility. Failure to
meet payment obligations, comply with affirmative covenants, or violations of negative
covenants could constitute an event of defau lt on our borrowings. The occurrence of any such
default events may have a material adverse effect on our financial condition, operational results
and cash flow.
Any unauthorized control or manipulation of our pr oducts’ information technology systems could
result in a loss of confidence in us and our products, thereby harming our business.
Our products feature complex information technology systems. We have designed and
implemented security measures intended to prev ent cybersecurity breaches and unauthorized
access to our products and their information technology system s, and we intend to introduce
additional security measures as needed. Nevertheless, there is a possibility that hackers and
other malicious actors might attempt to gain unauthorized access in the future, seeking to
modify, alter or manipulate our products’ softwa re or access data stored within or generated by
our products. Errors and vulnerabilities wit hin our information technology systems may be
subject to probing by third parties and could be exposed and exploited in the future, and
remediation of such breaches may not be prompt or entirely successful.
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Unauthorized access or control of our products or their systems, or any breach of data
security, could result in various risks including harm to our customers, unsafe operational
conditions or product failure, which could result in interruptions in our business, legal claims or
proceedings which may not result in our favor and could subject us to significant liability.
Moreover, regardless of their veracity, reports of unauthorized access to our products,
their information technology systems, or data , as well as any perception that our products or
systems are vulnerable to hacking or lack ade quate safety controls, could have a material
adverse effect on our business, prospects, result s of operations, financial condition, and cash
flows.
We have been and may in the future become, subject to patent, trademark and/or other intellectual
property infringement claims, which may be time-c onsuming, cause us to incur significant liability
and increase our costs of doing business.
We have been and may in the future become party to additional, intellectual property
infringement proceedings. See ‘‘Business — Intell ectual Property.’’ Companies, organizations,
or individuals, including our competitors, ma y hold or obtain patents, trademarks or other
proprietary or intellectual property rights that would prevent, limit or interfere with our ability
to make, use, develop, sell, lease or market our products or components, which could make it
more difficult for us to operate our business.
From time to time, we may receive communica tions from holders of patents, software
copyrights, trademarks, trade secrets or other inte llectual property or proprietary rights alleging
that we are infringing, misappropriating, diluting or otherwise violating such rights. Such
parties have brought and may in the future bring su its against us alleging infringement or other
violation of such rights, or otherwise assert their rights and urge us to acquire licenses to their
intellectual property. For example, our applications for and uses of trademarks relating to our
products, services, or designs, could be found to i nfringe upon existing trademark rights owned
by third parties. In addition, we may not be aware of existing patents or patent applications that
could be pertinent to our business as many patent applications are filed confidentially in one
country and are not published until months following the applicable filing date.
In the event that a claim relating to intell ectual property is asserted against us, our
suppliers or our third-party licensors, or if third parties not affiliated with us hold pending or
issued patents that relate to our products or technology, we may need to seek licenses to such
intellectual property or seek to challenge those patents. Even if we are able to obtain a license, it
could be non-exclusive, thereby giving our co mpetitors and other third parties access to the
same technologies licensed to us. In addition, we may be unable to obtain these licenses on
commercially reasonable terms, if at all, an d our challenge of third-party patents may be
unsuccessful. Litigation or other legal proceedings relating to intellectual property claims,
regardless of merit, may cause us to incur significant expenses and could distract our technical
and management personnel from their normal responsibilities. Further, if we are determined to
have infringed upon a third party’s intellectual property rights, we may be required to do one or
more of the following:
. cease selling or leasing, incorporating cert ain components into, or using products or
offering services that incorporate or use th e intellectual property that we allegedly
infringe, misappropriate, d ilute or otherwise violate;
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. pay substantial royalty or license fees or other damages;
. seek a license from the holder of the infringed intellectual property right, which
license may not be available on reasonable terms, or at all;
. redesign or reengineer our products, services or technologies, which may be costly,
time-consuming or impossible; or
. establish and maintain alternative branding for our products and services.
In the event of a successful claim of infringement against us and our failure or inability to
obtain a license to the infringed technology or other intellectual property right, our business,
prospects, financial condition, results of ope r a t i o n s ,a n dc a s hf l o w sc o u l db em a t e r i a l l ya n d
adversely affected. In addition, any litigation or claims, whether or not valid, could result in
substantial costs, negative publicity and di version of resources and management attention.
We may not be able to prevent unauthorized use of our intellectual property, which could harm our
business and competitive position.
We may not be able to prevent others from unauthorized use of our intellectual property,
which could harm our business and competitive position. We rely on a combination of patent,
trade secret (including those in our know-how), an d other intellectual prop erty rights, as well as
employee and third-party nondisclosure agreeme nts, intellectual property licenses, and other
contractual rights to establish and protect our rights in our technology and intellectual
property.
O u rp a t e n to rt r a d e m a r ka p p l i c a t i o n sm a ynot be granted, any patents or trademark
registrations that may be issued to us may not sufficiently protect our intellectual property and
any of our issued patents, trademark registrations or other intellectual property rights may be
challenged by third parties. Any of these scenar ios may result in limitations in the scope of our
intellectual property or restrictions on our use of our intellectual property or may adversely
affect the conduct of our business. Despite our efforts to protect our intellectual property rights,
third parties may attempt to copy or otherwise obtain and use our intellectual property or seek
court declarations that they do not infringe upon our intellectual property rights. Monitoring
unauthorized use of our intellectual property is difficult and costly, and the steps we have taken
or will take to prevent misappr opriation may not be successful. From time to time, we may have
to resort to litigation to enforce our intell ectual property rights, which could result in
substantial costs and diversion of our resources.
Our use of open-source software in our applications could subject our proprietary software to
general release, adversely affect our ability to sell our products and subject us to possible litigation,
claims or proceedings.
We use open-source software in the development and deployment of our products and
services, and we expect continued reliance on open-source software in the future. Companies
that use open-source software into their pr oducts have, from time to time, encountered
challenges related to the use of such software and potential non-compliance with open-source
licensing terms. To protect our proprietary softw are developed based on op en-source software
from general release, we ensure that the open-s ource software we use is under licenses that allow
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commercial use without mandating the release of our proprietary modifications. We also focus
on keeping our proprietary code distinct from the open-source components. This involves
ensuring that any modifications or extensions we make are not intertwined with the open-source
code in a way that would require us to disclose the proprietary parts under copyleft licenses.
Despite of the foregoing measures, we could be subject to legal actions initiated by third parties
who claim ownership of software that we believe falls under the category of open-source
software, or who allege breaches of open-source licensing terms.
Certain open-source software licenses may require users who distribute proprietary
software containing or linked to open-source software to publicly disclose some or all of the
source code of that proprietary software and/or make any derivative works of the open-source
code available under the same open-source license, which could include our proprietary source
code. While we oversee the use of open-source software and endeavor to prevent situations
where our proprietary source code may become s ubject to such requirements and limitations,
inadvertent instances of such usage may still occur.
We are, and may in the future be, subject to legal and regulatory proceedings and/or investigations
in the ordinary course of our business.
From time to time, we may face litigation, regulatory proceedings and government
investigations which may be brought against us by customers, end users, competitors,
governmental entities conducting civil, regulatory or criminal investigations, or other parties.
See ‘‘Business — Litigations.’’ These claims could be asserted under a variety of laws, including
but not limited to product liability laws, customer protection laws, intellectual property laws,
labor and employment laws, securities laws, t ort laws, contract laws, property laws, and
employee benefit laws. There is no guarantee of our success in defending against these legal and
regulatory proceedings or investigations or in asserting our rights under applicable laws.
Even if we succeed in our defense or asserting our rights, the process can be expensive,
time-consuming, and may not yield the desired outcome. Legal and regulatory proceedings can
also expose us to negative publicity, substantia l financial damages, legal defense expenses,
injunctive orders, and criminal, civil and administrative fines and penalties.
Our insurance coverage strategy may not be adequate to protect us from all business risks and
cover all of our potential losses.
We maintain various insurance policies relating to our business operations to safeguard
against risks and unforeseen events. We have proc ured a range of commercial insurance policies
to mitigate our operation risks and drive both economic and social benefits, including accident
insurance, employer’s liability insurance, equi pment insurance, and transportation insurance.
See ‘‘Business — Insurance.’’ However, our insurance coverage strategy may not protect us from
all business risks. If we were to incur substantia l losses and liabilities stemming from uninsured
occurrences such as business disruptions, litigation, or natural disasters, we could face
significant costs and resource diversion, whi ch could have a material adverse effect on our
business, results of operations, financial conditions and prospects. We may be required to bear
our losses to the extent that our ins urance coverage is insufficient.
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We have granted, and may continue to grant additional share incentives, which may result in
increased share-based payment expenses and diluti on to the shareholding of ex isting shareholders.
We established incentive platforms for the purpose of granting share-based compensation
awards to qualified individuals, primarily comprising our employees, to incentivize their
performance and align their interests with ours. See ‘‘History, Development and Corporate
Structure — Incentive Platforms.’’ We recognize e quity-settled share-based payment expenses in
our consolidated financial statements in accordance with IFRSs. We recorded equity-settled
share-based payments of RMB29.1 million, RMB 29.7 million, and RMB33.5 million in 2022,
2023 and 2024, respectively.
We believe the granting of share-based compensation is important to attract and retain key
personnel and employees, and we will continue to grant share-based compensation to employees
in the future. As a result, our expenses associated with share-based compensation may increase,
which may have an adverse effect on our results of operations, and the shareholding of existing
shareholders may experience further dilution.
Non-compliance with relevant regulations regar ding social insurance and the housing provident
fund may result in penalties and have an adverse impact on our business, financial condition, results
of operations and prospects.
In accordance with the PRC Social Insurance Law ( 《中華人民共和國社會保險法》)a n dt h e
Regulations on the Administration of Housing Fund ( 《住房公積金管理條例》) and other
relevant laws and regulations, China has established a social insurance system, including basic
pension insurance, basic medical insurance, wo rk-related injury insu rance, unemployment
insurance, maternity insurance, and housing fund system. An employer is required to make
contributions for the statutory social insurance and housing fund for its employees in
accordance with the rates provided under relevan t regulations and withhold the contribution
amounts to be paid by the employees themselves. During the Track Record Period and up to the
Latest Practicable Date, we had not been subj ect to any penalties for the social insurance
non-compliances and therefore did not incur any administrative penalties. See ‘‘Business —
Employees — Social Insurance and Housing Provident Funds.’’
However, we cannot assure you that the relevant government authorities will not require us
to pay the outstanding amount and impose late fees or fines on us. If we are otherwise subject to
investigations related to non-compliance with labor laws and are imposed severe penalties or
incur significant legal fees in connection with lab or law disputes or investigations, our business,
prospects, results of operations, financial condition, and cash flows may be adversely affected.
Any unanticipated lease terminations, as well as challenges in renewing existing premises at
favorable terms, could have a material adverse e ffect on our business. Non-registration of lease
agreements may subject us to fines.
As of the Latest Practicable Date, we maintained three leased properties in the PRC with
an aggregate gross floor area of approximately 20, 641 square meters from th ird parties, mainly
used as manufacturing plants, and office premise. Our leases may be terminated unexpectedly
due to various reasons, such as the landlord opting to repurpose the property, financial
disputes, or breaches of lease terms. Such terminations could force us to find alternative
premises quickly, potentially at higher costs or less favorable locations, impacting our
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operational efficiency and increasing costs. When leases on critical properties come up for
renewal, there may be challenges in renegotiat ing terms that are as favorable as the original
lease. Landlords may demand higher rent, more stringent lease conditions, or shorter lease
durations. Inflationary pressures or changes in the real estate market could also exacerbate this
issue, leading to increased operational costs and potentially limiting our flexibility in business
operations.
In addition, pursuant to the applicable PRC laws and regulations, both lessors and lessees
are required to file the lease agreements with relev ant authorities for record and obtain property
leasing filing certificates for their leases. As of the Latest Practicable Date, all of our leases had
not been filed with the governmental authorities. The failure to file and obtain property leasing
filing certificates for such three leases, as required under PRC laws, may subject us to a fine
ranging from RMB1,000 to RMB10,000 for each agr eement not filed. If such fines are imposed,
the maximum penalty we may be required to pay would be approximately RMB40,000 for the
above three leased properties.
We rely on our employees to implement our risk m anagement and internal control system, which
may be vulnerable to human error or mistakes.
We are dedicated to the establishment and m aintenance of robust risk management and
internal control systems. We have adopted and continually improve our internal control
mechanisms to ensure the compliance of our business operations. Furthermore, we conduct
periodic review of the implementation of our risk management policies and internal control
measures to ensure their effectiveness and suffi ciency. See ‘‘Business — Risk Management and
Internal Control.’’ Since these systems depend on implementation by our employees, and even
though we provide relevant internal training in this regard, we cannot assure you that our
employees are sufficiently or fully trained to implement these systems, or that their
implementation will be free from human erro r or mistakes. If we fail to timely update,
implement and modify, or fail to deploy sufficient human resources to maintain our risk
management policies and procedures, our business , financial condition, results of operations
and prospects could be materially and adversely affected.
We may be subject to anti-corruption, anti-briber y, anti-money laundering, financial and economic
sanctions, and similar laws and regulations, and noncompliance with such laws and regulations can
subject us to administrative, civil, and criminal penalties, collateral consequences, remedial
measures, and legal expenses, all of which could ad versely affect our business, prospects, results of
operations, financial cond ition, and cash flows.
We may be subject to anti-corruption, anti-bribery, anti-money laundering, financial and
economic sanctions, and similar laws and regulations in various jurisdictions in which we
conduct activities, including the United States Foreign Corrupt Practices Act (‘‘FCPA’’), and
other anti-corruption laws and regulations. Th e FCPA prohibits us and our officers, directors,
employees, and business partners acting on our behalf, including agents, from corruptly
offering, promising, authorizing, or providing anything of value to a ‘‘foreign official’’ for the
purposes of influencing official decisions or obtaining or retaining business or otherwise
obtaining favorable treatment. The FCPA also requires companies to make and keep books,
records, and accounts that accurately reflect transactions and dispositions of assets and to
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maintain a system of adequate internal accounting controls. A violation of these laws or
regulations could adversely affect our business, prospects, results of operations, financial
condition, and cash flows.
We have direct or indirect interactions with officials and employees of government agencies
and state-owned affiliated entities in the ord inary course of business. We also have business
collaborations with government agencies and state -owned affiliated entities. These interactions
subject us to an increasing level of compliance-related concerns. We are in the process of
implementing policies and procedures designed to ensure compliance by us and our Directors,
officers, employees, representatives, consultant s, agents, and business partners with applicable
anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions, and
similar laws and regulations. However, our policies and procedures may not be sufficient and
our directors, officers, em ployees, representatives, consultants, agents, and business partners
could engage in improper conduct for which we may be held responsible.
Non-compliance with anti-corruption, anti-bribery, anti-money laundering, or financial
and economic sanctions laws and regulations could subject us to whistleblower complaints,
adverse media coverage, investigations, and sever e administrative, civil and criminal sanctions,
collateral consequences, remedial measures, an d legal expenses, all of which could materially
and adversely affect our business, prospects, results of operations, financial condition, and cash
flows.
Certain countries or organizations, including the U.S., the European Union, the United
Nations, the United Kingdom, and Australia, have, through executive order, legislations or
other government means, implemented measures that impose economic sanctions against certain
countries, regions or targeted industry sectors, groups of companies or persons, and/or
organizations within such countries and regions. Sanctions laws and regulations are continually
evolving, with new individuals and entities regularly being added to the list of sanctioned
persons. Moreover, new requirements or restrictions may come into effect, potentially
intensifying scrutiny on our business, particularly concerning our international expansion
plans, or resulting in one or more of our business activities being deemed to have violated
sanctions. Our business and reputation could be adversely affected if the authorities of relevant
jurisdictions were to determine that any of our future activities constitutes a violation of the
sanctions they impose.
Any misconduct by our employees or by business partners and/or their employees, could potentially
expose us to significant legal li abilities, reputational harm, and other damages that may adversely
affect our business.
We rely on our employees to maintain and operate our business and have implemented an
internal code of conduct to guide the actions of our employees. However, we do not have
control over the actions of our employees, and any misbehavior of our employees could
materially and adversely affect our reputation and business. For example, if an employee were
to breach their confidentiality obligations by disclosing our or our business partners’ trade
secrets to third parties, our commercial inter ests may be harmed and we may be subject to legal
actions and reputational damage. Additionally, i f an employee abuses their authority to accept
bribes, we may face investigatio ns, penalties, and harm to our business interests and reputation.
We also rely on our business partners, including s uppliers, external manufacturers, the catalog
company and logistics service providers for our business operations. Although we have
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implemented measures to select business partners, we may not be able to successfully monitor,
maintain and improve the quality of their products and services. In the event of any
unsatisfactory performance by our business partners and/or their employees, our business,
prospects, results of operations, financial condition, and cash flows may be materially and
adversely affected. Moreover, th ere is a risk that some business pa rtners and all their employees
might engage in fraudulent activities, such as forging contracts, providing false information, or
concealing critical facts, which could mislead us into signing unfavorable agreements, thereby
harming our interests. Furthermore, defects or quality issues in products or services provided by
partners may lead to dissatisfaction, damaging our brand image and reduce our competitive
edge in the market.
We are subject to various environmental and sa fety laws and regulations that could impose
potential costs upon us for environmental compliance or monetary damages, fines and other
liabilities and damage to our brand name and reputation for noncompliance, and may cause delays
in building our manufacturing plants.
We are subject to multiple environmental and safety laws and regulations related to the
manufacturing of our products, including the use of hazardous materials in the manufacturing
process and the operation of our manufacturing plants. Such laws and regulations govern the
use, storage, discharge and disposal of hazard ous materials during the manufacturing process.
Changes in these laws or other new environmental and safety laws and regulations may require
us to change our operations, potentially resulting in a material adverse effect on our business,
financial condition, results of operations, cash flows and prospects. These laws can give rise to
liability for administrative oversight costs, cle anup costs, property damage, bodily injury, fines
and penalties. Violations of these laws and regulations could result in substantial fines and
penalties, third-party damages, suspension of production, remedial actions or a cessation of our
operations. Contamination at properties we own or operate, or properties to which we send
hazardous substances, may result in liability fo r us under environmental laws and regulations.
In addition, from time to time, the Chinese government issues new regulations, which may
require additional actions on our part to comply. If our plants or any of our other future
constructions fail to comply with applicable re gulations, we could be subject to substantial
liability for clean-up efforts, personal injury or fines or be forced to close or temporarily cease
the operations of our plants or other relevant constructions, any of which could have a material
adverse effect on our business, prospects, financial condition and results of operation.
Our operations are also subject to workplace safety laws and regulations, which require
compliance with various workplace safety requ irements, including requirements related to
environmental safety. These laws and regulations can give rise to liability for oversight costs,
compliance costs, bodily injury (including work ers’ compensation), fines, and penalties.
Additionally, non-compliance could result in delay or suspension of production or cessation
of operations. The costs required to comply with workplace safety laws can be significant, and
non-compliance could adversely affect our pro duction or other operations, which could have a
material adverse effect on our business, prospects, results of operations, financial condition, and
cash flows.
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Moreover, there is a growing global fo cus on the environmental practices of
manufacturers. Additionally, more stringent social responsibility laws and regulations may be
adopted in the future, which may result in an increase in our cost of compliance. Compliance
with such regulations is considered costly industrywide. As we expand into new markets, we will
become subject to additional environmental and safety laws and regulations. We may incur
additional costs to ensure compliance with such laws and regulations, as well as to manage local
labor practices.
Our business could be adversely affected by trade tariffs, export control laws or other trade
barriers.
As part of our growth strategy, we are actively pursuing expansion into international
markets. Our business could be influenced by the imposition of tariffs, export control laws, and
other trade barriers, potentially increasing the c ost or difficulty of exporting our products to the
imposing countries. We will become subject to additional tariffs, laws and barriers as we enter
into new markets. We may experience cost increa ses as a result of existi ng or future tariffs and
may not be able to pass on such additional costs to our customers, or otherwise mitigate the
costs. In the event that we raise prices to help cover the higher costs, we may face lower demand
for our exported products. A violation of export control laws could subject us to whistleblower
complaints, adverse media coverag e, investigations, and severe admi nistrative, civil and criminal
penalties, collateral consequences, remedial m easures and legal expenses. Any of the foregoing
could materially and adversely affect our busines s, prospects, results of operations, financial
condition, and cash flows.
For example, in recent years the U.S. government has attempted to renegotiate or
terminate certain existing bilateral or multila teral trade agreements. It has also imposed tariffs
on certain foreign goods which resulted in increased costs for goods imported into the U.S. In
response to these tariffs, a number of trading partners from the U.S. have imposed retaliatory
tariffs on a wide range of products from the U.S., making it more costly for companies to export
products to those countries. China and the U. S. have each imposed tariffs, indicating the
potential for further trade barriers which may escalate a nascent trade war between China and
the U.S. In addition, additional trade restrictions or barriers could be implemented on a broader
range of products or raw materials.
Fluctuations in exchange rates could have a mate rial adverse effect on our business, prospects,
results of operations, and financial condition.
We incurred foreign exchange gain of RMB 56 thousand, nil, and nil in 2022, 2023, and
2024, respectively. Our forei gn exchange gain in 2022 was related to the gain from our
conversion of an equity investment in us in Hong Kong dollars into Renminbi. As we expand
our business into international markets in the future, we may subject to increasing risk related
to foreign exchange rate fluctuations.
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The conversion of foreign currencies, including Hong Kong dollars and U.S. dollars, into
Renminbi is based on rates set by the PBOC. The Renminbi has fluctuated against Hong Kong
dollars and U.S. dollars, sometimes significantly and unpredictably. The value of Renminbi
against Hong Kong dollars, U.S. dollars and oth er currencies is affected by changes in China’s
political and economic conditions and by China’s foreign exchange policies, among other
things. We cannot assure you that Renminbi will not appreciate or depreci ate significantly in
value against Hong Kong dollars and U.S. dollars in the future. It is difficult to predict how
market forces or PRC or U.S. government pol icy may impact the exchange rate between
Renminbi and U.S. dollars in the future.
Any significant appreciation or depreciatio n of Renminbi may materially and adversely
affect our revenues, earnings and financial posit ion, and the value of, and any dividends payable
on, our H Shares in foreign currency. For exam ple, to the extent that we need to convert Hong
Kong dollars we receive from the Global Offering into Renminbi to pay our operating expenses,
appreciation of Renminbi against Hong Kong dollars would have an adverse effect on the
Renminbi amount we would receive fr om the conversion. Conversely , a significant depreciation
of Renminbi against Hong Kong dollars and U.S. dollars may significantly reduce Hong Kong
dollars’ and U.S. dollars’ equivalency of our earnings, which in turn could adversely affect the
price of our H Shares.
Very limited hedging options are available in China to reduce our exposure to exchange
rate fluctuations. While we may decide to ent er into further hedging transactions, the
availability and effectiveness of these hedges may be limited and we may not be able to
adequately hedge our exposure or at all. In addition, our currency exchange losses may be
magnified by PRC exchange control regulations that restrict our ability to convert Renminbi
into foreign currency. As a result, fluctuati ons in exchange rates may have a material adverse
effect on your investment.
If we do not continue to receive preferential tax treatments or government grants, our results of
operations may be adversely affected.
We currently benefit from several preferent ial tax treatments. Our Company obtained the
High and New Technology Enterprises status i n 2019 and had the status renewed in 2022, and
hence is entitled to a preferential enterprise in come tax rate of 15%. This preferential treatment
could be extended for another three years upon renewal. In addition, our Company was entitled
to the benefit of being able to deduct research a nd development costs at a rate of 175% during
the period from January 1, 2021 to September 30, 2022 and at a rate of 200% since October 1,
2022. The discontinuation of any of the preferential income tax treatments that we currently
enjoy could have a material adverse effect on our results of operations and financial condition.
We cannot assure you that we will be able to maintain or lower our current effective tax rate in
the future.
Additionally, we have received various government grants, including (i) one-off subsidies
in connection with certain acknowledgments or qualifications we receive from governmental
departments, (ii) governmental subsidies in r elation to our research projects, and (iii) tax
rebates. Any delay or uncertainty in collection or the discontinuation of these governmental
subsidies or tax rebates or the imposition of an y additional taxes could adversely affect our
business, prospects, profitability, results of operations, financial condition, and cash flows.
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Changes in tax laws may materially and adversely affect our business, prospects, financial
condition, results of operations, and cash flows.
New income, sales, use or other tax laws, statutes, rules, regulation or ordinances could be
enacted at any time, or interpreted, changed, modified or applied adversely to us, any of which
could adversely affect our business operations and financial performance. We are currently
unable to predict whether such changes will occur and, if so, the ultimate impact on our
business. Should such changes exert a negative impact on us, our suppliers, manufacturers, or
our customers, including due to associated uncertainties, these changes may materially and
adversely affect our business, prospects, financial condition, results of operations, and cash
flows.
We face risks related to health epid emics, natural disaster, terroris t activities, political unrest,
financial or economic crisis and other force majeur e events, which could significantly disrupt our
operations.
Our business could be adversely affected by the effects of health epidemics. In recent years,
there have been outbreaks of COVID-19 pandemic in China and globally. In response to
COVID-19 pandemic, various nations have adopted, among other measures, restrictions on
mobility and travel, cancellation of public activities and temporary suspension on public
transportation which may lead to delays or disruption in our operations, including but not
limited to, business activities and research an d development activities. A recurrence of an
outbreak of COVID-19 and other health epidemics c ould restrict the level of economic activities
generally and/or slow down or disrupt our busin ess activities, which could in turn adversely
affect our business, prospects, results of operations, financial condition, and cash flows.
In addition to the impact of health pandemics as described above, our business could be
materially and adversely affected by natural disasters, such as snowstorms, earthquakes, fires or
floods, or other events, such as wars, acts of terr orism, environmental a ccidents, power shortage
or communication interruptions. The occurrence of such a disaster or prolonged outbreak of an
epidemic illness or other adverse public health developments in the countries and regions where
we have operations could materially disrupt our b usiness and operations. Such events could also
significantly affect our industry and cause a tem porary closure of the facilities we use for our
operations, which would severely disrupt our op erations and have a material and adverse effect
on our business, results of operations, financial conditions and prospects.
Any financial or economic crisis, or perceived threat of such a crisis, including a significant
decrease in consumer confidence, may materiall y and adversely affect our business, financial
condition and results of operations. With a deteriorating worldwide economy, consumer
spendings and consumption of non-essential items may diminish, which in turn will affect the
demand for our sales and marketing services. I t is unclear whether these challenges will be
contained and what effects they each may have. There is considerable uncertainty over the
long-term effects of the expansionary monetary and fiscal policies that have been adopted by the
central banks and financial authorities of some of the economies where we operate our
businesses, including China. To the extent any fluctuations in the global economy significantly
and adversely affect consumers’ demand for our products, our business, results of operations,
financial conditions and prospects may be materially and adversely affected.
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RISKS RELATING TO OUR DOING BUSINESS IN CHINA
The new energy engineering machinery is an emerging industry in China which may be subject to
evolving governmental regulations that may affect our business operations.
The majority of our current operations are based in China. The new energy engineering
machinery industry is subject to continually evolving government regulations, encompassing the
Implementation Plan for Synergizing Efficien cy in Reducing Pollution and Carbon Emissions
(《減污降碳協同增效實施方案》), the Action Plan for In-Depth Fi ghting against Heavy Pollution
Weather Elimination, Ozone Pollution Prevention and Control and Diesel Truck Pollution
Control (《深入打好重污染天氣消除、臭氧污染防治和柴油貨車污染治理攻堅戰行動方案》), and
the Announcement on the Implementation of China VI Emission Standard for Automobiles ( 《關
於實施汽車國六排放標準有關事宜的公告》). In recent years, the regulatory framework in China
regarding the new energy engineering machinery industry has undergone significant changes,
and we expect that it will persist. Any modifica tions or amendments to these regulations may
lead to increased compliance costs for our business, potentially causing delays or hindering the
successful development of our products in China. Moreover, these changes could diminish the
anticipated benefits we associate with the development and manufacture of new energy
engineering machinery and the design and development of e-powertrain kits for manufacturing
new energy tractor trucks in China.
Changes in the economic and legal conditions, as well as the interpretation and implementation of
the relevant laws, rules and regulations, may affect our business, prospects, results of operations,
financial condition, and cash flows.
Due to our extensive operations in the PRC, ou r business, financial condition, results of
operations and prospects are inherently influenced by economic and legal developments within
the PRC. Laws, rules and regulations in relat ion to economic matters are promulgated from
time to time, including those related to such as foreign investment, corporate organization and
governance, commerce, t axation, finance, foreign exchange and trade.
Furthermore, the interpretation and application of the laws and regulations governing the
new energy engineering machinery industry also undergo continuous evolution and revision.
These dynamic changes in the legal landscape h ave the potential to significantly impact our
operations and business environment.
We may be subject to additional regulatory re quirements under new laws and regulations on
overseas offerings and listings issued by PRC government authorities.
On July 6, 2021, the relevant PRC government au thorities issued the Opinions on Strictly
Cracking Down Illegal Securities Acti vities in Accordance with the Law ( 《關於依法從嚴打擊證
券違法活動的意見》). These opinions emphasize the need to strengthen the administration over
illegal securities activities an d the supervision on overseas listings by China-based companies
and propose to take effective measures, such as promoting the construction of relevant
regulatory systems to deal with the risks and incidents faced by China-based overseas-listed
companies.
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On February 24, 2023, the CSRC, the Ministry of Finance of the PRC, the National
Administration of State Secrets Protection of China, and the National Archives Administration
of China published the Provisions on Strengthening Confidentiality and Archives
Administration of Overseas Securities Offering and Listing by Domestic Companies ( 《關於加
強境內企業境外發行證券和上市相關保密和檔案管理工作的規定》) (the ‘‘Archives Rules’’),
which came into effect on March 31, 2023. The Archives Rules require that, in relation to the
overseas securities offering an d listing activities of domestic enterprises, either in direct or
indirect form, such domestic enterprises, as wel l as securities companies and securities service
institutions providing relevant securities services, are required to strictly comply with relevant
requirements on confidentiality and archives management, establish a sound confidentiality and
archives system, and take necessary measures to implement their confid entiality and archives
management responsibilities. The interpretation and implementation of the Archives Rules may
keep evolving, failure to comply with which may materially affect our business, prospects,
results of operations, financial condition, and cash flows. See ‘‘Regulatory Overview —
Regulations Relating to Overseas Offering and Listing.’’
Given that the Archives Rules were recently promulgated, their interpretation, application,
and enforcement are still evolving and subject to change. We are closely monitoring how they
will affect our operations and our future financing activities.
We may be subject to the approval, filing or other requirements of the CSRC or other PRC
governmental authorities in connection with future capital raising activities.
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 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 this Global Offering or our
future financing activities, an d 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 pro ceeds from the Global Offeri ng into the PRC or take
other actions to restrict our financing activities, which could have a material and adverse effect
on our business, prospects, results of opera tions, financial condition, and cash flows.
Changes in international trade policies, and in r elationships between the PRC and other countries,
may adversely impact our business and operating results.
We are actively pursuing expansion into international markets. Specifically, we have
developed a direct current photovoltaic power system with plans to launch sales internationally.
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Unfavorable government policies related to international trade, including capital controls
or tariffs, or adverse shifts in diplomatic relations between China and foreign countries or
regions, have the potential to impact the sales of our products, in international markets. Since
January 2025, the United States has announced successive rounds of tariffs on goods imported
from China, adding further uncertainties to U.S.-China relations and the global macroeconomic
environment. We are closely monitoring potential changes in international trade policy and
assess the potential impact of these and other trade policy changes on our business operations
and financial performance.
As of the Latest Practicable Date, these changes had not had a material adverse effect on
our operations. Although we were commissioned by a company based in North America to
design and manufacture add-on e-powertrains in 2023, generating revenue of RMB8.9 million
from the United States, we have no exports to the U.S. in 2022 or 2024. Additionally, most of
our materials and components are sourced domestically, with none imported from the United
States.
Looking forward, our strategic expansion efforts are focused on markets across Southeast
Asia, the Middle East and Africa. Accordingly, we do not foresee the escalating U.S.-China
tensions having a significant impact on our business. However, we cannot assure you the
implementation of new tariffs, changes in legislation and regulations, or the renegotiation of
existing trade agreements will not result in a mate rial adverse effect on our business, prospects,
results of operations, financial condition, and cash flows.
We are subject to the currency exchange regulatory system.
The conversion of Renminbi is subject to applicable laws and regulations in the PRC. It
cannot be guaranteed that under a certain ex change rate, we will h ave sufficient foreign
exchange to meet our foreign exchange requirements. Under the current PRC foreign exchange
regulatory system, foreign exchange transactions under the current account conducted by us,
including the payment of dividends, do not require advance approval from the SAFE, but we are
required to present documentary evidence of such transactions and conduct such transactions at
designated foreign exchange banks within China that have the licenses to carry out foreign
exchange business.
Under existing foreign exchange regulations, following the completion of the Global
Offering, we will be able to pay dividends in foreign currencies without prior approval from the
SAFE by complying with certain procedural requ irements. However, there is no assurance that
these foreign exchange policies regarding paym ent of dividends in foreign currencies will
continue in the future. In addition, any insufficiency of foreign exchange may restrict our ability
to pay dividend to shareholders or to satisfy any other foreign exchange requirements, capitalize
our capital expenditure plans, and even our business, prospects, results of operations, financial
condition, and cash flows ma y be adversely affected.
Our operations are subject to PRC tax laws and regulations.
We are subject to periodic examinations on fulfillment of our tax obligation under the PRC
tax laws and regulations by PRC tax authorities. The PRC tax laws and regulations might be
subject to interpretations and adjustments by re levant authorities from time to time. Although
we believe that in the past, we have acted in compliance with the requirements under the
RISK FACTORS
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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 actions that
could materially and adversely affect our busines s, prospects, results of operations, financial
condition, and cash flows.
Holders of H Shares may be subject to PRC income taxes.
Holders of H Shares, being non-PRC resident individuals or non-PRC resident enterprises,
whose names appear on the register of members of H Shares of our Company, are subject to
PRC income tax in accordance with the applica ble tax laws and regulations, on dividends
received from us and gains realized through the sale or transfer by other means of H shares by
such shareholders.
According to the Individual Income Tax Law of the PRC ( 《中華人民共和國個人所得稅法》)
and the Implementation Regulations for the Individual Income Tax Law of the PRC ( 《中華人民
共和國個人所得稅法實施條例》), both came into effect on January 1, 2019, the tax applicable to
non-PRC resident individuals is proportionate at a rate of 20% for any dividends obtained from
within China or gains on transfer of shares and shall be withheld and paid by the withholding
agent. Pursuant to the Arrangement between the Mainland and the Hong Kong Special
Administrative Region (the ‘‘Hong Kong SAR’’) for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income ( 《內地和香港特別行政區關於對所
得避免雙重徵稅和防止偷漏稅的安排》) (the ‘‘Double Taxation Arrangements’’) executed on
August 21, 2006, the PRC Government may levy taxes on the dividends paid by PRC companies
to Hong Kong residents in accordance with the P RC laws, but the levied tax (in the case the
beneficial owner of the dividends are not companies directly holding at least 25% of the equity
interest in the company paying the dividends) shall not exceed 10% of the total dividends.
According to the Enterprise Income Tax Law of the PRC ( 《中華人民共和
國企業所得稅
法》), which was newly revised and implemented on December 29, 2018, and the Implementation
Regulations for the Enterprise Income Tax Law of the PRC ( 《中華人民共和國企業所得稅法實施
條例》), which was newly revised and implement ed on January 20, 2025, if a non-resident
enterprise has no presence or establishment within China, or if it has established a presence or
establishment but the income obtained has no actual connection with such presence or
establishment, it shall pay an enterprise income tax on its income derived from within China
with a reduced rate of 10%. Pursuant to the Do uble Taxation Arrangements, dividends paid by
PRC resident enterprises to Hong Kong residents can be taxed either in Hong Kong or in
accordance with the PRC laws. However, if the beneficial owner of the dividends is a Hong
Kong resident, the tax charged shall not exceed: (i) 5% of the total amount of dividends if the
Hong Kong resident is a company that directly owns at least 25% of the capital of the PRC
resident enterprise paying dividends; or (ii) otherwise, 10% of the total amount of dividends.
Considering the foregoing, non-PRC resident holders of our H Shares should be aware that
they may be obligated to pay PRC income tax on the dividends and gains realized through sales
or transfers by other means of the H Shares.
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While this may also apply to other jurisdictions, t here might be difficulties in effecting service of
legal process, enforcing foreign judgments agai nst us or our Directors, Supervisors and senior
management in the PRC.
We are a joint stock company incorporated in China. In addition, a majority of our
Directors, Supervisors and senior management re side within mainland China, and substantially
all of our and their assets are located within the P RC. Therefore, it may be difficult for investors
to directly effect service of legal process upo n us or our Directors, Supervisors and senior
management in the PRC.
On July 14, 2006, the Supreme People’s Court of the PRC and the government of Hong
Kong SAR entered into the Arrangement on Reci procal Recognition and Enforcement of
Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong
Kong Special Administrative Region Pursuant to Choice of Court Agreements between Parties
Concerned ( 《關於內地與香港特別行政區法院相互認可和執行當事人協議管轄的民商事案件判決
的安排》) (the ‘‘Arrangement’’), which was taken into effect on August 1, 2008.
Pursuant to the Arrangement, where any designated PRC court or any designated Hong
Kong court has made an enforceable final judgment requiring payment of money in a civil or
commercial case under a choice of court agreemen t in writing, any party concerned may apply to
the relevant PRC court or Hong Kong court for recognition and enforcement of the judgment.
A choice of court agreement in writing is defined as any agreement in writing entered into
between parties after the effective date of the Arrangement in which a Hong Kong court or a
mainland court is expressly selected as the court having sole jurisdiction for the dispute.
On January 18, 2019, the Supreme People’s Court of the PRC and the government of Hong
Kong SAR 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 ( 《關於內地與香港特別行政區法院相互認可和執行民商事案件判決的安
排》) (the ‘‘New Arrangement’’), which seeks to e stablish a mechanism with greater clarity and
certainty for recognition and en forcement of judgments in wider range of civil and commercial
matters between Hong Kong SAR and the mainland China. On January 29, 2024, the New
Arrangement was declared effective jointly by the Supreme People’s Court of the PRC and the
government of Hong Kong SAR, which has replaced the Arrangement. However, the New
Arrangement does not apply to certain judgements of civil and commercial matters.
Furthermore, there remain uncertainties as to the outcome of any applications to recognize
and enforce such judgments and arbitral awards in the PRC.
Although we will be subject to the Hong Kong Listing Rules and the Hong Kong Codes on
Takeovers and Mergers and Share Repurchases upon the listing of our H Shares on the Stock
Exchange, the holders of H Shares will not be able to bring actions on the basis of violations of
the Hong Kong Listing Rules and must rely on the Stock Exchange to enforce its rules. The
Hong Kong Listing Rules and Hong Kong Codes on Takeovers and Mergers and Share
Repurchases do not have the force of law in Hong Kong.
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RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our H Sha res. An active trading market may not develop,
especially taking into account that certain existi ng Shareholders and Corne rstone Investors may be
subject to a lock-up period, and the liquidity of our H shares may be limited, and the price and
trading volume of our H Shares may be volatile.
Prior to the Global Offering, there was no public market for our H Shares. We cannot
assure you that a public market for our H Shares with adequate liquidity and trading volume
will develop and be sustained following the completion of Global Offering. In addition, the
Offer Price of our H Shares is expected to be fixed by agreement between the Overall
Coordinators and us and may not be an indication of the market price of our H Shares following
the completion of the Global Offering. If an active public market for our H Shares does not
develop following the completion of Global Offering, the market price and liquidity of our H
Shares could be materiall y and adversely affected.
In particular, certain portion of H Shares to be converted upon conversion of Unlisted
Shares into H Shares or to be issued to Cornersto ne Investors will be subject to a lock-up period
from the Listing Date, which may significantly affect the liquidity and trade volume of our H
Shares in the short term following the Globa l Offering. A listing on the Hong Kong Stock
Exchange does not guarantee that an active and liquid trading market for our H Shares will
develop, especially during the period when certain portion of our H Shares may be subjected to
lock-up, or if it does develop, that it will sustain following the Global Offering, or that market
price of the H Shares will rise following the Global Offering. If an active public market for our
H Shares does not develop following the completion of Global Offering, the market price and
liquidity of our H Shares could be materially and adversely affected.
The price and trading volume of our H Shares may be highly volatile. Several factors, some
of which are beyond our control, such as variations in our results of operations, changes in our
pricing policy, the emergence of new technologies, strategic alliances or acquisitions, the
addition or departure of key personnel, changes in profit forecast or recommendations by equity
research analysts, changes in ratings by credit r ating agencies, litigation or the removal of the
restrictions on share transactions, could cause large and sudden changes to the volume and price
at which our H Shares will trade.
In addition, the Stock Exchange and other securities markets have, from time to time,
experienced significant price and volume volatility that is not related to the operating
performance of any particular company.
Future sale or major divestm ent of H Shares by our Pre-IPO Investors could materially and
adversely affect the prevailing market price of our H Shares.
The future sale of a significant number of our H Shares in the public market after the
Global Offering, or the possibility of such sales , by our Pre-IPO Investors could materially and
adversely affect the market price of our H Shares and could materially impair our future ability
to raise capital through offerings of our H Shares. Although such Pre-IPO Investors have agreed
to a lock-up on their H Shares (including the H Shares converted from Domestic Shares upon
listing, if applicable), any major disposal of such H Shares by any of such Pre-IPO Investors
RISK FACTORS
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upon expiry of the relevant lock-up periods (or the perception that these disposals may occur)
may cause the prevailing market price of our H Shares to fall which could negatively impact our
ability to raise equity capital in the future.
You will incur immediate and significant dilutio n and raising additional capital may cause further
dilution or restrict our operation.
The Offer Price of the Offer Shares is higher than the net tangible asset value per H Share
immediately prior to the Global Offering. Therefore, purchasers of the Offer Shares in the
Global Offering will experience an immediate dilution in pro forma consolidated net tangible
asset value. There can be no assurance that if we were to immediately liquidate after the Global
Offering, any assets will be distributed to Shareholders after the creditors’ claims. If we raise
additional capital through the sale of equity or convertible debt securities, your ownership
interest will be diluted, and the terms of these securities may include liquidation or other
preferences that adversely affect your rights as a shareholder. Debt financing and preferred
equity financing, if available, may involve agreements that include covenants limiting or
restricting our ability to take specific actions, such as incurring additional debt, making capital
expenditures, limitations on our ability to acquire or license intellectual property rights or
declaring dividends, or other operating restrictions.
Any possible conversion of Domestic Shares into H Shares could increase the supply of H Shares in
the market, which will negatively i mpact the market price of H Shares.
According to the stipulations by the State Council’s securities regulatory authority and the
Articles of Association, our Domestic Shares may be converted into H Shares and such
c o n v e r t e dHS h a r e sm a yb el i s t e do rt r a d e do na noverseas stock exchange, provided that prior
to the conversion and trading of such converted shares, the requisite internal approval processes
(but without the necessity of Shareholders’ approval by class) have been duly completed and the
approval from the relevant PRC regulatory authorities, including the CSRC, have been
obtained. In addition, such conversion, trading and listing must comply with the regulations
prescribed by the State Council’ s securities regulatory authorities and the regulations,
requirements and procedures prescribed by the relevant overseas stock exchange. We can
apply for the listing of all or any portion of our Domestic Shares on the Stock Exchange as H
Shares in advance of any proposed conversion to ensure that the conversion process can be
completed promptly upon notice to the Stock Exchange and delivery of shares for entry on the
H Share register. This could increase the supply of H Shares in the market, and future sales, or
perceived sales, of the converted H Shares may a dversely affect the trading price of H Shares.
If equity research analysts do not publish rese arch or reports about our business, or if they
adversely change their recommendations rega rding our H Shares, the market price for our H
Shares and trading volume may decline.
The trading market for our H Shares will be influenced by research or reports that equity
research analysts publish about us or our business. If one or more analysts who cover us
downgrade our H Shares or publish negative opinions about us, the market price for our H
Shares would likely decline regardless of the accuracy of the information. If one or more of these
analysts cease coverage of us or fail to regularly p ublish reports on us, we could lose visibility in
the financial markets, which in turn could cause the market price or trading volume of our H
Shares to decline.
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F u t u r es a l e so rp e r c e i v e ds a l e so fas u b s t a n tial number of our H Shares in the public market
following the Global Offering could materially and adversely affect the price of our H Shares and
our ability to raise additional capital in the future and may result in dilution of your shareholding.
Prior to the Global Offering, there has not been a public market for our H Shares. Future
sales or perceived sales by our existing Shareholders of our Shares after the Global Offering
could result in a significant decrease in the p revailing market price of our H Shares. Only a
limited number of the Shares currently outstanding will be available for sale or issuance
immediately after the Global Offering due to contractual and regulatory restrictions on disposal
and new issuance. Nevertheless, after these restrictions lapse or if they are waived, future sales
of significant amounts of our H Shares in the public market or the perception that these sales
may occur could significantly decrease the prevailing market price of our H Shares and our
ability to raise equity capital in the future.
There can be no assurance that we will declare and d istribute any amount of dividends in the future.
There can be no assurance that we will declare and pay dividends because the declaration,
payment and amount of dividends are subject to the discretion of our Directors, depending on,
among other considerations, our operations, earnings, cash flows and financial position,
operating and capital expenditure requirements, our strategic plans and prospects for business
development, our constitutional documents and applicable law. See ‘‘Financial Information —
Dividends.’’
Our Controlling Shareholders has significant in fluence over our Company and its interests may not
be aligned with the interest of our other shareholders.
Our Controlling Shareholders will, through its voting power at the Shareholders’ meetings
and its delegates on the Board, have significant influence over our business and affairs,
including decisions in respect of mergers or other business combinations, acquisition or
disposition of assets, issuance of additional shares or other equity securities, timing and amount
of dividend payments, and our management. Our Controlling Shareholders may not act in the
best interests of our minority Shareholders. In addition, without the consent of our Controlling
Shareholders, we could be prevented from entering into transactions that could be beneficial to
us. This concentration of ownership may also dis courage, delay or prevent a change in control
of our Company, which could deprive our Shareh olders of an opportunity to receive a premium
for the Shares as part of a sale of our Company and may significantly reduce the price of our H
Shares.
We have significant discretion as to how we will u se the net proceeds of the Global Offering, and
you may not necessarily agree with how we use them.
Our management may spend the net proceeds from the Global Offering in ways you may
not agree with or that do not yield a favorable return to our Shareholders. See ‘‘Future Plans
and Use of Proceeds — Use of Proceeds.’’ Howeve r, our management will have discretion as to
the actual application of our net proceeds. You a re entrusting your funds to our management,
whose judgment you must depend on, for the spe cific uses we will make of the net proceeds from
this Global Offering.
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Forward-looking statements contained in this prospectus are subject to risks and uncertainties.
This prospectus contains certain statements and information that are forward-looking and
uses forward-looking terminology such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘could,’’ ‘‘going forward,’’
‘‘intend,’’ ‘‘plan,’’ ‘‘project,’’ ‘‘seek,’’ ‘‘expect,’’ ‘‘may,’’ ‘‘ought to,’’ ‘‘should,’’ ‘‘would’’ or ‘‘will’’
and similar expressions. You are cautioned th at 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 risks and 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 t his cautionary statement.
You should read the entire prospectus carefully and we strongly caution you not to place any
reliance on any information contained in press articles or other media coverage regarding us or the
Global Offering.
You should rely solely upon the information contained in this prospectus, the Global
Offering and any formal announcements made by us in Hong Kong when making your
investment decision regarding our H Shares. Subsequent to the date of this prospectus but prior
to the completion of the Global Offering, there may be press and media coverage regarding us
and the Global Offering, which may contain, among other things, certain financial information,
projections, valuations and other forward-looking information about us and the Global
Offering. We have not authorized the disclosure of any such information in the press or media
and do not accept any responsibility for the accura cy or completeness of any such press articles
or other media coverage, nor the fairness or appropriateness of any forecasts, views or opinions
expressed by the press or other media regardi ng our H Shares, the Global Offering or us. We
make no representation as to the appropriateness, a ccuracy, completeness or reliability of any of
the projections, valuations or other forward-looking information about us in any such press
articles or media coverage. Accordingly, pros pective investors are cautioned to make their
investment decisions on the basis of the information contained in this prospectus only and
should not rely on any other information. By a pplying 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.
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In preparation for the Listing, we have sought the following waivers from strict compliance
with the relevant provisions of the Listing Rules:
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 and Rule 19A.15 of the Listing Rules, a new applicant applying for a
primary listing on the Stock Exchange must ha ve a sufficient management presence in Hong
Kong. This normally means that at least two of the new applicant’s executive directors must be
ordinarily resident in Hong Kong. Rule 19A.15 of the Listing Rules further provides that the
requirement in Rule 8.12 may be waived by havin g regard to, among other considerations, the
applicant’s arrangements for maintaining reg ular communication with the Stock Exchange.
Our management, business operations and assets are primarily located outside Hong Kong.
Our executive Directors are based in the PRC as o ur Board believes it would be more effective
and efficient for our executive Directors to be based in a location where our significant
operations are located.
Accordingly, pursuant to Rule 19A.15 of the Listing Rules, we have applied to the Stock
Exchange for, and the Stock Exchange has granted us, a waiver from strict compliance with the
requirements under Rule 8.12 and Rule 19A.15 of the Listing Rules, provided that the Company
implements the following arrangements:
(a) the Company has appointed and will continue to maintain two authorized
representatives (the ‘‘Authorized Repres entatives’’), namely Mr. Sun Kanghua and
Ms. Shum Kit Han (‘‘Ms. Shum’’), who will act as the Company’s principal
communication channel with the Stock Exchange. Each of the Authorized
Representatives will be available to m eet with the Stock Exchange in Hong Kong
within a reasonable time frame upon the request of the Stock Exchange and will be
readily contactable by telephone and email. As and when the Stock Exchange wishes
to contact the Directors on any matters, eac h of the Authorized Representatives will
have means to contact all of the Directors promptly at all times. The Company will
also inform the Stock Exchange promptly in respect of any change in the Authorized
Representatives.
(b) the Company has provided the contact details of each Director (such as mobile phone
numbers, office phone numbers and email addresses) to each of the Authorized
Representatives and to the Stock Exchan ge. This will ensure that the Authorized
Representatives and the Stock Exchange will have the means to contact any of the
Directors (including the independent non-executive Directors) promptly as and when
required, including means to communicate with the Directors when they are
travelling. The Company confirms and wil l ensure that all Directors who are not
ordinarily resident in Hong Kong possess or can apply for valid travel documents to
visit Hong Kong and will be able to meet with the Stock Exchange within a reasonable
period of time when required.
WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
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(c) the Company has appointed Gram Capital Limited as our compliance advisor (the
‘‘Compliance Advisor’’), pursuant to Rule 3A.19 of the Listing Rules. The
Compliance Advisor will have access at all ti mes to the Authorized Representatives,
Directors and senior management of the Company, and will act as an additional
channel of communication between the Stock Exchange and the Company for the
period commencing on the Listing Date and ending on the date on which the
Company complies with Rule 13.46 of the Listing Rules in respect of its financial
results for the first full financial year commencing after the Listing Date. The
Compliance Advisor will maintain c onstant contact with the Authorized
Representatives, Directors and senior management of the Company through
various means, including regular meetings and telephone discussions whenever
necessary. The Authorized Representati ves, Directors and other officers will
provide promptly such information and assistance as the Compliance Advisor may
reasonably require in connection with the performance of the Compliance Advisor’s
duties as set forth in Chapter 3A of the Listing Rules.
JOINT COMPANY SECRETARIES
Rule 8.17 of the Listing Rules provides that t he issuer must appoint a company secretary
who satisfies the requirements under Rule 3.28 of the Listing Rules. Rule 3.28 of the Listing
Rules provides that the issuer must appoint as its company secretary an individual who, by
virtue of his academic or professional qualifications or relevant experience, is, in the opinion of
the Stock Exchange, capable of discharging the functions of company secretary.
Note 1 to Rule 3.28 of the Listing Rules provides that the Stock Exchange considers that
the following academic or professi onal 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); and
(c) a certified public accountant (as defined in the Professional Accountants Ordinance).
Note 2 to Rule 3.28 of the Listing Rules provides that in assessing ‘‘relevant experience’’,
the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer an d other issuers and the roles he played;
(b) familiarity with the Listing Rules and other relevant law and regulations including the
Securities and Futures Ordinance, Companies Ordinance, 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 qualificati ons in other jurisdictions.
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Paragraph 13 of Chapter 3.10 of the Guide for New Listing Applicants provides that the
Stock Exchange will consider waiver applications in relation to Rules 3.28 and 8.17 of the
Listing Rules based on the specific facts and cir cumstances. Factors th at will be considered by
the Stock Exchange include:
(a) whether the applicant has principal business activities primarily outside Hong Kong;
(b) whether the applicant is able to demons trate the need to appoint a person who does
not have the Acceptable Qualification (as d efined 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 proposed com pany secretary to be suitable to act as the
applicant’s company secretary.
The Company has appointed Mr. Liu Xingyu (‘‘Mr. Liu’’) and Ms. Shum as the joint
company secretaries of the Company (the ‘‘Joint Company Secretary(ies)’’) to jointly discharge
the duties and responsibilities of our compan y secretaries with reference to their work
experience and qualifications.
Mr. Liu currently serves as the secretary o f our Board and a supervisor of our three
subsidiaries and has over ten years of experience in financial management. Further biographical
details of Mr. Liu are set out in ‘‘Directors, Supervisors and Senior Management’’ in the
prospectus. Although Mr. Liu does not possess the qualifications set out in Rule 3.28 of the
Listing Rules, the Company has appointed him as one of the Joint Company Secretaries due to
his extensive experience in business management and corporate governance matters, as well as a
thorough understanding of the daily operations and internal administration of the Group
accumulated since his joining the Group in May 2020. Ms. Shum has been appointed as the
other Joint Company Secretary in March 2024 to assist Mr. Liu in discharging the duties of our
company secretary. Ms. Shum is a Chartered Secret ary, a Chartered Govern ance Professional, a
fellow member of both The Hong Kong Chartered Governance Institute and The Chartered
Governance Institute in the United Kingdom , and a member of the executive committee of the
Mexican Chamber of Commerce in Hong Kong and is therefore qualified under Rule 3.28 of the
Listing Rules to act as a Joint Company Secretary. Further biographical details of Ms. Shum are
set out in ‘‘Directors, Supervisors and Senior Management’’ in the prospectus.
The Directors believe that the Joint Company S ecretaries should, apart from being able to
meet the professional qualifications or the rele vant experience (the ‘‘Relevant Experience’’,
unless otherwise defined, within the meaning of Note 2 to Rule 3.28 of the Listing Rules), have
sufficient knowledge about (a) the operation and b usiness environment of the Company; and (b)
regulatory requirements in the PRC which are applicable to the Company.
WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
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Since Mr. Liu does not possess the Relevant Experience, 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. Liu may be
appointed as a joint company secretary of the Company. Pursuant to paragraph 13 of Chapter
3.10 of the Guide for New Listing Applicants, th e waiver will be granted for a fixed period of
time (the ‘‘Waiver Period’’) and on the following conditions:
(a) the Company appoints a person who meets the requirements under Note 1 to Rule
3.28 of the Listing Rules as a joint company secretary to assist the proposed company
secretary in discharging his functions as a joint company secretary and in gaining the
Relevant Experience; and
(b) the waiver will be revoked immediately if the person who meets the requirements
under Note 1 to Rule 3.28 of the Listing Rules so appointed as a joint company
secretary ceases to provide assistance to the proposed company secretary, or if there
are material breaches of the Listing Rules by the Company.
The following arrangements h a v eb e e n ,o rw i l lb e ,p u ti np l a c et oa s s i s tM r .L i ui n
acquiring the qualifications and experience required under Rule 3.28 of the Listing Rules:
(a) Ms. Shum will work closely with Mr. Liu to jointly discharge the duties and
responsibilities as the Joint Company Secretaries and to assist Mr. Liu to acquire the
Relevant Experience for an initial peri od of three years from the Listing Date, a
period which should be sufficient for Mr. Liu to acquire the Relevant Experience;
(b) the Company will ensure that Mr. Liu and Ms. Shum have access to relevant training,
support and advice from the Compliance Advisor (appointed pursuant to Rule 3A.19
of the Listing Rules) and the Company’s l egal and professional advisors, who can
provide professional guidance to the Company and the Joint Company Secretaries as
to compliance with the Listing Rules and all other applicable laws and regulations;
and
(c) before the end of the three-year period, t he qualifications and experience of Mr. Liu
and the need for on-going assistance of Ms. Shum will be further evaluated by the
Company. The Company will demonstrate to the Stock Exchange and seek the Stock
Exchange’s confirmation that Mr. Liu, having had the benefit of Ms. Shum’s
assistance during the three year period, ha s attained the Relevant Experience and is
capable of discharging the functions of company secretary under Rule 3.28 of the
Listing Rules so that a further waiver from Rules 3.28 and 8.17 of the Listing Rules
will not be necessary. The Company understands that the waiver will be revoked
immediately if Ms. Shum ceases to provide assistance to Mr. Liu as a joint company
secretary during the three-year period or w h e r et h e r ea r em a t e r i a lb r e a c h e so ft h e
Listing Rules by the Company.
WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
–9 7–


--- page 107 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which 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,
a n dt h e r ea r en oo t h e rm a t t e r st h eo m i s s i o no fw h i c hw o u l dm a k ea n ys t a t e m e n th e r e i no rt h i s
prospectus misleading.
CSRC FILING
According to the Trial Measures and related guidelines, we are required to complete the
filing procedures with the CSRC in connection with the proposed Listing. We have submitted a
filing to the CSRC for application for the Listing on April 30, 2024. The CSRC confirmed
completion of such filing on December 11, 2024. 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 applications under the Hong Kong Public
Offering, this prospectus contains the terms and conditions of the Hong Kong Public Offering.
The Hong Kong Offer Shares are offered solely on the basis of the information contained
and representations made in this prospectus and on the terms and subject to the 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 Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, any of the Underwriters, any of our or their respective affiliates or any of our
or their respective directors, o fficers, employees, adv isors, agents or representatives, or any
other persons or parties involved in the Global Offering.
Neither the delivery of this prospectus nor any offering, sale, delivery, subscription or
acquisition made in connection with the Offer Shares shall, under any circumstances, constitute
a representation or create any implication that there has been no change in our affairs since the
date of this prospectus or that the information in this prospectus is correct as of any date
subsequent to the date of this prospectus.
For details of the structure of the Global Offering, including its conditions and the
arrangements relating to the Over-allotment Opt ion and stabilization, see ‘‘Structure of the
Global Offering.’’
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 8–


--- page 108 ---
INFORMATION ON THE CONVERSION OF UNLISTED SHARES INTO H SHARES
The Company has applied for th e conversion of 228,241,531 Unlisted Shares held by 45
Shareholders into H Shares and see ‘‘History , Development and Corporate Structure’’ and
‘‘Share Capital’’ in this prospectus for details of their interests in the Company and relevant
procedures for the conversion of Unlisted Share s into H Shares. Such H Shares to be converted
from Unlisted Shares are restricted from trading for a period of one year after the Listing. The
conversion of Unlisted Shares into H Shares h as been approved by the CSRC on December 11,
2024 and is still subject to the approval by the Stock Exchange.
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/its acquisition of the Hong Kong Offer Shares to,
confirm that he/she/it 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 outside Hong
Kong or the distribution of this prospectus in any jurisdiction other than Hong Kong.
Accordingly, and 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 where 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 per mitted under the applica ble securities laws of
such jurisdictions pursuant to r egistration with or authorization by the relevant securities
regulatory authorities or an exemption therefro m. In particular, the Offer Shares have not been
offered and sold, and will not be offered and sold, directly or indirectly, in the PRC.
UNDERWRITING
The Listing is sponsored by the Joint Sponsors and the Global Offering is managed by the
Overall Coordinators. Pursuant to the Hong Kong Underwriting Agreement, the Hong Kong
Public Offering is fully underwritten by the Hong Kong Underwriters under the terms and
conditions of the Hong Kong Underwriting Agreement. The International Offering is expected
to be fully underwritten by the Internationa l Underwriters and subject to the terms and
conditions of the International Underwriting Agreement. For further details on the
Underwriters and the underwriting arrangements, see ‘‘Underwriting.’’
APPLICATION FOR LISTING OF THE H SHARES 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 pursuant to the Global Offering (including any H Shares which may be
issued pursuant to the exercise of the Over-allotment Option) and the H Shares to be converted
from Unlisted Shares.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 9–


--- page 109 ---
Dealings in the H Shares on the Stock Exchange are expected to commence on Wednesday,
May 7, 2025. No other part of our share capital is listed on or dealt in on any other stock
exchange, and no such listing or permission to list is being or proposed to be sought in the near
future.
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 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 Stock Exchange.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of listing of, and permission to deal in, the H Shares on the Stock
Exchange and our compliance with the stock ad mission requirement s of HKSCC, the H Shares
will be accepted as eligible securities by HKSCC fo r deposit, clearance and settlement in CCASS
with effect from the Listing Date or any other date as determined by HKSCC. Settlement of
transactions between participants of the Stock Exchange is required to take place in CCASS on
the second settlement day after any trading day . All activities under CCASS are subject to the
General Rules of HKSCC and HKSCC Operationa l Procedures in effect from time to time. All
necessary arrangements have been made for the H Shares to be admitted in to CCASS. Investors
should seek the advice of their stockbrokers or other professional advisors for details of the
s e t t l e m e n ta r r a n g e m e n t sa ss u c ha r r a n g e m e n t sm a ya f f e c tt h e i rr i g h t sa n di n t e r e s t s .
H SHARE REGISTER AND STAMP DUTY
All H Shares issued pursuant to applications made in the Global Offering and converted
from Unlisted Shares will be registered on our H Share register of members to be maintained in
Hong Kong by our H Share Registrar, Tricor Invest or Services Limited. Our principal register
of members will be maintained by us at our head office in the PRC.
Dealings in the H Shares registered in our H Share register will be subject to Hong Kong
stamp duty. Hong Kong stamp duty is charged to each of the seller and purchaser at the ad
valorem rate of 0.1% on the higher of the consideration for or the market value of the H Shares
transferred. In other words, a total of 0.2% will be payable on a typical sale and purchase
transaction of the H Shares. In addition, a fixe d stamp duty of HK$5.00 is currently payable on
each instrument of transfer of H Shares.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Company, dividends payable in Hong Kong dollars in
respect of our H Shares will be paid to the Shareholders as recorded on our H Share register of
members in Hong Kong and sent by ordinary post, at the Shareholders’ risk, to the registered
address of each Shareholder.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–1 0 0–


--- page 110 ---
According to the Guide to the Program for ‘‘Full Circulation’’ of H shares promulgated by
CSDC on February 7, 2020, cash dividends to domestic investors of H-share ‘‘full circulation’’
shall be distributed through CSDC. An H-sh are listed company shall transfer RMB cash
dividends to the designated bank account of the Shenzhen subsidiary of CSDC, who shall
complete the clearing of cash dividends by distributing the cash dividends to investors through
domestic securities companies.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
We have instructed our H Share Registra r, and it has agreed not to register the
subscription, purchase or transfer of any H Shares in the name of any particular holder unless
and until the holder delivers a signed form to ou r H Share Registrar in respect of those H Shares
bearing statements to the effect that the holder:
. agrees with us and each of our Shareholders, and we agree with each Shareholder, to
observe and comply with the PRC Company Law and our Articles of Association;
. agrees with us and each of our Shareholders t hat the H Shares are freely transferable
by the holders thereof; and
. authorizes us to enter into a contract on his or her behalf with each of our Directors,
Supervisors, managers and officers whereby such Directors, Supervisors, managers
and officers undertake to observe and co mply with their obligations to our
Shareholders as stipulated in our Articles of Association.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisors if they are in any doubt as to the taxation implications of subscribing for, purchasing,
holding, disposal of, dealing in or the exercise of any rights in relation to the H Shares. None of
our Company, the Joint Sponsors, the Overall Coor dinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, the
Underwriters, any of our or their respective a ffiliates or any of our or their respective
directors, officers, employees, advisors, agen ts or representatives, or any other persons or
parties involved in the Global Offering accepts resp onsibility for any tax effects on, or liabilities
of, any person resulting from the subscription, purchase, holding, disposal of, dealing in, or the
exercise of any rights in relation to, the H Shares.
LANGUAGE
If there is any inconsistency between the English version of this prospectus and the Chinese
translation of this prospectus, the English version of this prospectus shall prevail unless
otherwise stated. For ease of reference, the names of the Chinese laws and regulations,
government authorities, institutions, natural persons or other entities have been included in this
prospectus in both the Chinese and English langu ages. In the event of any inconsistency, the
Chinese version shall prevail.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–1 0 1–


--- page 111 ---
ROUNDING
Certain amounts and percentage figures, su ch as share ownership and operating data,
included in this prospectus may have been subject to rounding adjustments. Accordingly, figures
shown as totals in certain tables may not be an arithmetic aggregation of the figures preceding
them.
EXCHANGE RATE CONVERSION
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars at specified rates.
Unless otherwise specified, the translation of Renminbi into Hong Kong dollars, of
Renminbi into U.S. dollars and of Hong Kong dollars into U.S. dollars, and vice versa, in this
prospectus was made at the following rates:
RMB0.9289 to HK$1.00
RMB7.2085 to US$1.00
HK$7.7604 to US$1.00
The RMB to HK$ and US$ to RMB exchange rates are quoted by the PBOC for foreign
exchange transactions prevailing on the Latest Practicable Date.
No representation is made that any amoun ts in RMB or Hong Kong dollars can be or
could have been at the relevant dates converte d at the above rate or any other rates or at all.
OTHER
Unless otherwise specified, all references to any shareholdings in our Company following
the completion of the Global Offering assume that the Over-allotment Option is not exercised.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–1 0 2–


--- page 112 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. Chen Fangming
(陳方明)
Room 5A, No.66, Lane 999
Guangzhong West Road
Jing’an District
Shanghai
PRC
Chinese
Dr. Qiu Debo ( 邱德波) No.10, Lane 242
Xinnan Road
Songjiang District
Shanghai
PRC
Chinese
Mr. Sun Kanghua ( 孫康華) Room 502, No. 261, Lane 358
Qiyue Road
Jiading District
Shanghai
PRC
Chinese
Ms. Yang Hui ( 楊慧) Room 302, No. 8, Lane 399
Xinghong Road
Minhang District
Shanghai
PRC
Chinese (Hong Kong)
Non-executive Directors
M r .C a oH a i y i(曹海毅) Room 2202, Block 3,
Yangguang Jincheng
No. 35 Xinjian East Road
Yuhua District
Changsha City
Hunan Province
PRC
Chinese
Mr. Wang Zhenkun ( 王振坤) Room 3–2–602, Milan Court
Golden Harbor
Hanyang District
Wuhan City
Hubei Province
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 3–


--- page 113 ---
Name Address Nationality
Independent Non-executive
Directors
Mr. Zhou Yuan ( 周元) Room 105, Building 55
No. 88, Changsheng South Road
Taicang City
Jiangsu Province
PRC
Chinese
D r .L iX i a o f u(李曉郛) Room 99–1404, Taihe Red Royal
No. 83 Henggao Road
Baoshan District
Shanghai
PRC
Chinese
Dr. Jiang Bailing ( 江百靈) No. 332, Lane 1001
Jiuliting Street
Songjiang District
Shanghai
PRC
Chinese
Mr. YIM, Chi Hung Henry
(嚴志雄)
Unit 3, 12/F, Tower A
North Point Centre Building
286 King’s Road
North Point
Hong Kong
Chinese (Hong Kong)
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 4–


--- page 114 ---
SUPERVISORS
Name Address Nationality
Mr. Liu Yudong ( 劉昱東) Room 1806, Unit 2, Tongchuang
Yucheng, Guotai Road
Panyu District
Guangzhou City
Guangdong Province
PRC
Chinese
Ms. Wang Yanzhen ( 王艷湞) Room 1502, Unit 9
No. 185 Longma Road
Songjiang District
Shanghai
PRC
Chinese
Ms. Sun Wenxu ( 孫文旭) Room 601, No.30, Lane 500
Fengshun Road, Zhuanqiao Town
Minhang District
Shanghai
PRC
Chinese
For further details on our Directors and Supervisors, see ‘‘Directors, Supervisors and
Senior Management.’’
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 5–


--- page 115 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors and Sponsor-Overall
Coordinators
China International Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners,
Joint Lead Managers and Capital
Market Intermediaries
China International Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
CCB International Capital Limited
12/F CCB Tower,
3 Connaught Road Central
Central
Hong Kong
China Galaxy International Securities (Hong Kong)
Co., Limited
20/F Wing On Centre
111 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 6–


--- page 116 ---
Joint Bookrunners,
Joint Lead Managers and
Capital Market Intermediaries
Citrus Securities Limited
Room 2201, 22/F
OfficePlus@Wan Chai
303 Hennessy Road
Wan Chai, Hong Kong
TradeGo Markets Limited
Room 3405, West Tower
Shun Tak Centre
168–200 Connaught Road Central
Hong Kong
Joint Lead Manager and
Capital Market Intermediary
SPDB International Capital Limited
33/F, SPD Bank Tower
1 Hennessy Road
Hong Kong
Legal Advisors to our Company As to Hong Kong law:
Cooley HK
35/F, Two Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC law:
AllBright Law Offices
9, 11/F–12/F, Shanghai Tower
No. 501 Yincheng Middle Road
Pudong New Area
Shanghai
PRC
As to PRC cybersecurity and data privacy law:
AllBright Law Offices
9, 11/F–12/F, Shanghai Tower
No. 501 Yincheng Middle Road
Pudong New Area
Shanghai
PRC
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 7–


--- page 117 ---
Legal Advisors to the Joint Sponsors
and the Underwriters
As to Hong Kong law:
Ashurst Hong Kong
43/F, Jardine House
1 Connaught Place
Central
Hong Kong
As to PRC law:
Commerce & Finance Law Offices
12–14th Floor,
China World Office 2
No. 1 Jianguomenwai Avenue
Chaoyang District
Beijing
PRC
Reporting Accountants and
Independent Auditor
Certified Public Accountants
KPMG
Public Interest Entity Auditor registered in accordance
with the Accounting and Financial Reporting Council
Ordinance
8th Floor, Prince’s Building
10 Chater Road
Central
Hong Kong
Industry Consultant China Insights Industry Consultancy Limited
10F, Block B, Jing’an International Center
88 Puji Road
Jing’an District
Shanghai
PRC
Receiving Banks CMB Wing Lung Bank Limited
45 Des Voeux Road
Central
Hong Kong
DBS Bank (Hong Kong) Limited
11/F, The Center
99 Queen’s Road Central
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 8–


--- page 118 ---
Registered Office, Headquarters and
Principal Place of Business in the
PRC
Room 208, 2/F, Block 3
No. 168 Shennan Road
Minhang District
Shanghai
PRC
Principal Place of Business in
Hong Kong
Room 1912, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Company’s Website
www.breton.top
(The information contained on this website does not form
part of this prospectus )
Joint Company Secretaries Mr. Liu Xingyu
Room 1203, No.19, Lane 368
Fengzhou Road, Malu Town
Jiading District
Shanghai
PRC
Ms. Shum Kit Han
(A fellow member of both The Hong Kong Chartered
Governance Institute and The Chartered Governance
Institute in the United Kingdom)
Room 1912, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Authorized Representatives Mr. Sun Kanghua
Room 502, No. 261, Lane 358
Qiyue Road
Jiading District
Shanghai
PRC
Ms. Shum Kit Han
Room 1912, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
CORPORATE INFORMATION
–1 0 9–


--- page 119 ---
Audit Committee Dr. Jiang Bailing (Chairman)
Mr. YIM, Chi Hung Henry
D r .L iX i a o f u
Nomination Committee D r .L iX i a o f u(Chairman)
Ms. Yang Hui
Dr. Jiang Bailing
Remuneration and Appraisal
Committee
Mr. Zhou Yuan (Chairman)
Mr. Chen Fangming
Dr. Jiang Bailing
Strategy Committee Mr. Chen Fangming (Chairman)
Dr. Qiu Debo
Mr. Zhou Yuan
Compliance Advisor Gram Capital Limited
Room 1209
12/F, Nan Fung Tower
88 Connaught Road Central/
173 Des Voeux Road Central
Central
Hong Kong
H Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Banks China Merchants Bank Shanghai Hualing Branch
N o .1 0 9 2 ,H u a l i n gR o a d
Baoshan District
Shanghai
PRC
Agricultural Bank of China Shanghai Jinqiao Branch
No. 188, New Jinqiao Road
Pudong New District
Shanghai
PRC
CORPORATE INFORMATION
–1 1 0–


--- page 120 ---
The information and statistics set out in this section and other sections of this prospectus
were extracted from different official govern ment publications, avail able sources from public
market research and other sources from independent suppliers, and from the independent
industry report prepared by China Insights Consultancy Limited (‘‘CIC’’). We engaged CIC to
prepare an independent industry report in connection with the Global Offering (the ‘‘CIC
Report’’). The information from official gover nment sources has not been independently verified
by us, the Joint Sponsors, Joint Global Coordinators, Joint Bookrunners, Joint Lead Managers,
any of the Underwriters, any of their respective d irectors, supervisors, and advisors, or any other
persons or parties involved in the Global Offering, and no representation is given as to its
accuracy. Accordingly, the information from o fficial government sources contained herein may
not be accurate.
CHINA’S ENGINEERING MACHINERY INDUSTRY
Overview
Engineering machinery encompasses a broad s pectrum of mechanical equipment, tools and
vehicles that are purposefully designed and em ployed for diverse activities across multiple
industries, including construction, mining, logistics, industrial production, and port operations.
The categories of engineering machinery are extensive, including loaders, wide-body dump
trucks, forklifts, excavators, aerial work platfo rms, and cranes, among others. Therefore, the
development of engineering machinery industry is closely related to the macroeconomic
situation.
The development of the economy, the progress of urbanization and the supportive policies
in engineering machinery industry and other re levant industries have exerted material impacts
on the development of China’s engineering machinery industry. The sales of engineering
machinery experienced a decline from 2020 to 202 3, largely attributed to the adverse impact of
COVID-19 and the downturn of the macroeconomic situation. The market for engineering
machinery is expected to gradually rebound to pre-COVID-19 level from 2024 to 2029, due to
the optimization of China’s industrial structure and improved products’ quality. According to
the CIC Report, the market size of major engineer ing machinery categories in terms of revenue
generated by both Chinese and foreign manufacturers in China is expected to increase from
RMB182.7 billion in 2024 to RMB336.0 billion in 2029, representing a CAGR of 13.0%. The
following chart illustrates the actual and foreca sted market size of major engineering machinery
categories in terms of revenue in China for the period indicated.
INDUSTRY OVERVIEW
–1 1 1–


--- page 121 ---
Market Size of Major Engineering Machinery Categories (1) in China, 2020–2029E
0
100
300
500
600
RMB Billion
2029E2028E2020 2021 2022 2023 2024 2025E 2026E 2027E
400
200
133.3
11.429.1
32.3
367.2
121.4
14.824.9
29.6
345.4
54.0
15.430.0
32.3
199.7
52.5
12.421.3
46.3
184.1
39.4
14.022.4
47.9
182.7
44.3
25.2
51.7
69.9
207.5
52.9
30.9
60.0
86.3
250.0
58.9
36.6
65.4
97.8
281.6
64.4
41.6
70.3
108.4
310.9
161.1 154.7
68.0 51.7 59.0
16.4 19.8 22.9 26.1
68.9
45.6
74.7
117.6
336.0
29.2
Total
–26.3% 11.8%
Excavators
Forklifts
Wide-body dump trucks
–22.2% 14.8%
10.3% 9.3%
Loaders –6.3% 15.3%
5.4% 15.9%
CAGR
2020–2024 2024–2029E
CAGR
Others
–16.0% 13.0%
Source: CIC
Note:
(1) The market size encompasses the revenue generated from shipments of all major engineering machinery
categories that occur within mainland China, including domestic shipments and imports. Major
engineering machinery categories include excavators, forklifts, loaders, wide-body dump trucks, and
others.
With a versatile product portfolio, marked by excellent quality and price competitiveness
of the products, China has become a leading player in the global engineering machinery market
in terms of production and export volume. This success is also underpinned by continual
enhancement in post-sale service capabilities of Chinese manufacturers abroad, leading to a
steady growth in the export volume of China’s engineering machinery in recent years. The
export amount of Chinese engineering machinery manufacturers increased from RMB64.8
billion in 2020 to RMB124.1 billion in 2024, representing a CAGR of 17.6%, and is expected to
steadily increase to RMB257.8 in 2029, representing a CAGR of 15.7%. As the export amount
steadily increases, the corresponding mark et size by Chinese manufacturers also sees a
consistent rise. The market size of major engin eering machinery categories in terms of revenue
of both domestic and export sales by Chinese m anufacturers is expected to increase from
RMB299.6 billion in 2024 to RMB588.1 billion in 2029, representing a CAGR of 14.4%. The
following chart illustrates the actual and foreca sted market size of major engineering machinery
categories by Chinese manufacturers for the period indicated.
INDUSTRY OVERVIEW
–1 1 2–


--- page 122 ---
Market Size of Major Engineering Machinery Categories (1)
by Chinese Manufacturers, 2020–2029E
0
100
300
600
500
RMB Billion
2029E2028E2020 2021 2022 2023 2024 2025E 2026E 2027E
400
200
137.8
14.3
40.2
54.6
417.9
132.3
17.7
40.5
67.0
428.9
71.4
19.9
39.8
69.9
315.6
71.5
17.233.0
70.8
281.4
66.1
19.6
37.1
79.1
299.6
75.7
43.9
88.1
115.6
346.3
89.2
54.5
101.8
140.5
413.6
101.7
65.0
112.9
162.7
474.5
113.6
75.2
123.6
184.5
533.8
170.9 171.5
114.6 88.9 97.7
32.0 36.9
124.1
84.3
133.5
204.7
588.1
41.6
27.5
Total
–16.8% 13.4%
Excavators
Forklifts
Wide-body dump trucks
–13.0% 15.9%
9.7% 11.0%
Loaders –2.0% 17.9%
8.3% 16.2%
CAGR
2020–2024 2024–2029E
CAGR
Others
–8.0% 14.4%
22.9
Source: CIC
Note: (1) The market size by Chinese manufacturers encompasses the revenue generated from shipments of
all major engineering machinery categories by Chinese manufacturers on a global scale, including
domestic shipments and overseas exports. Major engineering machinery categories include
excavators, forklifts, loaders, wide-body dump trucks, and others.
Main Challenges
The traditional engineering machinery relies on diesel internal combustion engine for
power, which has presented the following challenges to the overall economy and environment.
. Increasing environmental concerns . The traditional engineering machinery generates
significant carbon emissions and other harm ful substances, such as sulphur dioxides,
hydrocarbons, nitrogen oxides, and particulate matter, during its operations. The
shift from diesel to cleaner energy reso urces has been recognized as a vital and
irresistible trend in the engineering machinery industry. For example, the
Implementation Plans on Synergizing the Reduction of Pollution and Carbon
Emissions ( 《減污降碳協同增效實施方案》) were jointly published by the NEA and
MEE and other relevant government authorities in 2022, which promotes the
development of green resources. In 2021, MIIT unveiled the 14th Five-year Green
Industrial Development Plan ( 《「十四五」工業綠色發展規劃》), which emphasizes the
pursuit of a green and low-carbon path to the development and promotion of green
and environmental-friendly machinery.
. High operational costs . The operational costs associated with traditional engineering
machinery are relatively high, primarily due to their fuel consumption caused by
complex operation scenarios and large payloads. Operators also face challenges in
evaluating and managing fuel consumption accurately.
. Complex operational conditions . Traditional engineering machinery generally has
complex structures and configurations, resulting in higher accident rates and
challenges in maintenance and repair. This leads to lower equipment utilization
rates, increased costs associated with maintenance and repair for traditional
engineering machinery and relatively high human costs.
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Future Trends
New Energy Transition
The new energy transition for engineerin g machinery involves the replacing of
conventional energy sources that have a negat ive impact on the environment with new and
more sustainable energy sources. Taking new energy loaders and wide-body dump trucks as
examples, new energy engineering machi nery typically incurs 50%–85% less energy
consumption costs than traditional fuel engineering machinery under the same working
conditions. Therefore, using new energy engineering machinery is significantly cost-efficient in
terms of energy consumption, thereby imparting a substantially favorable economic influence
on enterprises. More than 99% of the new energy engineering machinery is battery-electric
engineering machinery, which is characterized by low end-use pollutant emissions.
Currently, loaders and wide-body dump trucks are experiencing the fastest development in
new energy transition among engineering machinery categories, mainly due to the following
reasons:
. Significant economic benefits. Energy-intensive engineer ing machinery categories
include loaders due to their high work intensity and wide-body dump trucks due to
their enormous payloads. The economic benefits of new energy loaders and wide-body
dump trucks are particularly significant as a result of the reduction in energy
consumption.
. High usage efficiency. Loaders and wide-body dump trucks are typically used in
off-highway fixed operating environments . The deployment of compatible charging
infrastructure expedites the energy replenishment for the machinery. High mobility
speeds reduce commuting time between jobsites and charging stations, minimizing
impact on the effective working time of engineering machinery.
As new energy technology advances and custo mer acceptance increases, the new energy
penetration rates of loaders and wide-body dump trucks are expected to observe significant
growth in future. The new energy transition for engineering machinery is witnessing sustainable
and high-quality development, due to the new en ergy technologies’ advancement and practical
applications’ progression:
. Price reduction. The continuous development of new energy technologies has led to a
decrease in the production costs of major c omponents, such as batteries, resulting in a
reduction in the price of new energy engineering machinery.
. Performance enhancement. Development of technologies, such as e-powertrain and its
integration to the engineering machinery, contributes to the improvement of the key
performances of new energy engineering machinery, such as its endurance and
weight-carrying capacity, and therefore promotes the mass-production and
employment of these machinery.
. Wide application. Companies across the value chain of the new energy engineering
machinery industry are being called upon to develop and launch a wide range of new
energy products to meet the sustainability expectations of the whole industry.
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Intelligentization
The intelligentization of engineering machinery refers to the upgrading of engineering
machinery equipment through intelligent t echnologies such as intelligent sensing and
autonomous operation algorithms, to achieve varying degrees of remote or autonomous
control. By utilizing intelligent engineering machinery, companies can reduce the need for
personnel or enable unmanned operations at work si tes, effectively addressing challenges like
high safety risks and labour costs and improve the operational efficiency at the same time.
. Remote control technology. Remote control technology involves the installation of
sensors, cameras, and other devices on engi neering machinery to capture visuals and
data from the work site. Orders from a remote operating room can be transmitted
over the network to the work site, allo wing operators to remotely control the
operation of engineering machinery. This technology facilitates remote machinery
control and enables the seamless management of multiple fleets concurrently.
Therefore, employing remote control techno logy significantly enhances the working
environment and safety for operators, helping to reduce the difficulties and costs
associated with recruitment and employee safety for enterprises, and allowing for the
creation of centralised operation control centres to optimize personnel deployment
and working procedure.
. Autonomous operation technology. Engineering machinery, utilizing autonomous
operation technologies such as environmental perception, path planning, and
algorithms for autonomous operation, will be able to autonomously complete the
operational process. Autonomous operation in the engineering machinery achieves a
complete substitution for human operators, ushering in a revolutionary
transformation of the operational paradigm in the engineering machinery industry.
The automation of engineering machinery faces significant technological hurdles due to its
complicated operational settings. Currently, most categories of autonomous engineering
machinery have not been commercialized. H owever, the application of autonomous
technology to wide-body dump trucks has experi enced advanced development with successful
commercial applications, as autonomous wide-body dump trucks are designed for
point-to-point transportation and usually operate at low speeds in relatively closed
environments with fewer obs tacles and disturbances.
With the continuous development of standalone intelligent technologies and collaborative
operations across diverse machineries, the intelligent capabilities of engineering machinery
operations will continue to develop in the future, contributing to the continuous expanding of
the application scenarios and categories, and i mproving levels of application of intelligent
technologies.
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CHINA’S NEW ENERGY ENGINE ERING MACHINERY INDUSTRY
Overview
New energy engineering machinery is predom inantly built on innovative power systems
driven by new energy sources. At this stage, electric engineering machinery boasts higher
technological maturity and represents as the mainstream product in the new energy engineering
machinery industry. New energy engineering machi nery, largely powered by electricity, typically
yields 20%–50% less carbon than conventional fuel-powered engineering machinery. In
particular, new energy wide-body dump trucks yield more than 70% less carbon than
traditional wide-body dump trucks in heavy-load downhill operations. Powered by electric
motors, new energy engineering machinery offers superior maneuverability, responsiveness,
reliability and cost efficiency when compared to its conventional counterparts. Moreover, it
boasts reduced energy consumption and maintenance expenses, resulting in lower overall
lifecycle usage costs.
Due to the advancements of new energy engineering machinery, coupled with the
development of electrification technologies and implementation of environmental policies,
China’s new energy engineering machinery indu stry has been evolving and is expected to rapidly
develop over the following years. Its market size in terms of revenue generated by both Chinese
and foreign manufacturers in China increased from RMB23.5 billion in 2020 to RMB54.0 in
2024, representing a CAGR of 23.2%, and is exp ected to increase to RMB124.2 billion in 2029,
representing a CAGR of 18.1%. The following chart illustrates the actual and forecasted market
size of major new energy engineer ing machinery categories and new energy penetration rate in
China for the period indicated.
Market Size of Major New Energy
Engineering Machinery Categories in China
(1) , 2020–2029E
6.4%
31.7% 33.3% 35.2% 37.0%
10.3%
19.2%
24.9%
29.6% 30.5%
0
30
90
120
150
RMB billion
2029E2028E2020 2021 2022 2023 2024 2025E 2026E 2027E
60
Total 23.2% 18.1%
Forklifts
Loaders
Others
18.1%
129.7%
17.5%
11.5%
33.0%
Wide-body dump trucks 127.6% 43.2%
14.3%
CAGR
2020–2024 2024–2029E
CAGR
23.5
45.8
18.015.313.18.3
1.7
2.9
54.0
15.8
2.56.9
63.2
18.2
9.4
79.3
21.9
13.7
24.9
18.6
93.8
27.9
23.7
109.3
8.5 11.7
6.03.8
0.1
0.214.9
35.6
0.4
0.6
21.5
38.3
20.0 23.2 28.9
31.8
37.7
41.9
46.0
30.8
28.7
124.2
14.9
49.9
1.2
1.9
New energy penetration rate(2)
Source: CIC
Notes:
(1) Major new energy engineering machinery categories include forklifts, loaders, wide-body dump trucks,
and others.
(2) The new energy penetration rate is calculated by dividing the market size of major new energy engineering
machinery categories by the market size of major engineering machinery categories in China.
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The new energy engineering machinery is widely used in diversified industries. The
following chart illustrates the actual and forecasted market size of major new energy engineering
machinery categories in China by downstream c ustomer industries for the period indicated.
Market Size of Major New Energy Engin eering Machinery Categories in China (1) by
Downstream Customer Industries, 2020–2029E
RMB Billion
8.4
11.0
4.9
8.9 10.8
6.4
13.0
5.64.7
6.6
1.5
2.7
4.3
5.7
7.9
14.7
93.8
7.6
8.0
11.7
17.7
2.29.3
3.9
10.9
15.9
19.9
23.2
10.7
4.36.45.8
14.3
20.8
22.0
25.5
12.1
4.87.0
18.2
25.5
23.8
27.6
13.3
5.3
7.5
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
23.5
35.6 38.3 45.8
54.0
63.2
79.3
109.3
124.2
3.1
4.9
1.8
2.8
0.9
3.5
3.4
0.8 10.6
5.5
3.1
1.2
3.9
3.4
4.2
12.7 15.7 17.5 20.8 2.8 3.02.1
0.9
3.9
3.1
2.3
2.50.5
2.4
2.5
0.3
3.2
1.7
7.4
5.4
Construction
Mining
Logistics & Ports
Industrial & Manufacturing
Irrigation & Water conservancy
Municipal engineering
Facility Management
Others
CAGR
2020–2024
CAGR
2024–2029E
28.9% 31.3%
100.3% 35.5%
24.8% 12.8%
20.6% 11.9%
32.1% 14.9%
19.6% 15.2%
2.2% 15.0%
14.9% 11.7%
Total 23.2% 18.1%
0
6
3
15
9
12
Source: CIC
The rapid development of China’s new energy engineering machinery industry has led to an
expanding presence and acclaim for Chinese products in the international markets. In 2024, the
market size of major new energy engineering mac hinery categories in terms of revenue of both
domestic and export sales of Chinese manufacturers reached RMB79.7 billion, representing a
CAGR of 29.2% from 2020 to 2024. It is expect ed that the market size will reach RMB176.0
billion in 2029, representing a CAGR of 17.2% from 2024 to 2029. With innovation in products
and technologies and expansion of global sales channels, Chinese new energy engineering
machinery will have a more notable pr esence in international markets.
Market Size of Major New Energy Engineering Machinery Categories
(1) by
Chinese Manufacturers, 2020–2029E
0
30
90
180
28.6
RMB Billion
2029E2028E2020 2021 2022 2023 2024 2025E 2026E 2027E
47.3
79.7
21.712.9 17.5 21.17.0
2.77.4
93.4
25.4
4.110.6
113.9
29.8
15.7
133.8
34.0
21.7
38.3
28.2
155.0
42.5
34.9
176.0
13.1 16.9
150
120
60
9.46.6
CAGR
2020–2024 2024–2029E
CAGR
0.1
0.3
0.5
0.621.2
54.1
1.3
2.033.3 33.2
38.0
47.8
53.3
61.7
68.6
75.4
81.6
64.2
1.9
3.2
Total 29.2% 17.2%
Forklifts
Loaders
Others
22.5%
131.1%
32.7%
11.3%
36.2%
Wide-body dump trucks 127.8% 44.4%
14.4%
Source: CIC
Note:
(1) Major new energy engineering machinery categories include forklifts, loaders, wide-body dump trucks,
and others.
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Market Drivers
. Continued growth in demand from downstream industries. Engineering machineries are
widely used in industries such as construction, mining, logistics, industrial production, and
implementation of port operations. With the continuous development of downstream
industries and supporting policies, demand for new energy engineering machineries has
also increased steadily. In particular, in the mining industry, engineering machineries such
as loaders and wide-body dump trucks are key c arriers for transporting ore. As the world’s
second largest economy, China has a huge demand for mineral products. In the
post-epidemic era, as the global supply chain undergoes structural adjustments due to
the continued shocks, China has generated more demand for local mineral products,
promoting the development of the mining industry. Furthermore, the official
implementation of favorable p olicies, such as the Notice on Further Strengthening the
Construction of Green Mines ( 《關於進一步加強綠色礦山建設的通知》)i s s u e db yt h e
Ministry of Natural Resources in April 2024 and the Notice of the Implementation Plan
for Promoting the Renewal of Construction and Municipal Infras tructure Equipment ( 《推
進建築和市政基礎設施設備更新工作實施方案的通知》) issued by the Ministry of Housing
and Urban-Rural Development of PRC, continuously drives the demand growth in the new
energy engineering machinery industry.
. Enhanced economic efficiency . The decrease in costs driven by supply chain optimization
leads to reduced procurement costs of new energy engineering machinery. Coupling with
relatively minimal maintenance and ope ration costs and a high cost-performance
efficiency, new energy engineering machi nery has become an increasingly attractive
option for customers. Moreover, with the ongoing iteration and advancement of new
energy technologies, energy-efficiency of new energy engineering machinery is continually
improving, thereby amplifying the economic benefits of these products. Identifying these
economic benefits and successful applicatio n cases, key players in industries such as
construction, mining, and port operations are showing their preferences to adopt new
energy engineering machinery over convention al fuel-powered engineering machinery. As a
result, the new energy penetration rate of engineering machinery market is poised for a
rapid growth in the forthcoming years.
. Technological advancements . Chinese engineering mac hinery companies have been
committed to innovating technologies and enhancing functionalities for engineering
machinery. This makes them well-positione d to offer cost-efficient and high-quality
products. Furthermore, development in electrification technologies enhances the
performance of new energy engineering mac hinery while decreasing production costs.
This addresses the concerns related to limited working hours, inadequate power, and high
initial procurement costs of new energy engineering machinery. These advancements
contribute to a higher acceptance and broade r utilization of new energy engineering
machinery across various application scenarios.
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Entry Barriers
. Technology capability. Product reliability and quality are paramount considerations for
enterprise users when acquiring new energy engineering machinery. Market players in the
industry must possess substantial expertise and technological proficiency to demonstrate
advanced capabilities in product research, development and manufacturing. Strong
research and development capability an d deep understanding of the market demand
enable the established market players to achieve strong product iteration capability.
. Industry experience and reputation. N e we n e r g ye n g i n e e r i n gm a c h i n e r yc o m p a n i e so f t e n
rely on past successful cases and industry reputation to gain customers’ trust due to the
lack of uniform industry standards and complexity of product application scenarios.
Leading players in the industry have establis hed brand recognition and customer bases in
the market. This poses a challenge for new ent rants, especially when competing against
established market leaders with scale and branding advantages.
. Supply chain capability. The production and manufactur ing of new energy engineering
machinery involve a diverse array of comp onents and raw materials, including steel,
hydraulic elements, and electrical components. The stability and efficiency of the supply
chain play a pivotal role in determining product quality, costs, and delivery timelines.
Furthermore, due to the significant size an dw e i g h to fm o s tn e we n ergy engineering
machinery categories, it is imperative for companies to establish a well-organized logistics
network to ensure the prompt and secure delivery of products to customers.
Key Sectors of China’s New Energy Engineering Machinery Industry
New Energy Loaders
Loaders are primarily used in shoveling and loading operations. Due to their compatibility
to various buckets, loaders are applied in various settings, including mining, factories, ports,
and other enclosed or semi-enclosed sites. How e v e r ,l o a d e r sa r ea s s o c i a t e dw i t hh i g he n e r g y
consumption and large emissions of carbon dioxide and particulate matter emissions among the
engineering machineries. Therefore, there is an urgent need to apply new energy technologies to
facilitate their transition into e nvironment-friendly alternatives.
New energy loaders primarily utilize elect ricity as their power source, resulting in a
significant reduction in carbon dioxide and particulate matter emissions and operational costs,
when compared to traditional loaders. Takin g a loader with a five-tonne load capacity as an
example, assuming a service lifespan of five years, the new energy five-tonne loader generally
can save approximately RMB1.0 million to RMB1.5 million in terms of total costs during the
overall lifecycle as compared to traditional loaders.
Market Size
The new energy loader market in China has ex perienced rapid growth driven by the rising
demand attributable to new energy loaders’ economic benefits and convenience of construction
of charging stations and piles. The market size of new energy loaders in China increased from
RMB0.2 billion in 2020 to RMB6.9 billion in 2024, representing a CAGR of 129.7%. With
continual development of electrification t echnologies, enhanced eco nomic efficiency and
INDUSTRY OVERVIEW
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favorable policies, the new energy loader mark et in China is expected to continue to rapidly
grow, with its market size increasing from RMB6.9 billion to RMB28.7 billion in 2029,
representing a CAGR of 33.0%. The new energy penetration rate experienced increase from
0.4% in 2020 to 21.7% in 2024, and is expected to continue to increase to 57.6% in 2029. The
following chart illustrates the actual and f orecasted market size of the new energy loader
industry and the new energy penetration rate in China for the periods indicated.
Market Size of New Energy Loaders in China, 2020–2029E
0
10
25
30
0.2
RMB Billion
2029E2028E2020 2021 2022 2023 2024 2025E 2026E 2027E
0.6
1.9 2.9
6.9
13.7
18.6
23.7
28.7
9.4
15
20
5
0.4%
35.6%
42.9%
50.3%
57.6%
1.0% 2.9% 7.9%
21.7% 28.2%
Loaders 129.7% 33.0%
CAGR
2020–2024 2024–2029E
CAGR
New energy penetration rate(1)
Source: CIC
Note: (1) The new energy penetration rate is calculated by dividing the shipments of new energy loaders by
the shipments of all loaders in China.
The international market has witnessed a rapid growth of Chinese new energy loader
manufacturers. The market size of new energy lo aders in terms of revenue of both domestic and
export sales by Chinese manufacturers reache d RMB7.4 billion in 2024 compared to RMB0.3
billion in 2020, representing a CAGR of 131.1%, and is expected to reach RMB34.9 billion in
2029, representing a CAGR of 36.2%. The following chart illustrates the actual and forecasted
market size of the new energy loaders by Chine se manufacturers for the periods indicated.
Market Size of New Energy Loaders by Chinese Manufacturers, 2020–2029E
0
10
40
0.3
RMB Billion
2029E2028E2020 2021 2022 2023 2024 2025E 2026E 2027E
0.6 2.0 3.2
7.4
15.7
21.7
28.2
34.9
10.6
20
30
Loaders 131.1% 36.2%
CAGR
2020–2024 2024–2029E
CAGR
Source: CIC
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Competitive Landscape of New Energy Loader Industry
The new energy loader industry in China is h ighly concentrated. In 2024, the top seven
market players contributed to an aggregate market share of approximately 86.6% and 86.9% in
terms of the shipments and revenue in mainland China, respectively, and our Company ranked
seventh with a market share of 3.8% and 4.1%, respectively. The following table sets forth the
ranking of companies that manufacture new ener gy loaders in China in terms of shipments and
revenue in 2024.
Ranking Company Principal Business Shipments Share Revenue Share
(units) (billion)
1 Company A Traditional engineering machinery
company
*2,900 24.5% *1.6 23.6%
2 Company B Traditional engineering machinery
company
*2,800 23.6% *1.7 25.0%
3 Company C Traditional engineering machinery
company
*1,500 12.6% *0.9 12.8%
4 Company D Traditional engineering machinery
company
*1,100 9.3% *0.6 9.1%
5 Company E Traditional engineering machinery
company
*1,000 8.4% *0.6 8.1%
6 Company F Traditional engineering machinery
company
*520 4.4% *0.3 4.2%
7 Our Company Pure-play new energy engineering
machinery company
*450 3.8% *0.3 4.1%
Total 86.6% 86.9%
Source: CIC
Notes:
1. Company A was established in 1985, with headquarter in Jiangsu, China. Its products mainly include road
engineering machinery, mechanical scrapers, and road machinery. It is a listed company on Shenzhen
Stock Exchange.
2. Company B was established in 1989, with headquar ter in Guangxi, China. It mainly designs and
manufactures construction, industrial, agricultural, and robotics machinery. It is a listed company on the
Shenzhen Stock Exchange.
3. Company C was a private company established in 2003, with headquarter in Shandong, China. Its
products mainly include loaders, excavators, and road machinery, among others.
4. Company D was established in 1993, with its headquarter in Fujian, China. It mainly designs and
manufactures loaders, rollers, excavators, forklifts, and relative components. It is a listed company on the
Hongkong Stock Exchange.
5. Company E was established in 2000, with headquarter in Hunan, China. Its products mainly include
construction and mining equipment, port machinery, and oil drilling machinery, among others. It is a
listed company on the Shanghai Stock Exchange.
6. Company F was established in 1993, with its headquarter in Shandong, China. Its products mainly include
bulldozers, road machinery, loaders, excavators, and concrete machinery. It is a listed company on the
Shenzhen Stock Exchange.
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New Energy Wide-body Dump Trucks
Wide-body dump trucks are heavy-duty off-road dump trucks mainly used to transport
heavy materials, such as ore, coal, and other min eral materials. These over-sized machines are
usually utilized in mining, energy and water conse rvancy projects. In particular, the significant
growth of demand from open-pit mining industry further drives the development of the
wide-body dump truck industry.
The complex working conditions in mining operations lead to high fuel consumption and
maintenance costs for traditional wide-body dump trucks. New energy wide-body dump trucks,
powered by electricity, have s ignificantly reduced operational and maintenance costs and
therefore are increasingly adopted by the mini ng companies. For example, assuming a service
lifespan of five years, a 105-tonne new energy wide-body dump truck in heavy-load uphill
operations can save approximately RMB1.8 million to RMB2.5 million in total costs during its
entire lifecycle as compared to the traditional fuel-powered counterparts.
Market Size
China’s new energy wide-body dump truck market has experienced rapid growth driven by
the increasing acceptance by customers in the mining industry due to its economic benefits. As
wide-body dump trucks typically operate in mines and quarries, the design and installation of
charging stations for these machines are managea ble and affordable. The practical deployment
of charging stations enables a higher utilizat ion rate of new energy wide-body dump trucks,
further promoting the transition from tradition al fuel-powered engineer ing machinery to its new
energy alternatives. Furthermore, some local go vernments proactively implement policies to
incentivize the transition from traditional fuel-powered wide-body dump trucks to the new
energy alternatives.
In 2024, the market size of new energy wide-body dump trucks in terms of revenue
generated by both Chinese and foreign manufacturers in China reached RMB2.5 billion as
compared to RMB0.1 billion in 2020, repres enting a CAGR of 127.6%, and is expected to
further reach RMB14.9 billion in 2029, representing a CAGR of 43.2%. The new energy
penetration rate observed an increase from 0 .4% in 2020 to 9.0% in 2024, and is expected to
further increase to 37.2% in 2029. The following chart illustrates the actual and forecasted
market size of the new energy wide-body dump t rucks and the new energy penetration rate in
China for the periods indicated.
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Market Size of New Energy Wide-body Dump Trucks in China, 2020–2029E
RMB Billion
2029E2028E2027E2020 2021 2022 2023 2024 2025E 2026E
0.1 0.4 1.2 1.7
3.8
6.0
8.5
11.7
14.9
2.5
12.6% 17.8% 23.6%
30.8% 37.2%
0.4% 1.4% 3.7% 6.6% 9.0%
0
15
20
5
10
Wide-body dump trucks 127.6% 43.2%
CAGR
2020–2024 2024–2029E
CAGR
New energy penetration rate(1)
Source: CIC
Note: (1) The new energy penetration rate is calculated by dividing the shipments of new energy wide-body
dump trucks by the shipments of all wide-body dump trucks in China.
New energy wide-body dump trucks produced by Chinese manufacturers are steadily
expanding their presence in the international market. This is attributable to their impressive
achievements, such as robust driving stability control system, heightened safety features, and
competitive prices. In 2024, the market size of new energy wide-body dump trucks in terms of
revenue of both domestic and export sales by Chinese manufacturers reached RMB2.7 billion as
compared to RMB0.1 billion in 2020, represen ting a CAGR of 127.8%. As Chinese new energy
wide-body dump truck manufacturers continue to enhance their product capabilities and
establish a broader network of marketing channels, the market size is expected to further
increase to RMB16.9 billion in 2029, representing a CAGR of 44.4%. The following chart
illustrates the actual and forecasted global market size of the new energy wide-body dump
trucks by Chinese manufacturers for the periods indicated.
Market Size of New Energy Wide-body Dump Trucks by Chinese Manufacturers, 2020–2029E
RMB Billion
2029E2028E2027E2020 2021 2022 2023 2024 2025E 2026E
0.1 0.5 1.3 1.9
4.1
6.6
9.4
13.4
16.9
2.7
9.2% 13.1% 17.5%
22.8% 27.9%
0.3% 1.3% 2.9% 4.7% 6.5%
0
15
20
5
10
Wide-body dump trucks 127.8% 44.4%
CAGR
2020–2024 2024–2029E
CAGR
New energy penetration rate(1)
Source: CIC
INDUSTRY OVERVIEW
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Heavy-load downhill and uphill are two main operating scenarios for wide-body dump
trucks. In the heavy-load downhill operations, such as sand and gravel mines, the requirements
for motor power of wide-body dump trucks are lower and the regenerative braking system can
be effectively utilized, resulting in better eco nomic efficiency performance of wide-body dump
trucks. The majority of new energy wide-body dump truck companies primarily target
customers in heavy-load downhill operations. Heavy-load uphill operations, primarily in mining
operations, represent 60% to 80% of all wide-body dump truck application operations. In
heavy-load uphill operations, new energy wide-b ody dump trucks operate for long periods with
high power consumption, placing higher demands on their energy storage systems than
operating in the heavy-load downhill operation.
New energy wide-body dump trucks primaril y address the requirements of heavy-load
uphill operations through two technological approaches, which are (i) enhancing battery
capacity to extend the single-charge range, and ( ii) improving the effective operational duration
of new energy wide-body dump trucks through battery swapping technology. Leading
companies are actively investing in research and development to ensure their new energy
wide-body dump trucks deliver outstanding performance in heavy-load uphill operations.
Enhancing battery capacity for new energy wide-b ody dump trucks requires lower initial capital
investment as compared to the application of battery swapping technology. As a result,
enhancing battery capacity becomes the prim ary technological approach for new energy
wide-body dump truck manufacturers to equip their products for heavy-load uphill operations.
Generally, long-endurance 105-tonne new energy wide-body dump trucks with batteries
exceeding approximately 650 kWh capacity could e ffectively balance customers’ demands for
extended endurance and efficient procureme nt cost as of the Latest Practicable Date.
Consequently, the majority of leading new energy wide-body dump truck manufacturers are
actively investing in the development of long-endurance new energy wide-body dump trucks
equipped with batteries of at least 650 kWh capacities. However, as of the Latest Practicable
Date, only a few market players had launched commercialized wide-body dump trucks for
heavy-load uphill operations with more than 650 k Wh battery capacity. In consideration of the
wide applications of wide-body dump trucks for heavy-load uphill operations, the capability to
launch wide-body dump trucks for heavy-load uphill operations leads to a greater market
opportunity for the market players over their peers.
Competitive Landscape of New Energy Wide-body Dump Trucks Industry
The new energy wide-body dump trucks marke t is still in its early stage, with a limited
number of players in the market. In 2024, the top five new energy wide-body dump truck
companies contributed to an aggregate mark et share of approximately 83.3% and 82.9% in
terms of shipments and revenue in mainland China, among which we ranked third with a market
share of 18.3% and 18.2%, respectively. The follo wing table sets forth the ranking of companies
INDUSTRY OVERVIEW
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that manufacture new energy wide-body dump trucks in China in terms of shipments and
revenue in 2024.
Ranking Company Principal Business Shipments Share Revenue Share
(units) (billion)
1 Company G Traditional engineering machinery
company
*420 25.0% *0.6 25.2%
2 Company H Traditional engineering machinery
company
*400 23.9% *0.6 24.3%
3 Our Company Pure-play new energy engineering
machinery company
*307 18.3% *0.4 18.2%
4 Company E Traditional engineering machinery
company
*170 10.1% *0.2 9.5%
5 Company I Traditional engineering machinery
company
*100 6.0% *0.1 5.7%
Total 83.3% 82.9%
Source: CIC
Notes:
1. Company G was established in 2003, with headquarter in Henan, China, and focuses on manufacturing
buses, trucks, specialized vehicles, components, and engineering machinery. It holds ownership of two
entities listed on the Shanghai Stock Exchange.
2. Company H was established in 2005,with headquarter in Shaanxi, China, and focuses on manufacturing
mining dump trucks. It is a listed company on Beijing Stock Exchange.
3. Company I is a private company established in 2005, with headquarters in Shandong, China. Its products
mainly include mining machinery, mining trucks, aerial work platforms, excavators, and road machinery,
among others.
Historical Trends of Prices on Major Raw Materi als and Components for New Energy Engineering
Machinery
The key components and raw materials for n ew energy engineering machinery mainly
include (i) battery cells, (ii) metal, such as copper, aluminum and stainless steel, and (iii)
e-powertrains. The operating results of new energy engineering machinery companies can be
adversely affected by price hikes or supply fluctuations of raw materials as a result of changes in
macroeconomic conditions, supply and demand, as well as market prospects.
INDUSTRY OVERVIEW
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LFP Batteries
At present, lithium iron phosphate (LFP) batteries have emerged as the dominant battery
technology employed by new energy engineering machinery. The LFP battery’s price
experienced fluctuations during 2020 to 2024. Due to LFP battery’s technological advances,
decreased manufacturing costs and increased p roduction volume, its price decreased from
R M B 0 . 7p e rw a t t - h o u ri n2 0 2 0t oR M B 0 . 6p e rw a t t - h o u ri n2 0 2 1 .I t sp r i c ei n c r e a s e dt oR M B 0 . 9
per watt-hour in 2022, due to the rising costs of its raw materials and increasing downstream
demand. In particular, the price of lithium carbonate, a critical upstream material for the LFP
battery, surged rapidly from 2021 to 2022. The following diagram illustrates the average prices
of LFP battery in China for the periods indicated.
Average LFP Battery Price in China, 2020–2029E
0
0.7
0.9
1.0
0.8
0.6
0.7
0.9
0.8
0.5
0.3
0.4
0.4
0.3 0.3
0.6
0.5
0.4
0.3
0.2
0.1
RMB/Wh
2023 2024 2025E 2026E 2029E 2027E 2028E20222020 2021
Source: CIC
Note: The average LFP battery price represents the average price of LFP batteries to be used in (i) new energy
engineering machinery which requires high battery performance, (ii) new energy passenger vehicles
which require relatively low battery performance, and (iii) other products.
Since the end of 2022, the price of battery-grade lithium carbonate, a key raw material for
LFP batteries, has continued to fluctuate downward, dropping from approximately RMB570
thousand per tonne in December 2022 to around RMB75 thousand per tonne in December 2024,
showing a decrease of over 80%. In the year ended December 31, 2024, the average LFP battery
price in China amounted to RMB0.52 per watt-hour, showing a decrease of 37.1% compared to
that in the year ended December 31, 2023. Consid ering the continuous growth in the supply of
battery-grade lithium carbonate and the expected launch of low-cost salt lake lithium carbonate
projects in the future, a supply surplus of battery -grade lithium carbona te is anticipated to
persist. In addition to the declining raw material prices, advancements in low-cost technological
pathways for LFP batteries are driving sustained production capacity expansion, expected to
result in oversupply. Therefore, it is expected that the price of LFP batteries will maintain a
declining trend in the future. According to CIC, the average LFP battery price in China is
expected to further decrease to around RMB0.3 per watt-hour in 2029.
INDUSTRY OVERVIEW
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Metal
The Company utilizes steel as its primary metal in production, with Q355B being the most
commonly used grade. Metal is the primary raw material used in the production of key
components for engineering ma chinery, such as chassis, stru ctural components, frames, and
axles, aside from LFP batteries. The prices of these components are largely influenced by metal
prices. The diagram below shows the average prices of Q355B steel in China during the specified
periods. According to CIC, driven by increasing iron ore production, global oversupply of steel
is expected to keep steel prices declining f rom approximately RMB4,750 per ton in 2023 to
approximately RMB4,020 per ton 2028.
Average Price of Q355B Steel in China, 2019–2028E
0
3,000
5,000
6,000
4,000
2,000
4,376
5,700
4,780 4,750 4,570 4,318 4,102 4,020
4,260
1,000
RMB/ton
2023 2024E 2025E 2026E 2027E20222019 2020 2021
Source: CIC
E-powertrains
Given the variance in machinery types and speci fications, the configuration and associated
costs of the components of the e-powertrains are diversified, thereby complicating the
establishment of a uniform pricing model.
GLOBAL MARKET OF NEW ENERGY TRACTOR TRUCK INDUSTRY
Tractor trucks refer to vehicles with the ability to provide motive power and designed for
towing trailers, which are widely used in long-d istance and short-distance transportation with
heavy loads. Tractor truck is a category of commercial vehicles. The Regulations for
Commercial Vehicle Manufacturers and Product Admission Management ( 《商用車生產企業及
產品准入管理規則》) published by MIIT imposes stringent requirements on production
capabilities of the commercial vehicles and their critical components. Tractor truck
manufacturers shall possess the requisite qua lifications to produce tractor truck vehicles in
China.
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The new energy tractor truck industry entails the conversion of traditional fuel-powered
tractor trucks into vehicles powered by new energy. These solutions predominantly encompass
new energy tractor trucks, components for tractor truck electrification, and other fittings. Due
to the multitude of technical cap abilities involved in the production of new energy tractor truck
industry, it is challenging for a single enterprise to possess all the requisite technological
capabilities to produc e new energy tractor trucks. Conseq uently, most clean energy solution
providers for tractor trucks choose to externall y source certain components to enhance product
stability and expedite the mass production p rocess. Typically, the externally sourced
components encompass remot e operation system, battery system and power system.
Additionally, some companies in the new energy tractor truck industry provide an
auxiliary e-powertrain as the complementary n ew energy transition solution for fuel-powered
tractor trucks, providing an independent power system to work with the existing internal
combustion engine. This device enables fuel-pow ered tractor trucks to gain additional electric
propulsion, thereby achieving the operational effect of a hybrid tractor truck without any
modifications to the original internal power system. Currently, the market size for this type of
complementary products accounts for no more than 0.5% of the global new energy tractor truck
market in terms of revenue in 2024.
With the continuous implementation of supportive policies for new energy tractor trucks,
advancements in new energy technologies, and the innovation of new energy products, the new
energy tractor truck industry has experienced an exponential growth. In 2024, the market size of
global new energy tractor truck in terms of revenue reached RMB47.8 billion, representing a
CAGR of 156.0% from 2020 to 2024, and is expected to reach RMB160.4 billion in 2029,
representing a CAGR of 27.4% from 2024 to 2029.
Market Size of Global New Energy Tractor Truck Industry, 2020–2029E
0
150
200
RMB Billion
2029E2028E2027E2020 2021 2022 2023 2024 2025E 2026E
1.1 6.3
10.1
17.2
8.7
25.8
20.0
9.8
29.8
21.2
26.6
47.8
33.4
31.8
65.2
47.5
39.0
86.5
64.1
48.9
113.0
80.6
57.9
138.5
95.7
64.7
160.4
100
50
Total 156.0% 27.4%
Overseas 159.0% 35.2%
CAGR
2020–2024 2024–2029E
CAGR
China 153.7% 19.5%
0.5
0.6 3.9
Source: CIC
INDUSTRY OVERVIEW
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SOURCE OF THE INDUSTRY INFORMATION
CIC was commissioned to conduct an analysis of, and to report China’s new energy
engineering machinery market at a fee of approx imately RMB700,000. The commissioned report
has been prepared by CIC independent of the influence of the Company and other interested
parties. CIC’s services include, among others, industry consulting, commercial due diligence,
and strategic consulting.
CIC conducted both primary and secondary research using a variety of resources. Primary
research involved consumer su rvey, interviewing key industry experts and leading industry
participants. Secondary research involved analyzing data from various publicly available data
sources, such as the National Bureau of Statist ics of China, information released by other
Chinese government authorities, annual reports published by industry participants, industry
organizations, as well as CIC’s internal database.
The market projections in the commissioned report are based on the following key
assumptions: (i) the overall social, economic, and political environment in China is expected to
remain stable during the forecast period; (ii) Ch ina’s economic and industrial development is
likely to maintain a steady growth during the forecast period; (iii) the key industry drivers
identified in the CIC Report are the factors that are likely to drive the growth of China’s new
energy engineering machinery industry during the forecast period; and (iv) there is no extreme
force majeure or significant changes in the regul atory regimes which may affect the industry in
either a dramatic or fundamental way.
Our Directors confirm that, after making reasonable enquiries, there is no material adverse
change in the market information since the date of the CIC Report which may qualify,
contradict or have an impact on the information in this section.
INDUSTRY OVERVIEW
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This section sets out summaries of certain as pects of PRC laws and regulations, which are
relevant to our business operations.
REGULATIONS RELATING TO NEW ENERGY ENGINEERING MACHINERY
On December 15, 2010, the Ministry of Industry and Information Technology of the PRC
(the ‘‘MIIT’’) issued the Administrative Rules on Admission of Commercial Vehicle
Manufacturers and Products ( 《商用車生產企業及產品准入管理規則》), which was implemented
on January 1, 2011. The rules stipulate that commercial vehicle manufacturers are required to
have a certain scale and the necessary produc tion capacity and cond itions for access.
Specifically, commercial vehicle enterpris es have specific production conditions and
equipment requirements for the stamping, welding, painting and assembly processes of the
cabin (body), and the moulding, riveting, painting and assembly processes of the chassis.
Tractor trucks are a category of commercial vehicles.
In June 2022, the Ministry of Ecology and Environment of the PRC (the ‘‘MEE’’), the
National Development and Reform Commissi on of the PRC (the ‘‘NDRC’’), the MIIT, the
Ministry of Housing and Urban-Rural Development of the PRC (the ‘‘MOHURD’’), the
Ministry of Transport of the PRC (the ‘‘MOT’’), the Ministry of Agricul ture and Rural Affairs
of the PRC, and the National Energy Administration jointly issued the Implementation Plan for
Synergizing Efficiency in Reducing Pollution and Carbon Emissions ( 《減污降碳協同增效實施方
案》), which proposed that by 2025, the collaborative promotion of pollution reduction and
carbon reduction work pattern shall be basic ally formed, and by 2030, the collaborative
capacity of pollution reduction and carbon reduction shall be significantly improved. In
addition, the orderly promotion of non-road mobile machinery using new energy and clean
energy power shall be explored, and demonstrat ion applications and commercial operations of
medium and heavy-duty electric and fuel cell trucks shall be carried out.
In November 2022, 15 departments including the MEE, the NDRC, the Ministry of Science
and Technology of the PRC, the MIIT, the Ministr y of Public Security of the PRC (the ‘‘MPS’’),
the Ministry of Finance of the PRC (the ‘‘MOF’’ ), and the MOT jointly issued the Action Plan
for In-Depth Fighting against Heavy Pollution Weather Elimination, Ozone Pollution
Prevention and Control and Diesel Truck Pollution Control ( 《深入打好重污染天氣消除、臭氧
污染防治和柴油貨車污染治理攻堅戰行動方案》
). It is clearly proposed that by 2025, the
proportion of new energy and national VI emi ssion standard trucks will strive to exceed
40%. The battle against diesel tr uck pollution will focus on the Beijing-Tianjin-Hebei region
and its surrounding areas, the Yangtze River Delta region, the relevant provinces (cities) of the
Fen-Wei Plain and the central and western citi es of the Inner Mongolia Autonomous Region,
where the freight volume is large.
In May 2023, the MEE, the MIIT, the Ministry of Commerce of the PRC (the
‘‘MOFCOM’’), the General Administration of Customs and the State Administration for
Market Regulation (the ‘‘SAMR’’) jointly relea sed the Announcement on the Implementation of
China VI Emission Standard for Automobiles ( 《關於實施汽車國六排放標準有關事宜的公告》),
which indicated that from July 1, 2023, the PRC will start to implement the National VI (B)
emission standard for vehicles. The newly revised requirements focus on the pollutant emission
limits for light-duty vehicles subject to the G B standard GB 18352.6–2016 and heavy-duty diesel
vehicles under GB standard GB 17691–2018. Both will need to meet enha nced minimum limits
starting from July 1, 2023. National VI (B) emis sion standard requires that (1) carbon monoxide
REGULATORY OVERVIEW
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emissions shall not exceed 500mg/km, (2) non- alkane emissions shall not exceed 35mg/km, (3)
nitrogen oxide emissions shall not exceed 35mg/km, (4) particulate matter emissions shall not
exceed 3mg/km, and (5) particulate nu mber per kilometer shall not exceed 6 61011. In addition,
the National VI (B) emission standard includes the monitoring of actual road driving emissions
(the ‘‘RDE’’). Only models whose RDE monitori ng results do not exceed the standard limits and
meet the durability requirements of 200,000 k ilometers can meet the requirements of the
National VI (B) emission standard.
REGULATIONS ON AUTOMOBILE SALES
Pursuant to the Administrative Measures on Automobile Sales ( 《汽車銷售管理辦法》)
promulgated by the MOFCOM on April 5, 2017, which became effective on July 1, 2017,
automobile suppliers and dealers are required to file with relevant authorities through the
information system for the national automobile circulation operated by the competent
commerce department within 90 days after the receipt of a business license. Where there is
any change to the information concerned, automobile suppliers and dealers must update such
information within 30 days after such change.
REGULATIONS ON THE RECALL OF DEFECTIVE AUTOMOBILES
On October 22, 2012, the State Council promu lgated the Administrative Provisions on
Defective Automotive Product Recalls (the ‘‘Provisions on Recalls’’) ( 《缺陷汽車產品召回管理條
例》), which became effective on January 1, 2013 and were amended on March 2, 2019. The
product quality supervision department of the St ate Council is responsible for the supervision
and administration of recalls of defective automotive products nationwide. Pursuant to the
Provisions on Recalls, manufacturers of automobile products are required to take measures to
eliminate defects in the products they sell. A manu facturer must recall all defective automobile
products. Failure to recall such products will result in an order to recall the defective products
from the quality supervisory authority of the State Council according to the Provisions on
Recalls. If any operator conducting sales, leasin g, or repair of vehicles discovers any defect in
automobile products, it must cease to sell, lease or use the defective products and must assist
manufacturers in recalling those products. Man ufacturers must recall their products through
publicly available channels and publicly announce the defects, emergency disposal methods for
avoiding damage and measures taken by the manufacturers for eliminating defects, among
others. Manufacturers must take measures to elim inate or cure defects, including rectification,
identification, modification, r eplacement or return of the products. Manufacturers that attempt
to conceal defects or do not recall defective aut omobile products in accordance with relevant
regulations will be subject to penalties, including fines, forfeiture of any income earned in
violation of law and revocation of licenses.
Pursuant to the Implementation Rules on th e Administrative Provisions on Defective
Automotive Product Recalls ( 《缺陷汽車產品召回管理條例實施辦法》)p r o m u l g a t e db yt h e
former General Administration of Quality Supervision, Inspection and Quarantine (the
‘‘GAQSIQ’’, which has been merged into the S AMR afterwards), which became effective on
January 1, 2016 and was most recently amended by the SAMR on October 23, 2020, if a
manufacturer is aware of any potential defects in its automobile products, it must promptly
conduct an investigation and report the results of such investigation to the SAMR. Where any
REGULATORY OVERVIEW
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defect is found during the investigations, the manufacturer must cease to manufacture, sell, or
import the relevant automobile products and recall such products in accordance with applicable
laws and regulations.
On November 23, 2020, the SAMR issued the Circular on Further Improving the
Regulation of Recall of Automobile wi th Over-the-Air (OTA) Technology ( 《關於進一步加強汽
車遠程升級 (OTA) 技術召回監管的通知》), pursuant to which automobile manufacturers that
provide technical services through OTA are required to complete a filing with the SAMR and
those who have provided such services through O TA must complete such filing before December
31, 2020. In addition, if an automaker uses OTA t echnology to eliminate defects and recalls its
defective products, it must make a recall plan and complete a filing with the SAMR.
REGULATIONS ON PRODUCT LIABILITY AND CONSUMER RIGHTS PROTECTION
Regulations on Product Liability
Pursuant to the Product Quality Law of the PRC ( 《中華人民共和國產品質量法》),
promulgated on February 22, 1993 and latest amended on December 29, 2018, a
manufacturer is prohibited from producing or selling products that do not meet applicable
standards and requirements for safeguarding human health and ensuring human and property
safety. Products must be free from unreasonable dangers threatening human and property
safety. Where a defective product causes physical injury to a person or property damage, the
aggrieved party may make a claim for compen sation from the producer or the seller of the
product. Producers and sellers of non-compliant products may be ordered to cease the
production or sale of the products and could be subject to confiscation of the products and/or
fines. Earnings from sales in contravention of such standards or requirements may also be
confiscated, and in severe cases, an offender’s business license may be revoked.
Regulations on Compulsory Product Certification
According to the Administrative Regulations on Compulsory Product Certification ( 《強制
性產品認證管理規定》) promulgated by the GAQSIQ on December 3, 2001, and became effective
on May 1, 2002, and was replaced and most recently amended on September 29, 2022 and
became effective on November 1, 2022, and the List of the First Batch of Products Subject to
Compulsory Product Certification ( 《第一批實施強制性產品認證的產品目錄
》)i s s u e db yt h e
GAQSIQ in conjunction with the Certification a nd Accreditation Administration of the PRC
and effective from December 3, 2001, motor vehicle s and their safety accessories, motor vehicle
tires and safety glass shall not leave the factory, be imported or be offered for sale without the
compulsory product certificate and the mandatory certification mark of the PRC.
REGULATIONS RELATING TO INTERNET INFORMATION AND AUTOMOTIVE DATA
SECURITY AND PERSONAL PRIVACY PROTECTION
Regulations Relating to Internet Info rmation and Automotive Data Security
Pursuant to the National Security Law of the PRC ( 《中華人民共和國國家安全法》)i s s u e d
by the Standing Committee of the National People’s (the ‘‘SCNPC ’’) on February 22, 1993 and
last amended on July 1, 2015, no individual or organization shall compromise national security
or provide any funding or assistance to any individual or organization that compromises
REGULATORY OVERVIEW
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national security. The state shall establish the rules and mechanisms for national security review
and supervision, and conduct national security review of foreign investment, particular
materials and key technologies, network information technology products and services that
affect or may affect national security, construc tion projects that involve national security
matters, and other major matters and activities to effectively prevent and resolve national
security risks.
Pursuant to the Cybersecurity Law of t he PRC (the ‘‘Cybersecurity Law’’) (《中華人民共和
國網絡安全法》) issued by the SCNPC on November 7, 2016 and implemented on June 1, 2017,
the state shall implement the rules for graded pro tection of cybersecurity. Network operators
shall, according to the requirements of laws and regulations as well as the mandatory
requirements of national and industry standards, develop internal security management
mechanisms, take technical measures and ot her necessary measures to ensure network
security and stable operation. The state empha sizes the protection of critical information
infrastructure in important sectors and ar eas including, among other things, public
telecommunications and informat ion services, energy, transpo rtation, irrigation, finance,
public services and e-government, which may gravely affect nationa ls e c u r i t y ,n a t i o n a l
economy, people’s livelihood and public interes t. Personal informat ion and important data
collected and produced by critical information infrastructure during operation shall be stored
within the territory; where due to business requirements it is truly necessary to provide it outside
the mainland, a security assessment shall be conducted according to the requirements of relevant
departments. Under the Cybersecurity Law, where network operators provide network access
and domain registration services for users, handle network access formalities for fixed-line or
mobile phone users, or provide users with information release services, instant messaging
services and other services, they shall require users to provide true identity information, or
otherwise, the network operators shall not provide them with relevant services. The
Cybersecurity Law also specifies that the netwo rk operators shall provide technical support
and assistance to public security and state security authorities for safeguarding national security
and investigating criminal activities. Network operators in violation of the provisions of the
Cybersecurity Law may be subject to penalties inc luding, among other things, order for making
rectifications, warnings or fines, confiscation o f unlawful gains, order for temporary suspension
of operations, suspension of bus iness for corrections, closing down of websites, revocation of
relevant operations permits. Pursuant to the D ecision to Revise the Cybersecurity Law of the
PRC (Draft for Comments) ( 《關於修改《中華人民共和國網絡安全法》的決定（徵求意見稿）》) (the
‘‘Cybersecurity Law Revision Draft’’) issued by the Cyberspace Administration of China (the
‘‘CAC’’) on September 12, 2022, the violations of the Cybersecurity Law might be subject to
more severe punishment if the Cybersecurity Law Revision Draft is implemented in its current
version.
Pursuant to the Provisions on the Technical Mea sures for the Protection of the Security of
the Internet ( 《互聯網安全保護技
術措施規定》) issued by the MPS on December 13, 2005 and
implemented on March 1, 2006, the providers of i nternet services and entity users of the network
shall carry into effect the technical measures for security protection in accordance with laws,
record and preserve user information (including registration information, time of login and
logout, IP address, contents released by users and release time) for not less than 60 days.
Pursuant to the Announcement on Launching the Security Certification of Apps ( 《關於開
展APP安全認證工作的公告》) jointly issued by the Office of th e Central Cyberspace Affairs
Commission and the SAMR and implemented on March 13, 2019 and the appendix Rules for
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Implementing the Security Certification of Mobile Internet Applications (APP) ( 《移動互聯網應
用程序 (APP) 安全認證實施規則》), the state encourages the APP operators to pass the APP
security certification on a voluntary basis, a nd encourages search engines and APP stores to
provide clear identification and give priority to APPs that pass the certification. According to
the Data Security Law of the PRC ( 《中華人民共和國數據安全法》) passed by the SCNPC on
June 10, 2021 and implemented on September 1, 2021, the state establishes a classified and tiered
system for data protection. When conducting data processing activities, one shall comply with
laws and regulations, establish a sound, full-range data security and management system,
organize and conduct data security education and training as well as take corresponding
technical measures and other necessary measures to protect data safety. Anyone who uses the
internet and other information networks to carry out data processing activities shall, on the
basis of the hierarchical network security protection system, fulfill the obligations of data
security protection. The processors of import ant data shall, in accordance with relevant
provisions, carry out risk assessment on their d ata processing activities on a regular basis and
submit risk assessment reports to the relevant competent authorities. Relevant organizations
and individuals shall cooperate with public security departments or state security authorities in
obtaining data for the purpose of safeguarding state security or investigating crimes according
to law. Those who fail to fulfill the obligations of data security protection and provide
important data abroad in violation of the law w ill be ordered to correct, warned, fined,
suspended with their business or suspended for rectification, or revoked of relevant business
licenses.
According to the Opinions on Strictly Cracking Down on Illegal Securities Activities in
accordance with the Law ( 《關於依法從嚴打擊證券違法活動的意見》) jointly issued by the
General Office of the Central Committee of the Communist Party of China and the General
Office of the State Council on July 6, 2021, China will strengthen the laws and regulations on
data security, cross-border data flow and confidential information management.
Pursuant to the Notice of the MIIT on Strengthening Network Safety and Data Safety
Work of Vehicle Connectivity ( 《工業和信息化部關於加強車聯網網絡安全
和數據安全工作的通
知》) issued by the MIIT and implemented on Septem ber 15, 2021, enterprises engaged in-vehicle
connectivity shall strengthen the prevention and protection of intelligent connected vehicles
safety, vehicle connectivity’s network safety, vehicle connectivity’s service platform safety and
data safety, and improve the safety standard system, for network and data safety.
The Measures for Data Security Administration in the Industry and Information
Technology Field (for Trial Implementation) ( 《工業和信息化領域數據安全管理辦法（試行）》)
(the ‘‘Measures for Data Security’’) was issued by the MIIT on December 8, 2022 and
implemented on January 1, 2023. In accordance wi th the Measures for Data Security, industrial
and telecommunication data processors are requi red to classify data by first categorizing it
based on its type, regularly assessing and assigning appropriate security levels, then aligning
data classification with industry requirements, business needs, data sources and purposes, and
other pertinent factors, and ultimately compiling a data classification list. In addition, the
industrial and telecommunication data processors should establish a robust data classification
management system and continually enhance it, take measures to protect data based on their
security levels, conduct key protection of critical data, implement stricter management and
protection measures for core data on the basis of critical data protection, and apply the highest
level of security requirements when processing data with different security levels simultaneously.
The Measures for Data Security also impose certain obligations on industrial and
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telecommunication data processors, including th e implementation of data security work system,
encryption key management, data collection, storage, usage, and transmission, data access,
transparency, data destruction practices, s afety audits and emergency response plans.
According to the Several Provisions on the Management of Automobile Data Security (for
Trial Implementation) ( 《汽車數據安全管理若干規定（試行）》) (the ‘‘Several Provisions on
Automotive Data’’) jointly issued by the C A C ,t h eN D R C ,t h eM I I T ,t h eM P Sa n dt h eM O T
on August 16, 2021 and implemented on October 1, 2021, automobile data processors including,
among others, automobile manufacturers, components and parts and software suppliers,
dealers, maintenance organizations, and ride-hailing and sharing service enterprises shall
process automobile data in a lawful, legitimate, specific and clear manner, and such data
includes personal information and important data involved during the design, production, sales,
use, operation and maintenan ce, among others, of vehicles.
On April 13, 2020, the Cybersecurity Review Measures ( 《網絡安全審查辦法》) was jointly
promulgated by the CAC, the NDRC, the MIIT, the MPS, the Ministry of State Security, the
MOF, the MOFCOM, the PBOC, the SAMR, the National Radio and Television
Administration, the National Administratio n of State Secrets Protection and the State
Cryptography Administration, replaced by 2021 revision promulgated by the aforementioned
departments and the CSRC, and the revised Cybersecurity Review Measures was formally
implemented on February 15, 2022. According to t he revised Cybersecuri ty Review Measures,
operators of online platforms with personal inf ormation of more than one million users must
file a cybersecurity review with the Cybersecurity Review Offi ce when they pursue listing in a
foreign country. In the meantime, the governmental authorities have the discretion to initiate a
cybersecurity review on any data processing acti vity if they deem such a data processing activity
affects or may affect national s ecurity. The specific implementation rules on cybersecurity
review are subject to further clarification by subsequent regulations.
On October 29, 2021, the CAC issued the Measures for the Security Assessment of
Cross-Border Data Transmis sion (Draft for Comments) ( 《數據出境安全評估辦法（徵求意見
稿）》), and then on July 7, 2022, the CAC official ly issued the Measures for the Security
Assessment of Cross-Border Data Transmission ( 《數據出境安全評估辦法》), which became
effective and implemented on September 1, 20 22. The Measures for the Security Assessment of
Cross-Border Data Transmission applies to the security assessment conducted by data
processors where they provide overseas partie s with important data and personal information
collected and generated during the operation in the PRC. Based on the Measures for the
Security Assessment of Cross-Border Data Transmission, data processors shall apply for the
security assessment of data cross-border trans fer to the national cyberspace administration
through the provincial cyberspace administration in the place where they operate if they provide
data outside China and fall into one of the followi ng conditions: (1) data processors provide
important data outside China, (2) operators of c ritical information in frastructure and data
processors who process personal information of over one million users provide personal
information outside China, (3) d ata processors who provide accumu lative personal information
of over 100,000 users or accumulative sensitive personal information of over 10,000 users
outside China from January 1 of previous year, and (4) other situation as required to declare the
security assessment for data cross-borde r transfer as requested by the cyberspace
administration. On September 24, 2024, the CAC issued the Administration Regulations on
Cyber Data Security ( 《網絡數據安全管理條例》) (the ‘‘Regulations on Cyber Data Security’’),
which will be effective on January 1, 2025. The Regulations on Cyber Data Security stipulates
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that data processors who carry out cyber data processing activities that affect or may affect
national security shall undergo national secur ity review in accordance with relevant state
regulations. In addition, the Regulations on Cyber Data Security also regulate other specific
requirements in respect of the data processing a ctivities conducted by data processors in the
view of personal data protection, important data safety, data cross- broader safety management
and obligations of network platform service provider.
According to the Amendment (IX) to the Criminal Law of the PRC ( 《中華人民共和國刑法
修正案（九）》) issued by the SCNPC on August 29, 2015 and implemented on November 1, 2015,
network service providers shall be subject to criminal liability if they breach the obligation of
information network security management re quired by the Amendment (IX) to the Criminal
Law of the PRC and reject the rectification ordered by relevant authorities.
Regulations Relating to Personal Privacy Protection
Under the Several Provisions on Regulating the Market Order of Internet Information
Services (《規範互聯網信息服務市場秩序若干規定》) issued by the MIIT on December 29, 2011
and effective on March 15, 2012, the Decision on Strengthening the Protection of Online
Information ( 《關於加強網絡信息保護的決定》) issued by the SCNPC and implemented on
December 28, 2012, the Order for the Protectio n of Telecommunication s and Internet User
Personal Information ( 《電信和互聯網用戶個人信息保護規定》) issued by the MIIT on July 16,
2013 and implemented on September 1, 2013, and the Cybersecurity Law of the PRC ( 《中華人民
共和國網絡
安全法》) issued by the SCNPC on November 7, 2016 and implemented on June 1,
2017, any collection and use of a user’s personal information must be legal, rational and
necessary, and the user should be clearly notified the purposes, methods and scopes of collecting
and using information, channels for enquiring and correcting information, and the consequence
of refusal to provide information. An internet information service provider shall be prohibited
from divulging, tampering or destroying any personal information, or selling or providing such
information to other parties. Any violation of these laws and regulations may result in warnings,
fines, confiscation of illegal gains, revocation o f licenses, cancelation of filings, closedown of
websites or even criminal liabilities.
Pursuant to the Civil Code of the PRC ( 《中華人民共和國民法典》) (the ‘‘Civil Code’’)
adopted by the National People’s Congress (th e ‘‘NPC’’) on May 28, 2020 and implemented on
January 1, 2021, the personal information of natural persons is protected by law. Any
organization or individual must legally obtain the relevant personal information of others and
must ensure the security of the relevant informa tion, and must not illegally collect, use, process
or disseminate the personal information of othe rs, nor illegally trade, provide or disclose the
personal information of others.
According to the Several Provisions on Automotive Data, when processing personal
information, automobile data processors shall obtain personal consent or comply with other
circumstances stipulated by laws and admini strative regulations. If the automobile data
processors collect data of subjects outside the vehicle and such data is provided outside the
vehicle for the purpose of ensuring driving safety, but are unable to obtain consent from such
subjects, the automobile data processors shall anonymize the data by means such as deleting the
pictures containing identifiable natural persons , or partially contouring the facial information
in the pictures.
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According to the Personal Information Protection Law of the PRC ( 《中華人民共和國個人
信息保護法》) (the ‘‘Personal Information Protection Law’’) adopted by the SCNPC on August
20, 2021 and implemented on November 1, 2021, the personal information of natural persons
shall be protected by law. No organization or individual may infringe upon natural persons’
rights and interests relating to personal infor mation. The Personal Information Protection Law
integrates previously scattered rules on personal information rights and privacy protection, and
initially establishes a personal information protection system. The Personal Information
Protection Law clarifies that personal information shall be processed under the principles of
lawfulness, legitimacy, neces sity and good faith and shall b e processed for a clear and
reasonable purpose, directly related to the processing purpose and in a manner that has the
minimum impact on the rights and interests of individuals, and limited to the minimum scope
necessary for achieving the processing purpose. It shall be processed under the principle of
openness, and the quality of information shall be guaranteed and measures shall be taken to
protect personal information from divulgation, tampering or loss.
REGULATIONS ON AUTONOMOUS DRIVING
On December 20, 2020, the MOT promulgated the Guiding Opinions on Promoting the
Development and Application of Road Tra nsport Autonomous Driving Technologies ( 《交通運
輸部關於促進道路交通自動駕駛技術發展和應用的指導意見》), which clarified the development
goal of the application of autonomous driving technology in road transportation. Specifically,
(1) by 2025, the research on the basic theory of autonomous driving has made positive progress,
and key technologies such as road infrastructure intelligence, vehicle-road collaboration and
product research and development and test verification have made important breakthroughs, (2)
a number of basic and key standards for autonomous driving have been issued, and (3) a
number of national autonomous driving test bases and pilot application demonstration projects
have been built to realize large-scale application in some scenarios and promote the
industrialization of autonomous driving technology.
REGULATIONS ON LAND AND THE DE VELOPMENT OF CONSTRUCTION
PROJECTS
Regulations on Land Grants
Under the Interim Regulations on Assignment and Transfer of the Rights to the Use of the
State-Owned Urban Land of the PRC ( 《中華人民共和國城鎮國有土地使用權出讓和轉讓暫行條
例
》), promulgated by the State Council on May 19, 1990 and amended on November 29, 2020, a
system of assignment and transfer of the right to use state-owned land was adopted. A land user
must pay land premium to the state as considerat ion for the assignment of the right to use a land
site within a certain term, and the land user who obtained the right to use the land may transfer,
lease out, mortgage or otherwise commercially exploit the land within the term of use. Under the
Interim Regulations on Assignment and Trans fer of the Rights to the Use of the State-Owned
Urban Land of the PRC and the Urban Real Estate Administration Law of the PRC ( 《中華人民
共和國城市房地產管理法》), the local land administrati on authority may enter into an
assignment contract with the land user for the assignment of land use rights. The land user is
required to pay the land premium as provided in th e assignment contract. After the full payment
of the land premium, the land user must register with the land administration authority and
obtain a land use rights certificate which evi dences the acquisition of land use rights.
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Regulations on Planning of a Construction Project
Pursuant to the Regulations on Planning Administration Regarding Assignment and
Transfer of the Rights to Use of the State-Owned Land in Urban Area ( 《城市國有土地使用權出
讓轉讓規劃管理辦法》) promulgated by the Ministry of Construction of the PRC (the ‘‘MOC’’)
on December 4, 1992 and amended in January 26, 2011, a construction land planning permit
shall be obtained from the municipal planning authority with respect to the planning and use of
land. According to the Urban and Rural Planning Law of the PRC ( 《中華人民共和國城鄉規劃
法》) promulgated by the SCNPC on October 28, 2007 and latest amended on April 23, 2019, a
construction work planning permit must be obtained from the competent urban and rural
planning government authority for the construction of any structure, fixture, road, pipeline or
other engineering projects within an urban or rural planning area.
After obtaining a construction work plann ing permit, subject to certain exceptions, a
construction enterprise must apply for a construction work commencement permit from the
construction authority under the local people’s government at the county level or above in
accordance with the Administrative Provisions o n Construction Permit of Construction Projects
(《建築工程施工許可管理辦法》) promulgated by the MOHURD, on June 25, 2014, implemented
on October 25, 2014 and latest amended on March 30, 2021.
Pursuant to the Administrative Measures for Reporting Details Regarding Acceptance
Examination upon Completion of Buildings and Municipal Infrastructure ( 《房屋建築和市政基
礎設施工程竣工驗收備案管理辦法》) promulgated by the MOC on October 19, 2009 and the
Provisions on Acceptance Examination upon Completion of Buildings and Municipal
Infrastructure ( 《房屋建築和市政
基礎設施工程竣工驗收規定》) promulgated and implemented
by the MOHURD on December 2, 2013, upon the completion of a construction project, the
construction enterprise must submit an application to the competent department in the people’s
government at or above the county level where the project is located, for examination upon
completion of building and for filing purpose; and to obtain the filing form for acceptance and
examination upon completion of the construction project.
REGULATIONS ON ENVIRONMENTA L PROTECTION AND WORK SAFETY
Regulations on Environmental Protection
Pursuant to the Environmental Protection Law of the PRC ( 《中華人民共和國環境保護法》)
(the ‘‘Environmental Protection Law’’) promulgated by the SCNPC, on December 26, 1989,
amended on April 24, 2014 and effective on January 1, 2015, any entity which discharges or will
discharge pollutants during the course of operations or other activities must implement effective
environmental protection safeguards and pro cedures to control and properly treat waste gas,
waste water, waste residue, dust, malodorous gases, radioactive substances, noise, vibrations,
electromagnetic radiation and other hazards produced during such activities.
Environmental protection authorities impose various administrative penalties on persons
or enterprises in violation of the Environmental Protection Law. Such penalties include
warnings, fines, orders to rectify within the pre scribed period, orders to cease construction,
orders to restrict or suspend production, orders to make recovery, orders to disclose relevant
information or make an announcement, imposition of administrative action against relevant
responsible persons, and orders to shut down enterprises. Any person or entity that pollutes the
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environment resulting in damage could also be held liable under the Civil Code. In addition,
environmental organizations may also bring lawsuits against any entity that discharges
pollutants detrimental to the public welfare.
Regulations on Work Safety
Under relevant construction safety laws and regulations, including the Work Safety Law of
the PRC ( 《中華人民共和國安全生產法》) which was promulgated by the SCNPC on June 29,
2002 and latest amended on June 10, 2021, produ ction and operating business entities must
establish objectives and measures for work safety and improve the working environment and
conditions for workers in a planned and systema tic way. A work safety protection scheme must
also be set up to implement the work safety job responsibility system. In addition, production
and operating business entities must arrange work safety training and provide the employees
with protective equipment that meets the natio nal or industrial standards. Furthermore,
production and operating business entities shall report their major hazard sources and related
safety and emergency measures to the emergen cy management department and other relevant
departments for the record, establish a safety risk grading control system and take
corresponding control measures. Automobile and components manufacturers are subject to
the above-mentioned work safety requirements.
REGULATIONS ON FIRE CONTROL
Pursuant to the Fire Safety Law of the PRC ( 《中華人民共和國消防法》)p r o m u l g a t e db yt h e
SCNPC on April 29, 1998 and latest amended on A pril 29, 2021, for special construction
projects stipulated by the housing and urban-ru ral development authority of the State Council,
the developer shall submit the fire safety des ign documents to the housing and urban-rural
development authority for examination, while for construction projects other than those
stipulated as special construction projects, the developer shall, at the time of applying for the
construction permit or approval for work commencement report, provide the fire safety design
drawings and technical materials which satisfy the construction needs. According to Interim
Regulations on Administration of Examinat ion and Acceptance of F ire Control Design of
Construction Projects ( 《建設工程消防設計審查驗收管理暫行規定》)p r o m u l g a t e db yt h e
MOHURD on April 1, 2020 and effective on June 1, 2020, and amended on August 21, 2023
and effective on October 30, 2023, an examinat ion system for fire prevention design and
acceptance only applies to specia l construction projects, and for other projects, a record-filing
and spot check system would be applied.
LAWS AND REGULATIONS RELATING TO IMPORT AND EXPORT OF GOODS
According to the Measures for the Archival Filing and Registration of Foreign Trade
Business Operators ( 《對外貿易經營者備案登記
辦法》), which was promulgated by the
MOFCOM on June 25, 2004 and executed on July 1, 2004, and was last amended on May 10,
2021, foreign trade operators engaged in goods or technology import and export are required to
go through the record-filing registration pr ocedures with the Ministry of Commerce or its
entrusted institutions, except for those tha t are not required to complete the record-filing
registration as prescribed by laws, administrativ e regulations and the provisions of the Ministry
of Commerce. Where a foreign trade operator fails to go through the record-filing registration
formalities according to relevant provisions, the customs are entitled to refuse to handle the
formalities for declaration and clearance of goods imported or exported by the operator.
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According to the revised Foreign Trade Law of the PRC ( 《中華人民共和國對外貿易法》)m a d e
by the SCNPC on 30 December 2022, no filings is r equired for foreign trade operators engaged
in goods import and export or technology impor t and export, with effect from 30 December
2022.
According to the Provisions on the Administration of Recordation of Customs Declaration
Entities of the PRC ( 《中華人民共和國海關報關單位備案管理規定》), promulgated by the
General Administration of Customs of th e PRC on November 19, 2021, which came into
effect on January 1, 2022, where the consignee or consignor of imported or exported goods or a
customs declaration enterprise applies for recordation, it shall obtain the qualification of
market entities; particularly where the consig nee or consignor of imported or exported goods
applies for recordation, it shall be filed as a foreign trade operator. Where the consignee or
consignor of imported or exported goods or a customs declaration enterprise has undergone the
formalities of recordation for customs declaration entities, branches that meet the requirements
of the preceding paragraph may also apply for r ecordation for customs declaration entities.
LAWS AND REGULATIONS RELATING TO LABOR, SOCIAL INSURANCE AND
HOUSING PROVIDENT FUND
According to the Labor Law of the PRC ( 《中華人民共和國勞動法》)p r o m u l g a t e db yt h e
SCNPC on July 5, 1994 and last amended and ne wly effective on December 29, 2018, the Labor
Contract Law of the PRC ( 《中華人民共和國勞動合同法》) promulgated by the SCNPC on June
29, 2007, effective on January 1, 2008 and amended on December 28, 2012, newly effective on
July 1, 2013 and the Implementing Regulations of the Labor Contracts Law of the PRC ( 《中華
人民共和國勞動合同法實施條例
》) promulgated by the State Council on September 18, 2008,
effective on the same date, employers must strictly abide by state standards and provide relevant
trainings to its employees, protect their labor rights and perform its labor obligations. Labor
relationships between employers and empl oyees must be executed in written form. Labor
contracts shall be categorized into labor contract s with fixed term, labor contracts without fixed
term and labor contracts to be expired upon com pletion of certain tasks. The remuneration
payable by employers to its employees shall n ot be less than local minimum wage. Employers
must establish a system for labor safety and san itation, and strictly comply with national
standards and provide relevant education to it s employees. Violations of the Labor Contract
Law of the PRC and the Labor Law of the PRC may result in the imposition of fines and other
administrative and criminal liabili ty in the case of serious violations.
According to the Social Insurance Law of the PRC ( 《中華人民共和國社會保險法》)
promulgated by the SCNPC on October 28, 2010 and amended and newly effective on
December 29, 2018 and the Provisional Regulations on Collection and Payment of Social
Insurance Premiums ( 《社會保險費徵繳暫行條例》) recently amended by the State Council and
effective on March 24, 2019, a domestic enterprise shall pay premium for pension insurance,
unemployment insurance, maternity insurance, w ork injury insurance, basic medical insurance
for its employees at an appropriate percentage based on the amounts stipulated by the laws. If
the relevant payment is not paid in full and on tim e to the relevant local administrative agency,
t h ee m p l o y e rm a yb eo r d e r e dt om a k eu pt h eg a por pay a fine. Meanwhile, the Regulations on
Work Injury Insurance ( 《工傷保險條例》), the Regulations on Unemployment Insurance ( 《失業
保險條例》), the Trial Measures on Employee Maternity Insurance of Enterprises ( 《企業職工生
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育保險試行辦法》) and other laws and regulations contain specific clauses on different types of
social insurance. Employers governed by such laws and regulations shall pay corresponding
insurance premiums for their employees.
According to the Regulations on the Administration of Housing Provident Fund ( 《住房公
積金管理條例》) promulgated by the State Council on April 3, 1999 and last amended and newly
effective on March 24, 2019, employers shall mak e deposit registration for housing provident
fund at the housing provident fund management center and pay the housing provident fund in
full and on time. If employers fail to make payment of housing provident fund within the time
limit or if there is a shortfall in payment of housing provident fund, employers will be ordered
by the housing provident management center to make the payment or make up the shortfall
within the prescribed time limit, otherwise, the housing provident fund management center is
entitled to apply for compulsory en forcement with the people’s court.
REGULATIONS RELATING TO INTELLECTUAL PROPERTY
China has adopted comprehensive legislation s governing intellectual property rights,
including copyrights, trademarks, patents and domain names. China is a signatory to the
primary international conventions on intelle ctual property rights and has been a member of the
Agreement on Trade Related Aspects of Intellect ual Property Rights since its accession to the
World Trade Organization in December 2001.
Copyright
On September 7, 1990, the SCNPC promulgated the Copyright Law of the PRC ( 《中華人民
共和國著作權法》) (‘‘the Copyright Law’’), which was effective on June 1, 1991 and amended on
October 27, 2001, February 26, 2010 and Nove mber 11, 2020, and the latest amendment took
effect on June 1, 2021. The amended Copyright La w extends copyright protection to internet
activities, products disseminated over the inte rnet and software products. In addition, there is a
voluntary registration system administered b y the Copyright Protection Centre of China.
According to the Copyright Law, Chinese citizens, legal persons, or other organizations shall,
whether published or not, own copyright in their copyrightable works, which include, among
others, works of literature, art, natural scien ce, social science, engineering technology and
computer software. Copyright owners enjoy certa in legal rights, including right of publication,
right of authorship and right of reproduction. An infringer of the copyrights shall be subject to
various civil liabilities, which include ceasing infringement activities, apologizing to the
copyright owners and compensating the loss of copyright owner. Infringers of copyright may
also be subject to fines and/or administrative or criminal liabilities in severe situations.
In order to further implement the Regulations on Computer Software Protection ( 《計算機
軟件保護條例》), promulgated by the State Council on December 20, 2001 and amended on
January 8, 2011 and January 30, 2013, respectively, the National Copyright Administration
issued the Measures for the Registrat ion of Computer Software Copyright ( 《計算機軟件著作權
登記辦法
》) on February 20, 2002, which specifies deta iled procedures and requirements with
respect to the registration of software copyrights.
Under the Issuance of the Regulations on the Protection of Layout-Designs of Integrated
Circuits ( 《集成電路佈圖設計保護條例》) (‘‘the Regulations on Integrated Circuits’’),
promulgated by the State Council on April 2, 2001 and coming into force on October 1,
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2001, any layout-design created by a Chinese natu ral person, legal person or other organizations
shall be eligible for the exclusive right of layout-design in accordance with Regulations on
Integrated Circuits. Any layout-design which is to be protected shall be original in the sense that
the layout-design is the result of the creator’s own intellectual effort, and it is not commonplace
among creators of layout-designs and manufactu rers of integrated circuits at the time of its
creation. The intellectual property administration department of the State Council is
responsible for the relevant administrati ve work concerning the exclusive right of
layout-design in accordance with these regulations.
Trademark
According to the Trademark Law of the PRC ( 《中華人民共和國商標法》)p r o m u l g a t e db y
the SCNPC on August 23, 1982, and amended on F ebruary 22, 1993, October 27, 2001, August
30, 2013 and April 23, 2019, respectively, the Tr ademark Office of the State Administration for
Industry and Commerce Authority (the ‘‘SAIC’’) under the State Council is responsible for the
registration and administration of trademark s in China. The SAIC under the State Council has
established a Trademark Review and Adjudicati on Board for resolving trademark disputes.
Registered trademarks are valid for ten years f rom the date the registration is approved. A
registrant may apply to renew a registration with in twelve months before the expiration date of
the registration. If the registrant fails to apply in a timely manner, a grace period of six
additional months may be granted. If the registrant fails to apply before the grace period
expires, the registered trademark shall be dereg istered. Renewed registrations are valid for ten
years. On April 29, 2014, the State Council issued the revised Implementing Regulations of the
Trademark Law of the PRC ( 《中華人民共和國商標法實施條例》), which specifies the
requirements of applying for trademark registration and renewal.
Patent
According to the Patent Law of the PRC ( 《中華人民共和國專利法》)( ‘ ‘ t h eP a t e n tL a w ’ ’ ) ,
promulgated by the SCNPC on March 12, 1984 and amended on September 4, 1992, August 25,
2000, December 27, 2008, and October 17, 2020, resp ectively, with the latest amendment taking
effect on June 1, 2021, and the Implementation Rules of the Patent Law of the PRC ( 《中華人民
共和國專利法實施細則》) (the ‘‘Implementation Rules of the Patent Law’’), promulgated by the
State Council on June 15, 2001 and revis ed on December 28, 2002, January 9, 2010 and
December 11, 2023 and the latest amendment took effective on January 20, 2024, respectively,
the patent administrative department und er the State Council is responsible for the
administration of patent-related work nationw ide and the patent administration departments
of provincial or autonomous regions or m unicipal governments are responsible for
administering patents within the respectiv e administrative areas. The Patent Law and
Implementation Rules of the Patent Law provide three types of patents, namely ‘‘inventions,’’
‘‘utility models’’ and ‘‘designs’’. Invention patents are valid for twenty years, utility model
patents are valid for ten years, and since June 1 , 2021, the validation period for design patents
whose application date is after June 1, 2021 has been extended to fifteen years in each case from
the date of application. The Chinese patent system adopts a ‘‘first come, first file’’ principle,
which means that where more than one person files a patent application for the same invention,
utility model or design, a patent will be granted to the person who files the application first. An
invention or a utility model must possess novelty, inventiveness and practical applicability to be
patentable. Third Parties must obtain consent or a proper license from the patent owner to use
the patent. Otherwise, the unauthorized use constitutes an infringement on the patent rights.
REGULATORY OVERVIEW
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Domain Names
On August 24, 2017, the MIIT promulgated th e Administrative Measures for Internet
Domain Names ( 《互聯網域名管理辦法》) (the ‘‘Domain Name Measures’’), which became
effective on November 1, 2017. The Domain Name Measures regulate the registration of domain
names, such as China’s national top-level domain name ‘‘.CN.’’ The China Internet Network
Information Center (the ‘‘CNNIC’’), issued t he Administrative Regulations for Country Code
Top-Level Domain Name Registration and Countr y Code Top-Level Dispute Resolutions Rules
(《關於發佈並實施《國家頂級域名註冊實施細則》系列規定的公告》) on June 18, 2019, pursuant to
which the CNNIC can authorize a domain name dis pute resolution institution to decide domain
name related disputes.
REGULATIONS ON FOREIGN INVESTMENT IN CHINA
Investment activities in China by foreign investors are primarily regulated by the
Catalogue of Encouraged Industries for Foreign Investment ( 《鼓勵外商投資產業目錄》), the
Special Administrative Measures (Negat ive List) for Foreign Investment Access ( 《外商投資准入
特別管理措施（負面清單）》) (the ‘‘Negative List’’) and Foreign Investment Law of the PRC ( 《中
華人民共和
國外商投資法》) (the ‘‘Foreign Investment Law’’) and their respective implementation
rules and ancillary regulations. The latest Catalogue of Encouraged Industries for Foreign
Investment (《鼓勵外商投資產業目錄（2022 年版）》) was jointly promulgated by the MOFCOM
and NDRC on October 26, 2022 and took effect on January 1, 2023. The latest Special
Administrative Measures (Negative L ist) for Foreign Investment Access ( 《外商投資准入特別管
理措施（負面清單）（2024 年版）》), was jointly promulgated by the MOFCOM and the NDRC on
September 6, 2024 and took effect on November 1, 2024.
Pursuant to the Foreign Investment Law, foreig n investment will enjoy pre-entry national
treatment in China (which means treatment that is no less favorable than treatment to domestic
investment at the market entry stage), except tha t foreign-invested enterprises operating in
‘‘restricted’’ or ‘‘prohibited’’ industries set forth on the Negative List are required to obtain
market entry clearance and other approvals. The Foreign Investment Law does not explicitly
touch upon the concept of de facto control or contractual arrangements with variable interest
entities, but its catch-all provision in the defini tion of foreign investment leaves possibility for
future laws and regulations to specify contractual arrangements as a form of foreign investment.
The Foreign Investment Law also includes certain protective principles and provisions for
foreign investors and their investment in China. For example, (1) local government authorities
must abide by their commitments made to foreign inv estors, (2) foreign-invested enterprises are
allowed to issue shares of stock and corporat e bonds, (3) expropriation and requisition of
foreign investment are generally prohibited exc ept under special circumstances, where statutory
procedures must be followed and fair and reas onable compensation must be made in a timely
manner, (4) mandatory technology transfer is prohibited, (5) foreign investors funds are
permitted to be freely transferred out and into th e PRC territory during the entire lifecycle of
foreign investment, and (6) foreign-invested en terprises are provided with opportunities of fair
competition in a market economy. In addit ion, the Foreign Investment Law allows
foreign-invested enterprises that were established under the prior foreign investment laws and
regulations to maintain their corporate structure and governance within five years after the
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implementation of the Foreign Investment Law, a fter which such foreign-invested enterprises
may be required to adjust the legacy corporate structure and governance pursuant to the
currently effective Company Law of the PRC and other relevant laws and regulations.
The Implementation Regulations of Foreign Investment Law ( 《中華人民共和國外商投資法
實施條例》) were promulgated by the State Council on December 26, 2019 and took effect on
January 1, 2020. These implementation rules further clarified that China encourages and
promotes foreign investment, protects the lawf ul rights and interests of foreign investors,
regulates foreign investment, continues to optimize foreign investment environment and
advances a higher-level opening. The SAMR and its local counterparts supervise the registration
of foreign-invested enterprises. If additional licenses and permits are required, foreign investors
will apply to relevant government authorities supervising such licenses and permits following
the same conditions and procedures applicable to PRC domestic investors unless otherwise
stipulated by laws and regulations.
On December 30, 2019, the MOFCOM and the SAMR jointly promulgated the Measures
on Reporting of Foreign Investment Information ( 《外商投資信息報告辦法》), which took effect
on January 1, 2020. Pursuant to these measures, wh ere a foreign investor directly or indirectly
conducts investment activities in China, the foreign investor or th e foreign-invested enterprise
must submit the investment information to th e competent commerce authority through the
enterprise registration system and the national enterprise credit information publicity system.
Failure to report required investment inf ormation may subject foreign investors or
foreign-invested enterpri ses to legal liabilities.
REGULATIONS RELATING TO FOREIGN EXCHANGE
The principal regulations governing foreign currency exchange in China are the
Administrative Regulations on Foreign Exchange of the PRC ( 《中華人民共和國外匯管理條
例》) (the ‘‘Foreign Exchange Administrative Regu lation’’), which were promulgated by the State
Council on January 29, 1996, became effective on April 1, 1996 and was subsequently amended
on January 14, 1997 and August 1, 2008 (which became effective on August 5, 2008),
respectively, and the Administrative Regulations on Foreign Exchange Settlement, Sales and
Payment (《結匯、售匯及付匯管理規定》), which was promulgated by the PBOC, on June 20,
1996 and became effective on July 1, 1996. Unde r these regulations, payments of current
account items, such as profit distributions an d trade and service-rela ted foreign exchange
transactions, can be made in foreign currencies without prior approval from the State
Administration of Foreign Exchange (the ‘‘SAFE’’), by complying with certain procedural
requirements. By contrast, approval from or registration with appropriate governmental
authorities or the designated banks is required where Renminbi (the ‘‘RMB’’) is to be converted
into foreign currency and remitted outside of the PRC to pay capital account items such as the
repayment of foreign currency-denominated loan s, direct investment ov erseas and investments
in securities or derivative products outside of th e PRC. The Foreign Investment Enterprises (the
‘‘FIE(s)’’) are permitted to convert their after -tax dividends into foreign exchange and to remit
such foreign exchange out of their foreign exchange bank accounts in the PRC.
On March 30, 2015, SAFE promulgated the Notice on Reforming the Administration of
Foreign Exchange Settlement of Capit al of Foreign-Invested Enterprises ( 《國家外匯管理局關於
改革外商投資企業外匯資本金結匯管理方式的通知》) (the ‘‘SAFE Circular 19’’), which took
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effect on June 1, 2015 and further revised in 2019. According to the SAFE Circular 19, the
foreign currency capital contribution to an FIE in its capital account may be converted into
RMB on a discretional basis.
On June 9, 2016, SAFE promulgated the Circular on Reforming and Regulating Policies on
t h eM a n a g e m e n to ft h eS e t t l e m e n to fForeign Exchange of Capital Accounts ( 《國家外匯管理局
關於改革和規範資本項目結匯管理政策的通知》) (the ‘‘SAFE Circular 16’’). The SAFE Circular
16 unifies the Discretional Foreign Exchange Settlement for all the domestic institutions. The
Discretional Foreign Exchange Settlement refer s to the foreign exchange capital in the capital
account which has been confirmed by the relevant policies subject to the discretional foreign
exchange settlement (including foreign exchange capital, foreign loans and funds remitted from
the proceeds from the overseas listing) and can be settled at the banks based on the actual
operational needs of the domestic institutions. The proportion of Discretional Foreign
Exchange Settlement of the foreign exchange c apital is temporarily determined as 100%.
Violations of the SAFE Circular 19 or SAFE Circular 16 could result in administrative penalties
in accordance with the Foreign Ex change Administrative Regula tion and relevant provisions.
Furthermore, the SAFE Circular 16 stipulates that the use of foreign exchange incomes of
capital accounts by FIEs shall follow the principles of authenticity and self-use within the
business scope of the enterprises. The foreign exchange incomes of capital accounts and capital
in RMB obtained by the FIE from foreign exchange settlement shall not be used for the
following purposes: (1) directly or indirectly used for the payment beyond the business scope of
the enterprises or the payment prohibited by relevant laws and regulations, (2) directly or
indirectly used for investment in securities o r financial schemes other than bank guaranteed
products unless otherwise provided by relevant laws and regulations, (3) used for granting loans
to non-affiliated enterprises, unless otherwise permitted by its business scope, and (4) used for
t h ec o n s t r u c t i o no rp u r c h a s eo fr e a le s t a t ethat is not for self-use (except for real estate
enterprises).
On October 23, 2019, SAFE promulgated the Notice of the State Administration of
Foreign Exchange on Further Promoting the Convenience of Cross-Border Trade and
Investment ( 《國家外匯管理局關於進一步促進跨境貿易投資便利化的通知》) (the ‘‘SAFE
Circular 28’’). The SAFE Circular 28 stipulate s that non-investment FIEs may use capital to
carry out domestic equity investment in accordance with the law under the premise of not
violating the negative list and that the projects invested are true and in compliance with laws
and regulations.
On April 10, 2020, the SAFE issued the Notice of the SAFE on Optimizing Foreign
Exchange Administration to Support the Development of Foreign-Related Business ( 《國家外匯
管理局關於優化外匯管理支持涉外業務發展的通知》) (the ‘‘SAFE Circular 8’’). The SAFE
Circular 8 provides that under the condition that the use of funds is genuine and compliant
with current administrative provisions on use of income relating to capital account, enterprises
are allowed to use income under capital account such as capital funds, foreign debts and
overseas listings for domestic payment, without submission to the bank prior to each
transaction of materials eviden cing the veracity of such payment.
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LAWS AND REGULATIONS ON TAXATION
Enterprise Income Tax
According to the Enterprise Income Tax Law of the PRC ( 《中華人民共和國企業所得稅法》)
(the ‘‘EIT Law’’) promulgated by the NPC on March 16, 2007 and last amended by the SCNPC
on December 29, 2018 and the Implementation Regulations on the EIT Law ( 《中華人民共和國
企業所得稅法實施條例》) promulgated by the State Council on December 6, 2007 and last
amended on January 20, 2025, taxpayers consis t of resident enterprises and non-resident
enterprises. Resident enterprises are defined a s enterprises that are established in the PRC in
accordance with PRC laws, or that are establi shed in accordance with the laws of foreign
countries but whose actual or de facto control is administered from within the PRC.
Non-resident enterprises are defined as enterpr ises that are set up in accordance with the laws
of foreign countries and whose actual administration is conducted outside the PRC, but have
established institutions or premises in the PRC, or have no such established institutions or
premises but have income generated from ins ide the PRC. Under the EIT Law and relevant
implementing regulations, a uniform corporate i ncome tax rate of 25% is applicable. However,
if non-resident enterprises have no formed permanent establishments or premises in the PRC, or
if they have formed permanent establishment institutions or premises in the PRC but there is no
actual relationship between the relevant income derived in the PRC and the established
institutions or premises set up by them, the enter prise income tax is, in that case, set at the rate
of 10% for their income sourced from inside the PRC.
Value-Added Tax
According to the Provisional Regulations on Value-Added Tax of the PRC ( 《中華人民共和
國增值稅暫行條例》) promulgated by the State Council on December 13, 1993 and last amended
on November 19, 2017 and the Implementation Rules of the Provisional Regulations on
Value-Added Tax of the PRC ( 《中華人民共和國增值稅暫行條例實施細則》)p r o m u l g a t e db yt h e
MOF on December 25, 1993 and last amended on October 28, 2011, any entities or individuals
engaged in sale of goods, provision of processing services, repairs and r eplacement services or
importation of goods within the territory of the PRC are taxpayers of Value-Added Tax (the
‘‘VAT’’) and shall pay the VAT in accordance w ith the laws and regulations. The rate of VAT
for sale of goods is 17% unless otherwise specified.
According to the Circular of the MOF and Sta te Administration of Taxation on Adjusting
Value-Added Tax Rate ( 《關於調整增值稅稅率的通知》) issued by the MOF and the State
Taxation Administration (the ‘‘SAT’’) on Apr il 4, 2018 which came into force on May 1, 2018,
the tax rate for the taxable sales or import of goods by the taxpayers would be changed from
17% and 11% to 16% and 10% respectively. Afterwards, further adjustments were made
according to the Announcement on Relevant P olicies for Deepening the Value-Added Tax
Reform (《關於深化增值稅改革有關政策的公告》) jointly issued by the MOF, the SAT and the
General Administration of Customs of the PRC on March 20, 2019 which came into force on
April 1, 2019. For general VAT taxpayers who engaged in VAT taxable sales or importing
goods, applicable tax rates that were previ ously subject to 16% and 10% were adjusted to 13%
and 9%, respectively.
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REGULATIONS RELATING TO OVERSEAS OFFERING AND LISTING
On February 17, 2023, with the approval of the State Council, the China Securities
Regulatory Commission (the ‘‘CSRC’’) promul gated the Trial Administrative Measures of
Overseas Securities Offering an d Listing by Domestic Companies ( 《境內企業境外發行證券和上
市管理試行辦法》) (the ‘‘Trial Measures’’) and relevant fi ve guidelines, which came into force on
March 31, 2023. According to the Trial Measure s: (1) PRC domestic companies seeking to offer
or list securities overseas, both directly and indirectly, should complete the filing procedure and
submit relevant information to the CSRC; (2) d omestic companies that seek to offer or list
securities overseas directly means that PRC comp anies limited by shares offer or list securities in
overseas securities markets; and (3) any PRC comp any limited by shares seeking to list overseas
are required to file with the CSRC within three business days after submitting an application for
overseas listing. Failure to complete the filing under the Trial Measures may subject a PRC
domestic company to rectification ordered by the CSRC, warning, and fine ranging from RMB1
million to RMB10 million and its controlling shareholders, actual controllers, the person
directly in charge and other directly liable persons may result in administrative penalties, such
as warnings and fines.
Besides, PRC domestic companies seeking to o verseas offering and listing shall strictly
comply with the laws, administrative regulations and relevant provisions of the PRC
government on foreign investment, state-owned assets, industry regulation, overseas
investment, etc., shall not disrupt domestic market order, and shall not harm national
interests, public interest and t he legitimate rights and interes ts of domestic investors. PRC
domestic companies that conducts overseas offering and listing shall (1) formulate its articles of
association, improve its internal control sys tem and standardize its corporate governance,
financial affairs and accounting activities in accordance with the Company Law of the PRC, the
Accounting Law of the PRC and other PRC laws, a dministrative regulations and applicable
provisions, (2) shall abide by the legal system of the PRC on confidentiality and take necessary
measures to implement the confidentiality respons ibility, (3) shall not divulge any state secret or
the work secrets of state authorities, and (4) shall also comply with laws, administrative
regulations and the relevant provisions of the PRC where involved in the overseas provision of
personal information and important data. In addition, the Trial Measures also provides the
circumstances where the overseas offering and listing is explicitly prohibited, including: (1) such
securities offering and listing is explicitly prohibited by specific PRC laws and regulations, (2)
circumstances that constitute threat to or endanger national security, (3) the PRC domestic
company, or its controlling shareholder(s) and the actual controller, have committed crimes of
corruption, bribery, embezzlem ent, misappropriation of property or undermining the order of
the socialist market economy during the latest three years, (4) the PRC domestic company is
currently under investigations for suspicion of criminal offenses or major violations of laws and
regulations, and no conclusion has yet been made thereof, or (5) there are material ownership
disputes over equity held by the controlling shareholder(s) or by other shareholder(s) that
controlled by the controlling shareholder(s) and/or the actual controller.
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On February 24, 2023, the CSRC and other relevant government authorities promulgated
the Provisions on Strengthening the Confidentia lity and Archives Administration of Overseas
Securities Issuance and Lis ting by Domestic Companies ( 《關於加強境內企業境外發行證券和上
市相關保密和檔案管理工作的規定》) (the ‘‘Provision on Confidentiality’’), which came into force
on March 31, 2023. According to the Provision on Confidentiality, where any PRC domestic
company provides or publicly discloses to the relevant securities companies, securities service
institutions, overseas regulatory authorities and other entities and individuals, or provides or
publicly discloses through its overseas listing subjects, documents and materials involving state
secrets and working secrets of state organs, it sh all report the same to the competent department
with the examination and approval authority for approval in accordance with the law, and
submit the same to the secrecy administration department of the same level for filing. Domestic
companies providing accounting archives or copi es thereof to entities and individuals concerned
such as securities companies, securities service i nstitutions and overseas regulatory authorities
shall perform the corresponding procedures pursu ing to the relevant provisions of the state. The
working papers formed within the territory of the PRC by the securities companies and
securities service institutions that provide co rresponding services for the overseas issuance and
listing of domestic companies shall be kept within the territory of the PRC, and those that need
to leave the PRC shall go through the examination and approval formalities in accordance with
the relevant provisions of the state.
FULL CIRCULATION
‘‘Full Circulation’’ represents listing and circulating on the Stock Exchange of unlisted
shares of an H-share listed company, including unlisted shares held by shareholders prior to
overseas listing, unlisted shares additionally i ssued after overseas listing, and unlisted shares
held by foreign shareholders. On November 14, 2019, CSRC announced the Guidelines for the
‘‘Full Circulation’’ Program for Domestic U nlisted Shares of H-Share Listed Companies ( 《H股
公司境內未上市股份申請「全流通」業務指引》) (the ‘‘Full Circulations Guidelines’’), which was
amended on August 10, 2023. The Full Circulations Guidelines allows certain qualified H-share
listed companies and H-share companies to be listed for the application of full circulation to
CSRC.
According to the Full Circulations Guidelines , shareholders of domestic unlisted shares
may determine by themselves through consulta tion the amount and proportion of shares,
provided that the requirements laid down in the relevant laws and regulations and set out in the
policies for state-owned asset a dministration, foreign investment and industry regulation are
met, and the corresponding H-share listed co mpany may be entrusted to file with the CSRC.
The H-share listed company shall submit a report on the relevant situation to the CSRC within
15 days after the registration with the China S ecurities Depository and Clearing Corporation
L i m i t e do ft h es h a r e sr e l a t e dt ot h eapplication has been completed.
On December 31, 2019, China Securities Depos itory and Clearing Corporation Limited
and Shenzhen Stock Exchange jointly announced the Measures for Implementation of H-Share
‘‘Full Circulation’’ Business ( 《H股「全流通」業務實施細則》) (the ‘‘Measures for
Implementation’’). The businesses of cross-border share transfer registration, maintenance of
deposit and holding details, transaction entrus tment and instruction transmission, settlement,
management of settlement participants, services of nominal holders, etc. in relation to the
H-share ‘‘Full Circulation’’ business, are subject to these Measures for Implementation.
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In order to fully promote the reform of H-shares ‘‘Full Circulation’’ and clarify the
business arrangement and procedures for the relevant shares’ registration, custody, settlement
and delivery, China Securities Depository and Clearing Corporation Limited has issued the
Circular on Issuing the Guidelines to the Program for ‘‘Full Circulation’’ of H-Shares ( 《關於發
佈〈H股「全流通」業務指南〉的通知》) in February 2020, which specifi ed the business preparation,
account arrangement, cross-border share transfer registration and overseas centralized custody,
etc. On September 20, 2024, China Securities De pository and Clearing Corporation Limited
issued the Notice on Abolishing the Guidelines to the Program for ‘‘Full Circulation’’ of
H-Shares, abolished these guidelines and stipul ated that relevant business shall be carried out in
accordance with the Guidelines to the Program for ‘‘Full Circulation’’ of H-Shares promulgated
by China Securities Depository and Clearing Corporation Limited Shenzhen Branch. On
February 7, 2020, China Securities Depository and Clearing (Hong Kong) Co., Ltd.
promulgated the Guidelines to the Program for Full Circulation of H-Shares of China
Securities Deposito ry and Clearing (Hong Kong) Co., Ltd. ( 《中國證券登記結算（香港）有限公司
H股「全流通」業務指南》) to specify the relevant escrow, custody, agent service of China
Securities Depository and Clearing (Hong Kong) Co., Ltd., arrangement for settlement and
delivery and other relevant matters.
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OVERVIEW
We are a China-based provider of electric- powered engineering machinery. We design,
develop and commercialize battery-electric engineering machinery with autonomous capabilities
and provide intelligent operation services. Our history can be traced back to November 2016
when our Company was established as a limited liability company under the name of Shanghai
Boxi Intelligence Technology Co., Ltd. ( 上海博璽智能科技有限公司) in the PRC. Since then,
our founder, Mr. Chen, who has profound industry knowledge and insights of the field of new
energy technologies, and rich experience in investment operations and industrialization, has
been leading our Company. For the biography and relevant industry experience of Mr. Chen,
see ‘‘Directors, Supervisors and Senior Manag ement.’’ In March 2019, we changed our company
name to Breton Technology Company Limited ( 博雷頓科技有限公司). Prior to the launch of the
BRT951EV, our first five-tonne battery-electri c loader, in December 20 19, we were primarily
engaged in the research and development of core technologies for our e-powertrain kits. In
November 2022, our Company was converted int o a joint stock limited company and renamed
as Breton Technology Co., Ltd. ( 博雷頓科技股份公司).
KEY MILESTONES
The following is a summary of our key milestones:
Year Milestones
2016 Our Company was established under the name of Shanghai
Boxi Intelligence Technology Co., Ltd. ( 上海博璽智能科技有限
公司).
2018 We conducted series A financing in October, raising an
aggregate amount of RMB50.16 million.
2019 We changed our corporate name to Breton Technology
Company Limited ( 博雷頓科技有限公司)i nM a r c h ,a n d
started to use the brand name ‘‘Breton ( 博雷頓)’’.
We launched BRT951EV, our first b attery-electric loader to
the market, establishing ourselves as one of the few pioneers to
successfully develop and mass-produce new energy loaders in
China.
2020 We inaugurated our intelligent manufacturing base in
Zaozhuang, Shandong, in August, where we undertake the
manufacturing of our battery-electric loaders.
We launched BRT90E, our first 90-tonne battery-electric
wide-body dump truck.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Year Milestones
2021 We conducted Series B Financing in August, raising an
aggregate amount of approximately RMB274.9 million.
We spearheaded the development of an array of
remote-operate technologies ta ilored for our battery-electric
loaders starting from December.
2022 We conducted Series C Financing in June, raising an aggregate
amount of approximately RMB155.9 million.
We sold our first 700-kWh BRT105E, our flagship 105-tonne
battery-electric wide-body dump truck in August featuring the
largest battery capacity, longe st operational time and highest
charging efficiency in China at the time of its debut.
We inaugurated the first pilot station for direct current
photovoltaic energy system in Panzhihua, Sichuan,
encompassing photovoltaic energy generation, energy storage
and charging functionalities in December.
2023 We marketed upgraded model of battery-electric loader,
namely BRT970EV, further expanding our market reach.
We completed Series C+ Financing, raising RMB954.0 million
in March.
We deployed our autonomous wide-body dump trucks in
March.
We deployed our first remote-operate loader in Chongqing,
China in November.
2024 We were awarded ‘‘Shanghai U nicorn (Potential) Enterprise to
Receive Prioritized Service for 2024 (2024 年上海市重點服務獨
角獸（潛力）企業)’’.
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OUR MAJOR SUBSIDIARIES
The date of establishment and principal business activities of each of our major
subsidiaries are set out in the table below:
No. Name of subsidiary
Date and place
of establishment
Principal business
activities
Registered
capital
Ownership as
of the Latest
Practicable
Date
1. Inner Mongolia Breton
Intelligent Technology
Co., Ltd.
(內蒙古博雷頓智能科技
有限公司)
January 7, 2019,
PRC
Sales of new energy
tractor trucks
RMB20 million 100%
2. Zhejiang Breton
Technology Co., Ltd.
(浙江博雷頓科技有限
公司)
April 12, 2019,
PRC
Manufacturing,
research and sales
of new energy
vehicles
RMB100 million 100%
3. Breton (Shanghai)
Intelligent Technology
Co., Ltd. ( 博雷頓（上海）
智能科技有限公司)
(formerly known as
Linju (Shanghai) Power
Technology Co., Ltd.
(臨矩（上海）動力科技有
限公司))
June 25, 2019,
PRC
Research and
development of
automotive
technology, new
energy technology,
and automation
technology
RMB10 million 100%
4. Baipin (Shanghai)
Intelligent Technology
Co., Ltd.
(佰頻（上海
）智能科技
有限公司)
July 2, 2019,
PRC
Research and
development of
automotive
technology, new
energy technology,
and automation
technology
RMB40 million 100%
5. Breton (Shandong) New
Energy Vehicle Co.,
Ltd. ( 博雷頓（山東）新能
源汽車有限公司)
May 25, 2020,
PRC
Manufacturing,
research and sales
of new energy
loaders
RMB330 million 100%
6. Breton (Hunan)
Technology Co., Ltd.
(博雷頓（湖南）科技有限
公司)
October 12,
2022, PRC
Manufacturing,
research and sales
of new energy
wide-body dump
trucks
RMB300 million 100%
7. Breton (Lanxi) New
Energy Engineering
Machinery Co., Ltd.
(博雷頓（蘭溪）新能源工
程機械有限公司)
January 28,
2023, PRC
Manufacturing,
research and sales
of new energy
loaders
RMB200 million 100%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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No. Name of subsidiary
Date and place
of establishment
Principal business
activities
Registered
capital
Ownership as
of the Latest
Practicable
Date
8. Breton (Wuhan)
Technology Co., Ltd.
(博雷頓（武漢）科技有限
公司)
March 1, 2023,
PRC
Research and sales of
new energy
loaders
RMB300 million 100%
9. Breton (Wuhan) New
Energy Equipment Co.,
Ltd. ( 博雷頓（武漢）新能
源裝備有限公司)
March 1, 2023,
PRC
Manufacturing,
research and sales
of new energy
loaders
RMB100 million 100%
10. Breton ESG Pte. Ltd. November 29,
2023,
Singapore
Investment holding 10,000
Singapore
dollars
100%
11. Breton (Hong Kong)
Technology Limited
November 4,
2024, Hong
Kong
Import and export
trade
HK$100,000 100%
12. Breton (Beijing)
Technology Co., Ltd.
(博雷頓（北京）科技有限
公司)
November 25,
2024, PRC
Sales of new energy
engineering
machinery
RMB20 million 100%
ESTABLISHMENT AND MAJOR SHAREHOLDING CHANGES OF OUR COMPANY
(a) Our Establishment and Changes in our Share Capital prior to the Series A Financing
On November 28, 2016, our Company was establ ished as a limited liability company under
the laws of the PRC with an initial registered capital of RMB20,000,000. The shareholding
structure of our Company as of the establishment date was as follows:
No. Shareholder
Registered
capital
subscribed for
Percentage of
shareholding in
our Company
(RMB) (%)
1. Shanghai Boxi Electric Co., Ltd. ( 上海博璽電氣
股份有限公司)(1) (‘‘Boxi Electric’’)
19,000,000 95.00
2. Mr. Lei Faming ( 雷發明) (2) (‘‘Mr. Lei’’) 1,000,000 5.00
Total 20,000,000 100.00
Notes:
(1) From April 2016 to August 2021, Mr. Chen served as a director of Boxi Electric. Shanghai Yijin, a
company controlled by Mr. Chen, was the then third largest shareholder of Boxi Electric.
(2) Mr. Lei was an Independent Third Party.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 5 3–


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Pursuant to the shareholders’ resolutions dated July 1, 2018, the registered capital of our
Company was increased from RMB20,000, 000 to RMB60,000,000. Shanghai Fangyu
Investment Co., Ltd. ( 上海方煜投資有限公司) (‘‘Shanghai Fangyu’’), a company controlled by
Mr. Chen until March 2021, subscribed for all the increased registered capital of
RMB40,000,000.
Pursuant to the equity transfer agreement d ated July 25, 2018 entered into by Mr. Lei and
Shanghai Fangyu, Mr. Lei agreed to transfer all his equity interest in our Company to Shanghai
Fangyu at nil consideration, as Mr. Lei had not paid up any of the contributions subscribed by
him at the time of such transfer. Shanghai Fangy u would instead assume Mr. Lei’s obligations
of capital contribution. After such capital in crease and equity transfer, Shanghai Fangyu and
Boxi Electric held approximat ely 68.33% and 31.67% of our equity interest, respectively.
Pursuant to our shareholders’ resolutions dated August 20, 2018, our registered capital was
increased from RMB60,000,000 to RMB70,000,000, all of which was contributed by Mr. Chen.
On October 31, 2018, Shanghai Fangyu transf erred all its equity interest in our Company
to Shanghai Fangao, a limited partnership cont rolled by Mr. Chen as its general partner, at nil
consideration, as Shanghai Fangyu had not paid up any of the contributions. Shanghai Fangao
would instead assume Shanghai Fangyu’s obligations of capital contribution.
Upon the completion of the above equity transfers and capital increases, our shareholding
structure was as follows:
No. Shareholder
Registered
capital
subscribed for Equity interest
(RMB) (%)
1. Shanghai Fangao 41,000,000 58.57
2. Boxi Electric 19,000,000 27.14
3. Mr. Chen 10,000,000 14.29
Total 70,000,000 100.00
(b) Series A Financing
Pursuant to our shareholders’ resolutions dated October 31, 2018, our registered capital
was increased from RMB70,000,000 to RMB108,0 00,000, and a group of investors, all of which
were Independent Third Parties, agreed to subscr ibe for the increased registered capital of
RMB38,000,000 at an aggregate consideration of R MB50,160,000 (the ‘‘Series A Financing’’).
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 5 4–


--- page 164 ---
The consideration of the Series A Financing was determined based on arm’s length negotiations
among the relevant parties taking into account the then development of our Company. The
respective subscription amount and consideration paid by the subscribers in the Series A
Financing were as follows:
No. Subscribers
Registered
capital
subscribed for Consideration
(RMB) (RMB)
1. Suzhou Zhongding No. 5 Equity Investment
Fund Partnership (Limited Partnership)
(蘇州鐘鼎五號股權投資基金合夥企業
（有限合夥）) (‘‘Zhongding No.5’’)
22,727,273 30,000,000
2. Suzhou Zhongding No. 5 Qinglan Equity
Investment Fund Partnership (Limited
Partnership) ( 蘇州鐘鼎五號青藍股權投資基金
合夥企業（有限合夥）) (‘‘Zhongding Qinglan’’)
2,272,727 3,000,000
3. Zheshang New Energy Co., Ltd. ( 浙商新能源
有限公司) (‘‘Zheshang New Energy’’)
5,000,000 6,600,000
4. Langting (Shanghai) Investment Co., Ltd.
(廊庭（上海）投資有限公司)( ‘ ‘ L a n g t i n g
Investment’’)
3,000,000 3,960,000
5. Lin Ziting ( 林姿廷) 5,000,000 6,600,000
Total 38,000,000 50,160,000
Upon the completion of the Series A Financing, Boxi Electric, Shanghai Fangao, Mr.
Chen, Zhongding No.5, Zhongding Qinglan, Zheshang New Energy, Langting Investment and
Lin Ziting held approximately 17.59%, 37.96 %, 9.26%, 21.05%, 2.10%, 4.63%, 2.78% and
4.63% equity interest in our Company, respectively. For further details of the Series A
Financing, please see ‘‘— Pre-IPO Investments’’ below.
(c) Equity Transfers between Serie s A Financing and Series B Financing
From 2020 to 2021, several equity interest transfers were conducted with the price for each
registered capital ranging from RMB1.50 t o RMB10.00, which was determined after arm’s
length negotiations between the parties taking into account the development of the Company at
the time of negotiation of the relevant equity transfers. For further details, please see ‘‘—
Pre-IPO Investments’’ below.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 5 5–


--- page 165 ---
Upon the completion of the equity transfers, our shareholding structure was as follows:
No. Shareholder
Registered
capital
subscribed for Equity interest
(RMB) (%)
1. Shanghai Fangao 41,000,000 37.96
2. Mr. Chen 15,090,000 13.97
3. Zhongding No.5 11,363,636 10.52
4. Fujian Diquan Equity Investment Partnership
(Limited Partnership) ( 福建省締泉股權投資
合夥企業（有限合夥有限合夥）)
(‘‘Fujian Diquan’’)
3,850,000 3.56
5. Cai Yulin ( 蔡玉霖) 5,400,000 5.00
6. Lin Ziting 5,000,000 4.63
7. Yue Yong ( 岳永) 4,100,000 3.80
8. Zhao Yongge ( 趙永革) 3,000,000 2.78
9. Yang Zibin ( 楊子彬) 3,000,000 2.78
10. Yang Jiayong ( 楊家勇) 2,600,000 2.41
1 1 . Z h a oX u e w e n( 趙學文) 2,000,000 1.85
12. Zhang Xiaohui ( 張曉暉) 1,500,000 1.39
1 3 . X i a oW e n b i n( 肖文斌) 1,500,000 1.39
14. Zhang Shanliang ( 張珊涼)
(1) 1,500,000 1.39
15. You Yifei ( 游以菲) 1,400,000 1.30
16. Zhongshan Broad-Ocean Motor Co. Ltd
(中山大洋電機股份有限公司)
(‘‘Broad-Ocean Motor’’)
1,260,000 1.17
17. Cloud Tribe Yijin 1,150,000 1.06
18. Zhongding Qinglan 1,136,364 1.05
19. Chai Guang ( 柴廣)(2) 1,050,000 0.97
20. Lu Qianyuan ( 路倩原) 500,000 0.46
21. Li Xiaoxiao ( 李瀟瀟) 400,000 0.37
22. Wang Yicheng ( 王藝澄) 200,000 0.19
Total 108,000,000 100.00
Notes:
(1) Among the registered capital of RMB1,500,000, RMB1,460,000 subscribed for by Zhang Shanliang ( 張珊
涼) was entrusted to her by her families, friends and business partners. Pursuant to the equity transfer
agreements dated August 30, 2022, Zhang Shanliang ( 張珊涼) transferred all the registered capital of
RMB1,500,000 to Jiaxing Dixin Equity Investment Partnership (Limited Partnership) ( 嘉興市締芯股權投
資合夥企業（有限合夥）) and the proceeds were repaid to the entrustors in accordance with their respective
entrustment arrangements, and the entrustment arrangement was terminated accordingly.
(2) Before Chai Guang ( 柴廣) became a registered Shareholder, the registered capital of RMB1,050,000
subscribed for by him was entrusted to and held by Mr. Chen. The entrustment arrangement was
terminated in May 2021.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 5 6–


--- page 166 ---
(d) Series B Financing
Pursuant to our shareholders’ resolutions dated August 16, 2021, our registered capital was
increased from RMB108,000,000 to RMB129,990,000, and a group of investors, all of which
were Independent Third Parties, agreed to subscribe for the increased registered capital in a
total amount of RMB21,990,000 at an aggregate c onsideration of RMB274,875,000 (the ‘‘Series
B Financing’’). The consideration of the Series B Financing was determined based on arm’s
length negotiations among the relevant parties taking into account the then development of our
Company. The respective subscription amount and consideration paid by the subscribers in the
Series B Financing were set out as follows:
No. Subscribers
Registered
capital
subscribed for Consideration
(RMB) (RMB)
1. Huzhou Qingyun Xinzhengtu Equity
Investment Partnership (Limited Partnership)
(湖州青雲新征途股權投資合夥企業（有限
合夥）) (‘‘Huzhou Qingyun’’)
9,400,000 117,500,000
2. Zibo Naying Equity Investment Partnership
(Limited Partnership) ( 淄博納贏股權投資合
夥企業（有限合夥）) (‘‘Zibo Naying’’)
7,460,000 93,250,000
3. Guangzhou Naibixin Phase I Venture Capital
Fund Partnership (Limited Partnership)
(廣州耐必信一期創業投資基金合夥企業（有限
合夥）) (‘‘Guangzhou Naibixin’’)
2,400,000 30,000,000
4. Broad-Ocean Motor 1,050,000 13,125,000
5. Shenzhen Changde Ent erprise Management
Consulting Partnership (Limited Partnership)
(深圳長德企業管理諮詢
合夥企業（有限合夥）)
(‘‘Shenzhen Changde’’)
800,000 10,000,000
6. Sichuan Hydrogen Lithium Breton New Energy
Technology Co., Ltd. ( 四川氫鋰博雷頓新能源
科技有限公司)( ‘ ‘ S i c h u a nH y d r o g e n
Lithium’’)
80,000 1,000,000
7. Chengang International Trade (Shanghai) Co.,
Ltd. ( 誠盎國際貿易（上海）有限公司)
(‘‘Chengang International’’)
400,000 5,000,000
8. Nanjing Bochen Shengan Information
Technology Service Co., Ltd. ( 南京博辰勝安
信息技術服務有限公司) (‘‘Bochen Shengan’’)
400,000 5,000,000
Total 21,990,000 274,875,000
For further details of the Series B Financing, p lease see ‘‘— Pre-IPO Investments’’ below.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 5 7–


--- page 167 ---
(e) Shareholding changes between Series B Financing and Series C Financing
On February 16, 2022, Yue Yong and Zhongch uang Hengxing Asset Management Co.,
Ltd. ( 中創恆興資產管理有限公司) (‘‘Zhongchuang Hengxing’’) entered into an equity transfer
agreement, pursuant to which Yue Yong agreed to transfer a 0.62% equity interest in our
Company to Zhongchuang Hengxing at a consideration of RMB10 million.
On the same day, Yue Yong entered into an eq uity transfer agreement with Chai Guang,
pursuant to which Yue Yong agreed to transfer a 0.08% equity interest in our Company to Chai
Guang at a consideration of RMB1.25 million.
In addition, in recognition of the contributions of Dr. Qiu Debo (the then president of our
Company) and Ms. Yang Hui (our then consultant) to our Company, and to incentivize them to
further promote our development, it was resolved at the Shareholders’ meeting on February 16,
2022 that the registered capital of our Com pany increased from RMB129,990,000 to
RMB139,990,000, and the increased registered capital was held by Shanghai Jifang (an
incentive platform of the Group incorporated in the PRC), Dr. Qiu Debo and Ms. Yang Hui at
a total consideration of RMB16 million.
Furthermore, due to the change in investment s trategies, Zibo Naying decided to transfer
its subscribed for but unpaid registered ca pital of RMB3,326,400. Pursuant to the equity
transfer agreements dated June 17, 2022, the following transfers of our registered capital were
effected:
No. Transferor Transferee
Registered
capital
transferred Consideration
(RMB) (RMB)
1. Zibo Naying . Jiaxing Tongneng Xingyuan Equity
Investment Partnership (Limited
Partnership) ( 嘉興同能興源股權投資合夥
企業（有限合夥）) (‘‘Jiaxing Tongneng’’)
877,500 0 (1)
. Shanghai Chenqi Trunk Network
Technology Partnership (Limited
Partnership) ( 上海辰棋幹線網絡 科技合夥
企業（有限合夥）) (formerly know as
Hainan Trunk Network Technology
Partnership (Limited Partnership) ( 海南
幹線網絡 科技合夥企業（有限合夥）))
(‘‘Shanghai Chenqi’’)
179,930 0
(1)
. Hefei Rendun Equity Investment
Partnership (Limited Partnership) ( 合肥
仁頓股權投資合夥企業（有限合夥）)
(‘‘Hefei Rendun’’)
899,654 0 (1)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 5 8–


--- page 168 ---
No. Transferor Transferee
Registered
capital
transferred Consideration
(RMB) (RMB)
. Shanghai Kechuang Shenxin Venture
Capital Partnership (Limited
Partnership) ( 上海科創申新創業投資合夥
企業（有限合夥）) (‘‘Kechuang
Partnership’’)
162,500 0 (1)
. Shanghai Kechuang Shenxin Venture
C a p i t a lM a n a g e m e n tC o . ,L t d .(上海科
創申新創業投資管理有限公司)
(‘‘Kechuang Management’’)
107,250 0 (1)
. CIMC Vehicles (Group) Co., Ltd. ( 中集
車輛（集團）股份有限公司)( ‘ ‘ C I M C ’ ’ )
144,040 0 (1)
. Rockets Capital L.P. 955,526 0 (1)
Subtotal 3,326,400 0 (1)
2. Yue Yong . Rockets Capital L.P. 157,346 1,966,825
. Changzhou Kesheng Equity Investment
Partnership (Limited Partnership) ( 常州
科升股權投資合夥企業（有限合夥）)
(‘‘Kesheng Partnership’’)
1,100,000 13,750,000
Subtotal 1,257,346 15,716,825
3. Li Xiaoxiao (2) . Shanghai Chenqi (2) 400,000 5,000,000
Notes:
(1) Zibo Naying subscribed for a registered capital of RMB7,460,000 at a consideration of RMB93,250,000
during the Series B Financing. As at the date of the equity transfer agreements, Zibo Naying had paid up
the register capital of RMB4,133,600, with the register capital of RMB3,326,400 (i.e. the registered capital
sold by Zibo Naying pursuant to the equity transfer agreements dated June 17, 2022) unpaid. Therefore,
the consideration was nil. The relevant transferees would instead assume the corresponding capital
contribution obligations.
(2) Shanghai Chenqi is a limited partnership established in the PRC. H Truck HK Limited, a company
controlled by Li Xiaoxiao, is a limited partner holding 29.5% partnership interest in Shanghai Chenqi.
For further details of shareholding changes between Series B Financing and Series C
Financing, please see ‘‘— Pre-IPO Investments’’ below.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 5 9–


--- page 169 ---
(f) Series C Financing
Pursuant to our shareholders’ resolutions dated June 17, 2022, our registered capital was
increased from RMB139,990,000 to RMB145,558,000, and a group of investors, all of which
were Independent Third Parties, agreed to subscribe for the increased registered capital in a
total amount of RMB5,568,000 at an aggregate con sideration of RMB155,903,999 (the ‘‘Series
C Financing’’). The consideration of the Series C Financing was determined based on arm’s
length negotiations among the relevant parties taking into account the then development of our
Company. The respective subscription amount and consideration paid by the subscribers in the
Series C Financing were set out as follows:
No. Subscribers
Registered
capital
subscribed for Consideration
(RMB) (RMB)
1. Jiaxing Tongneng 1,350,000 37,800,000
2. Shanghai Chenqi 276,817 7,750,875
3. Hefei Rendun 1,384,083 38,754,324
4. Kesheng Partnership 937,500 26,250,000
5. Kechuang Partnership 250,000 7,000,000
6. Kechuang Management 165,000 4,620,000
7. CIMC 221,600 6,204,800
8. Rockets Capital L.P. 983,000 27,524,000
Total 5,568,000 155,903,999
For further details of the Series C Financing, p lease see ‘‘— Pre-IPO Investments’’ below.
(g) Equity Transfers in August 2022
Pursuant to the equity transfer agreements dated August 30, 2022, the following transfers
of our registered capital were effected:
No. Transferor Transferee
Registered
capital
transferred Consideration
(RMB) (RMB)
1. Zhongchuang
Hengxing (1)
. Yellow River Shanxi Industrial Co., Ltd.
(黃河山西實業有限公司) (‘‘Shanxi
Industrial’’)(1)
400,000 8,000,000
2. Yue Yong . Shanxi Industrial 300,000 6,000,000
. Wu Weizhong ( 吳偉忠) 300,000 6,000,000
. Jiaxing Dixin Equity Investment
Partnership (Limited Partnership) ( 嘉興
市締芯股權投資合夥企業（有限合夥）)
(‘‘Jiaxing Dixin’’)
200,000 4,000,000
Subtotal 800,000 16,000,000
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 170 ---
No. Transferor Transferee
Registered
capital
transferred Consideration
(RMB) (RMB)
3. Zhang
Shanliang
. Jiaxing Dixin 1,500,000 30,000,000
4. Zhang Xiaohui . Jiaxing Dixin 200,000 4,000,000
5. Chengang
International
. Jiaxing Dixin 100,000 2,000,000
6. Kesheng
Partnership (2)
. Changzhou Kesheng Venture Capital
Center (Limited Partnership) ( 常州科升
創業投資中心（有限合夥）)( ‘ ‘ K e s h e n g
Center’’)(2)
2,037,500 40,000,000
7. Zhao Xuewen . Kesheng Center 1,000,000 20,000,000
Notes:
(1) Zhongchuang Hengxing is a wholly owned subsidiary of Shanxi Industrial.
(2) At the time of the equity transfer, Kesheng Partnership (deregistered in December 2022) and Kesheng
Center were limited partnerships established in the PRC by the same group of partners (general partner
and limited partners).
For further details of equity transfers in Augu st 2022, please see ‘‘— Pre-IPO Investments’’
below.
(h) Conversion into a Joint Stock Company
On November 4, 2022, our then Shareholders passed resolutions approving, among other
things, (i) the conversion of our Company from a limited liability company into a joint stock
company with its corporate name cha nged to Breton Technology Co., Ltd. ( 博雷頓科技股份公
司), and (ii) the conversion of our audited net assets value in an amount of RMB313,283,150.37
as of August 31, 2022 into 300,000,000 Shares with a nominal value of RMB1.00 each at a ratio
of 1 : 0.9576, which were issued to the then Shareholders in proportion to their respective equity
interests in our registered capital, and the cr editing of the remaining net assets value of
RMB13,283,150.37 as our capital reserves. The conversion was completed on November 23,
2022.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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(i) Series C+ Financing
Pursuant to a series of shareholders’ re solutions in November 2022, December 2022,
February 2023 and March 2023, respectively, o ur registered capital was increased from
RMB300,000,000 to RMB366,651,762, and a group of investors, all of which were Independent
Third Parties, agreed to subsc ribe the increased registered capital in a total amount of
RMB66,651,762 at an aggregate consideration of RMB954,000,000 (the ‘‘Series C+
Financing’’). The consideration of the Series C+ Financing was determined based on arm’s
length negotiations among the relevant parties taking into account the then development of our
Company. The respective subscription amount and consideration paid by the subscribers in the
Series C+ Financing were set out as follows:
No. Subscribers
Registered
capital
subscribed for Consideration
(RMB) (RMB)
1. Hunan Xiangtan Caixin Chanxing Equity
Investment Partnership (Limited Partnership)
(湖南湘潭財信產興股權投資合夥企業（有限
合夥）) (‘‘Xiangtan Caixin’’)
20,959,674 300,000,000
2. Tianjin Xingyue Puyu Technology Co., Ltd.
(天津星月璞瑜科技有限責任公司)
(‘‘Xingyue Puyu’’)
2,095,967 30,000,000
3. Jiaxing Xuying Equity Investment Partnership
(Limited Partnership) ( 嘉興序盈股權投資合
夥企業（有限合夥）) (‘‘Jiaxing Xuying’’)
3,423,413 49,000,000
4. Jinhua Boleidun Talent Equity Investment
Partnership (Limited Partnership)
(金華市博雷頓人才股權投資合夥
企業（有限
合夥）) (‘‘Jinhua Boleidun’’)
13,973,116 200,000,000
5. Hubei Changjiang Automobile Valley Industry
Investment Fund Partnership (Limited
Partnership) ( 湖北長江車谷產業投資基金合夥
企業（有限合夥）) (‘‘Changjiang Automobile
Valley’’)
20,959,674 300,000,000
6. Shandong Province New and Old Kinetic
Energy Conversion Cross-Border Venture
Capital FOF Fund Partnership (L.P.) ( 山東省
新舊動能轉換跨境創投母基金合夥企業（有限
合夥）) (‘‘Shandong Kinetic Energy’’)
5,239,918 75,000,000
Total 66,651,762 954,000,000
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Upon the completion of Series C+ Financing, our shareholding structure was as follows:
No. Name of Shareholders
Number of
Shares Issued
Approximate
percentage of
shareholding in
our Company
after the
issuance of
Shares
1. Shanghai Fangao 84,502,397 23.05%
2. Mr. Chen 31,101,004 8.48%
3. Zhongding No. 5 23,420,841 6.39%
4. Xiangtan Caixin 20,959,674 5.72%
5. Changjiang Automobile Valley 20,959,674 5.72%
6. Huzhou Qingyun 19,373,720 5.28%
7. Shanghai Jifang 14,942,497 4.08%
8. Jinhua Boleidun 13,973,116 3.81%
9. Cai Yulin 11,129,584 3.04%
10. Lin Ziting 10,305,170 2.81%
11. Zibo Naying 8,519,491 2.32%
12. Fujian Diquan 7,934,981 2.16%
13. Kesheng Center 6,260,391 1.71%
14. Yang Zibin 6,183,102 1.69%
15. Zhao Yongge 6,183,102 1.69%
16. Yang Jiayong 5,358,689 1.46%
17. Shandong Kinetic Energy 5,239,918 1.43%
18. Guangzhou Naibixin 4,946,482 1.35%
19. Broad-Ocean Motor 4,760,989 1.30%
20. Hefei Rendun 4,706,860 1.28%
21. Jiaxing Tongneng 4,590,953 1.25%
22. Rockets Capital L.P. 4,319,664 1.18%
23. Jiaxing Dixin 4,122,068 1.12%
24. Jiaxing Xuying 3,423,413 0.93%
25. Xiao Wenbin 3,091,551 0.84%
26. Qiu Debo 3,091,551 0.84%
27. You Yifei 2,885,448 0.79%
28. Zhang Xiaohui 2,679,344 0.73%
29. Yang Hui 2,576,293 0.70%
30. Chai Guang 2,370,189 0.65%
31. Cloud Tribe Yijin 2,370,189 0.65%
32. Yue Yong 2,355,049 0.64%
33. Zhongding Qinglan 2,342,085 0.64%
34. Xingyue Puyu 2,095,967 0.57%
35. Zhao Xuewen 2,061,034 0.56%
36. Shanghai Chenqi 1,765,785 0.48%
37. Shenzhen Changde 1,648,827 0.45%
38. Shanxi Industrial 1,442,724 0.39%
39. Lu Qianyuan 1,030,517 0.28%
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No. Name of Shareholders
Number of
Shares Issued
Approximate
percentage of
shareholding in
our Company
after the
issuance of
Shares
40. Kechuang Partnership 850,177 0.23%
41. Zhongchuang Hengxing 824,414 0.22%
42. Bochen Shengan 824,414 0.22%
43. CIMC 753,597 0.21%
44. Wu Weizhong 618,310 0.17%
45. Chengang International 618,310 0.17%
46. Kechuang Management 561,117 0.15%
47. Wang Yicheng 412,207 0.11%
48. Sichuan Hydrogen Lithium 164,883 0.04%
Total 366,651,762 100.00%
For further details of the Series C+ Financing, please see ‘‘— Pre-IPO Investments’’ below.
(j) Equity Transfers after Series C+ Financing
On February 22, 2024, You Yifei and Beijing Shiyuan Zhonglian Technology Co., Ltd. ( 北
京世源眾聯科技有限公司) (‘‘Shiyuan Zhonglian’’) entered into an equity transfer agreement,
pursuant to which You Yifei agreed to transfer a 0.27% equity interest in our Company to
Shiyuan Zhonglian at a consideration of RMB9.5 million, which was determined based on arm’s
length negotiations among the parties thereto.
On April 19, 2024, Chengang Inter national and Fu Changming ( 付長明) entered into an
equity transfer agreement, pursuant to which Chengang International agreed to transfer a
0.17% equity interest in our Company to Fu Ch angming at a consideration of RMB5,873,945,
which was determined based on arm’s length negotiations among the parties thereto.
INCENTIVE PLATFORMS
In recognition of the contributions of the relevant persons (primarily comprise our
employees) and to incentivize them to further p romote our development, Shanghai Jifang,
Shanghai Fangzhanbo and Shanghai Fangao, were established in the PRC as our incentive
platforms.
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(a) Shanghai Jifang
Shanghai Jifang is a limited partnership es tablished in the PRC on January 14, 2022 and
m a n a g e db yi t sg e n e r a lp a r t n e r ,L i uX i n g y u .A sof the Latest Practicable Date, Shanghai Jifang
had 36 limited partners holding approximately 97.93% partnership interest in it, and Shanghai
Jifang directly held approximately 4.08% equity interest in our Company. Its partners are set
out as follows:
Partners Current position(s) in our Company
Partnership
interest
General partner
Liu Xingyu
(1) Secretary of the Board and a joint company
secretary
2.07%
Limited partners
Shanghai Fangzhanbo N/A (2) 28.24%
Mr. Chen (1) Executive Director, chairman of the Board and
general manager
0.34%
Qiu Debo Executive Director and president 20.69%
Sun Kanghua Executive Director and chief financial director 1.03%
Wang Yanzhen Supervisor 1.03%
Sun Wenxu Supervisor 0.31%
30 key employees of the
Group
Key employees of engineering machinery
department, mining tractor trucks
department and human resources department,
etc.
46.28%
Total 100.00%
Notes:
(1) From March 2022 to January 2023, Mr. Liu Xingyu and Mr. Chen held the partnership interests on behalf
of certain participants under our employee incent ive schemes. The entrustment arrangements were
terminated in January 2023.
(2) Shanghai Fangzhanbo is one of our incentive platforms, for further details on Shanghai Fangzhanbo, see
‘‘(b) — Shanghai Fangzhanbo’’ below.
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(b) Shanghai Fangzhanbo
Shanghai Fangzhanbo is a limited partnersh ip established in the PRC on August 26, 2022
and managed by its general partner, Liu Xingyu. As of the Latest Practicable Date, Shanghai
Fangzhanbo had 34 limited partners. Its partners are set out as follows:
Partners Current position(s) in our Company
Partnership
interest
General partner
Liu Xingyu Secretary of the Board and a joint company
secretary
0.00%
Limited partners
Yang Hui Executive Director and director of public
relations
48.84%
Mr. Chen Executive Director, chairman of the Board and
general manager
4.88%
31 key employees of the
Group
Key employees of engineering machinery
department, mining tractor trucks
department and self-driving department, etc.
46.28%
Total 100.00%
(c) Shanghai Fangao
Shanghai Fangao, formerly known as Ningbo Fangyu, is a limited partnership established
in the PRC on September 11, 2018 and managed by its general partner, Mr. Chen. As of the
Latest Practicable Date, Shanghai Fangao had 24 limited partners (including 22 current
employees of the Group and two founding partners of Shanghai Fangao at the early stage of
establishment) holding approxi mately 16.17% partnership interest in it, and Shanghai Fangao
directly held approximately 23.05% equity inte rest in our Company. Its partners are set out as
follows:
Partners Current position(s) in our Company
Partnership
interest
General partner
Mr. Chen
(1) Executive Director, chairman of the Board and
general manager
83.83%
Limited partners
Liu Xingyu Secretary of the Board and a joint company
secretary
0.73%
Sun Kanghua Executive Director and chief financial director 0.73%
Sun Wenxu Supervisor 0.12%
19 key employees of the
Group
Key employees of sales department, finance
department and office of the president, etc.
5.32%
Others (two individuals) N/A 9.27%
Total 100.00%
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Note:
(1) From February 2020 to January 2023, Mr. Chen and another founding partner of Shanghai Fangao at the
early stage of establishment held the partnership interests on behalf of certain participants under our
employee incentive schemes. The entrustment arrangements were terminated in January 2023.
For further details, see ‘‘Statutory and Gen eral Information — C. Further Information
about our Directors, Supervisors and Substa ntial Shareholders — 5. Employee Incentive
Schemes’’ in Appendix VI to this prospectus.
PRE-IPO INVESTMENTS
Our Company obtained several rounds of investments from the Pre-IPO Investors through
equity subscriptions and transfers. For furth er details, see ‘‘— Establishment and Major
Shareholding Changes of Our Company’’ above.
(a) Principal terms of the Pre-IPO Investments
The following table summarizes the details of the Pre-IPO Investments to our Company
made by the Pre-IPO Investors:
Pre-IPO Investor Date of Agreement Settlement Date
Amount of
registered
capital/
Shares
subscribed
for/acquired
Amount of
consideration
paid
Approximate
cost per
Share paid
Discount to
the Offer
Price (3)
(RMB) (RMB) (1) (RMB) (1)(2)
Series A Financing*
Zhongding No. 5
October 31, 2018
January 31, 2019 22,727,273 30,000,000
0.64 96.17%
Zhongding Qinglan January 31 , 2019 2,272,7 27 3,000,000
Zheshang New Energy November 7, 2018 5,000,000 6,600,000
Langting Investment December 24, 2018 3,000,000 3,960,000
Lin Ziting September 25, 2019 5,000,000 6,600,000
Equity transfers between Series A Financing and Series B Financing
(4)
Fujian Diquan February 10, 2020 April 29, 2020 6,000,000 8,625,000 0.96 94.26%
Fujian Diquan August 1, 2020 December 30, 2020 850,000 1,300,500
0.74 94.57%
Yue Yong
August 26, 2020
March 26, 2021 7,600,000 11,628,000
Zhao Xuewen October 29, 2020 5,000,000 7,650,000
Zhang Xiaohui October 29, 20 20 3,000,00 0 4,590,000
Chai Guang March 10, 2022 1,000,000 1,530,000
Fujian Diquan July 12, 2022 2,400,000 3,672,000
Broad-Ocean Motor September 16, 2020 Septem ber 22, 2020 1,260,000 1,927,800 0.74 94.57%
Chai Guang September 20, 2020 March 10, 2022 50,000 76,500 0.74 94.57%
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Pre-IPO Investor Date of Agreement Settlement Date
Amount of
registered
capital/
Shares
subscribed
for/acquired
Amount of
consideration
paid
Approximate
cost per
Share paid
Discount to
the Offer
Price (3)
(RMB) (RMB) (1) (RMB) (1)(2)
Zhao Yongge September 30, 2020 Febr uary 10, 2021 3,000,000 4,800,000
0.78 95.33%You Yifei
October 12, 2020
April 1, 2021 1,400,000 2,240,000
Yang Jiayong February 10, 2021 2,600,000 4,160,000
Cai Yulin November 15, 2020 September 3, 2021 5,400,000 9,864,500 0.89 94.68%
Zhang Shanliang December 15, 2020 April 1, 2021 1,500,000 6,000,000 1.94 88.40%
Lu Qianyuan
January 3, 2021
February 5, 2021 500,000 5,000,000
4.85 70.99%
Wang Yicheng January 19, 2021 200,000 2,000,000
Li Xiaoxiao March 9, 2021 March 24, 2021 400,000 4,000,000
Yang Zibin March 15, 2021 March 18, 2021 1,000,000 10,000,000
Yang Zibin March 16, 2021 March 22, 2021 2,000,000 20,000,000
Xiao Wenbin August 16, 2021 January 18, 2022 1,500,000 4,500,000 1.46 91.27%
Series B Financing**
Huzhou Qingyun
August 16, 2021
September 18, 2021 9,400,000 117,500,000
6.06 63.76%
Zibo Naying December 1, 2021 7,460,000 93,250,000
Guangzhou Naibixin June 18, 2021 2,400,000 30,000,000
Broad-Ocean Motor October 27, 2020 1,050,000 13,125,000
Shenzhen Changde June 10, 2021 800,000 10,000,000
Sichuan Hydrogen Lithium March 11, 2021 80,000 1,000,000
Chengang International June 9, 2021 400,000 5,000,000
Bochen Shengan September 16, 2021 400,000 5,000,000
Equity transfers between Series B Financing and Series C Financing
Zhongchuang Hengxing
February 16, 2022
June 24, 2022 800,000 10,000,000
6.06 63.76%
Chai Guang March 1, 2022 100,000 1,250,000
Rockets Capital L.P.
June 17, 2022
August 9, 2022 157,346 1,966,825
Kesheng Partnership March 14, 2022 1,100,000 13,750,000
Shanghai Chenqi May 16, 2022 400,000 5,000,000
Jiaxing Tongneng
June 17, 2022
August 18, 2022 877,500 0
(5)
6.06 (5) 63.76%
Shanghai Chenqi March 30, 2022 179,930 0 (5)
Hefei Rendun July 6, 2022 89 9,654 0 (5)
Kechuang Partnership July 11, 2022 162,500 0 (5)
Kechuang Management June 30, 2022 107,250 0 (5)
CIMC July 11, 2022 144,040 0 (5)
Rockets Capital L.P. August 9, 2022 955,526 0 (5)
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Pre-IPO Investor Date of Agreement Settlement Date
Amount of
registered
capital/
Shares
subscribed
for/acquired
Amount of
consideration
paid
Approximate
cost per
Share paid
Discount to
the Offer
Price (3)
(RMB) (RMB) (1) (RMB) (1)(2)
Series C Financing***
Jiaxing Tongneng
June 17, 2022
August 16, 2022 1,350,000 37,800,000
13.59 (6) 18.72%
Shanghai Chenqi March 31, 2022 276,817 7,750,875
Hefei Rendun August 30, 202 2 1,384,083 38,754,324
Kesheng Partnership March 28, 2022 937,500 26,250,000
Kechuang Partnership July 1 1, 2022 250,000 7,000,000
Kechuang Management April 1, 2022 165,000 4,620,000
CIMC July 11, 2022 221,600 6,204,800
Rockets Capital L.P. August 9, 2022 983,000 27,524,000
Equity transfers between Series C Financing and Series C+ Financing
Wu Weizhong
August 30, 2022
August 17, 2022 300,000 6,000,000
9.70
(7) 41.99%
Shanxi Industrial November 1 , 2022 300,000 6,000,000
Jiaxing Dixin December 13, 2022 2,000,000 40,000,000
Kesheng Center August 5, 2022 1,000,000 20,000,000
Series C+ Financing****
Xiangtan Caixin
November 28, 2022
December 1, 2022 20,959,674 300,000,000
14.31
(8) 14.41%
Xingyue Puyu December 6, 2022 2,095,967 30,000,000
Jiaxing Xuying December 7, 2022 3,423,413 49,000,000
Jinhua Boleidun December 27, 2022 January 3, 2023 13,973,116 200,000,000
Changjiang Automobile
Valley
February 9, 2023 February 27, 2023 20,959,674 300,000,000
Shandong Kinetic Energy March 21, 2023 M arch 24, 2023 5,239,918 75,000,000
Equity Transfers after Series C+ Financing
Shiyuan Zhonglian February 22, 2024 February 29, 20 24 1,000,00 0 9,500,000
9.50 43.18%
Fu Changming April 19, 2024 April 22, 2024 618,310 5,873,945
Notes:
* Post-money valuation of the Company upon completion of the Series A Financing was RMB142,560,000.
** Post-money valuation of the Company upon completion of the Series B Financing was
RMB1,624,875,000.
*** Post-money valuation of the Company upon completion of the Series C Financing was
RMB4,075,624,000.
**** Post-money valuation of the Company upon completion of the Series C+ Financing was
RMB5,247,960,000.
(1) Other than disclosed specifically below, consideration for the Pre-IPO Investments was determined based
on arm’s length negotiations among the relevant parties taking into account our Company’s post-money
valuation and the then development of our Company’s technology development prospects.
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(2) Calculated based on the number of Shares as adjusted after our Company’s conversion to a joint stock
company in November 2022.
(3) The discount to the Offer Price is calculated based on the assumption that the Offer Price is HK$18.0 per
Offer Share, assuming that the Over-allotment Option is not exercised.
(4) The consideration was determined based on arm’s length negotiations among the parties with reference to
the price of historical equity transfers of our Company up to the time of the negotiation and taking into
account our Company’s then development and listing plan.
(5) Zibo Naying subscribed for a registered capital of RMB7,460,000 at a consideration of RMB93,250,000
during the Series B Financing. As at December 1, 2021, Zibo Naying had made a total paid-in capital
contribution of RMB51,670,000, corresponding to the subscribed registered capital of RMB4,133,600,
with the subscribed registered capital of RMB3,326,400 unpaid.
On June 17, 2022, due to the change in its investment strategies, Zibo Naying entered into an equity
transfer agreement with each of Jiaxing Tongneng, Shanghai Chenqi, Hefei Rendun, Kechuang
Partnership, Kechuang Management, CIMC and Rockets Capital L.P., respectively, pursuant to which
Zibo Naying agreed to transfer an aggregate of RMB3,326,400 of our Company’s registered capital to
them at nil consideration as Zibo Naying had not paid up contribution for this part of subscribed
registered capital. For details of the transfers, see ‘‘— Establishment and Major Shareholding Changes of
Our Company — (e) Shareholding changes between Series B Financing and Series C Financing’’ above.
Each of Jiaxing Tongneng, Shanghai Chenqi, Hefei Rendun, Kechuang Partnership, Kechuang
Management, CIMC and Rockets Capital L.P. would instead assume Zibo Naying’s obligations of
capital contribution for the registered capital of RMB3,326,400 in proportion to the register capital
acquired by them after the equity transfers. Accordingly, the settlement date represented the date when
the relevant Pre-IPO Investors fulfilled their respective capital contribution obligations.
(6) The increase in the consideration was primarily due to (i) the accelerated growth of our Company’s
performance in the second half of 2021 and the first quarter of 2022 with the launch of our BRT958EV
battery-electric loader and BRT966EV new energy loader and their acceptance by the market, (ii) our
Company’s ability to continuously introduce new products, and (iii) further clarity on the prospect of the
industry.
(7) The consideration was determined based on arm’s length negotiations among the parties taking into
account the price of the Series C Financing, as well as the then development of our Company.
(8) The consideration was determined after taking into account further growth in our Company’s
performance in the second half of 2022, as well as the overall macroeconomic and capital market
conditions.
(i) Lock-up Period
Pursuant to the applicable PRC laws and reg ulations, within the 12 months following
the Listing Date, no existing Shareholders (including the Pre-IPO Investors) may dispose
of any of the Shares held by them.
(ii) Use of Proceeds
We utilized the proceeds from the Pre-IPO Inv estments for the principal business of
our Group, including evolving, designing and manufacturing of our new energy heavy-duty
machines, recruitment of management and technical talents, development of technology
platform, expansion of sales and services network, and replenishment of our working
capital. As of the Latest Practicable Date, a pproximately 93.5% of the funds raised from
the Pre-IPO Investments has been utilized.
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(iii) Strategic Benefits
The Pre-IPO Investments not only fueled our research and development and business
operation, but also demonstrated the investors’ confidence in our business operation and
strengths, and our growth prospects. Our Gro up could benefit from the business resources
and potential business opportunities that ma y be provided by the Pre-IPO Investors from
time to time. Some of Pre-IPO Investors are professional investment entities, and they
brought us valuable industrial strengths, exper ience in market expansion and their insight
on business strategies, and they also provided us with advice on our corporate governance,
financial reporting and internal control.
(iv) Special Rights of the Pre-IPO Investors
The Pre-IPO Investors were granted customary special rights, including but not
limited to right of first refusal, tag-along ri ght, anti-dilution righ t, redemption right and
information right.
In respect of the redemption right, according to the shareholders’ agreement entered
into by, among others, our Company and the Pre-IPO Investors (the ‘‘Shareholders
Agreement’’), the relevant Shareholder s will be entitled to request Mr. Chen to
repurchase/purchase all or part of the Shares held by them in our Company, if any of
t h ec i r c u m s t a n c e so c c u r( w h i c h e v e ri se a rlier): (i) our Company fails to complete a
qualified initial public offering or be acquired with an agreed premium, before December
31, 2025; (ii) the Group or Mr. Chen materially breach the terms of the Shareholders
Agreement or other transaction documents, law s, regulations, or regulatory requirements,
resulting in material adverse impact on the Gr oup; (iii) material integrity issues concerning
Mr. Chen in relation to the operation of the Group arise; or (iv) the Group suffers damages
due to a lack of necessary operational qualifications. In compliance with paragraph 13 of
chapter 4.2 of the Guide for New Listing Applicants, such redemption right was suspended
when our Company submitted its listing application form to the Stock Exchange and will
be terminated upon completion of the Listing.
Pursuant to the special rights terminat ion arrangements between the Company and
each of the Pre-IPO Investors, no special right s of the Pre-IPO Investors will exist after the
Listing.
(b) Joint Sponsors’ Confirmation
On the basis that (i) the respective consider ation for the Pre-IPO Investments has been
settled no less than 120 clear days before the Listing Date, and (ii) no special rights of the
Pre-IPO Investors will exist after the Listing, the Joint Sponsors confirm that the Pre-IPO
Investments are in compliance with the Chapter 4.2 of the Guide for New Listing Applicants.
(c) Information about Pre-IPO Investors
Set out below is a description of our principal Pre-IPO Investors, each holding more than
1.00% of our total issued share capital immediately prior to the Global Offering.
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(i) Zhongdi Shareholders
Fujian Diquan is a limited partnership established in the PRC on June 14, 2019,
primarily engaged in equity investments, investment management, asset management and
other activities with private equity funds. Its general partner is Shanghai Zhongdi
Investment Co., Ltd. ( 上海中締投資有限公司) (‘‘Shanghai Zhongdi’’). As of the Latest
Practicable Date, Fujian Diquan had only one limited partner, namely Zhang Shanliang
(張珊涼) (a former Shareholder) holding 99.50% of the partnership interests.
Zibo Naying is a limited partnership established in the PRC on May 14, 2021,
primarily engaged in equity investments, investment management, asset management and
other activities with private equity funds. Its general partner is Shanghai Zhongdi. As of
the Latest Practicable Date, Zibo Naying had ten limited partners, with only one limited
partner holding more than 30% of the partnership interests therein, namely Zhang
Shanliang ( 張珊涼) holding approximately 46.18% o f the partnership interests.
Jiaxing Tongneng is a limited partnership established in the PRC on November 23,
2021, primarily engaged in equity investment s, investment management, asset management
and other activities with private equity funds . Its general partners are Shanghai Zhongdi
and Kunshan Maidun Investment Management Co., Ltd., which is in turn owned as to
approximately 72.07% by Qiu Liping ( 邱立平). As of the Latest Practicable Date, Jiaxing
Tongneng had 11 limited partners and none of them held 30% or more than 30% of the
partnership interests therein.
Jiaxing Dixin is a limited partnership established in the PRC on March 8, 2022,
primarily engaged in equity investments, investment management, asset management and
other activities with private equity funds. Its general partner is Shanghai Zhongdi. As of
the Latest Practicable Date, Jiaxing Dixin had seven limited partners, with only one limited
partner holding more than 30% of the partnership interests therein, namely Huzhou
Zhuosheng Equity Investment Partn ership (Limited Partnership) ( 湖州卓昇股權投資合夥
企業（有限合夥）) holding approximately 74.43% of th e partnership interests, which was
ultimately beneficially owned by Xia Xingxing ( 夏形形).
Shanghai Zhongdi, the general partner of each of Fujian Diquan, Zibo Naying,
Jiaxing Tongneng and Jiaxing Dixin, is owned as to 39.00% by Li Tongzuan ( 李統鉆),
38.00% by Shanghai Junhuai Investment Management Group Co., Ltd. ( 上海君懷投資管理
集團有限公司) (‘‘Shanghai Junhuai’’) and 23% by Xiao Wenbin, a Shareholder. Shanghai
Junhuai is owned as to 61.80% by Zhang Huixian ( 張輝
賢).
To the best knowledge of the Directors, ea ch of these entities/individuals is an
Independent Third Party.
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(ii) Zhongding Shareholders
Zhongding No.5 is a limited partnership established in the PRC on November 1, 2017,
primarily engaged in equity investments. Its general partner is Shanghai Dingxiao
Enterprise Management Consulting Center (Limited Partnership) ( 上海鼎蕭企業管理諮詢
中心（有限合夥）) (‘‘Shanghai Dingxiao’’), whic h is managed by Shanghai Dingman
Enterprise Management Co., Ltd. ( 上海鼎蔓企業管理有限公司) (‘‘Shanghai Dingman’’)
as its general partner. Shanghai Dingman is owned as to 52.88% by Yan Li ( 嚴力). As of
the Latest Practicable Date, Zhongding No.5 had 40 limited partners and none of them
held 30% or more than 30% of the partnership interests therein.
Zhongding Qinglan is a limited partnership established in the PRC on November 30,
2017, primarily engaged in equity investments. Its general partners are Shanghai Dingxiao
and Shanghai Dingying Investment Management Center (Limited Partnership) ( 上海鼎迎
投資管理中心（有限合夥）)( ‘ ‘Shanghai Dingying ’’), which is ultimately controlled by Yan
Li. As of the Latest Practicable Date, Zhongding Qinglan had two limited partners, with
only one limited partner holding more than 30% of the partnership interests therein,
namely Taikang Life Insurance Co., Ltd. ( 泰康人壽保險有限責任公司) holding
approximately 74.07% of the partnership interests therein.
To the best knowledge of the Directors, each of these entities/individuals is each an
Independent Third Party.
(iii) Xiangtan Caixin
Xiangtan Caixin is a limited partnership established in the PRC on October 29, 2021,
primarily engaged in equity investments. Its general partners are Hunan Caixin Fund
Management Co., Ltd. ( 湖南省財信產業基金管理有限公
司) and Xiangtan Chanxing
Private Equity Fund Management Co., Ltd. ( 湘潭產興私募股權基金管理有限責任公司),
which are ultimately beneficially owned by Hunan Provincial People’s Government ( 湖南省
人民政府) and State-owned Assets Supervision and Administration Commission of
Xiangtan Municipal People’s Government ( 湘潭市人民政府國有資產監督管理委員會),
respectively. As of the Latest Practicabl e Date, Xiangtan Caixin had three limited
partners, with only one limited partner holding more than 30% of the partnership interests
therein, namely Xiangtan Zhenxiang State Owned Assets Management and Investment
Co., Ltd. ( 湘潭振湘國有資產經營投資有限公司) holding 49.98% of the partnership
interests, which was ultimately beneficial ly owned as to 90.00% by State-owned Assets
Supervision and Administration Commission of Xiangtan Municipal People’s
Government. To the best knowledge of the D irectors, Xiangtan Caixin, its general
partners, and its limited partners are each an Independent Third Party.
(iv) Changjiang Automobile Valley
Changjiang Automobile Valley is a limited partnership established in the PRC on
January 12, 2023, primarily engaged in equity investments. Its general partner is Hubei
Changjiang Chegu Private Equity Fund Management Co., Ltd. ( 湖北長江車谷私募基金管
理有限公司), which is ultimately beneficially owned by State-owned Assets Supervision and
Administration Commission of the Hubei Provincial People’s Government (
湖北省人民政
府國有資產監督管理委員會) (‘‘Hubei SASAC’’). As of the Latest Practicable Date,
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Changjiang Automobile Valley had 3 limited partners, with two limited partners holding
more than 30% of the partnership interests t herein, namely Hubei Changjiang Industry
Investment Fund Co., Ltd. ( 湖北長江產業投資基金有限公司) holding approximately
49.92% of the partnership interests, which w as ultimately benefi cially owned by Hubei
SASAC, and Wuhan Economic Development Investment Co., Ltd. ( 武漢經開投資有限公
司) holding approximately 33.33% of the partn ership interests, which was ultimately
beneficially owned by Wuhan Economic and Technological Development Zone (Hannan
District) State-owned Assets Superv ision and Administration Bureau ( 武漢經濟技術開發區
（漢南區）國有資產監督管理局). To the best knowledge of the Directors, Changjiang
Automobile Valley, its general partner, and its limited partners are each an Independent
Third Party.
(v) Huzhou Qingyun
H u z h o uQ i n g y u ni sal i m i t e dp a r t n e r s h i pe s t a b l i s h e di nt h eP R Co nJ a n u a r y2 8 ,2 0 2 1 ,
primarily engaged in equity investments. Its general partner is Shanghai Puchao Private
Fund Management Co., Ltd. ( 上海普超私募基金管理有限公司) (‘‘Shanghai Puchao’’),
which in turn is owned as to 51.00% by Mu Lei ( 慕磊) and as to 49.00% by Xiao Zhen ( 蕭
震). As of the Latest Practicable Date, Huzhou Qingyun had six limited partners, with only
one limited partner holding more than 30% of the partnership interests therein, namely
Ningbo Baili Yihe Energy Co., Ltd. ( 寧波百利怡和能源有限公司
) holding approximately
82.02% of the partnership interests, which was owned as to 95.00% by Han Ruichen ( 韓瑞
辰). To the best knowledge of the Directors, Huzhou Qingyun, its general partner, Mu Lei,
Xiao Zhen, Han Ruichen, and its limited partners are each an Independent Third Party.
(vi) Jinhua Boleidun
Jinhua Boleidun is a limited partnership established in the PRC on December 8, 2022,
primarily engaged in equity investments, investment management, asset management and
other activities with private equity funds. Its general partner is Jinhua Innovation
Investment Development Co., Ltd. ( 金華市創新投資發展有限公司) (‘‘Jinhua Innovation’’).
Jinhua Innovation is owned as to 46.67% by Jinhua Guokong Asset Management Co., Ltd.
(金華市國控資產管理有限公司), which in turn is ultimately beneficially owned by
State-owned Assets Supervision and Administration Commission of Jinhua Municipal
People’s Government ( 金華市人民政府國有資產監督管理委員會), and as to 41.33% by
Zhejiang Puhuatianqin Equity Investment Management Limited Corporation ( 浙江普華天
勤股權投資管理有限公司) (‘‘Zhejiang Puhuatianqin’’), which is owned as to 72.00% by
Shen Qinhua ( 沈琴華). As of the Latest Practicable Date, Jinhua Boleidun had five limited
partners, with only one limited partner holding more than 30% of the partnership interests
therein, namely Lanxi Juli Industrial Fund Investment Co., Ltd. ( 蘭溪市聚力產業基金投資
有限公
司) holding 35.00% of the partnership intere sts, which was ultimately beneficially
owned by State-owned Assets Supervision and Administration Office of Lanxi Municipal
People’s Government ( 蘭溪市人民政府國有資產監督管理辦公室). To the best knowledge of
the Directors, Jinhua Boleidun, its general partner, Jinhua Guokong Asset Management
Co., Ltd., Zhejiang Puhuatianqin, Shen Qinhua, and its limited partners are each an
Independent Third Party.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 7 4–


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(vii) Kesheng Center
Kesheng Center is a limited partnership established in China on June 15, 2022 and a
fund registered with the Asset Management Association of China ( 中國證券投資基金業協
會). Its general partner and manager is Sha nghai Kesheng Venture Investments &
Management Co., Ltd. ( 上海科升創業投資管理有限公司) (‘‘Shanghai Kesheng’’), which in
turn is owned as to 98% by its actual controller, Chen Yaomin ( 陳耀民). As of the Latest
Practicable Date, Kesheng Center had 21 li mited partners and none of them held 30% or
more than 30% of the partnership interests therein. Kesheng Center, with a fund size of
approximately RMB200 million, focuses on investments in the fields of new energy, new
materials, biomedicine, and intelligent manufacturing. To the best knowledge of the
Directors, Kesheng Center, its general partne r, Chen Yaomin, and its limited partners are
each an Independent Third Party.
(viii) Shandong Kinetic Energy
Shandong Kinetic Energy is a limited partnership established in the PRC on July 30,
2019, primarily engaged in external investments with its own funds. Its general partner is
Shandong Xinye Equity Investment Management Co., Ltd. ( 山東新業股權投資管理有限公
司) (‘‘Shandong Xinye’’), which in turn is ultimately beneficially owned as to 99.00% by Li
Jiankun ( 李建坤). As of the Latest Practicable Date, Shandong Kinetic Energy had three
limited partners with only one limited partner holding more than 30% of the partnership
interests therein, namely Zaozhuang Xinye Project Management Partnership (Limited
Partnership) ( 棗莊新業項目管理合夥企業（有限合夥）) (‘‘Zaozhuang Xinye’’) holding
64.00% of the partnership interests. The general partner of Zaozhuang Xinye is
Shandong Xinye, and it has seven limited partners and none of them holds 30% or more
than 30% of the partnership interests therein. To the best knowledge of the Directors,
Shandong Kinetic Energy, its general partner, Li Jiankun, and its limited partners are each
an Independent Third Party.
(ix) Guangzhou Naibixin
Guangzhou Naibixin is a limited partnership established in the PRC on March 15,
2021, primarily engaged in equity investment s, investment management, asset management
and other activities with private equity funds. Its general partner is Guangzhou NaiBigxin
Investment Management Co., Ltd. ( 廣州耐必信創業投資管理有限公司) (‘‘Guangzhou
NaiBigxin Investment’’), which in turn is owned as to 98.00% by Li Ting ( 李婷). As of
the Latest Practicable Date, Guangzhou Naib ixin had one limited partner, namely Hainan
Lanlan Network Technology Co., Ltd. ( 海南藍嵐網路科技有限公司) (‘‘Hainan Lanlan’’)
holding approximately 99.00% of the partne rship interests. Hainan Lanlan is wholly
owned by Guangzhou Huaduo Network Technology Co., Ltd. ( 廣州華多網路科技有限
公
司) (‘‘Guangzhou Huaduo’’), which is ultimatel y beneficially owned as to approximately
33.33% by Fu Di ( 付迪), Li Ting and Song Lin ( 宋淋), respectively. To the best knowledge
of the Directors, Guangzhou Naibixin, it s general partner, Guangzhou NaiBigxin
Investment, Li Ting, its limited partner, Guangzhou Huaduo, Fu Di, and Song Lin are
each an Independent Third Party.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 7 5–


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(x) Broad-Ocean Motor
Broad-Ocean Motor was established in the PRC on October 23, 2000 and listed on the
Shenzhen Stock Exchange (stock code: 002249.SZ) on June 19, 2008. As of the Latest
Practicable Date, Broad-Ocean Motor was c ollectively owned as to 27.16% by Lu Chuping
(魯楚平)a n dP e n gH u i( 彭惠) (spouse of Lu Chuping). Broad-Ocean Motor primarily
engaged in developing varieties of electric components, including motors for construction
and home appliances, e-powertr ains for new energy vehicles, a nd hydrogen fuel cell systems
along with their key components. To the best knowledge of the Directors, Broad-Ocean
Motor and its ultimate beneficial owner s are each an Independent Third Party.
(xi) Hefei Rendun
Hefei Rendun is a limited partnership es tablished in the PRC on February 22, 2022,
primarily engaged in external investments wi th its own funds. Its general partner is Hefei
Renfa Xinneng Investment Fund Management Co., Ltd. ( 合肥仁發新能投資基金管理有限
公司) (‘‘Hefei Renfa’’), which in turn is owned as to 60.00% by Xie Xiaoyong ( 解小勇)a n d
as to 40.00% by Jiang Shan ( 江山), respectively. As of the Latest Practicable Date, Hefei
Rendun had three limited partners, with two holding more than 30% of the partnership
interests therein, namely Yang Zibin (an existing Shareholder) holding approximately
39.99% of the partnership interests, and Shenzhen Antuoxin Investment Partnership
(Limited Partnership) ( 深圳安托信投資合夥企業（有限合夥）) holding approximately
39.99% of the partnership interests. Zeng Hongtao ( 曾紅濤) is the general partner of
Shenzhen Antuoxin Investment Partnership (Limited Partnership), holding 95.00%
partnership interest therein. To the best knowledge of the Directors, Hefei Rendun, its
general partner, Xie Xiaoyong, Jiang Shan, its limited partners, and Zeng Hongtao, are
each an Independent Third Party.
(xii) Rockets Capital L.P.
Rockets Capital L.P. is a private equity investment fund registered with Cayman
Islands Monetary Authority on March 8, 20 22. Rockets Capital, a limited liability
company incorporated in the Cayman Islands, is the general partner and manager of
Rockets Capital L.P. As of the Latest Pract icable Date, Rockets Capital L.P. had 16
limited partners, among which XPeng Inc., an exempted company incorporated in Cayman
Islands with limited liability whose Americ an depository shares were listed on the New
York Stock Exchange (NYSE: XPEV) and whose Class A ordinary shares were listed on
the Stock Exchange (stock code: 9868), w as the largest limited partner holding
approximately 60.73% of the partnership interests in Rockets Capital L.P. Rockets
Capital L.P. focuses on investing in startup companies in the smart electric vehicle industry
chain, clean energy, and frontier technology sectors. To the best knowledge of the
Directors, Rockets Capital L.P., its genera l partner and limited partners are each an
Independent Third Party.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 7 6–


--- page 186 ---
(xiii) Individual Investors
Each of the individual investors holding more than 1.00% of our total issued share
capital immediately prior to the Global Offering, being Cai Yulin, Lin Ziting, Yang Zibin,
Zhao Yongge and Yang Jiayong is an Independent Third Party.
PUBLIC FLOAT
Upon completion of the Globa l Offering (assuming that the O ver-allotment Option is not
exercised) and the conversion of Unlisted Shar es into H Shares, 228,241,531 Unlisted Shares will
be converted into H Shares and listed on the Stock Exchange. The 138,410,231 Unlisted Shares
held by our Shareholders as of the Latest Practicable Date will not be considered as part of the
public float as those Shares are Unlisted Shares which will not be converted into H Shares and
listed on the Stock Exchange following the completion of the Global Offering.
Upon the completion of the Global Offering (assuming that the Over-allotment Option is
not exercised) and the conversion of Unlisted Sha res into H Shares, the H Shares held by certain
of our Shareholders who are, or directly or indirectly controlled by our core connected persons,
will not be counted towards the public float. Details of these Shareholders are set out below:
. Mr. Chen, Shanghai Fangao and Cloud Tribe Yijin are our Controlling Shareholders
and the 60,171,890 H Shares held by them will not count towards the public float;
. Shanghai Jifang, one of our incentive platforms, is controlled by Mr. Liu Xingyu, the
supervisor of certain subsidiaries of the Company, and therefore it is a close associate
of Mr. Liu Xingyu and the 7,471,249 H Shares held by Shanghai Jifang will not count
towards the public float; and
. Each of Dr. Qiu Debo and Ms. Yang Hui is an e xecutive Director, thus the aggregate
of 5,667,844 H Shares held by them will not count towards the public float.
To the best knowledge of our Director, save as disclosed above, upon the completion of the
Global Offering (assuming that the Over-allotment Option is not exercised) and conversion of
Unlisted Shares into H Shares, 167,930,548 H Shares held or controlled by our Shareholders
who are not our core connected persons, represent ing approximately 44.23% of our total issued
Shares, will be counted towards the public float , which is in compliance with the requirement
under Rule 8.08 of the Listing Rules.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 7 7–


--- page 187 ---
CAPITALIZATION OF OUR COMPANY
The table below sets out the capitalization of our Company as of the date of the Latest
Practicable Date and upon the completion of the Global Offering and the conversion of
Unlisted Shares into H Shares (assuming that the Over-allotment Option is not exercised):
As at the
Latest Practicable Date
Immediately following the completion of the Global Offering and conversion of the Unlisted
Shares into H Shares (assuming the Over-allotment Option is not exercised)
No. Shareholder
Number of
Unlisted
Shares
Ownership
percentage of
shareholding
in the
Unlisted
Shares
Number of
HS h a r e s
Ownership
percentage of
shareholding
in the
HS h a r e s
Number of
Unlisted
Shares
Ownership
percentage of
shareholding
in the
Unlisted
Shares
Number of
total Shares
Ownership
percentage of
shareholding
in the total
issued share
capital
1 Shanghai Fangao (1) 84,502,397 23.05% 42,251,199 17.51% 42,251,198 30.53% 84,502,397 22.26%
2M r . C h e n (1) 31,101,004 8.48% 15,550,502 6.45% 15,550,502 11.24% 31,101,004 8.19%
3 Cloud Tribe Yijin (1) 2,370,189 0.65% 2,370,189 0.98% — — 2,370,189 0.62%
4 Zibo Naying (2) 8,519,491 2.32% 8,519,491 3.53% — — 8,519,491 2.24%
5 Fujian Diquan (2) 7,934,981 2.16% 7,934,981 3.29% — — 7,934,981 2.09%
6 Jiaxing Tongneng (2) 4,590,953 1.25% 4,590,953 1.90% — — 4,590,953 1.21%
7 Jiaxing Dixin (2) 4,122,068 1.12% 4,122,068 1.71% — — 4,122,068 1.09%
8 Xiao Wenbin (2) 3,091,551 0.84% 3,091,551 1.28% — — 3,091,551 0.81%
9 Zhongding No. 5 (3) 23,420,841 6.39% 23,420,841 9.71% — — 23,420,841 6.17%
10 Zhongding Qinglan (3) 2,342,085 0.64% 2,342,085 0.97% — — 2,342,085 0.62%
11 Xiangtan Caixin 20,959,674 5.72% 7,335,886 3.04% 13,623,788 9.84% 20,959,674 5.52%
12 Changjiang
Automobile
Valley
20,959,674 5.72% 10,479,837 4.34% 10,479,837 7.57% 20,959,674 5.52%
13 Huzhou Qingyun 19,373,720 5.28% 19,373,720 8.03% — — 19,373,720 5.10%
14 Shanghai Jifang 14,942,497 4.08% 7,471,249 3.10% 7,471,248 5.40% 14,942,497 3.94%
15 Jinhua Boleidun 13,973,116 3.81% — — 13,973,116 10.10% 13,973,116 3.68%
16 Cai Yulin 11,129,584 3.04% 11,129,584 4.61% — — 11,129,584 2.93%
17 Lin Ziting 10,305,170 2.81% 1,030,517 0.43% 9,274,653 6.70% 10,305,170 2.71%
18 Kesheng Center 6,260,391 1.71% 6,260,391 2.60% — — 6,260,391 1.65%
19 Yang Zibin 6,183,102 1.69% 1,854,931 0.77% 4,328,171 3.13% 6,183,102 1.63%
20 Zhao Yongge
(4) 6,183,102 1.69% 6,183,102 2.56% — — 6,183,102 1.63%
21 Yang Jiayong (4) 5,358,689 1.46% 5,358,689 2.22% — — 5,358,689 1.41%
22 Shandong Kinetic
Energy
5,239,918 1.43% 1,833,971 0.76% 3,405,947 2.46% 5,239,918 1.38%
23 Guangzhou Naibixin 4,946,482 1.35% 4,946,482 2.05% — — 4,946,482 1.30%
24 Broad-Ocean Motor 4,760,989 1.30% 1,666,346 0.69% 3,094,643 2.24% 4,760,989 1.25%
25 Hefei Rendun 4,706,860 1.28% — — 4,706,860 3.40% 4,706,860 1.24%
26 Rockets Capital L.P. 4,319,664 1.18% 4,319,664 1.79% — — 4,319,664 1.14%
27 Jiaxing Xuying 3,423,413 0.93% 1,711,707 0.71% 1,711,706 1.24% 3,423,413 0.90%
28 Qiu Debo 3,091,551 0.84% 3,091,551 1.28% — — 3,091,551 0.81%
29 Zhang Xiaohui 2,679,344 0.73% 937,770 0.39% 1,741,574 1.26% 2,679,344 0.71%
30 Yang Hui 2,576,293 0.70% 2,576,293 1.07% — — 2,576,293 0.68%
31 Chai Guang 2,370,189 0.65% 2,370,189 0.98% — — 2,370,189 0.62%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 7 8–


--- page 188 ---
As at the
Latest Practicable Date
Immediately following the completion of the Global Offering and conversion of the Unlisted
Shares into H Shares (assuming the Over-allotment Option is not exercised)
No. Shareholder
Number of
Unlisted
Shares
Ownership
percentage of
shareholding
in the
Unlisted
Shares
Number of
HS h a r e s
Ownership
percentage of
shareholding
in the
HS h a r e s
Number of
Unlisted
Shares
Ownership
percentage of
shareholding
in the
Unlisted
Shares
Number of
total Shares
Ownership
percentage of
shareholding
in the total
issued share
capital
32 Yue Yong 2,355,049 0.64% 824,267 0.34% 1,530,782 1.11% 2,355,049 0.62%
33 Shanxi Industrial (5) 1,442,724 0.39% 721,362 0.30% 721,362 0.52% 1,442,724 0.38%
34 Zhongchuang
Hengxing (5)
824,414 0.22% 412,207 0.17% 412,207 0.30% 824,414 0.22%
35 Xingyue Puyu (2) 2,095,967 0.57% 2,095,967 0.87% — — 2,095,967 0.55%
36 Zhao Xuewen 2,061,034 0.56% 2,061,034 0.85% — — 2,061,034 0.54%
37 You Yifei 1,885,448 0.51% 1,885,448 0.78% — — 1,885,448 0.50%
38 Shanghai Chenqi 1,765,785 0.48% 1,765,785 0.73% — — 1,765,785 0.47%
39 Shenzhen Changde 1,648,827 0.45% 1,319,062 0.55% 329,765 0.24% 1,648,827 0.43%
40 Kechuang
Partnership
(6)
850,177 0.23% — — 850,177 0.61% 850,177 0.22%
41 Kechuang
Management (6)
561,117 0.15% — — 561,117 0.41% 561,117 0.15%
42 Lu Qianyuan 1,030,517 0.28% 360,681 0.15% 669,836 0.48% 1,030,517 0.27%
43 Shiyuan Zhonglian 1,000,000 0.27% 700,000 0.29% 300,000 0.22% 1,000,000 0.26%
44 Bochen Shengan 824,414 0.22% 288,545 0.12% 535,869 0.39% 824,414 0.22%
45 CIMC 753,597 0.21% 376,799 0.16% 376,798 0.27% 753,597 0.20%
46 Wu Weizhong 618,310 0.17% 216,409 0.09% 401,901 0.29% 618,310 0.16%
47 Fu Changming 618,310 0.17% 618,310 0.26% — — 618,310 0.16%
48 Wang Yicheng 412,207 0.11% 412,207 0.17% — — 412,207 0.11%
49 Sichuan Hydrogen
Lithium
164,883 0.04% 57,709 0.02% 107,174 0.08% 164,883 0.04%
50 Investors taking part
in the Global
Offering
— — 13,000,000 5.39% — — 13,000,000 3.42%
Total 366,651,762 100% 241,241,531 100% 138,410,231 100% 379,651,762 100%
Notes:
(1) Shanghai Fangao is controlled by Mr. Chen as its general partner.
As of the Latest Practicable Date, the general par tner of Cloud Tribe Yijin was Cloud Tribe Management,
which was held as to 51% by Shanghai Yijin and 49% by Yijin Venture Capital Management, and the
limited partners of Cloud Tribe Yijin were Shanghai Yijin Caiqingzi Venture Capital Center (limited
partnership) ( 上海易津財慶子創業投資中心（有限合夥）), an entity ultimately controlled by Mr. Chen, and
Shanghai Minhang District Innovation Venture Capital Guiding Fund Management Center (Shanghai
Minhang District Finance Service Center) ( 上海市閔行區創新創業投資引導基金管理中心（上海市閔行區金
融服務中心）), an Independent Third Party. Yijin Venture Capital Management was held as to
approximately 51.76% by Shanghai Yijin. Shangha i Yijin was held as to approximately 19.49% by Mr.
Chen and approximately 80.51% by Shanghai Yijin Management, whose general partner and limited
partner were Mr. Chen (holding 98.91% partnership interest) and one of the founding partners of
Shanghai Fangao at the early stage of establishment (holding 1.09% partnership interest), respectively.
For further details, see ‘‘Relationship with our Controlling Shareholders.’’
(2) All of Jiaxing Dixin, Fujian Diquan, Jiaxing Tongneng and Zibo Naying are limited partnerships
established in the PRC and ultimately controlled by Shanghai Zhongdi Investment Co., Ltd., which in
turn is owned as to 39%, 38% and 23% by Li Tongzuan ( 李統鉆), Shanghai Junhuai Investment
Management Group Co., Ltd. and Xiao Wenbin, respectively. Li Tongzuan is an Independent Third
Party. Shanghai Junhuai Investment Management Group Co., Ltd. is held as to 61.80% by Zhang Huixian
(張輝賢), father of Zhang Shanliang (a former Shareholder). Xiao Wenbin is an existing Shareholder.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 7 9–


--- page 189 ---
The sole limited partner of Fujian Diquan is Zhang Shanliang, a former Shareholder, who holds 99.00%
partnership interest in Fujian Diquan.
Zibo Naying has ten limited partners, among which Zhang Shanliang, Li Xiaoxiao (two former
Shareholders) and Xingyue Puyu (an existing Shareholder) holds 46.18%, 4.30% and 6.46% partnership
interest in Zibo Naying, respectively.
(3) Both of Zhongding No.5 and Zhongding Qinglan are limited partnerships established in the PRC and
ultimately controlled by Yan Li.
(4) Zhao Yongge and Yang Jiayong are the spouse of one another.
(5) Zhongchuang Hengxing is a wholly owned subsidiary of Shanxi Industrial.
(6) Kechuang Partnership is a limited partnership es tablished in the PRC and Kechuang Management is a
limited liability company established in the PRC, bot h of them are ultimately controlled by Fang Jialiang
(方加亮), an Independent Third Party.
MAJOR MERGER, ACQUISITION AND DISPOSAL
During the Track Record Period, we did not conduct any acquisitions, disposals or mergers
that we consider to be material to us.
PREVIOUS PLAN FOR A-SHARE LISTING
On February 16, 2023, we entered into a pre-listing tutoring engagement agreement with
China International Capital Corporation Limited ( 中國國際金融股份有限公司)i nr e l a t i o nt o
our previous plan to list on the Science and Technology Innovation Board of Shanghai Stock
Exchange. As part of the preparation for such preliminary listing plan, we filed a notice of
pre-listing tutoring for A-share listing application ( 上市輔導備案申請) on February 16, 2023,
and then submitted four tutoring progress reports ( 輔導進展報告) during April 2023 and
January 2024 with the Shanghai office of CSRC (the ‘‘A-share Listing Preparation’’).
Having considered the then overall market co nditions and our business development needs,
and to provide further capital for the development and expansion of our business, raise our
profile and market awareness of our brand, and present us with an opportunity to further
expand our investor base and global presence, we decided to pursue an H-share listing on the
Stock Exchange. On April 1, 2024, we termina ted the preliminary tutoring process. Our
Company has not submitted any listing application for the A-share listing to the CSRC or any
stock exchange in the PRC.
Our Directors confirm that there were no unresolved or potential disputes or material
disagreements between our Company and relevant professional parties, including China
International Capital Corporation Limited ( 中國國際金融股份有限公司), the tutoring
institution, AllBright Law Offices ( 上海市錦天城律師事務所), the PRC legal advisor, and
KPMG Huazhen LLP ( 畢馬威華振會計師事務所（特殊普通合夥）), the certified public
accountants, in respect of the A-share Listing Preparation, and our Directors are also of the
view that (i) there are no material matters in rela tion to the A-share Listin g Preparation that will
affect the suitability of our Company to be listed on the Stock Exchange in any material respect,
(ii) there are no other matters in relation to th e A-share Listing Preparation that ought to be
brought to the attention of the potential investors and the Stock Exchange, and (iii) there are no
substantial changes in the entities of such profe ssional parities engaged by our Company for the
proposed Listing.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 8 0–


--- page 190 ---
Based on the due diligence work conducted by the Joint Sponsors, nothing has come to the
Joint Sponsors’ attention that would reasonably cause the Joint Sponsors to cast doubt in any
material respect with the Directors’ view above.
CORPORATE STRUCTURE IMMEDIATEL Y BEFORE THE COMPLETION OF THE
GLOBAL OFFERING
The chart below sets out the corporate str ucture of our Company and subsidiaries
immediately before the completion of the Global Offering:


 Shanghai Fangao(1) Mr. Chen(1) Cloud Tribe Yijin(1) Zhongdi
Shareholders(2)
Zhongding
Shareholders(3)
Xiangtan
Caixin
Changjiang
Automobile Valley
Huzhou
Qingyun
Shanghai
Jifang
35 other
Shareholders(4)
Our Company
(PRC)
Our Controlling Shareholders
23.05%







Inner Mongolia
Breton Intelligent
Technology Co., Ltd.
(PRC)
Breton (Shanghai)
Intelligent Technology
Co., Ltd.
(PRC)
Baipin (Shanghai)
Intelligent Technology
Co., Ltd.
(PRC)
Breton (Hunan)
Technology Co.,
Ltd.
(PRC)
Zhejiang Breton
Technology Co.,
Ltd.
(PRC)
Breton (Shandong)
New Energy
Vehicle Co., Ltd.
(PRC)
Breton (Lanxi) New
Energy Engineering
Machinery Co., Ltd.
(PRC)
Breton (Wuhan)
Technology Co.,
Ltd.
(PRC)
Breton (Beijing)
Technology Co.,
Ltd.
(PRC)
Breton (Wuhan) New
Energy Equipment
Co., Ltd.
(PRC)
100% 100% 100% 100% 100% 100% 100% 100% 100%
Breton HK
Holding Limited
(Hong Kong)
100%
Breton
Corporation
(Cayman)
100%
Breton Energy
Technology
Zambia Limited(6)
(Republic of
Zambia
99%
100%
Breton ESG
Pte. Ltd.
(Singapore)
100%
8.48% 0.65% 7.71% 7.03% 5.72% 5.72% 5.28% 4.08% 32.30%
Breton
(Hong Kong)
Technology Limited
(Hong Kong)
100%
VOIE LACTEE
ENERGIE
S.A.S(5)
(Democratic Republic
of the Congo)
49%
Notes:
(1) As of the Latest Practicable Date, Mr. Chen was entitled to exercise approximately 32.18% of the voting
rights in our Company through: (i) 31,101,004 Shares (representing approximately 8.48% of the voting
rights in our Company) directly held by him, (ii) 84,502,397 Shares (representing approximately 23.05% of
the voting rights in our Company) held by Shanghai Fangao, our incentive platform controlled by Mr.
Chen as its general partner, and (iii) 2,370,189 Shares (representing approximately 0.65% of the voting
rights in our Company) held by Cloud Tribe Yijin. For further details, see ‘‘Relationship with our
Controlling Shareholders.’’
(2) Zhongdi Shareholders include Jiaxing Dixin, Fujian Diquan, Jiaxing Tongneng, Zibo Naying and Xiao
Wenbin.
(3) Zhongding Shareholders include Zhongding No.5 and Zhongding Qinglan.
(4) See ‘‘— Capitalization of Our Company’’ for details.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 8 1–


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(5) VOIE LACTEE ENERGIE S.A.S was incorporated in Democratic Republic of the Congo and was owned
as to approximately 49% by Breton (Hong Kong) Technology Limited, and 51% by a local resident, who
is an Independent Third Party and an employee of our business partner in Democratic Republic of Congo
as of the Latest Practicable Date. The Company decided to ultimately control VOIE LACTEE ENERGIE
S.A.S through a voting rights arrangement pursuant to which Breton (Hong Kong) Technology Limited is
entitled to two votes per share while the Independent Third Party is entitled to one vote per share,
primarily because of local regulatory requirements that a majority of equity interests of a company shall
be owned by local residents if it intends to applies for certain certificates and qualifications.
(6) Breton Energy Technology Zambia Limited was incorporated in Republic of Zambia and was owned as to
approximately 99% by Breton Corporation, and 1% by a local resident, who is an Independent Third
Party and one of our business partner providing transportation services in Republic of Zambia as of the
Latest Practicable Date.
CORPORATE STRUCTURE IMMEDIATEL Y FOLLOWING THE COMPLETION OF THE
GLOBAL OFFERING
The chart below sets out the corporate str ucture of our Company and subsidiaries
immediately following the completion of the Global Offering (assuming that the Over-allotment
Option is not exercised):
Shanghai Fangao(1) Mr. Chen(1) Cloud Tribe Yijin(1) Zhongdi
Shareholders(2)
Zhongding
Shareholders(3)
Xiangtan
Caixin
Changjiang
Automobile Valley
Huzhou
Qingyun
Shanghai
Jifang
35 other
Shareholders(4)
Our Company
(PRC)
22.26% 8.19% 0.62% 7.44% 6.79% 5.52% 5.52% 5.10% 3.94% 31.20%
Investors taking
part in the Global
Offering
3.42%
Our Controlling Shareholders
Inner Mongolia
Breton Intelligent
Technology Co., Ltd.
(PRC)
Breton (Shanghai)
Intelligent Technology
Co., Ltd.
(PRC)
Baipin (Shanghai)
Intelligent Technology
Co., Ltd.
(PRC)
Breton (Hunan)
Technology Co.,
Ltd.
(PRC)
Zhejiang Breton
Technology Co.,
Ltd.
(PRC)
Breton (Shandong)
New Energy
Vehicle Co., Ltd.
(PRC)
Breton (Lanxi) New
Energy Engineering
Machinery Co., Ltd.
(PRC)
100% 100%
100%
100% 100% 100% 100%
Breton (Wuhan)
Technology
Co., Ltd.
(PRC)
Breton (Wuhan) New
Energy Equipment
Co., Ltd.
(PRC)
Breton ESG
Pte. Ltd.
(Singapore)
100%
Breton (Beijing)
Technology
Co., Ltd.
(PRC)
100%
100%
100%
100%
Breton
 (Hong Kong)
Technology Limited
(Hong Kong)
Breton HK
Holding Limited
(Hong Kong)
100%
Breton
Corporation
(Cayman)
100%
Breton Energy
Technology
Zambia Limited(6)
(Republic of
Zambia
99%
VOIE LACTEE
ENERGIE
S.A.S(5)
(Democratic Republic
of the Congo)
49%
Note:
See notes 1 to 6 to the chart in ‘‘— Corporate Structur e Immediately Before the Completion of the Global
Offering’’ above.
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OVERVIEW
Who We Are
We are a China-based provider of electric- powered engineering machinery. We design,
develop and commercialize battery-electric engineering machinery with autonomous capabilities
and provide intelligent operation services . According to CIC, we ranked third and seventh
among all manufacturers of new energy wide-body dump trucks and loaders in China, with a
market share of 18.3% and 3.8% in terms of shipments in 2024, respectively, being the only
pure-play manufacturer among the top manufacturers of these two types of new energy
engineering machinery. In 2024, we achieved a market share of 3.2% in the wide-body dump
truck market and 1.3% in the loader market in China in terms of revenue, with both markets
including new energy and fuel-powered machine ry. We also design and develop e-powertrain
kits for battery-electric tractor trucks and colla borate with manufacturers to bring these vehicles
to market.
We are a fast-growing manufacturer of bat tery-electric wide-body dump trucks and
loaders. From 2022 to 2024, our shipments of battery-electric wide-body dump trucks grew from
59 to 307 units, and shipments of battery-elect ric loaders increased from 326 to 450 units,
achieving a CAGR of 128.1% and 17.5%, respectively. According to CIC, we ranked first in
shipments of battery-electric wide-body dump tru cks with battery capacities exceeding 650 kWh
for three consecutive years from 2022 to 2024.
Our design and engineering process begin s with a detailed analysis of customer
requirements and intended use scenarios, which informs our performance-oriented product
designs and precise engineerin g practices. We use different manufacturing arrangements for
each product type, leveraging the strengt hs of both in-house production and external
partnerships. Following this strategy, we initially launched the BRT951EV, a five-tonne
battery-electric loader model, in December 2019, followed by the introduction of the BRT90E, a
90-tonne battery-electric wide-body dump truck model, in May 2020. As of the Latest
Practicable Date, our lineup predominantly featured battery-electric models, including
battery-electric loaders with payloads ranging from three to seven tonnes, and battery-electric
wide-body dump trucks covering tonnages from 90 to 135 tonnes.
Our business thrives on the strength of advan ced technological cap abilities. We have been
continuously advancing e-powertrain design, elec trical and electronic architecture, and machine
intelligence. We have introduced a charging circuit design for our battery-electric wide-body
dump trucks, incorporating four-branch parallel c harging circuits that allow four connectors to
simultaneously charge a single truck. This innovation makes us the first in the market to enable
a 700-kWh battery to be fully charged within approximately 70 minutes under standard working
conditions, according to CIC. We are also the f irst in China to develop and commercialize a
dual-motor design for engineering machinery, according to the same source, which resolves the
technical issue of mutual inte rference and power diversion b etween the drive and working
motors, thereby significantly reducing energy consumption and lowering repair and
maintenance costs. Moreover, we are the first manufacturer in China to bring autonomous
battery-electric wide-body dump trucks and remote-operated battery-electric loaders to the
market, according to CIC. Our proprietary suite of remote and autonomous operation
technologies enhances the intelligence, safety and efficiency of our loaders and wide-body dump
trucks, especially on jobsites where direct human operation is unsafe or impractical due to
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extreme temperatures or hazardous conditions. These capabilities set us apart from
manufacturers who rely heavily on outsourced software for their remote and autonomous
operations.
Our technological achievements have earned us significant industry recognition. We are a
‘‘Key Little Giant’’ enterprise designated by the MIIT in 2022, a select category within the
national ‘‘Little Giant’’ program that honors novel, high-performing small and medium-sized
enterprises in specialized fields. Our e-pow ertrain kit was recognized as one of the top ten
commercialized high-tech achievements of 2022 by Shanghai Science and Technology
Committee. We also play an active role in sh aping crucial standards for new energy
engineering machinery in China. For instance, we contributed as drafters to the national
safety technical specifications for earth-movi ng machinery, and to the industry standards for
technical conditions and testing methods for battery-electric wheeled loaders and
battery-electric wide-body dump trucks.
Industry Opportunities
Engineering machinery, indispensable to operations in mining and quarrying, energy and
utilities, logistics and transportation, manufa cturing and industrial production, construction
and infrastructure as well as agriculture, is und ergoing a pivotal shift to wards new energy. This
transition is propelled by the urgent need to addr ess climate concerns, economic benefits and
expanding market demand.
. Climate change imperatives . Machinery with internal combustion engines is a major
contributor to air pollution, emitting large quantities of greenhouse gases,
hydrocarbons, nitrogen oxides, and particulate matter. According to CIC, the
number of engineering machines in operation in 2022 is less than 3% of the number of
registered cars. However, the engineerin g machinery industry emits substantially
higher levels of pollutants compared to the automobile industry. Specifically, in
China, emissions of carbon dioxide, nitrogen oxide and particulate matter from
engineering machinery in 2022 are equi valent to 13%, 20% and 109% of those from
automobiles, respectively, according to CIC.
. Economic benefits . The shift toward new energy engineering machinery is not only
environmentally driven but also economica lly advantageous. These machines reduce
costs related to energy consumption and ma intenance over their lifecycle and are
compatible with advanced technologies such as artificial intellig ence and telematics,
which further enhance their value by lowering operational and labor costs more
efficiently than traditional fuel-powered machinery. The economic edge has spurred
the adoption of new energy engineering machinery in the market, outpacing the early
adoption rates of new energy passenger veh icles. According to CIC, while new energy
passenger vehicles took eight years to reach a 5.5% market penetration rate from a
negligible base, new energy loaders and wide-body dump trucks achieved the same in
less than six years.
. Growing market demand . Driven by the pressing need for decarbonization and
effective climate action, new energy engi neering machinery is gaining preference
worldwide. There has been a significant rise in both international and domestic
demand for new energy engineering machinery. In China, the adoption of favorable
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policies further accelerates this trend, such as the Notice on Further Strengthening the
Construction of Green Mines ( 《關於進一步加強綠色礦山建設的通知》) issued by the
Ministry of Natural Resources in April 2024, fueling the growth of market demand
for new energy solutions in the industry.
The Breton Solutions
Our exploration into the new energy field b egins with the research and development of
e-powertrain kits customized for first-generatio n battery-electric tractor trucks. We have further
extended our technological capab ilities into the field of engineering machinery, a market that
has vast and unserved demand for new energy products and solutions.
The following diagram illustrates our key development milestones:
Launch of 5-tonne
battery-electric
loader
Launch of 90-tonne
battery-electric
wide-body
dump truck
Introduction of 700 kWh
105-tonne wide-body
dump trucks with four
inter-branch paralleling
design
Debut of self-
developed
powertrain
Delivery of
autonomous wide-
body dump truck
Successive introduction
of battery-electric
loaders of various
tonnage
Delivery of
remote-operate
loader
2019
2020
2021
2022
2023
Trial operation of
photovoltaic energy
system
Inauguration of
Zaozhuang plant
Launch of the first
hydrogen-fueled
loader
2024
Inauguration of
Wuhan plant
Bulk delivery of
autonomous battery-
electric wide-body
dump trucks
Our engineering machinery exhibits the following key competitive advantages:
. Green enhancement. Our engineering machinery, pow ered exclusively by non-fossil
fuel sources, achieves zero exhaust emissi ons. Our battery-electric loaders and
wide-body dump trucks are designed to significantly reduce carbon emissions
compared to similar fuel-powered models, making them a greener alternative to
traditional machinery. For instance, over a five-year service lifespan, our five-tonne
battery-electric loaders are estimated to reduce carbon emissions by approximately
342.0 tonnes per unit. Likewise, the 700-k Wh variant of our 105-tonne battery-electric
wide-body dump trucks are projected to lower carbon emissions by approximately
490.4 tonnes per unit during heavy-load uphill operations (tasks that involve
transporting heavy loads up inclines, whi ch typically consume more energy) and by
approximately 624.6 tonnes per unit during heavy-load downhill operations (where
the trucks carry heavy loads down slope) over the same period. Furthermore, these
machines operate at lower noise levels, with our battery-electric loaders and
wide-body dump trucks averaging 70 decibels and 74 decibels, respectively,
substantially quieter than the 86 decib els and 82 decibels typically produced by
their fuel-powered counterparts, according to CIC.
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. Cost efficiency. Despite higher initial purchase cost, our battery-electric loaders and
wide-body dump trucks offer long-term savings over their operational lifetime due to
lower energy consumption and maintenance expenses. Over a five-year lifespan, our
five-tonne battery-electric loaders can y ield total net savings of approximately
RMB1.2 million per unit, and our 105-tonne battery-electric wide-body dump trucks
can save approximately RMB2.2 million per unit on heavy-load uphill operations,
and approximately RMB1.2 million per unit on heavy-load downhill operations. The
integration of remote and autonomous operation technologies further reduces the
need for large on-site crews, leading t o substantial savings in staffing costs.
. Adaptability. Our machinery lineup, featuring diverse payload and battery capacities,
has found widespread applications in mining and quarrying, energy and utilities,
logistics and transportation, manufactu ring and industrial production, construction
and infrastructure as well as agriculture. According to CIC, the BRT105E model, a
105-tonne battery-electric wide-body dump truck with a 700-kWh battery, is the first
in China capable of performing uphill tasks for over 5.5 hours continuously on a
single charge. This breakthrough expands th e versatility of battery-electric wide-body
dump trucks, enabling them to meet a broader range of operational demands. Our
knowledge in thermal management and e-powertrain design ensures that our products
perform reliably under extreme conditions, such as the intense temperatures of
Xinjiang, Inner Mongolia and Shanxi, the dusty and stormy environments of tunnel
construction and coking coal operations, and the high-altitude regions of Xinjiang
and Qinghai.
. Operator experience and safety . Across all our human-operated products, we
incorporate a smart cockpit that enhanc es the operating experience through
advanced ergonomic designs and intuitive controls. Operators enjoy the benefits of
a real-time overview of e quipment status and gain access to comprehensive data
analytics facilitated by interconnected sensors and algorithm-powered software. For
increased safety, our intelligent safety intervention system proactively manages
braking and steering during emergencies, whi ch improves overall reliability in critical
situations. Our products are also equipped with panoramic detection capabilities,
identifying blind spots and offering timely alerts for operators, pedestrians and
passing vehicles.
. Intelligent operations . Our remote and autonomous operation technologies transform
mundane, hazardous and labor-intensive tasks into efficient, safe and unmanned
operations. These advancements not only enhance machine uptime and overall
productivity by eliminating human errors, but also create a safe working environment
by enabling operators to manage machine s remotely and securely, especially in
hazardous conditions and extreme weather. With predictive analytics and adaptive
algorithms, operators can exploit autonomo us features for smooth navigation across
rugged terrains, supervise multiple machine s simultaneously, and increase operational
efficiency without being physically present.
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Expanding beyond our range of engineering machinery, we went further to provide
autonomy and energy transition solutions catering to diverse customer needs across
geographies, jobsites and working conditions. These solutions are intended to complement
our product sales by creating additional, sustainable revenue streams through service fees and
software licensing. We anticipate that diversify ing our offerings will drive long-term growth,
achieve economies of scale, and further strengt hen our market position and financial health.
. Autonomy solutions . We offer intelligent mining solutions and autonomous scheduling
software to automate operations, facilitate remote control of machinery and manage
multiple fleets simultaneously. Our technologies are engineered to integrate with an
expanding range of engineering machinery across diverse operational scenarios, which
allows businesses to achieve real-time, synchronous control over their entire fleet and
minimize labor costs by reducing the need for human intervention in routine,
high-risk or complex tasks.
. Energy transition solutions . Our energy transition solutions are designed to convert
traditional fuel-powered vehicles into hybrids that can operate on both fuel and
battery power. We achieve this by designing, engineering and manufacturing add-on
e-powertrains that work in conjunction with existing internal combustion engines. We
believe our energy transition solutions promote sustainability and provide a
cost-effective pathway for decarbonization across various industries.
. Photovoltaic energy system. We are developing a direct current photovoltaic energy
system that integrates solar panels, inverters, storage batteries and charging stations
for energy generation, storage and chargi ng. The direct-circuited-only design
enhances efficiency, reduces heat loss an d improves stability, making it ideal for
regions without grid infrastructure. In December 2022, we launched a pilot system in
Panzhihua, Sichuan, which supports unmanned operation and is compatible with
various electric vehicles and machinery. We are also expanding our photovoltaic
energy business in internati onal markets and expect to complete a new project in 2025
that will generate electricity to support operations.
Our Financial Performance
We recorded a solid financial performance during the Track Record Period. Our revenue
was RMB360.1 million, RMB4 63.7 million, and RMB635.5 mi llion in 2022, 2023 and 2024,
respectively. Our loss for the year was RMB 178.1 million, RMB229.4 million, and RMB274.5
million in 2022, 2023 and 2024, respectively. Ou r adjusted net loss (a non-IFRS measure) was
RMB142.6 million, RMB189.8 million, and RMB217.6 million in 2022, 2023 and 2024,
respectively.
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OUR STRENGTHS
Pioneer in China’s New Energy Engineering Machinery Industry
We are a pioneer in China’s new energy engineering machinery industry, focused on the
design, development and commercialization of battery-electric loaders and wide-body dump
trucks. Our battery-electric loaders are the firs t of their kind to receive certification from the
Quality Inspection and Testing Center of Construction Machinery of the PRC in July 2020,
according to CIC, which validates their quality and paves the way for commercial success.
Our early efforts and extensive knowledge in t he industry have made us a top manufacturer
of new energy loaders and wide-body dump trucks. According to CIC, we ranked third and
seventh among all manufacturers of both new energy wide-body dump trucks and loaders in
China, with a market share of 18.3% and 3.8% in ter ms of shipments in 2024, respectively, being
the only pure-play manufacturer among the top manufacturers of these two types of new energy
engineering machinery. From 2022 to 2024, our sh ipments of battery-electric wide-body dump
trucks grew from 59 to 307 units, and shipments of battery-electric loaders increased from 326
to 450 units, achieving a CAGR of 128.1% and 17.5%, respectively. According to CIC, we
ranked first in shipments of battery-electric w ide-body dump trucks with battery capacities
exceeding 650 kWh for three consecutive years from 2022 to 2024.
We have led the way in technological advanceme nts in e-powertrain design, electrical and
electronic architecture and machine intellige nce. We introduced a pio neering four-branch
parallel charging circuit design for our battery -electric wide-body dump trucks, enabling four
charging connectors to charge a single truck simultaneously. This design enables a 700-kWh
battery to be fully charged within approximatel y 70 minutes under standard working conditions.
The charging time, according to CIC, is comparable to that of a model equipped with a
350-kWh battery available in the market. According to the same source, we are also the first in
China to develop and commercialize a dual-mo tor design for engineering machinery, which
addresses the technical issue of mutual interfer ence and power diversion between the drive and
working motors, thereby significantly reducing energy consumption and lowering repair and
maintenance costs. Moreover, we are the first manufacturer in China to bring autonomous
battery-electric wide-body dump trucks and remote-operated battery-electric loaders to the
market, according to CIC.
We have garnered widespread recognition wit hin the industry. We are a ‘‘Key Little Giant’’
enterprise designated by the MIIT in 2022, a select category within the national ‘‘Little Giant’’
program that honors novel, high-performing small and medium-sized enterprises in specialized
fields. In addition, we were named as Shanghai K ey Service Unicorn (Potential) Enterprise in
2024. Our e-powertrain kit was recognized as one of the top ten commercialized high-tech
achievements of 2022 by the Shanghai Science and Technology Committee. Furthermore, we
play an active role in developing crucial standards for new energy engineering machinery in
China, contributing to the creation of national sa fety technical specifica tions for earth-moving
machinery, as well as industry standards for technical conditions and testing methods for
battery-electric wheeled loaders and wide-body dump trucks.
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Advanced Technology and Engineering Cap abilities Driving Product Excellence
Our engineering machinery incorporates a wide array of proprietary technologies
developed through a forward design and engineering approach. As of December 31, 2024, our
investment in incorporating advanced technologies into engineering machinery has yielded 131
issued patents and 82 pending patent applicati ons. Our achievements in advancing electrical
design and engineering, developing remote and autonomous operation technologies, and
enhancing connectivity and telematics are pivotal in driving the continuous improvement and
excellence of our offerings.
. Electrical design and engineering . We employ a forward design and engineering
approach, honing our expertise in all critical aspects of engineering machinery
including e-powertrain, electrical and electr onic architecture, vehicle control units
(VCU), thermal management and battery systems. Utilizing our expertise in
e-powertrain and electrical and electronic architecture, we introduced a charging
circuit design for our battery-electric wide-body dump trucks that integrates
four-branch parallel charging circuits, making us the first in the market to enable a
700-kWh battery to be fully charged within approximately 70 minutes under standard
working conditions, according to CIC. Moreover, we are the first in China to develop
and commercialize a dual-motor design for engineering machinery, according to the
same source, overcoming the technical i ssue of mutual interference and power
diversion between the drive motor and the w orking motor. This design significantly
reduces energy consumption, lowers repa ir and maintenance costs and enhances
operational efficiency and reliability. As of December 31, 2024, we had 121 patents
and 51 pending patent applications in the field of electrical design and engineering.
. Remote and autonomous operation technology. Our remote and autonomous operation
technologies change the way how loaders and wide-body dump trucks are operated,
especially on jobsites where direct huma n operation is unsafe or impractical due to
extreme temperatures or hazardous conditions. Our remote operation technology
enables control from distances exceedi ng 2,000 kilometers, with an image
transmission latency of less than 200 milliseconds. Such capability not only ensures
operator safety by eliminating the need to be physically present in the cabin, avoiding
exposure to machine vibration and reducing fatigue, but also simplifies the operation
with an intuitive ‘‘virtual cockpit’’ i nterface. Enabled by a dvanced perception
capabilities, our autonomous operatio n technology can help detect and identify
both moving and static obstacles as small as 20 centimeters within a 50-meter radius,
and achieve trajectory track ing and parking with an accuracy of up to ten centimeters,
enabling machines to traverse smoothly and autonomously over rugged and
undulating terrains. As of December 31, 2024, we had three patent and 22 pending
patent applications dedicated to remote and autonomous operation technology.
. Connectivity and telematics . All of our machines are equipped with telematics and
connected devices, gatheri ng machine data, deriving insights on machinery
performance, monitoring operator behaviors, and facilitating remote diagnostics
and software updates. Every interaction with operators and each data point collected
from our machines contributes to the enhancement of our product development and
service offerings. As of the Latest Practicable Date, our network covered over 2,500
Breton machines. The data generated by our machinery supports our utilization of
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data analytics and machine learning for predictive maintenance and proactive
services, minimizing unexpected downti me and reducing repair expenses. As of
December 31, 2024, we had seven patents and nine pending patent applications
focused on connectivity and telematics.
Green Solutions Adapting to Diverse Customer Needs
Our technical expertise drives a rapid inno vation cycle, facilitating the efficient
introduction of new products and services to the market. We design modular, cross-platform
systems and electronic components from the ground up, making them reconfigurable for
different fleets, jobsites and working conditions. This framework not only ensures their
adaptability and serviceability across a diverse range of product lines and models, but also
allows us to streamline new product development and optimize research and development
efficiency. For instance, the 700-kWh vari ant of our BRT105E model, engineered for
heavy-load uphill operations, pr ogressed from conceptualizat ion to delivery within a short
period of 12 months.
We maintain a competitive edge by providing integrated hardware and software solutions
that draw upon our deep expertise in technology, engineering and manufacturing. Our offerings
include autonomy and energy transition so lutions to meet the operational needs of our
customers. We are actively enhancing the integ ration of machinery, software, hardware and
operational settings to develop intelligent mining solutions for confined spaces such as open-pit
mines. With remote and autonomous operations incorporated into our broadening lineup of
engineering machinery, our autonomy solutions enable smart, safe and cost-effective fleet
management. Whether from a single remote location or nearby command centers, operators can
exercise real-time control over the entire flee t simultaneously, which ensures consistent
performance across all machines and optimi zes task efficiency. Starting from mining
operations, we intend to gradually expand our autonomy solutions to cover a wider variety
of operational scenarios, such as chemical plants, smelters, power plants, ports and industrial
parks in the future.
Our energy transition solutions offer a financially viable option for industries seeking
decarbonization while relying on traditional fossil fuels. These solutions include designing,
engineering and manufacturing add-on e-powertrains for conventional fuel-powered vehicles,
providing an independent power system that works alongside the existing internal combustion
engine and facilitating a cost-eff icient transition to hybrid operation. We designed and delivered
these e-powertrains to a trucking company ba sed in North America, enabling fuel-powered
tractors to operate as hybrids. We have been expanding our energy transition solutions to
include an increasing number of applications, including operations in underground mining
environments.
Vast Sales and Service Network Cultivating Broad Customer Base
Our sales model combines direct sales and distribution channels, which allows us to
establish high-touch customer interactions wit h customers across major industry verticals, and
penetrate both nationwide and regional markets swiftly. Our footprint spanned across 30
provinces and municipalities in China, supported by a network of over 38 distributors as of
December 31, 2024. At the same time, we have been steadily broadening our international
presence.
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While maintaining a broad network coverage, we effectively engage with customers by
promptly addressing their needs and offering timely customer support. We have created an
integrated platform connecting research and de velopment with sales and post-sale services,
enabling us to quickly respond to customer requests ranging from product design, finance lease
arrangements, to logistics coordination and pos t-sale support. Our integrated platform not only
accelerates the iterative proc ess of our products but also enriches our engagement with
customers, allowing us to gain a deeper insight i nto their requirements. This, in turn, fosters
customer loyalty as we deliver products and services catering to their specific needs.
In addition to standard on-site deployments and adjustments, we provide a series of
technical training for our products and 24/7 online technical support to guarantee that our
customers can harness the full potential of our offerings. Furthermore, we go above and beyond
by implementing a routine maintenance check plan, regularly assessing the status and
performance of our customers’ purchased produ cts and promptly resolving any on-site issues.
We also offer a ‘‘two-hour/72-hour’’ resolution for any product-related issues, with standard
problems resolved within two hours and mate rial issues addressed within 72 hours.
We have cultivated a diverse customer base, spanning various industry sectors such as
mining and quarrying, energy and utilities, log istics and transportation, manufacturing and
industrial production, and construction and infra structure. The quality and reliability of our
products are underscored by the trust of customers and end users, most of whom are key players
in their respective fields. For example, we suppl ied battery-electric wide-body dump trucks to a
leading cement and building material group in China, supporting carbon-free, heavy-duty
hauling at their manufacturing sites. We also facilitated green mining practices for a subsidiary
of a Fortune Global 500 mining company by providing our loaders and wide-body dump trucks
for use in their operations. Additionally, one of the largest open-pit coal mines in Northwest
China chose our loaders and wide-body dump trucks, which demonstrated consistent
performance under extreme conditions with temperatures ranging from –29 °Ct o3 9 °C. Their
selection of our products not only reflects our industry standing but also speaks volumes about
the reliability of our products.
Robust Supplier Relationships Building Cost-Saving and Resilient Supply Chain
We have forged strategic partnerships wit h select suppliers of critical electronic
components to spearhead innovation in component design. By working closely with these
suppliers throughout the procurement process, we not only secure advantageous pricing but also
co-create innovations that yield mutual value an d competitive advantages. For instance, since
June 2021, we have collaborated with a leading motor manufacturer to develop
category-defining drive and working motors for our engineering machinery. Additionally, we
have partnered with renowned battery manufacturers to develop advanced power battery
systems and battery management systems, in cluding a 700-kWh power battery system with
four-branch parallel charging circuits, which optimizes energy usage, improves battery
efficiency and compatibility, and enhances the overall system reliability of our products.
In addition to these suppliers, we maintain relationships with a diverse range of suppliers
across all segments of the supply chain to ensure a consistent flow of dependable parts, secure
favorable pricing, and strengthen the resilience of our supply chain against disruptions. During
the Track Record Period, we collaborated with f our battery manufacturers and 158 electronic
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component manufacturers. We maintain these partnerships through the establishment of precise
performance metrics and by conducting regular evaluations and implementing improvements to
enhance overall performance.
Strong Manufacturing Expertise En suring High-Quality Standards
We believe strong manufacturing capabilities are crucial for our business expansion. In
August 2020, our specialized production and assem bly lines for battery-electric loaders at our
manufacturing plant in Zaozhuang, Shandong, be gan operation, with an annual design capacity
of 600 units. At this facility, we streamline production with an integrated manufacturing system,
using heavy-duty automated guided vehicles for product assembly, and logistics automated
guided vehicles for efficient delivery of com ponents and raw materials. In anticipation of
increasing demand for new energy engineering m achinery in the next five years, we constructed
our second loader manufacturing plant in Wuhan, Hubei, which commenced operations in
August 2024, with an annual design capacity of 5,000 units of battery-electric loaders.
We apply a lean production model that emphasizes continuous improvement, regular staff
training, cost-effective scheduling and efficient inventory management, delivering high-quality
standards, fast product turnaround and increa sed customer satisfaction. Our manufacturing
operations are supported by stringent quality control measures at every step, from machine
development to inspection. During the Track Record Period and up to the Latest Practicable
Date, we did not experience any material sale s returns, product recalls or product liability
claims that adversely affected our business or financial condition.
Visionary Leadership and Technology Experts Leading Industry Standards
Our management team is dedicated to delivering innovative products and solutions
drawing on their global vision, product expert ise and professional background. Our founder
and chairman of our Board, Mr. Chen Fangming, has over 15 years of experience in investing in
the new energy and new material sectors. He has a proven track record of investing in around 30
companies across the new energy industry value chain, such as Shenzhen Sinexcel Electric Co.,
Ltd. (SZSE: 300693), Kingstone Semiconductor Joint Stock Company Ltd. and LAPLACE
Renewable Energy Technology Co., Ltd. Dr. Qiu Debo, the president of our Company, brings
us more than two decades of management and ope rational experience in the engineering
machinery industry. He formerly served as the ex ecutive director, chief executive officer and
president of Lonking Holdings Limited (HKEx: 3339), where he steered the company to a
global top-three position in the loader segment of the engineering machinery industry during his
tenure.
Beyond our visionary leadership, our succes s is further propelled by the diverse
professional backgrounds, p rofound industry experiences and robust technological
capabilities of our technology team. Comprising seasoned experts in new energy engineering
machinery, electronics and autonomous operations, our technology team works collaboratively,
generating a strong synergy that propels our c ontinuous breakthroughs and achievements.
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OUR STRATEGIES
Advance Our Technological Innovations and Engineering Capabilities
We aspire to pioneer the development and commercialization of next-generation products
that are endowed with intelligence capabilities. To this end, we will continue to advance our
research and development efforts by delivering i ntegrated hardware and software solutions,
leveraging our extensive expertise in technology, engineering, and manufacturing. Specifically,
we expect to offer a suite of scenario-specific products and solutions that incorporate intelligent
technologies, supported by advanced systems such as AI-powered expert service support,
automated operating systems based on cloud and edge computing, and roadside systems for
autonomous cluster operations.
We aim to refine our cross-platform architect ure to streamline our product development
process and improve the overall research and development efficiency. We are focused on
augmenting our engineering capabilities by developing our upgraded electrical and electronic
architecture, modularized chassis, and a 10 00V high-voltage electrical system, which are
designed to facilitate ease of assembly and adaptability to meet the changing and diverse needs
of our customers.
Expand Offerings of Products and Solutions
We endeavor to expand our product lineup by introducing battery-electric loaders and
wide-body dump trucks that feature increased payload and battery capacities and/or utilize
alternative energy sources such as hydrogen and methanol to extend operational times. In the
second half of 2025, we plan to launch a reva mped version of our five-tonne and six-tonne
loader models, with reduced costs with highe r durability and performance. This model is
designed to be deployed in scenarios requiring extended operational time and high stability,
such as coal mines, construction sites, ports and steel mills. Beyond expanding our product
lineup, we intend to offer energy transition solutions and autonomy solutions, including
intelligent mining solutions and autonomous scheduling software, across a broad range of
applications.
Expand Our Presence in International and Domestic Markets
We strive to become a global new energy solu tion provider that delivers high-quality
products and services at competitive prices. We plan to expand our global reach and enhance
our overseas sales and service capabilities to meet the diverse needs of international customers.
We plan to expand into international markets across Southeast Asia, the Middle East and
Africa, such as Zambia, Laos and Indonesia, where demand for new energy engineering
machinery is on the rise due to their rich mineral r esources. Our expansion strategies include (i)
partnering with distributors with established r esources and experience abroad, (ii) targeting
Chinese companies operating int ernationally, and (iii) deploying dedicated sales, marketing and
after-sales teams on-site. We have been expa nding our machinery operation services in
international markets as well as growing our photovoltaic energy business, with a focus on
providing power solutions for mining operations in overseas countries. We may explore
opportunities to establish overseas manufactur ing plants in these international markets in due
course.
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On the domestic front, we intend to establish five regional service hubs in major first-tier
cities, including Beijing, Xi’an, Chengdu, Guangzhou and Hefei. These hubs will serve multiple
functions, including product displays, business d evelopment, regional sal es, post-sale service
management, staff and distributor training, and warehousing of spare parts and accessories. We
are establishing regional service hubs to support and collaborate with a broader network of
service centers strategically located near our c ustomers in the northwestern, northern, eastern,
southwestern and southern regions of China. We aim to collaborate with local service providers
to further expand the network of our local service centers throughout China. These centers will
provide end users with product training, spare par ts, accessories and post- sale services. Through
these efforts, we aim to build strong sales channels, broaden our distribution network, and
increase our influence in critical industry sectors.
Continue to Strengthen Manufacturing Capabilities
We endeavor to strengthen our manufacturing capabilities, particularly in the assembly of
complete engineering machinery within our own facilities. We aim to improve operational
efficiency, enforce stringent quality control, achieve cost-effectiveness, and increase product
margins throughout the entire process, from research and development to manufacturing. For
example, we plan to establish a new manufacturing plant for battery-electric wide-body dump
trucks in Xiangtan, Hunan, from the ground up. On ce fully built out, this facility is expected to
boost our annual production capacity to 2,000 units of wide-body dump trucks.
Pursue Strategic Alliances and Investments
We are actively pursuing strategic alliances and investment opportunities to support our
business expansion. Our strategic approach in volves seeking collabo rations and investments
across various segments of the new energy industry chain, with a clear dual focus on promoting
economic growth and delivering environmental benefits to our society. Leveraging our extensive
industry experience, we believe we are well- positioned to identify and seize investment
opportunities efficiently and in a timely manner.
OUR PRODUCTS
We design, develop, manufacture, sell and leas e battery-electric engineering machinery,
primarily battery-electric loaders and wid e-body dump trucks, each offering a variety of
payload and battery capacities. We also design and develop e-powertrain kits for battery-electric
tractor trucks and offer complete tractor trucks for sale and lease. Our products are primarily
used in industries such as mining and quarrying, energy and utilities, logistics and
transportation, manufacturing and industrial production, construction and infrastructure as
well as agriculture.
Battery-electric Loaders
Our battery-electric loaders, equipped with front-mounted buckets and robust wheels, are
designed for heavy-duty lifting and material handl ing operations. Their maneuverability allows
them to navigate in challenging environments such as rough terrains and active construction
sites.
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Our Major Loader Offerings
Starting with the launch of the BRT951EV, a five-tonne battery-electric loader model, in
December 2019, we have expanded our loader lineup to include a fleet of three-tonne to
seven-tonne battery-electric loaders.
The following table illustrates certain featur es and specifications of our primary loader
models in chronological order according to their time of first sale.
BRT956EV BRT936EV BRT958EV BRT966EV BRT970EV
Image
Time of first sale May 2020 March 2021 July 2021 March 2022 April 2023
Length *width *height (mm) 8,300*3,000*3,440 7,650*2,430*3,325 8 ,300*3,000*3,440 9,030*3,2 00*3,550 9,030*3,220*3,550
Performance configurations
Payload capacity (1) (tonne) 5.0 3.0 5.5 6.6 7.0
Rated/Peak power of drive
motor (2) (kW)
120/240 60/120 140/280 200/430 200/430
Rated/Peak power of working motor (3) (kW) 100/200 60/120 100/200 140/220 140/220
Hydraulic cycle time (4) (s) ≤10.6 ≤10 ≤9.6 ≤11 ≤11
Peak traction force (5) (kN) 170 100 170 198 198
Maximum breakout force (6) (kN) ≥176 ≥97 ≥176 ≥200 ≥200
Maneuverability configurations
Wheelbase (7) (mm) 3,230 2,850 3,230 3,450 3,450
Tier center turning radius (8) (mm) 6,310 5,440 6,320 6,150 6,150
Battery configurations
Battery capacity (9) (kWh) 282 184 282 423 423
Charging time (charging power) (10) 1h (240kW) 1h (180kW) 1h (240kW) 1.5h (240kW) 1.4h (240kW)
Notes:
(1) Represents the maximum permissible weight that a loader can safely transport in addition to its own
unloaded weight.
(2) Represents the maximum power output that the drive motor of a loader can achieve during operation,
referred to as ‘‘peak power,’’ as well as the sustainable power level it can maintain under normal working
conditions, known as ‘‘rated power.’’
(3) Represents the maximum power output that the working motor of a loader can achieve during operation,
referred to as ‘‘peak power,’’ as well as the sustainable power level it can maintain under normal working
conditions, known as ‘‘rated power.’’
(4) Represents the total duration covering the loader’s boom lifting, bucket unloading and boom lowering
actions, a key metric of a loader’s productivity.
(5) Represents the maximum force a loader can exert in the forward direction to overcome all opposing
forces.
(6) Represents the maximum vertical force generated by the lifting hydraulic cylinder or the bucket hydraulic
cylinder of a loader in an upward direction.
(7) Represents the distance from the center of an engineering machine’s front wheel to the rear wheel, which
affects the stability and maneuverability of a loader.
(8) Represents the distance from the center of a loader to the outer edge of its turning circle, which indicates
the degree of tightness of the loader’s turning and is a measure of the loader’s maneuverability in confined
spaces.
(9) Represents the total amount of electrical energy a battery can store, which impacts the duration the
engineering machinery can operate before needing a recharge.
(10) Represents the time required to charge a battery within a standard battery power range, from 20% to 95%
of its full capacity.
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Powered by a wide array of proprietary technologies, our loaders excel in the following
aspects:
. Environmental benefits . While traditional fuel-powered loaders are major sources of
environmental pollution, our battery-e lectric loaders provide a substantial
environmental advantage with zero tailpipe emissions of carbon and other air
pollutants such as hydrocarbons, nitrogen oxides and particulate matters.
Furthermore, our loaders operate at low noise levels, averaging approximately 70
decibels, much quieter than the 86 decibe ls typically generated by traditional
fuel-powered loaders, according to CIC.
. Performance excellence . We pioneer a dual-motor design for battery-electric loaders,
enhancing their ability to manage heavy loads and navigate challenging terrains
efficiently. This design significantly red uces hydraulic cycle times to as low as nine
seconds, which demonstrates our loaders’ capability to move more materials within a
shorter timeframe, making them well-suit ed for projects that demand high volume
handling within tight deadlines. Furthermore, the dual-motor setup delivers excellent
responsiveness, with an average response time of 0.15 seconds. Such quick response
ensures our loaders operate with enhan ced smoothness and precision of control,
minimizing the risk of operational errors and alleviating operator fatigue during
prolonged and intensive work sessions.
. Cost efficiency. Our loaders achieve enhanced energy consumption efficiency through
an advanced power output modulation system, which dynamically adjusts the power
output to match the operational conditions and load capacities, thereby optimizing
energy usage. The single-pedal design of our loaders’ braking system effectively
captures and recycles energy during braking, channeling this energy back into the
battery rather than dissipating it as hea t. The following table illustrates the
hypothetical full lifecycle cost savings analysis of our five-tonne loader model as
compared to its five-tonne fuel-powered counterpart. The following cost saving
analysis is only hypothetical in nature based on our theoretical calculations and is not
substantiated by actual data collected from the operations of our loaders.
Service life without significant decay in performance(1) 5 years
Full lifecycle energy consumption costs(2) Approximately RMB1,935,000 Approximately RMB380,000
Full lifecycle maintenance costs(3) Approximately RMB150,000 Approximately RMB75,000
Full lifecycle usage costs(4) Approximately RMB2,085,000 Approximately RMB455,000
Full lifecycle usage cost savings(5) Approximately RMB1,630,000
Purchase costs(6) Approximately RMB350,000 Approximately RMB760,000
Full lifecycle cost savings(7) Approximately RMB1,220,000
Five-tonne fuel-powered
loader
Our five-tonne battery-electric
loader
Hypothetical Full Lifecycle Cost Saving Analysis
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Notes:
(1) According to CIC, the average lifespan of both fuel-powered and battery-electric loaders is five
years.
(2) Total energy consumption cost over the lifespa n is calculated by multiplying the average annual
energy consumption cost by the loader’s typical lifespan. Annual energy consumption cost is
calculated by multiplying the average unit price of energy by the average hourly energy
consumption, the daily operational hours, and the total operational days in a year. In 2023, the
average price of diesel in China was RMB7.59 per liter, based on the official pricing for 0# diesel
published by local development and reform authorities. For electricity, the average price was
RMB0.635/kWh in 2023, according to the commercial and industrial electricity rates released by
State Grid Corporation of China in March 2021.
(3) Fuel-powered loaders incur an annual maintenance cost of RMB30,000 due to their mechanical
structures. In contrast, battery-electric loaders have an annual maintenance cost of RMB15,000,
according to CIC.
(4) Total usage cost over the lifespan is calculated a s the sum of the full lifecycle energy consumption
cost and the full lifecycle maintenance cost.
(5) Total usage cost savings over the lifespan are calculated by comparing the total energy consumption
cost over the lifespan and the total maintenance cost over the lifespan of fuel-powered and
battery-electric loaders.
(6) The purchase cost of a five-tonne fuel-powered loader from a typical Chinese machinery
manufacturer is RMB350,000, according to CIC.
(7) Total lifespan cost savings are calculated by comparing the total usage cost savings over the lifespan
and the purchase cost between fuel-powered and battery-electric loaders.
. Long operational time. Our loaders offer extended operational time and rapid
recharging capabilities. With battery pa ck capacities ranging from 184 kWh to 423
kWh, these loaders can operate continuously for six to twelve hours on a single full
charge. In addition, our loaders with 423-kWh battery packs can be fully recharged
within approximately 80 minutes. The ch arging efficiency makes our loaders the
preferred choice for industries requiring prolonged operational hours, such as
large-scale engineering, construction projects and infrastructure development in
locations such as open-pit mines, quarries, port docks, steel mills, coking plants and
ceramic factories.
. Adaptability . Our loaders are engineered to efficiently operate across a wide range of
jobsites and working conditions. They feature an advanced battery thermal
management system coupled with aerogel ba ttery insulation, which is engineered to
support operations in extreme temperatures from –30 °Ct o6 0 °C. To date, our loaders
have demonstrated resilience through four severe winters in Ordos, Inner Mongolia,
and have also operated in the extreme cold of the Altay Mountains, where
temperatures can drop as low as –40 °C. Moreover, with a compact wheelbase
ranging from 2,850 mm to 3,550 mm, our loaders offer precise maneuverability with a
reduced turning radius, which allows for agile operation even in confined spaces.
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Furthermore, our loaders offer diverse customization options to meet the specific
operational needs of our customers across jobsites and working conditions. We
provide specialized configurations including grapple loaders, fork loaders, rake
loaders and side-dumping loaders, each designed for distinct types of tasks.
Additionally, our loaders feature a quick attachment swap system that allows
operators to switch between functional attachments swiftly.
. Connectivity . Our loaders are equipped with advanced connectivity to enable remote
access and control, featuring real-time loca tion tracking, battery health assessment to
detect anomalies and the visualization of da ta for tracking and analysis, monitoring
a n dp r e d i c t i o no fo p e r a t o rb e h a v i o r sa n dinstant fault alerts. Operators have the
convenience of remotely managing the loaders, which includes setting geofences, as
well as executing commands such as locking and unlocking, pre-heating, cooling and
switching between high and low voltage power modes. Furthermore, our
Over-The-Air (OTA) technology simplifies the process of receiving and installing
software updates remotely, guaranteeing that our loaders consistently operate with
the latest control strategies and management software.
. Operator experience. Our loaders are equipped with a one-touch silence feature that
immediately quiets engine noise, creating a comfortable environment during breaks.
Operators benefit from a real-time overview of the machine’s status and have access to
detailed data analytics. Furthermore, our loaders include a suspended seat that offers
multi-layer shock absorption, significantly improving comfort for operators especially
when navigating over rough terrains.
Case Study 1
In the second half of 2021, we sold a BRT958EV five-tonne battery-electric loader to a
coking company in Xiaoyi, Shanxi. The harsh conditions at the operational site, characterized
by dust and extreme temperature variations, posed challenges to the durability and
adaptability of engineering machinery. Despi te these conditions, a fter more than 15,000
hours of continuous operation up until May 2024, the loader demonstrated robust durability,
maintaining over 86% of its maximum battery capacity.
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Our Remote-operated Battery-electric Loaders
To address the growing incorporation of intelligent technology in the global engineering
machinery industry, we have developed a propri etary suite of software and hardware for remote
operations, which can be integrated into any model within our loader lineup.
Case Study 2
In November 2023, we initially deployed our re mote-operated battery-electric loaders,
model BRT959EV, at an organic fertilizer facility in Chongqing, China. This factory is tasked
with handling large volumes of odorous poultry manure, making it difficult for on-site
operations. Prior to the deployment of our remote-operated loaders, on-site operators had to
work directly within these conditions.
With the introduction of the BRT959EV model, operators no longer need to enter the
factory physically. Instead, they can perform their tasks remotely through a ‘‘virtual cockpit,’’
w h i c hp r o v i d e sa ni m m e r s i v ev isualization of the loader’s re al-time status and operational
mode, allowing operators to manage the loader with intuitive understanding and precise
control over its immediate positioning. This new mode of operation substantially reduces
direct exposure to harsh environments and boosts overall operator experience. It effectively
addresses the persistent challenges our customers face with high employee turnover and
staffing shortages in demanding work conditions.
Operations via the ‘‘virtual cockpit’’
Building on the success of this pilot proj ect, we launched the BRT958KLe, our first
cabinless battery-electric l oader model, in April 2024. This model introduces a cabin-free
architecture to reduce its overall weight and consequently its average energy consumption
especially on rugged terrains. By removing the traditional operator cabin, the loader can be
remotely operated, eliminating the need for on-board human operators.
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BRT958KLe features a 360-degree panoramic v ideo stitching system and a status feedback
system, allowing operators to easily toggle between different loader views via touch controls on
a human-machine interface. It enables precise remote control from distances of up to 2,000
kilometers, achieving an image transmission lat ency of less than 200 milliseconds. Such remote
operation capability allows operators to control and monitor the loader from the central
console with enhanced operational efficien cy. See ‘‘— Our Technologies — Remote and
Autonomous Operation System’’ for details on the technological features of the
remote-operated system.
BRT958KLe, our first cabinless remote-operated loader
We primarily sell our remote-operated battery-electric loaders, with or without a cabin, as
part of an integrated package that includes interconnected hardware and algorithm-powered
software for remote operations. Additionally, we are exploring options to offer autonomous
scheduling software and intelligent mining solutions to support the coordinated operation of
fleets of remote-operated loaders and autonomous wide-body dump trucks for open-pit mines.
See ‘‘— Our New Business Initiatives — Autonomy Solutions.’’
Commercialization of Our Loaders
The selling prices of our loaders vary by model, ranging from approximately RMB0.4
million to RMB1.3 million including Value-Added Tax (VAT) during the Track Record Period.
We expect the prices of our current loader models to decrease gradually due to anticipated
reductions in the market prices of battery cells and other components. However, future models
featuring larger payloads and greater battery ca pacities will be priced higher than our current
offerings.
According to CIC, the selling prices of three -tonne to seven-tonne fuel-powered loaders in
China range from approximately RMB0.25 milli on to RMB0.8 million, with an average lifespan
comparable to our battery-electric loaders at approximately five years. While fuel-powered
loaders generally have lower average selling p rices, our loaders offer significant energy cost
savings. Specifically, our five-tonne models save approximately RMB0.3 million per unit
annually in energy costs compared to their fuel -powered counterparts. See ‘‘— Our Products —
Battery-electric Loaders — Our Major L oader Offerings — Cost Efficiency.’’
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During the Track Record Period, our loaders e xperienced increased sales and leasing,
supported by strengthened sales and marketing efforts and enhanced performance, adaptability
and reliability, which have contributed to greater customer acceptance. The following table sets
forth the total sales volume, leasing volume and shipments of our loaders for the years
indicated.
For the Year Ended December 31,
2022 2023 2024
Sales volume (unit) 295 484 401
Leasing volume (unit) 31 41 49
Shipments
(1) (unit) 326 525 450
Note:
(1) Represents the total number of loaders we sold and leased during the years indicated.
We generated revenue of RMB183.7 million, RMB281.2 million and RMB224.2 million
from sales of our loaders in 2022, 2023 and 2024, respectively, representing 51.0%, 60.6% and
35.3% of our total revenue for the corresponding years. We generated rental income of RMB4.9
million, RMB3.6 million and RMB4.5 million fro m leases of our loaders in 2022, 2023 and 2024,
respectively, representing 1.4%, 0.8% and 0.7% of our total revenue for the corresponding
years.
Trial-use of Our Loaders
We understand that many of our target customers are more accustomed to traditional
fuel-powered machinery than to new energy altern atives. To effectively penetrate the market, we
offer trial periods for our battery-electric loaders, giving potential customers the opportunity to
experience the economic and operational benef its of our green machinery firsthand. The trial
experience not only demonstrates the value and efficiency of our products but also enables us to
gather direct feedback, build strong customer relationships and encourage organic promotion.
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The following table sets forth the key metric s of our trial-use loaders during the Track
Record Period.
For the Year Ended December 31,
2022 2023 2024
Loaders for trial-use
At the beginning of the year 48 52 49
Newly added during the year 51 25 28
Converted into sales during the year 47 28 25
At the end of the year 52 49 51
Conversion rate (1) 47.5% 36.4% 32.5%
Notes:
(1) Represents the number of trial-use loaders converted into sales during a year divided by the sum of the
number of trial-use loaders at the beginning of the year and newly added during the year.
We typically offer a trial period for our loaders ranging from seven days to six months at
no cost to the customer. If the customer chooses t o continue using the loaders after the trial
period, our standard leasing rates apply. We reco rded revenue from post-trial fees of nil in 2022,
2023 and 2024. Logistics costs for delivering and returning loaders during the trial period are
either borne by us, as part of our efforts to attrac t trial customers, or by the trial customers
themselves.
Pipeline of Future Loader Models
As we continue to evolve and enhance our product offerings, we plan to launch a revamped
version of our five-tonne and six-tonne loader models in the second half of 2025, with reduced
costs with higher durability and performance. Th is model is designed to be deployed in scenarios
requiring extended operational time and high stability, such as coal mines, construction sites,
ports and steel mills.
Battery-electric Wide-body Dump Trucks
Our battery-electric wide-body dump truck s are engineered to tackle the challenging
demands of rugged terrains and manage heavy loads effectively. They are powered by new
energy, with electricity being the sole or primary source. Our dump trucks are primarily
deployed in open-pit mining operations for essential tasks such as transporting, unloading and
distributing materials that have been collected by other machinery. Traditional fuel-powered
wide-body dump trucks operating in challenging conditions typically experience high fuel
consumption and maintenance costs. In contrast, our battery-electric wide-body dump trucks,
which are primarily powered by electricity, significantly reduce energy consumption and lower
maintenance and operational costs.
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Our Major Wide-body Dump Truck Offerings
Our current lineup includes two main models, the BRT90E and the BRT105E, which are
designed for downhill and/or uphill operations. The following table illustrates certain features
and specifications of our primary wide-body dump truck models in chronological order
according to their time of first sale.
BRT90E (350 kWh) BRT105E (423 kWh) BRT105E (700 kWh) BRT120E (724kWh)
Image
Time of first sale May 2020 August 2022 August 2022 September 2024
Length *width *height (mm) 9,560*3,710*3,930 9,960*3,710*4,200 10,960*3,710*4,200 10200*3950*4260
Operation scenario Downhill and
low-gradient
uphill
Downhill and
low-gradient
uphill
Uphill Uphill
Performance configurations
Payload capacity (1) (tonne) 57 68–70 63 73
Rated/Maximum power
output (2) (kW)
500/800 500/800 500/800 500/800
Battery configurations
Battery capacity (3) (kWh) 350 423 700 724
Number of charging branches 2 2 4 4
Charging time
(charging power) (4)
1h (300kW) 1.2h (300kW) 1.2h (600kW) 1h (800kW)
Notes:
(1) Represents the maximum allowable weight that a wide-body dump truck can safely carry in addition to its
own empty weight.
(2) Represents the maximum power output that the motor of a wide-body dump truck can achieve during
operation, referred to as ‘‘peak power,’’ as well as the sustainable power level it can maintain under
normal working conditions, referred to as ‘‘rated power.’’
(3) Represents the total amount of electrical energy a battery can store, which impacts the duration the
wide-body dump truck can operate before needing a recharge.
(4) Represents the time required to charge a battery within a standard battery power range, from 20% to
100% of its full capacity.
Our battery-electric wide-body dump trucks exh ibit competitive strengths in the following
key aspects:
. Environmental benefits. Our dump trucks operate with zero carbon emissions and
produce no air pollutants, distinguishing them from the high pollution levels of
traditional fuel-powered dump trucks. Additionally, they generate less noise, with an
average sound level of 74 decibels, compared to the 82 decibels typically produced by
conventional fuel-powered models. Such advancement not only promotes eco-friendly
and sustainable industry practices but also creates a comfortable operating
environment for operators.
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. Cost efficiency . Our dump trucks feature an adaptive energy recovery system to
enhance performance across diverse operational scenarios and working conditions.
Through regenerative braking, the drive motor captures energy that would otherwise
dissipate as heat, redirecting this energy b ack to the battery. In emergency scenarios,
the system engages mechanical brakes imme diately. Such mechanism is particularly
beneficial during heavy-load downhill operations, leading to a net positive energy
balance by efficiently recapturing and reusing energy. The following table illustrates
the hypothetical full lifecycle cost savings analysis of our 105-tonne battery-electric
wide-body dump truck in heavy-load uphill operations as compared to its
fuel-powered counterpart. The following cost saving analysis is only hypothetical in
nature based on our theoreti cal calculations and is not su bstantiated by actual data
collected from the operations of our wide-body dump trucks.
Service life without significant decay in performance(1) 5 years
Full lifecycle energy consumption costs(2) Approximately RMB4,780,000 Approximately RMB1,355,000
Full lifecycle maintenance costs(3) Approximately RMB200,000 Approximately RMB125,000
Full lifecycle usage costs(4) Approximately RMB4,980,000 Approximately RMB1,480,000
Full lifecycle usage cost savings(5) Approximately RMB3,500,000
Purchase costs(6) Approximately RMB800,000 Approximately RMB2,050,000
Full lifecycle cost savings(7) Approximately RMB2,249,000
Fuel-powered wide-body dump truck Our 105-tonne battery-electric
wide-body dump truck
Hypothetical Full Lifecycle Cost Saving Analysis
Notes:
(1) According to CIC, the average lifespan of both fuel-powered and battery-electric wide-body dump
trucks is approximately five years.
(2) Total energy consumption cost over the lifespa n is calculated by multiplying the average annual
energy consumption cost by the typical lifespan. Annual energy consumption cost is calculated by
multiplying the average energy unit price by the energy consumption per kilometer, the average
daily mileage, and the total number of operational days in a year.
(3) Fuel-powered wide-body dump trucks incur an annual maintenance cost of RMB40,000 due to their
mechanical structures. In comparison, battery-electric wide-body dump trucks have an annual
maintenance cost of RMB25,000, according to CIC.
(4) Total usage cost over the lifespan is calculated a s the sum of the full lifecycle energy consumption
cost and the full lifecycle maintenance cost.
(5) Total usage cost savings over the lifespan are calculated by comparing the total energy consumption
cost over the lifespan and the total maintenance cost over the lifespan of fuel-powered and
battery-electric wide-body dump trucks.
(6) The purchase cost of a 105-tonne fuel-powered wide-body dump truck from a typical Chinese
machinery manufacturer is RMB800,000, according to CIC.
(7) Total lifespan cost savings are calculated by comparing the total usage cost savings over the lifespan
and the purchase cost between fuel-powered and battery-electric wide-body dump trucks.
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. Adaptability . Designed for operations in dema nding conditions, our dump trucks
incorporate a dual-motor topology design that provides significant traction to enable
stable operations, even when transporting full payloads up inclines of 30%. Such
capability renders them well-suited for challenging uphill tasks where robust
performance is critical.
. Long operational time . The 700-kWh variant of our BRT105E model is designed for
extended use, delivering more than 5.5 hours o f continuous operations at full payload
capacity. Incorporating our proprietary d esign of four-branch parallel charging
circuits, the charging time for the 700-kWh battery is approximately 70 minutes under
normal working conditions, which reduces downtime associated with recharging and
maximizes operational efficiency on mining sites.
. Connectivity . Our dump trucks are equipped with advanced connectivity to enable
remote access and control, featuring re al-time location tr acking, operation
parameters monitoring, battery and entir e machinery health assessment, and the
visualization of data for tracking and analysis, monitoring and prediction of operator
behaviors and instant fault alerts. Ope rators can conveniently manage our dump
trucks remotely, performing tasks such as setting geofences, executing commands
such as locking and unlocking, pre-heating, cooling and switching between high and
low voltage power modes. Furthermore, our OTA technology streamlines the process
of offering post-sale services, ensuring that our dump trucks always operate with the
latest control strategie s and management software.
. Safety. Our dump trucks feature an intelligent braking intervention and warning
system that automatically activates the brakes and makes warnings in response to
collision threats or brake pedal malfunctions. Additionally, upon the customer’s
request, these dump trucks can be outfitted with a 360-degree detection capability and
full-color night vision, providing operators with light signals and sound warnings to
enhance situational awareness of potential collisions or emergencies.
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Case Study 3
In November 2023, we sold nine of our 700-kWh BRT105E dump trucks to a subsidiary
of a Fortune Global 500 mining company located in Xilin Gol, Inner Mongolia. Situated at
an altitude exceeding 1,100 meters with winter temperatures plunging below –34.5 °C, the site
presented severe challenges for heavy-load engineering machinery.
BRT105E navigating snowy mountain s at the mining sites in Xilin Gol
Despite these conditions, our BRT105E model demonstrated exceptional stability and
efficiency, delivering substant ial economic benefits. Detailed energy consumption records
from the customer showed that, for equivalent payloads and distances, the energy costs of the
BRT105E dump trucks were approximately one-th ird of those for traditional diesel-powered
dump trucks. By switching to our BRT105E mod el, the company significantly reduced its
overall cost of molybdenum concentrate production, achieving savings of over RMB4,200 per
tonne and annual savings e xceeding RMB12.0 million.
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Our Autonomous Battery-electric Wide-body Dump Trucks
In response to the increasing domestic and in ternational market d emand for autonomous
operation especially in open-pit mines, we integrated our proprietary autonomous system onto
our BRT105E model and introduced our first-generation autonomous battery-electric
wide-body dump trucks in March 2023.
Our first-generation autonomous wide-body dump truck
Operating autonomously, this machine can navigate and perform its tasks without any
manual intervention. Our autonomous dump truck s can precisely identify obstacles as small as
20 centimeters from up to 50 meters away. Through our cloud-based dispatch platform,
customers can easily schedule tasks for their autonomous dump trucks and perform real-time
analysis of operational data generated by these machines. Our autonomous dump trucks
leverage advanced technologies such as intellig ent sensing, real-time video stitching, video
streaming and three-dimensional mapping, which enable the trucks to navigate the rugged and
undulating terrains commonly found in mining areas, even under challenging environmental
conditions such as dust or sandstorms. These technologies also enable our dump trucks to
autonomously avoid obstacles and perform accu rate trajectory tracking and parking, with a
precision of within ten centimeters. See ‘‘— Our Technologies — Remote and Autonomous
Operation System’’ for details on the technological features of our autonomous operation
system.
Based on our prototype test, our autonomous du mp trucks can work for approximately 18
hours a day with minimal on-site staff, efficien tly achieving labor cost savings of over RMB1.0
million per unit across a service lifespan of five years. In addition, we provide specialized
engineers and technical support to promptly address any issues that may arise amid autonomous
operations.
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We primarily sell our autonomous dump trucks as part of a package, which also includes
hardware components such as a drive-by-wire chassis and roadside units, as well as specialized
autonomous operation software deployed directly on the trucks. Similar to our remote-operated
loaders, we are exploring the potential of offering autonomous scheduling software, as well as
intelligent mining solutions to enable the coord inated operation of fleets of remote-operated
loaders and autonomous wide-body dump trucks for open-pit mines. See ‘‘— Our New Business
Initiatives — Autonomy Solutions.’’
Commercialization of Our Wide-body Dump Trucks
The selling prices of our battery-electric wide-body dump trucks vary by model, ranging
from approximately RMB0.9 million to RMB2.3 million including VAT during the Track
Record Period. We expect the prices of our curren t wide-body dump truck models to gradually
decrease due to anticipated declines in the mar ket prices of battery cells and other components.
However, future models with larger payloads and g reater battery capacities will be priced higher
than our current offerings.
According to CIC, the selling prices of fuel-powered wide-body dump trucks in China
range from approximately RMB0.7 million to RMB0.9 million, with an average lifespan
comparable to our battery-electric wide-body dump trucks at approximately five years. While
fuel-powered wide-body dump trucks typically have lower average selling prices, our
battery-electric models provide significant savi ngs in energy consumption costs. Specifically,
our 105-tonne battery-electric wide-body dump trucks save approximately RMB0.7 million per
unit annually in energy costs compared to fuel-powered counterparts. See ‘‘— Our Products —
Battery-electric Wide-body Dump Trucks — Our Major Wide-body Dump Truck Offerings —
Cost Efficiency.’’
Our dump trucks experienced significant gro wth in sales and leases throughout the Track
Record Period, driven by our intensified marketing efforts, the launch of new models targeting
to a broader market, and enhanced research and development to refine the performance,
adaptability and reliability. The following table sets forth the total sales volume, leasing volume
and shipments of our dump trucks for the years indicated.
For the Year Ended December 31,
2022 2023 2024
Sales volume (unit) 59 88 281
Leasing volume (unit) 0 8 26
Shipments
(1) (unit) 59 96 307
Note:
(1) Represents the total number of dump trucks we sold and leased during the year indicated.
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We generated revenue of RMB76.3 million , RMB126.5 million and RMB364.6 million
from sales of our dump trucks in 2022, 2023 and 2024, representing 21.2%, 27.3% and 57.4% of
our total revenue for the corresponding years. Additionally, we generated rental income of nil,
RMB1.2 million and RMB6.3 million from lea ses of our dump trucks in 2022, 2023 and 2024,
representing nil, 0.3% and 1.0% of our total revenue for the corresponding years.
Trial-use of Our Wide-body Dump Trucks
In line with our strategy for loaders, we offe r trial use of our battery-electric wide-body
dump trucks to enable customers to familiarize themselves with our products and experience the
economic and operational benefits of our products firsthand. The following table sets forth the
number of our trial-use wide-body dump trucks and its changes during the Track Record
Period.
For the Year Ended December 31,
2022 2023 2024
Wide-body dump trucks for trial-use
At the beginning of the year 7 15 25
Newly added during the year 13 14 10
Converted into sales during the year 5 4 8
At the end of the year 15 25 27
Conversion rate
(1) 25.0% 13.8% 22.9%
Note:
(1) Represents the number of trial-use wide-body dump trucks converted into sales during a year divided by
the sum of the number of trial-use wide-body dump trucks at the beginning of the year and newly added
during the year.
We typically offer a 15- to 120-day trial p e r i o df o ro u rd u m pt r u c k sa tn oc o s tt ot h e
customer. If a customer decides to continue using the trucks after this trial, our standard leasing
rates apply. Revenue from post-trial fees amount ed to nil in 2022, 2023 and 2024. We typically
bear the logistics costs for the delivery and re turn of the trial-use wide-body dump trucks.
Pipeline of Future Dump Truck Models
We plan to expand our wide-body dump truck lineup with the addition of a 145-tonne
range-extended model with 724-kWh batte ries in the second half of 2025 and a 135-tonne
battery-electric model equipped with over 900-k Wh batteries in 2026. Designed with the rigors
of large-scale coal mining operations, both the ra nge-extended and battery-electric wide-body
dump trucks are built to support extended periods of operations. With their ultra-large tonnage
capability and battery capacity, these wide-body dump trucks are expected to optimize work
duration and improve energy consumption efficiency, thereby minimizing operational costs for
our customers.
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E-powertrain Kits for Battery-electric Tractor Trucks
We design, engineer, and manufacture e-powertr ain kits for battery-electric tractor trucks
and supply these kits to a catalog company that holds the requisite vehicle manufacturing
qualifications. This catalog company integrates our e-powertrain kits into its chassis to
complete the assembly of the trac tor trucks. Once assembled, we purchase these fully assembled
trucks from the catalog company and then distribute them to our customers. See ‘‘—
Manufacturing — Tractor Truck E-powertrain Kit Manufacturing.’’
E-powertrain kits for battery-electric tractor trucks
Our e-powertrain kits for battery-electric tra ctor trucks possess the following features.
. Extended driving range . Our e-powertrain kits facilita te extended driving range and
fast charging for battery-electric tractor trucks. Tractor trucks equipped with our
e-powertrain kits can achieve a driving range of 150 km while operating at a maximum
load of 49 tonnes. Additionally, our e-powertrain kits feature a dual-gun fast charging
mode, which enables a battery-empty tr actor truck to be fully recharged in
approximately one hour.
. Rapid acceleration and shifting. Our e-powertrain kits offer instantaneous torque and
rapid acceleration, which allow tractor trucks to reach speeds of 40 km/h (typical
operational speed for tractor trucks) in under 14 seconds with a 49-tonne total weight,
making them ideal for short-haul operations. Moreover, our e-powertrain kits ensure
seamless and dependable gear shifting by continuously adjusting gear ratios to enable
efficient acceleration without distinct gear steps.
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Tractor trucks are motor vehicles designed for hauling cargo, containers and other types of
vehicles. They are widely used in logistics, ware housing, airports, rail stations and ports. The
following table provides key specifications for the main tractor truck models we sold during the
Track Record Period.
Charging model
Battery-swapping
model
Economy charging
model
Length *width (mm) 7,360*2,550 7,360*2,550 7,360*2,550
Full load weight (kg) 9,980 (standard
load)/10,400
(heavy load)
10,400 (standard
load)
9,980 (standard
load)/10,500
(heavy load)
Maximum speed
(km/h)
89 89 85
Battery capacity
(kWh)
282 282 258
We distribute the battery-elect ric tractor trucks incorporating our e-powertrain kits to our
downstream customers following the procurement of these trucks from the catalog company.
The sales volume of the tractor trucks decreased from 148 units in 2022 to 66 units in 2023, and
further decreased to 27 units in 2024. During the T rack Record Period, the selling prices of the
battery-electric tractor trucks ranged from approximately RMB0.3 million to RMB0.8 million
including VAT.
Our collaboration agreement with the catal og company expired in November 2024 and as
we shifted our focus towards new energy engineering machinery and solutions, we have decided
not to renew the agreement. We have no plans to pr oduce e-powertrain kits for tractor trucks or
to purchase assembled tractor trucks from the catalog company in the future. Going forward,
our sales of tractor trucks will be limited to clearing out our existing inventory.
OUR NEW BUSINESS INITIATIVES
Our business is founded on innovations that center around our customer needs. Since 2023,
we have expanded our technological and engineer ing expertise to include new energy solutions,
such as autonomy solutions, energy transition s olutions and photovoltaic energy system. These
solutions are intended to complement our product sales by creating additional, sustainable
revenue streams through service fees and software licensing. We believe that diversifying our
offerings will drive long-term growth, achieve economies of scale, and further strengthen our
market position and financial health.
Autonomy Solutions
Beyond engineering machinery equipped with remote and autonomous operation
capabilities, we offer autonomy solutions through intelligent mining solutions and
autonomous scheduling software. These solutio ns are designed to automate designated tasks,
facilitate remote control and operations of mach inery, enable efficient management of multiple
fleets simultaneously. Additionally, they support fully autonomous operations, helping our
customers eliminate the need for direct human supervision, therefore ensuring the safety of
personnel and improving overall operational efficiency.
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Intelligent Mining Solutions
Drawing on our advancements in remote and autonomous operation technologies, we are
laying the groundwork for delivering intelligent mining solutions tailored to enclosed
environments such as open-pit mines. Custome rs no longer need to purchase our engineering
machinery for demanding tasks. Instead, they can utilize our intelligent mining solutions, using
our fleet of machinery to complete their mining operations autonomously or remotely. Our
solutions are designed to handle a range of tasks including excavation, crushing, loading,
transportation, unloading and charging, all achie vable without operators present at the jobsites.
Once we deploy our autonomous and remotely operated fleets at the sites of our customers, our
team of technical experts and service staff manages the entire operations, from initial setup and
integration to ongoing maintenance and optimization.
Our revenue model for intelligent mining solutions is based on ongoing service fees, which
vary depending on factors such as the operati onal environment, fleet size, complexity of
scheduling needs, term of the service agreement, infrastructure development level, and any
value-added services requested (such as custom re porting and integration with existing systems).
We may also adopt a tiered approach to accommodate various service requirements, ranging
from basic remote monitoring to comprehensive autonomous operation management. As of the
Latest Practicable Date, we had entered into an ag reement with a customer to provide intelligent
mining solutions.
Autonomous Scheduling Software
We intend to provide scheduling software that facilitates the operation, scheduling and
orchestration of large fleets of battery-electric loaders and wide-body dump trucks, whether
they are equipped with remote and autonomous operation technology or not. Our scheduling
software is designed for deployment within central consoles at customers’ jobsites or accessed
through application programming interface. It al lows operators to remotely control and operate
multiple machines and provides recommendations to optimize machine dispatch and operations.
We expect to adopt a licensing model for our autonomous scheduling software, which will
include subscription fees covering software u pdates and ongoing support and services. The
pricing structure will vary depending on the complexity of tasks the software is required to
perform, the number of machines to be integrated, and any custom features or integrations
requested by the customer. During the Track Record Period, we had not generated any revenue
from the autonomous scheduling software.
Energy Transition Solutions
Leveraging our technological and engineering expertise, we have expanded our offerings to
include energy transition solutions. As of the Latest Practicable Date, we provided energy
transition solutions to a trucking company based in North America for the design and
manufacturing of add-on e-powertrains to conv ert diesel tractors to operate as hybrids.
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We utilize modular technology stacks developed through our engineering platforms to
provide tailor-made design and engineering ser vices and manufacture core kits for the energy
transition solutions according t o the specific technical and mechanical specifications requested
by our customers. Each kit is subject to thorough testing, inspection, modification and tuning
within our manufacturing facilities to ensure th at the final products precisely match our design
blueprints and fulfill all functional requirements. We adopt a project-based pricing model,
considering the costs associated with our raw mat erial procurement, research and development
and engineering.
Case Study 4
In 2022, we were commissioned by a trucki ng company based in North America to
design and manufacture add-on e-powertrains, allowing conventional diesel tractors to
operate as hybrids. The e-powertrains we design ed are specialized for integration with the
existing tractors of the company’s clients, allowing the tractors to transition from running
solely on diesel to becoming dual-power models , utilizing both diesel and electricity.
During the Track Record Period, our revenue attributable to our energy transition
solutions was insignificant.
Photovoltaic Energy System
In the emerging field of new energy engineerin g machinery, many downstream businesses
lack the essential electrical infrastructure re quired to fully adopt such advanced machinery. To
meet this demand, we are in the process of develop ing and commercializing a proprietary direct
current photovoltaic energy system, which integrates photovoltaic panels, direct current
inverters, energy storage batteries and chargin g stations. It is design ed to provide one-stop
solutions for photovoltaic energy generation, storage and charging.
The system operates exclusively on direct curr ent power. Specificall y, the photovoltaic
panels generate electricity in direct current, the e nergy storage unit charges and discharges using
direct current, and the charging stations distribute power in direct current as well. Such design
offers numerous advantages, including reduced heat loss, higher energy conversion efficiency,
improved system stability, and d ecreased hardware requirements. The all-direct current system
is particularly advantageous in areas lacking trad itional grid infrastructure. By eliminating the
reliance on conventional grid scheduling and management systems, our system offers greater
independence and reliability.
In December 2022, we initiated a pilot photo voltaic energy generation, storage and
charging station in Panzhihua, Sichuan, for trial operations. The station is capable of unmanned
operation and is compatible with a variety of el ectric vehicles and engineering machinery.
Moving forward, we intend to leverage the exp erience gained from this pilot to propel the
commercialization of such stations.
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We are expanding our international photovoltai c energy business, particularly in providing
power solutions for mining operations. In Zambia, for instance, we established a subsidiary in
January 2025 and are developing grid infrastruct ure to support mining sites. We are currently
implementing an energy storage solution in Za mbia to provide scalable renewable energy
services, with completion expected by 2025. Once in service, this infrastructure will power the
customer’s production line and support the charging requirements of our battery-electric
products.
OUR REVENUE MODEL
During the Track Record Period, we generated most of our revenue from sales of products,
including battery-electric loaders, wide-body dump trucks and tractor trucks, as well as sales of
spare parts and accessori es (primarily e-powertrains and charging piles, as well as add-on
e-powertrains we sold under our energy transition solutions). Starting in 2024, we began
generating revenue through the sale of battery-electric engineering machinery with autonomous
capabilities. We also generate rental income by leasing our loaders, dump trucks and tractor
trucks to lessees who prefer to use our products without purchasing them.
Apart from product sales and leasing, we offer a wide range of repair and maintenance
services adapting to our customer needs. To introduce prospective customers to the economic
and operational benefits of our products, we provi de trial uses and, on a case-by-case basis, may
charge trial-use fees. As we began commercializing our remote and autonomous operation
technologies in 2023, we also generate servic e fees from providing a utonomy solutions.
The following table sets forth a breakdown of our revenue by business line for the years
indicated.
For the Year Ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Sales of products:
Battery-electric loaders 183,730 51.0 281,154 60.6 224,197 35.3
Battery-electric wide-body dump
trucks 76,290 21.2 126,456 27.3 364,588 57.4
Battery-electric tractor trucks 77,940 21.6 28,551 6.1 7,035 1.1
Spare parts and accessories 15,311 4.3 19,372 4.2 25,687 4.0
Subtotal 353,271 98.1 455,533 98.2 621,507 97.8
Rendering of services 485 0.1 2,794 0.6 3,187 0.5
Rental income 6,350 1.8 5,411 1.2 10,763 1.7
Total revenue 360,106 100.0 463,738 100.0 635,457 100.0
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OUR TECHNOLOGIES
Our business operates on robust technological and engineering capabilities. We utilize a
modular approach that segments our technologies into distinct building blocks, which facilitates
the efficient development of a growing lineup of new products while achieving economies of
scale. Over time, we have applied the modular appr oach to construct versatile design platforms
for our loaders and wide-body dump trucks. Each platform offers a variety of configuration
options to meet diverse customer preferences, which help improve our research and development
efficiency and accelerate our time-to-market.
Building on these platforms, we have developed a proprietary suite of technologies for our
loaders and wide-body dump trucks, including remote and autonomous operation systems,
e-powertrain, electrical and electronic architecture, VCU, thermal management, and battery
systems. The diagram below illustrates the co re technologies featured in our loaders and
wide-body dump trucks.
Vehicle Control Software
E/E Architecture
Vehicle Networking System
Software
EPOWER
Auxiliary Drive Control
Software
High and Low Voltage
Harness
Dual Motor ConfigurationThermal Management
System Software
Motor and Controller
Cooling Software
Gearbox
Thermal Management E-powertrainIntelligent Operation
Battery-electric Loaders and Wide-body Dump Trucks
Driver Controller System
Software
Driver Controller System
Hardware
Multi -Sensor Perception
Fusion Algorithm
Panoramic Stitching
Algorithm
Intelligent Assisted Driving
Algorithm
Autonomous Scheduling
Software
Remote-operated
Algorithm
Battery System
Battery Management
System Hardware
Integrated Control Joystick
Smart Cockpit
Battery Management
System Software
Remote and Autonomous Operation System
We have developed a full stack of proprietary software for the autonomous and remote
operations of our engineering machinery, making us the first in China to commercialize
remote-operated battery-electric loaders and autonomous battery-electric wide-body dump
trucks, according to CIC.
Remote operation system . Our remote operation system employs image codec and
low-latency communication technologies, which reduce image transmission latency to less
than 200 milliseconds. Such reduction in visual lag minimizes operator’s sense of disruption.
The system’s optimized control strategies enable precise control of loaders from distances up to
2,000 kilometers. Employing multi-sensor fusion technology, the system combines signals from
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multiple cameras with radar-generated point clouds to enhance the visual data captured by the
cameras. Our proprietary warning and assistive intelligent operation algorithms further enhance
operational precision, simplify manual handling and improve safety.
Autonomous operation system . Our autonomous operation system combines a rich array of
sensors with robust computing capabilities and advanced intelligent algorithms. Utilizing
real-time 3D spatial positioning, it employs forward fusion technology for processing sensor
data, ensuring prompt rendering of results w ithin 100 milliseconds. Capable of detecting
obstacles as small as 20 centimeters within a 50-meter range, the system formulates optimal
operation strategies based on pe rception and detection results. O ur perception fusion algorithm
provides a real-time bird’s-eye view of the env ironment, presenting a detailed status of both
dynamic and static object, which enables autonomous obstacle avoidance and high-precision
trajectory tracking and parking within a ten-centimeter range.
E-powertrain
Our e-powertrain features a pioneering dual- motor design that incorporates a drive motor
and a working motor, which effectively resolves t he technical challenges related to interference
and power diversion between the two motors. The dual-motor design not only improves the
stability of the power system but also ensures optimal performance with minimal energy
consumption. Additionally, our gearbox control strategy refines the control sequence for
electromagnetic valves within the gearbox, which i ncreases the efficiency of gear transitions and
reduces the risk of malfunctions during shifts.
To further improve energy efficiency, our loader’s working motor is equipped with an
adaptive start-stop transition feature. When t he loader’s hydraulic system remains idle for a
specified duration, the working motor automatically shuts off to conserve energy. Upon
resuming operation, the working motor promptly restarts to support the operations of the
hydraulic system, thus optimizing energy use while maintaining consistent performance.
Electrical and Electronic Architecture
The electrical and electronic architecture enc ompasses the structural layout of electrical
and electronic components, the topology of bus communication system, the layout of electronic
control components, and the design of both high- and low-voltage electrical connections and
wiring harnesses. Employing the forward design and engineering method with the functional
performance requirements of the entire machinery in mind, this architecture supports
autonomous operations and ensures that all components function effectively under various
conditions, delivering optimal performance and a superior functional experience.
High-voltage safety technology . We employ a specialized system for continuous real-time
monitoring of insulation resistance and the state of the high-voltage interlock loop across the
machinery and its components. Safety perfo rmance is our priority, and our proprietary
high-voltage leakage detection algorithms identify insulation degradation and faults effectively.
In case of a high-voltage leakage, our system a ccurately locates and addresses the issue,
providing a robust defense against potential high-voltage safety incidents and enhancing the
safety and reliability of our products.
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Electromagnetic interference and compatibility design. Our product design mitigates
potential sources of electroma gnetic interference, their t ransmission routes, and the
susceptibility of components to such interference. We take effective measures in the layout of
high-voltage components, the routing and design of wiring harnesses, the shielding and
protection of adaptive components and wiring, and the material and layout of communication
cables. These measures ensure that our products’ e lectromagnetic interfer ence and compatibility
performance adhere to standards and safeguard the stable and reliable operation of our
products.
Regenerative braking system. Our braking system features regenerative braking with motor
feedback and mechanical braking, supplemented by an emergency brake system for added
redundancy. This system prioritizes rapid, safe and stable braking performance while
maximizing the conversion of kinetic energy into electrical energy for recovery. It intelligently
adjusts according to different scenarios and potentially increases the driving range by 5% to
10% during heavy-load downhill operations. Even under emergency conditions, the eddy
current brake is designed to prevent heat decay in mechanical brakes to ensure effective
emergency braking and operation safety.
Vehicle Control Unit
The Vehicle Control Unit (VCU) acts as the central domain controller in our products,
receiving signal s from various strategically positione d sensors across the machinery. These
sensors monitor a range of data, including brake and accelerator pedal positions, voltage and
current levels of key components, speed, torque, temperature and charging connector status.
Such comprehensive data collection allows the VCU to accurately determine the status of the
entire machinery, its systems and all critical components. By interpreting the operator’s
intentions, the VCU precisely manages the activity of each component and the overall power
output, ensuring precise control for the operator.
Furthermore, based on the gathered information about our products, the VCU utilizes
deployed intelligent recognition and control models to assess their operational status and
health. It continuously upgrades the parameters of each component of our products in real-time,
thereby enhancing the overall wo rking efficiency of the machinery and extending the lifespan
and durability of its components.
Thermal Management
Temperature regulation is critical for the overall performance of our products. We have
implemented a sophisticated syste m of nested heating circuits that efficiently recycle excess heat
generated under different conditions, enabling the cyclic reuse of heat throughout the
machinery. To optimize this process, we used Computational Fluid Dynamics (CFD)
simulation software to analyze and enhan ce the flow field of the machinery and its
components. This analysis has improved heat dissipation efficiency by optimizing the layouts
of fans and radiators.
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Furthermore, we applied CFD analysis to fine-tune the heat flow within the machinery’s
power compartment based on flow and temperature field analysis. By incorporating advanced
technologies such as phase change materials and heat pumps, we have achieved thermal
equilibrium, which reduces the power needed fo r heat dissipation, leading to lower energy
consumption in the thermal management system.
Battery System
We source high-energy density battery cells and modules from top-tier suppliers and
integrate them into our battery system using our proprietary system design. The power batteries
in our products generally perform optimally for approximately five years before significant
capacity loss begins. Their lifespans are affected by factors such as the number of charge and/or
discharge cycles, operating environment, te mperature and charging and/or discharging
practices. According to CIC, end users general ly prefer replacing the entire machine rather
than just the battery, as component wear over time can impact overall machinery stability.
To enhance battery lifespan, safety, and c harging efficiency, we have co-developed a
dynamic battery balancing technology to ensure t hat the multiple branches of our large-capacity
battery systems remain balanced du ring charging and discharging cycles. Additionally, we have
introduced micro-circulation among battery branches to minimize the circulating current effect,
thereby extending overall battery health. I n our 700-kWh model BRT105E, we incorporated
four-branch parallel charging circuits to enable convergence of a 1,000A high charging current
while minimizing inter-branch interference.
Our proprietary battery thermal management system precisely controls the temperature of
the battery system during charging. It maintai ns the battery temperature within an optimal
range and ensures minimal temperature variance between cells, which enhances adaptability to
various operating conditions. The system also supports remote battery heating to allow for the
pre-heating of the battery in cold conditions before operation, which improves both user
experience and operational efficiency. Moreover, our proprietary three-sided liquid cooling
structure enhances overall cooling efficiency, resulting in a 20% reduction in cooling energy
consumption. To prevent battery overheating, ou r system ensures a consistent coolant flow rate
of at least 10L/min in each branch and maintains a flow rate difference of less than 2% between
branches.
MANUFACTURING
Our manufacturing strategy focuses on maintaining product quality and enhancing
operational efficiency. We employ distinct manuf acturing methods for each product type, all of
which combine the benefits of both in-house production and external collaboration to balance
our core manufacturing competen cies with economic efficiency.
Battery-electric Loader Manufacturing
We manufacture e-powertrains of our loaders, which are essential to our intellectual property, at
our own manufacturing plants. This setup allows our design, engineering and manufacturing teams to
collaborate closely, significantly speeding up our product development process. Additionally, our
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in-house manufacturing capabilities facilitate diverse customization and rapid iteration of our
products, which enable us to adapt our designs to meet specific customer requirements and integrate
these adaptations into our existing product lineup.
During the Track Record Period, we primarily collaborated with 13 third-party
manufacturers to produce major structural and other components, making sure they meet the
technical standards and specifications set by our design and engineering teams. Routine and
labor-intensive tasks such as material cutting, shaping, welding, machining and coating are
outsourced to these manufacturers. We also conduct on-site quality inspections at every critical
stage of the manufacturing process to maintai n our high-quality standards. This approach
makes sure that every step of the outsourced production complies with our specifications, and
any deviations are promptly identified and corrected to preserve the integrity and quality of our
products.
In addition to producing components, we undertake the complete assembly of our loaders,
including body assembly, final machinery assembly and end-of-line testing. Furthermore, we
conduct a thorough pre-delivery inspection to ensure the quality and readiness of our machinery
before shipping to customers. See ‘‘— Quality Control — Quality Control in Manufacturing
Process.’’
The following diagram illustrates the key st ages in the production process of our loaders:
Outsourced manufacturing process
In-house manufacturing process
Transmission
assemblyE-powertrain
Structural
components
Motor and
transmission
integration
E-powertrain
testing
Material cutting
and shaping
Welding and
Machining Coating
Assembly End-of-line
testing
Below are the key stages in our in-house production process for e-powertrains of our
loaders, with each stage averaging three to four hours to complete:
. Transmission assembly. Transmission assembly begins with component preparation,
followed by assembling the planetary carr ier, planetary gear, and the rear and front
housing, attaching the power take-off, the f ront-end cover, and installing necessary
peripherals such as pipes and valves.
. Motor and transmission integration. The motor is integrated with the assembled
transmission to ensure effective coordin ation between the motor and transmission.
. E-powertrain testing. The assembled e-powertrain undergoes testing to detect any
operational issues and ensure compliance with required quality and performance
standards.
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Below are the key stages in the outsourced production process for the structural
components of our loaders, which typically take approximately two days to complete:
. Material cutting and shaping. Both thermal and mechanical methods are utilized to cut
steel plates into designed shapes. These components undergo multidirectional
pressing, rolling and stretching to correct any distortions, ensuring they are
properly flattened.
. Welding and machining. Cut pieces are assembled and welded together using carbon
dioxide shielded welding and automated welding robots. High-precision machining
centers refine hinge holes and mounting sur faces to ensure dimensional accuracy and
a precise fit for assembly.
. Coating. Components such as frames and arms undergo surface preparation in a shot
blasting chamber before being coated with eco-friendly water-based paints in a
multi-layer process, including primers and topcoats. The painted components are then
cured in drying chambers.
Below are the key stages in the complete assembly of our loaders, with each stage taking
approximately four days to complete:
. Assembly. Using an AGV assembly line, major components such as power batteries,
motors and hydraulic parts are mounted onto the chassis. These components are
secured with automated screw-tightening systems and filled with necessary fluids such
as brake and hydraulic oils.
. End-of-line testing. In the specialized facility with in our manufacturing plants, our
complete loaders undergo road testing and performance evaluations, simulating
real-world operating conditions to ensure reliability and safety.
The entire component procurement and production cycle for our loaders takes
approximately 50 days to complete. According to CIC, the production and procurement cycle
for fuel-powered loaders typically ranges from 40 to 60 days.
Battery-electric Wide-body Dump Truck Manufacturing
We manufacture e-powertrain kits for our battery-electric wide-body dump trucks in-house
and outsource the production of structural and other components such as battery frames,
chassis, cabins and cargo beds, as well as the a ssembly process to third-party manufacturers.
Such arrangement allows us to focus on our strengths in the design and development of
complete machinery and the manufacturing of core components, while leveraging the specialized
expertise of third-party manufacturers for cost-efficient production and assembly. During the
Track Record Period, we collaborated with five third-party manufacturers for the production of
major structural and other components and the assembly process for our dump trucks.
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To maintain high-quality standards, we have developed our own technical manual that
contains detailed standards and specifications which our third-party manufacturers are required
to follow, which provides guidance to ensure that all outsourced components and assembly
processes meet our expectations. Furthermore , we assign our engineers to the sites of our
third-party manufacturers to conduct on-site inspections and provide supervision throughout
the production and assembly pro cess of outsourced components.
The following diagram illustrates the key stages in the production process of our dump
trucks:Outsourced manufacturing process
In-house manufacturing process
Transmission
assembly
E-powertrain
kits
Structural
components
Motor and
transmission
integration
E-powertrain
testing
Material cutting
and shaping
Stamping and
Machining Coating
Assembly End-of-line
testing
The production processes for our dump trucks are largely similar to those of loaders,
except that the structural components for wide- body dump trucks are predominantly stamped,
while those for loaders are typically welded. See the key stages in our in-house production
process for e-powertrains of our loaders under ‘‘— Manufacturing — Battery-electric Loader
Manufacturing.’’ Similar to our loaders, the complete component procurement and production
cycle for our dump trucks takes approximately 50 days. According to CIC, the production and
procurement cycle for fuel-powered wide-body dump trucks typically ranges from 40 to 60 days.
In selecting these third-party manufacturers, we prioritize criteria such as certifications,
proven track records, manufacturing capabiliti es, technological exper tise, product quality,
service offerings, pricing, and their commitment to long-term partnerships.
The salient terms of our agreem ents with the third-party manufacturers are as follows:
. Quality assurance. The third-party manufacturer is responsible for the quality of the
chassis, while we are responsible for the quality of the e-powertrain kits and the entire
wide-body dump trucks.
. Pricing. We pay volume-based tiered service fees to these third-party manufacturers.
The unit price for the service fee decreases in direct proportion to the volume of
commissioned manufacturing work.
. Payment schedule. We remit payments to the third-party manufacturer at four distinct
intervals: within three working days foll owing the execution of this agreement, in
advance of shipment, 45 days subsequent to the receipt of the equipment, and within
three working days after the expiration of the warranty period.
. Confidentiality obligations. B o t hp a r t i e sb e a ram u t u a lo bligation to maintain the
confidentiality of information concerning pricing and other confidential data.
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. Duration. The duration of the agreements is typically for three years, and we negotiate
the terms of the agreements with the third-party manufacturers annually.
Tractor Truck E-powertrain Kit Manufacturing
We manufacture e-powertrain kits for tractor trucks in-house. Our manufacturing
operations for the e-powertrain include transmission assembly, motor and transmission
integration, and e-powertrain testing. These processes are largely similar to those used for
our loaders and dump trucks. See the key stages in our in-house production process for
e-powertrain of our loaders under ‘‘— Manufacturing — Battery-electric Loader
Manufacturing.’’
We have collaborated with catalog companies holding requisite manufacturing
qualifications for the production of tractor trucks. Under this arrangement, we supply
e-powertrain kits to the catalog company, which t hey then integrate with their chassis and other
critical components to assemble the complete t ractor trucks. Upon completion of the assembly
process, we procure these fully assembled trucks from the catalog company and include them in
our inventory for sale to downstream customers . See ‘‘— Our Products — E-powertrain Kits for
Battery-electric Tractor Trucks.’’ We belie ve such collaboration combines the catalog
companies’ production expertise with our proficiency in developing and manufacturing
e-powertrain kits, resulting in high-quality production at optimal costs.
According to the ‘‘Administrative Measures for the Access of Road Motor Vehicle
Manufacturers and Products’’ (《道路機動車輛生產企業及產品准入管理辦法》, the ‘‘Measures’’),
manufacturers of road motor vehicles must obtai n the relevant manufacturing qualifications
before production and sales. Since tractor trucks fall under the category of road motor vehicles,
obtaining the vehicle manufacturing qualification is required prior to production. Under our
collaboration arrangement, catalog companie s are designated as the ‘‘manufacturer’’ of the
tractor trucks according to the Measures, which requires them to obtain the necessary vehicle
manufacturing qualifications. We find this arrangement to be more cost-effective, as it allows us
to focus on supplying e-powertrain kits and distributing the assembled tractor trucks, rather
than obtaining manufacturing qualifications ourselves. According to CIC, this collaboration
arrangement is common in the new energy tractor truck industry. As advised by the PRC Legal
Advisor, our collaboration with catalog companies does not contravene any applicable PRC
laws and regulations.
During the Track Record Period, we collaborated with Dongfeng Vasol Automobile Co.,
Ltd. ( 東風華神汽車有限公司), referred to as the ‘‘Catalog Company.’’ The Catalog Company, a
subsidiary of Dongfeng Motor Group Company Limited ( 東風汽車集團股份有限公司, HKEx:
0489) and an independent third party, speciali zes in manufacturing and selling a variety of
commercial vehicles. With registered capital exceeding RMB1.0 billion and a workforce of over
1,000 employees, the Catalog Company has been in partnership with us since October 2019.
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We have entered into a five-year collaboration agreement with the Catalog Company,
which includes the following salient terms:
. Vehicle announcement catalog. The Catalog Company is responsible for ensuring that
the tractor trucks provided to us comply with national technical and quality
standards, as well as the technical agreemen t jointly executed by both parties. They
must also confirm that the mass-produced tractor trucks align with the vehicle
announcement catalog that are published by the MIIT. If the tractor trucks purchased
from the Catalog Company fail to obtain veh icle licenses due to issues attributable to
the Catalog Company, they are obligated to take corrective action at their own
expense.
. Exclusivity. For tractor truck models for which we bear the cost of the vehicle
announcement catalog application, the Catalog Company is prohibited from selling
those models to any third party without our prior written consent.
. Intellectual property rights. The ownership of intellectual property rights pertaining to
components developed jointly by us and the Catalog Company under our
collaborative projects shall be determined through mutual negotiations, considering
each party’s contributions and other relevant factors. Each party retains ownership of
its respective trademarks, patents, core technologies and other intellectual property,
as legally entitled.
. Distribution. The Catalog Company shall assist and cooperate with us or any other
designated company by providing the n ecessary authorization documents and
materials required for distribution. Additionally, the Catalog Company shall
support us in completing any required reg istration or filing processes related to
distribution.
. Confidentiality obligations. Both parties are under a mutual obligation to maintain the
confidentiality of any confidential information related to the cooperation for a period
of five years following the e xecution of this agreement.
We treat the entire process — our sale of e-powertrain kits to the Catalog Company, our
purchase of assembled tractor trucks from the Catalog Company, and our distribution of these
trucks to end customers — as a single transaction. As a result, we do not record revenue or costs
for the first two steps (sales of e-powertrai n kits to the Catalog Company and purchases of
assembled tractor trucks from the Catalog Company). Instead, we only record revenue and the
corresponding costs from the final step of the collaboration, which is the sale of tractor trucks
to our customers.
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We treat the entire process as a single integrated transaction, including (i) the sale of
e-powertrain kits to the Catalog Company (‘‘Step 1’’), (ii) the purchase of assembled tractor
trucks from the Catalog Company (‘‘Step 2’’), and (iii) the subsequent sale of these tractor
trucks to end customers (‘‘Step 3’’). We record revenue and cost of sales in Step 1 and record
inventory purchase in Step 2. At the end of each reporting period, we eliminate the associated
revenue and cost of sales entries. We record e-powertrain kits as raw materials in our inventory
until we receive the assembled tractor trucks w e purchase from the Catalog Company, at which
point they are reclassified as finished goods in our consolidated financial statements for the first
two steps. In Step 3, we recognize gross revenue and corresponding cost of sales when we sell
these tractor trucks to end customers. For the s ale of tractor trucks, we recorded revenue of
RMB77.9 million, RMB28.6 million and RMB7.0 million, and costs of sales of RMB75.5
million, RMB33.2 million and RMB8.7 million from the sales of tractor trucks in 2022, 2023
and 2024, respectively. We recorded gross profit margin for distribution of tractor trucks of
3.1% in 2022, and gross loss margin of 16.4% and 23.1% in 2023 and 2024, respectively.
In terms of pricing, the Catalog Company sets the price for e-powertrain kits based on its
standard procurement pricing system, which is applied consistently across all its suppliers. As a
distributor, we purchase tractor trucks from th e Catalog Company at their standard pricing for
all distributed products. When selling these tr ucks to end customers, we set the prices based on
our cost analysis and market competition.
During the Track Record Period and up to t he Latest Practicable Date, the Catalog
Company procured e-powertrain kits from us sol ely for producing tractor trucks sold to us. The
only exception occurred in 2022 when the Catal og Company purchased six e-powertrain kits,
assembled them into tractor trucks and sold them to other companies. This was a one-off
transaction prompted by the Catalog Company’s specific business needs at the time, and we
generated revenue of RMB2.7 million from the sale of these six e-powertrain kits in 2022. Aside
from these six tractor trucks, all other tracto r trucks assembled by the Catalog Company using
o u re - p o w e r t r a i nk i t sw e r es o l dt ou sd u r i n gt h eT r a c kR e c o r dP e r i o da n du pt ot h eL a t e s t
Practicable Date. See ‘‘Overlapping of Our Customers and Suppliers.’’
Our Manufacturing Plants
We currently operate three specialized manufacturing plants: one in Zaozhuang,
Shandong, one in Wuhan, Hubei, for manufacturing battery-electric loaders, and another in
Yuyao, Zhejiang, for manufacturing e-powertrain kits for battery-electric wide-body dump
trucks and tractor trucks. Additionally, we intend to expand our production infrastructure by
constructing several new plants, which not only increase our manufacturing capacity for loaders
but also enhance our in-house production ca pabilities for wide-body dump trucks.
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Manufacturing Plant for Loaders
We manufacture battery-electric loaders at our Zaozhuang plant, which began operation in
August 2020 and is situated in a leased facility in Zaozhuang, Shandong. The table below sets
forth details on the design capacity, producti on output, and capacity utilization rate of our
Zaozhuang plant for the years indicated.
For the Year Ended December 31,
2022 2023 2024
Battery-electric loaders
Design capacity (units) 600 600 600
Production output (units) 413 336 386
Capacity utilization rate
(1) 68.8% 56.0% 64.3%
Note:
(1) The capacity utilization rate represents the to tal production output divided by the design capacity.
This fluctuation of the capacity utilization rate of our Zaozhuang plant during the Track
Record Period was due to adjustments in our manufacturing plans based on anticipated market
demand and our inventory levels.
In anticipation of increasing demand for batte ry-electric loaders in the next five years, we
constructed our second loader manufacturing plant in Wuhan, Hubei, which commenced
operations in August 2024, with an annual design capacity of 5,000 units of loaders.
Manufacturing Plants for E-powertrain Kits
We previously manufactured e-powertrain kit s for battery-electric wide-body dump trucks
and tractor trucks at our manufacturing plant located in Shanghai until our lease expired in
September 2022. Starting from October 2022, we relocated the manufacturing of these
e-powertrain kits to our Yuyao plant.
The table below sets forth details on the design capacity, production output, and capacity
utilization rate of the Shanghai plant and Yuyao plant for the years indicated.
For the Year Ended December 31,
2022 2023 2024
E-powertrain kits
Design capacity (sets) 200 200 200
Production output (sets) 189 159 246
Capacity utilization rate (%)
(1) 94.5% 79.5% 123.0% (2)
Notes:
(1) The capacity utilization rate represents the to tal production output divided by the design capacity.
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(2) The capacity utilization rate of our Yuyao plant in December 31, 2024 exceeded 100% as we optimized the
shift arrangements of manufacturing staff during this year to meet production targets and fulfill the
market demand for our dump trucks, resulting in the production output exceeding the designed capacity.
At the end of 2024, we ceased the operation of our Yuyao plant and moved related manufacturing to our
Wuhan plant.
Plants Under Construction
While we effectively utilized our manufacturi ng plants during the Track Record Period, we
anticipate a significant increase in demand for both loaders and wide-body dump trucks in the
near future. According to CIC, the new energy lo ader market in China is projected to grow from
RMB6.9 billion in 2024 to RMB28.7 billion in 2029, with a CAGR of 33.0% from 2024 to 2029.
According to the same source, the new energy wide-body dump truck market in China is
expected to grow from RMB2.5 billion in 2024 to RMB14.9 billion in 2029, with a CAGR of
43.2% from 2024 to 2029. To capitalize on these market opportunities and strengthen our
market position, we plan to scale up our production capacity by establishing new manufacturing
plants for loaders and wide-body dump trucks. As new plants require time for construction and
a ramp-up period to reach full capacity, we believe our current capacity expansion strategy is
well-aligned with the anticipated demand for our products.
We plan to construct another loader manufacturing plant in Lanxi, Zhejiang, which is
expected to be completed in 2025, with an annual design capacity of 5,000 units of
battery-electric loaders. Furthermore, we are in the process of establishing a new wide-body
dump truck manufacturing and assembly pla nt in Xiangtan, Hunan, which is expected to
commence operations in 2025, with an annual desi gn capacity of 2,000 units of battery-electric
wide-body dump trucks.
RESEARCH AND DEVELOPMENT
Research and development are critical for ad vancing our technological capabilities. We
have invested significant res ources in research and development to continually refine our
technologies, enhancing the performance, adaptability and reliability of our products. We
recorded research and development costs of R MB44.9 million, RMB68.6 million and RMB81.7
million, respectively, in 2022, 2023 and 2024. We conduct research and development activities
primarily in our dedicated center in Shang hai. As of December 31, 2024, our research and
development team consisted of 103 experts, mos t of whom have extensive industry experience in
new energy, engineering machinery, electronics, electrical engineering and remote and
autonomous operations.
We have forged strategic partnerships wit h select suppliers of critical electronic
components to spearhead innovation in component design. For instance, since June 2021, we
have collaborated with a leading motor manufac turer to develop category-defining drive and
working motors for our engineering machinery. Under our cooperation agreement with this
motor manufacturer, all intellectual property rights resulting from this collaboration will be
exclusively owned by us. Additionally, we have partnered with renowned battery manufacturers
to develop advanced power battery systems and battery management systems, including a
700-kWh power battery system with four-branch parallel charging circuits, which optimizes
energy usage, improves battery efficiency and compatibility, and enhances the overall system
reliability of our products. According to our cooperation agreement with these battery
manufacturers, any intellectual property rights r esulting from this collaboration will be jointly
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owned by both parties, provided that both hav e made contributions. Alternatively, if the
intellectual property is developed independently by one party, that party will retain exclusive
ownership.
In addition, we collaborate with universities and academic institutions to enhance our
research and development capabilities. For in stance, we have partnered with a prestigious
university in Shanghai to develop energy consumption optimization algorithms for predicting
short-range speeds in battery-electric engineer ing machinery, which enhances the accuracy of
energy consumption predictions and enables sophisticated management in our products.
Additionally, we are engaged in a technical collaboration with a prominent intelligent control
institute in Wuxi, Jiangsu, focusing on the development of autonomous wide-body dump trucks.
Our research and development team complet ed 11, 13 and nine research and development
projects in 2022, 2023 and 2024, respectively, which primarily focused on the development of
new product models, refinement of existing models, iteration of key components, development
of our remote and autonomous operation system, and enhancement of our photovoltaic energy
system. As of the Latest Practicable Date, we had 32 ongoing research and development
projects, which are concentrated on our future product pipelines, iteration of our core
technologies, refinement of our remote and autonomous operation system, and improvements to
our internal operation system.
SUPPLY CHAIN MANAGEMENT
During the Track Record Period up to the Lates t Practicable Date, we maintained a stable
supply chain and inventory of key product components, including the VCU, motor and network
control units, transmission control unit, display screens, dashboards, air conditioning and
water-cooling systems. The chips integral to these components were not affected by the global
chip shortage to ensure the consistent production and availability of our products.
We have adopted a multifaceted approach to co ntrol procurement costs. For instance, we
have entered into supply agreements with our major suppliers, which guarantee a steady supply
of essential raw materials and components. See ‘‘— Our Suppliers — Salient Terms of Our
Supply Agreements’’ for salient terms of such agreements. As of the Latest Practicable Date, our
relationships with these suppliers had remained stable without any material adverse changes.
In addition to maintaining strong ties wi th our major suppliers, we are proactively
expanding our supplier network to broaden our s ourcing channels for key components, thereby
reducing dependency on our existing suppliers and enhancing our supply chain resilience.
Specifically, we are diver sifying our battery suppliers as part o f a strategic effort to reduce costs
without compromising quality. Despite these efforts, we may still incur substantial expenses
associated with the procurement of raw materia ls and components necessary for manufacturing
and assembling our products. See ‘‘Risk Factors — Risks Relating to Our Business and Industry
— We may encounter cost increases or disruptions in the supply of raw materials or other
components used in our products.’’
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INVENTORY
We store finished products, components and raw materials within our own manufacturing
plants as well as those of our third-party manuf acturer and catalog companies. Our inventory
turnover days were 266 days, 226 days and 161 days in 2022, 2023 and 2024, respectively. We
recognize the amount of any write-down of inventories to net realizable value and all losses of
inventories in the period the write-down or loss occurs. In 2022, 2023 and 2024, our impairment
loss on inventory amounted to RMB25.7 million, RMB20.9 million and RMB17.4 million,
respectively, accounting for 7.1%, 4.5% and 2 .7% of our total revenue for the corresponding
years.
To effectively manage our inventory levels, we employ strict control policies and utilize an
inventory management system that allows us to ad just our inventory levels based on existing
orders and projected sales. Furthermore, we h ave established partnerships with third-party
logistics providers to ensure efficient and timely delivery of raw materials. Our supply chain for
raw materials and components is compact and res ponsive, with deliveries made directly to our
manufacturing plants from suppliers or through our selected logistics service providers.
QUALITY CONTROL
We aim to provide our customers with products and services of the utmost quality. To
achieve this, we have employed a comprehensive quality control system that allows us to uphold
our product quality standards, reduce wastage and enhance production efficiency. Our quality
control procedures cover the full lifecycle of our products, primarily including: (i) product
design and development; (ii) supply chain man agement; and (iii) manufacturing process.
Quality Control in Product Design and Development
We develop our products in compliance with applicable laws, regulations and industry
standards. Our development process include s a series of evaluations and validations of
prototype products to ensure high quality and c ost-effective production. Additionally, we test
our prototypes under diverse environmental conditions to guarantee they meet the operational
requirements of our customers.
Quality Control in Supply Chain Management
We maintain detailed policies and procedures for supplier selection to ensure the quality of
components and raw materials we procure. When evaluating potential suppliers, we conduct
thorough due diligence, taking into account facto rs such as reputation, credentials, experience,
product availability and pricing. Our quality control team within the supply chain management
division regularly reviews and assesses our suppliers, focusing on the quality of their products,
the timeliness of their deliveries, and their commitment to our business cooperation.
All suppliers are required to comply with our supply management policies, which include
specific requirements for product labeling and packaging to ensure traceability. Our quality
control team is responsible for communicating our quality standards to suppliers and
conducting thorough inspections of product samples to verify compliance with the technical
specifications of our product designs. To ensure the quality of incoming materials, our quality
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control team performs inspections of all raw materials received. We conduct ad hoc on-site visits
of our suppliers’ facilities and require timely corrective measures to r emedy any quality issues
identified.
Quality Control in Manufacturing Process
Our manufacturing department houses a dedicated quality control team responsible for
overseeing our overall quality strategy, qu ality systems and processes to ensure minimal
deviation from set procedures. Throughout pr oduction, our quality control team monitors
technical standards, evaluates the quality of finished products, and assesses operational
execution. Our inspectors adhere strictly to ins pection benchmarks, routinely check stored
products, and conduct pre-delivery inspections before shipment. If any defects are detected,
inspectors immediately report to the quality co ntrol team, which then conducts an analysis on
the quality or technical issue, formulates rectif ication plans, and implements corrective and
preventive measures accordingly.
To maintain effective oversight, we compi le regular quality reports shared with our
research and development and manufacturing departments and keep consistent inspection
records. Any technical glitches discovered are pro mptly addressed, with follow-up evaluations
scheduled to ensure resolution. We also hold regular meetings to resolve the quality issues
identified in the manufacturing process.
For safety and compliance, we conduct training programs for our assembly workers that
cover safety protocols and secure operational procedures. We also implement systematic
monitoring to ensure our assembly workers comply with operational protocols, assess the
outcome of production assembly and observe the execution of safe and civilized production
practices. These evaluations are documented i n detailed inspection logs, enhancing worker
safety awareness and contributing to the overall quality of our products.
We are dedicated to complying with applicable laws, regulations, and standards in product
production and sales. For instance, key components such as chargers, lithium batteries and
electronic control systems are designed an dm a n u f a c t u r e da c c o r d i n gt ot h em a n d a t o r y
standards for new energy engineering machine ry and tractor trucks. During the Track Record
Period and up to the Latest Practicable Date, we did not experience any material sales returns,
product recalls or product liability claims that adversely affected our business or financial
condition.
SALES AND SERVICE NETWORK
Our sales model combines direct sales and distribution channels, leveraging the distinct
advantages of each sales approach to generate s ynergistic benefits. Through direct sales, we
connect directly with customers to ensure our brand values and messages are consistently
delivered, fostering personalized experiences th at strengthen relationships and gather detailed
feedback. Direct sales had been particularly eff ective for our battery-electric wide-body dump
trucks during the Track Record Period, which allows us to build high-touch interactions with
large and medium-sized enterprises and continuously improve our models to meet specific needs
across industry verticals.
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On the other hand, we partner with distributo rs who resell our products to end users. We
enhance our market presence by leveraging the established networks of our distributors,
especially in regions where direct sales are impr actical or economically unfeasible. Some of our
direct customers, recognizing the economic value of our battery-electric engineering machinery,
choose to become our distributors themselves, thereby creating a mutually beneficial
relationship that extends our market reach and influence.
The following table sets forth a breakdown of our sales volume by product type for the
years indicated.
For the Year Ended December 31,
2022 2023 2024
Loaders
Direct sales
(1) 140 220 204
Sales through distributors (2) 155 264 197
Total sales volume 295 484 401
Wide-body dump trucks
Direct sales (1) 35 78 188
Sales through distributors (2) 24 10 93
Total sales volume 59 88 281
Tractor trucks
Direct sales (1) 26 44 10
Sales through distributors (2) 122 22 17
Total sales volume 148 66 27
Notes:
(1) Represents the sales volume of our products that are purchased by (i) customers who purchase our
products for their own use, and (ii) distributor customers who purchase our products for leasing to their
clients or for the provision of machinery operation services.
(2) Represents the sales volume of our products that are purchased by distributors who contractually resell or
are reasonably expected to resell our products.
Direct Sales
We market and sell our products directly to two main customer groups: (i) customers who
purchase our products for their own use, and (ii) customers, often also our distributors, who
purchase our products to lease to their clients or to provide machinery operation services, which
include supplying both the machinery and ope rators for contracted tasks. In 2022, 2023 and
2024, the number of our direct sales customers was 65, 83 and 92, respectively.
We enter into standard sales agreements with our direct sales customers. See ‘‘— Our
Customers — Salient Terms of Our Sales Agreemen ts’’ for salient terms of our sales agreements.
The selling price of our products through direct sales is determined by multiple factors,
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including the cost of raw materials, equipment, and labor for manufacturing our products plus
the expected profitability, the quantity of the purchase, and the pricing of similar products
offered by our competitors. We maintain a unifo rm pricing structure across all customer types
to ensure consistent pricing and to avoid channel conflicts.
Distribution Channels
We extend our market reach beyond direct sales by leveraging a network of distributors
across China, a prevalent strategy in the new energy engineering machinery industry in China,
according to CIC. Our distributors are primarily companies with established local customer
bases, specializing in the sales and leasing of engineering machinery as well as providing
machinery operation services.
Distributors base their purchase decisions on fa ctors such as sales forecasts, existing orders
and estimated supply lead times. Typically, a dis tributor places an order with us after securing a
firm commitment or a lead from an end user, subsequently entering into two separate sales
agreements with the end user and with us. Distributors may also pre-stock our products in order
to meet anticipated demand, particularly at ye ar-end to prepare for potential production and
logistics delays during the Chinese New Ye ar holiday. Once our sales agreement with the
distributor is executed and the products are d elivered, ownership is transferred to the
distributor. The products are then shipped to end users, with delivery and any required post-sale
services managed by either us or the distributor as specified in our sales agreements. See ‘‘— Our
Customers — Salient Terms of Our Sales Agreemen ts’’ for salient terms of our sales agreements.
Distributor Selection and Management
To ensure high-quality sales and services, we implement a rigorous selection process and
ongoing evaluation of our distri butors. Our selection criteria include industry knowledge, access
to customer networks, understanding of our produc ts, capability to provi de post-sale services,
commitment to long-term partnerships, creditworthiness, financial health and business scope.
We regularly review our distributors’ performance evaluations, focusing on their credit status,
inventory control, business network expansion, operational improvements and sales
achievements.
Our distributor management policies include daily management, support structures, sales
analysis, and performance assessments to ensure alignment with our standards and objectives.
Additionally, we offer robust support to enhance our distributors’ sales and management skills.
Our regional representatives actively collaborate with distributors, assisting them during
customer visits and negotiations to provide timely advice. We also conduct training programs
aimed at improving the sales skills of distributor staff to enhance overall sales performance.
Under our distribution agreements, we have established exclusive distribution
arrangements that prevent our distributors from selling similar new energy loader, wide-body
dump truck or tractor truck products supplied by other manufacturers. During the Track
Record Period and up to the Latest Practicable Date, to the best of our knowledge, our
distributors had solely distributed our loaders and wide-body dump trucks, provided they were
distributing any of these types of engineering machinery and vehicles.
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Cannibalization Strategy
To prevent cannibalization between our direct sales and distributorship channels, as well as
among our distributors, we have implemented a set of strategies and policies. We grant our
distributors distribution rights within specific regions across the country and prohibit
distributors from selling beyond their designated regions without our authorization, which
effectively eliminates market overlap and competition among distributors in different regions.
Our products have unique identification codes on the chassis, enabling us to accurately detect
unauthorized cross-region sales. If a distributor wishes to sell our products outside its
designated area, we evaluate such request pu rsuant to our cross-region sales management
policies. We may approve such request if the distributor designated to that region has not
contacted with the target end users.
We believe, during the Track Record Period an d up to the Latest Practicable Date, there
were no instances of cannibalization between our direct sales efforts and sales through
distributors, nor between our leasing business a nd the distributors’ leasing operations. In the
event that a customer is contacted by both our sales representatives and distributors, the person
who first contacts the customer will manage the order. If a distributor handles the order, we will
not intervene or engage directly with that distributor’s client. These clients typically do not
purchase or lease our products directly from us, as they have established relationships with our
distributors, who often operate in the same geographic regions and provide better local
coverage. We do not actively seek to expand our dir ect leasing business and offer leasing services
only when specifically requested by customers, as we remain focused on our core strengths in the
research, development and manufacturing of engineering machinery.
Distributor Inventory Management
Our sales agreements with distributors do not permit product returns. Distributors
independently determine their inventory level s based on their business needs and forecasts.
However, if they overstock inventory beyond th eir capacity, it could negatively impact their
financial health. We may request distributors to provide reports on the status of product sales,
leases or usage in machinery operation services for end users, allowing us to monitor and assess
their inventory management, quickly identify potential issues and take corrective action as
necessary.
Our Distribution Network
Our distribution network consists of independent distributors, and associated distributors
in which we hold a minority equity interest, typ ically between 10% and 49%. These associated
distributors are established through partner ships with third-party entities that bring deep
industry expertise, broad customer bases and strong distribution experience. Our relationships
with the partners we collaborated to establish associated distr ibutors were primarily formed
through our standard business development pr ocesses. Our sales personnel across different
regions identified and approached potential part ners, referring qualified prospects to our sales
and marketing team and senior management, who a ssessed their profiles and made decisions on
the suitability for collaboration.
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Our partners are generally recognized for their industry expertise and customer networks
within their regions. Many of them are experi enced players in their fields, including top
engineering machinery sales companies in Sichua n and Henan, large-scale logistics operators in
Shandong and Chongqing, new energy solution pr oviders focused on carbon neutrality and
renewable energy projects, and technology companies specializing in digital mining and supply
chain management solutions. Additionally, other partners contribute expertise in areas such as
semitrailer and specialty vehicle manufacturing, mineral trade and distribution, coal logistics
and processing, and environmental technology and construction, with operations extending
across more than ten provinces in China. These partners bring deep regional knowledge and
established local networks, enhancing our distri bution capabilities and expanding our regional
reach, providing access to customer resources beyond what we could achieve on our own. In
addition to their co-investments in the associated distributors, some partners have relationships
with us in ways such as serving as former or current independent distributors, being affiliated
with our direct sales customers, or having connections to our minority shareholders.
By establishing associated distributors, we s trengthen partner commitment, encouraging
them to invest more resources without concerns of replacement and reducing the likelihood of
switching to competitors. These deep, enduring relationships enable us to effectively leverage
our partners’ customer bases to broaden our mar ket reach effectively. Additionally, these
partnerships enhance end-user trust in our associated distributors and improve their customer
acquisition success, while also providing us with insights into distributor operations for
improved decision-making and risk management. According to CIC, the associated
distributorship model is a widely accepted pra ctice in the engineering machinery industry.
Our rights to oversee or participate in the man agement of these associated distributors are
subject to the investment agreements with our par tners. For associated d istributors where our
equity interest exceeds 10%, we actively partici pate in strategic decisi on-making processes,
including business expansion and evaluating sale s orders to assess the creditworthiness of end
users. We generally hold the right to appoint one director to the boards of these associated
distributors. Approval from our appointed director is required for certain resolutions specified
in the distributor’s articles of association, including related-party transactions and transactions
exceeding a designated threshold. According to C IC, many leading player s in the engineering
machinery industry also adopt a strategy to lever age associated distributors to strengthen their
regional sales coverage.
In alignment with our strategic goals for bus iness expansion, we have been optimizing our
distribution network by initiating partnerships with new, qualified distributors and
discontinuing those who fail to meet our stand ards for sales performance, operational
efficiency, activity levels, or adherence to our distributor management policies. We adjust our
network based on distribution density in each sales region to ensure we maintain an efficient yet
competitive footprint, improving sales efficiency and overall performance.
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The following table sets forth the number of our distributors and its changes in the years
indicated:
For the Year Ended December 31,
2022 2023 2024
Independent distributors
At the beginning of the year 24 30 33
Distributors started cooperation with us
during the year 33 32 19
Distributors terminated cooperation with us
during the year (27) (29) (27)
At the end of the year 30 33 25
Associated distributors
At the beginning of the year — 6 11
Distributors started cooperation with us
during the year 6 6 2
Distributors terminated cooperation with us
during the year — 1 —
At the end of the year 6 11 13
The growth in the number of both independent and associated distributors reflects our
ongoing efforts to expand our distribution capabilities with capable, resource-rich partners
nationwide, thereby boosting our market presence at both national and regional levels.
During the Track Record Period, we terminated relationships with several independent
distributors primarily because they had poor sales performance and failed to meet our sales
targets. In 2022, 2023 and 2024, we terminated relationships with 27, 29 and 27 independent
distributors, respectively. We generated revenue of RMB32.7 million, RMB23.3 million, and
RMB9.1 million from these distributors in 2022, 2023 and 2024, accounting for 2.1%, 1.7% and
1.4% of our total revenue for the corresponding years. In October 2023, we transferred our 15%
equity interest in one of our associated distri butors to the partner wi th whom we originally
established the associated distributor. The transfer, conducted on an arm’s length basis, was
driven by the partner’s confidence in the associa ted distributor’s grow th potential and their
desire to increase their ownersh ip stake. Following this transfer, the associated distributor
became an independent entity while continuing its distribution relationship with us.
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We recorded revenue from recurring distributors — those who conducted transactions with
us during the Track Record Period and had done so for at least two consecutive years — of
RMB37.3 million, RMB226.9 million and RMB184.7 million in 2022, 2023 and 2024,
respectively, accounting for 10.4%, 48. 9% and 29.1% of our total revenue for the
corresponding years.
In 2022, 2023, and 2024, five, 16 and 16 of our distributors, respectively, purchased our
products not only to resell them but also to lease them to end users or provide machinery
operation services. We generated revenue of RMB44.9 million, RMB85.3 million and
RMB289.3 million from sales to these distri butors in 2022, 2023 and 2024, respectively,
accounting for 12.5%, 18.4% and 45.5% of our total revenue during the corresponding years.
During the Track Record Period, we recorded revenue of RMB51.6 million from product
sales to associated distributors who subsequently resold these products to end users related to us
through our minority Shareholders in 2024, accounting for 8.1% of our total revenue for the
same year. Additionally, two of our associated distributors sold our products to end users
under common control with them. For these transactions, we recorded revenue of RMB1.9
million, RMB2.3 million and RMB28.5 million in 2022, 2023 and 2024, respectively, accounting
for 0.5%, 0.5% and 4.5% of our total revenue for the same years.
We apply the same pricing, payment method, credit and distributor management policies to
both independent and associated distributors. We use the same templates for both distribution
agreements and sales agreements for all independ ent and associated distributors, regardless of
whether they purchase our products for resale, lease to end users, or provide machinery
operation services. These agreements are on nor m a lc o m m e r c i a lt e r m s ,n e g o t i a t e do na na r m ’ s
length basis and there are no material differences between the salient terms of these agreements.
Distributors set retail prices based on individual negotiations with end users, guided by our
suggested retail prices which take into account regional market competition. Our pricing
recommendations, while non-binding, allow us to monitor and maintain a consistent pricing
structure across distribution channels yet offer dis tributors the flexibility to adjust their retail
prices based on factors such as purchase volume, production costs, and the market prices of
similar product s, as needed.
Finance Lease Arrangement
We collaborate with finance lease compani es to offer finance lease services to our
customers who are willing to purchase our products but require financing options. We select our
finance lease partners based on various factors, in cluding: (i) their license and qualifications, (ii)
their interest rates offered to our customers, (iii ) their experience with lease transactions within
our industries, (iv) the timing of their loan disbursements, and (v) their ability to provide timely
financial support, which helps ensure the prompt collection of our trade receivables.
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During the Track Record Period, we colla b o r a t e dw i t hat o t a lo f1 2f i n a n c el e a s e
companies, encompassing state-owned enterpris es, foreign joint ventures, as well as specialized
firms with expertise in the engineering machine ry sector. We typically enter into framework
collaboration agreements with finance lease companies with the following salient terms:
. Credit limit. Each of the finance lease companies o ffers their finance lease services to
our customers within a maximum total credit limit, ranging from RMB30 million to
RMB200 million for different finance lease companies.
. Collaboration model. Under our collaboration with the finance lease companies, we
recommend their services to our customers, c ollect our customers’ information, and
provide tracking services for the leased items. The finance lease companies are
responsible for assessing our customers’ qualifications, approving the financing leases
within the stipulated timeframe, disbursing the funds, and managing the collection of
lease payments.
. Forms of leasing and leased items. Our leasing options include direct lease and
sale-leaseback. The leased items consist of our products, including loaders and
wide-body dump trucks.
. Confidentiality. Both parties are obligated to maintain the confidentiality of all
business information and are prohibited from disclosing it without prior written
consent. This obligation remains in effect after the termination or expiration of the
contract.
Except for our collaborations under the finance lease arrangement, there are no other past
or present family, employment, financial or ot her relationships between us, the finance lease
companies, our respective shareholders, directors, senior management or any of their respective
associates.
Before providing finance lease services, fi nance lease companies typically review the
qualifications of our customers. They require our customers to provide documents such as audit
reports or financial statements, proof of assets, VAT invoicing information and credit reports,
in order to assess the customer’s financial status, business operations and creditworthiness to
determine whether they are eligible to enter into finance lease arrangement. In 2022, 2023 and
2024, 12, 38 and 84 of our customers entered into th e finance lease arrangement, respectively.
Direct Lease
Under a direct lease arrangement, we typical ly enter into a tripartite agreement with the
finance lease company and the customer. The finance lease company purchases the products
directly from us and pays the full purchase price. Subsequently, the customer leases these
products from the finance lease company under a finance lease agreement and makes monthly
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installment payments. From time to time, we provi de a repurchase guarantee to the finance lease
company under this arra ngement. The following diagram illustrates the transaction flow among
us, our customers, and the finance lease co mpany under a direct lease arrangement.
Our Company
(Product Seller)
Finance Lease
Company
(Lessor)
Customer
(Lessee)
(1) Purchase of the product
 according to customer’s
 specification
(2) Payment for the product
(3) Lease of the product
(4) Lease payment
(5) Providing repurchase
 guarantee
The salient terms of the tripartite agreement and repurchase guarantee agreement under
the direct lease arrangement are as follows:
. Ownership of the leased asset. Ownership of the leased asset remains with the finance
lease company until the customer has fully repaid all debts under the lease agreement.
No one other than the finance lease company has the right to dispose of the leased
asset. During the lease term, the customer only has the right to use the asset and is not
permitted to sell, transfer, sublease, mort gage, pledge, invest with, or take any actions
that infringe upon the ownership rights of the finance lease company.
. Delivery of the leased asset. The leased asset will be delivered by us to the location
designated by the customer. The customer (or their agent) must accept delivery and
cannot refuse it for any reason. If del ivery is delayed or cannot be made due to
national policies, laws, regulations, force majeure or issues related to transportation,
unloading or customs that are not the responsibility of the finance lease company, the
finance lease company will not be held liable. The customer must resolve these issues
directly with us.
. Acceptance of the leased asset. Once the leased asset arrive s at the location specified by
the customer, the customer assumes responsibility for its safekeeping. The customer
must complete the acceptance of the asset w ithin three days of r eceipt and submit the
corresponding receipt and acceptance docum ents to the finance le ase company within
three days after acceptance.
. Repurchase guarantee . If the customer defaults on payment obligations or breaches
the lease agreement, we are obligated to repurchase the products from the finance
lease company.
Sale-leaseback
Under a sale-lease back arrangement, we ty pically enter into a sales agreement with our
customer, pursuant to which the customer purch ases the product from us and makes an initial
down payment. The remaining balance is paid directly to us by a finance lease company
designated by the customer. The customer then sells the product to the finance lease company
and leases it back by making monthly lease p ayments. From time to time, we provide a
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repurchase guarantee to the finance lease company under this arrangement. The following
diagram illustrates the transaction flow among us, our customers and the finance lease company
under a sale-leaseback arrangement.
Finance Lease
Company
(Lessor)
Customer
(Lessee)
(5) Lease back of the product
(3) Sale of the product
(6) Lease payment
Our Company
(Product Seller)
(7) Providing repurchase
 guarantee
(4) Payment for the product (2) Initial down payment
(1) Sale and delivery of
 the product
The salient terms of the sales-leaseback agr eement and repurchase guarantee agreement
under the sales-leaseback arrangement are as follows:
. Ownership of the leased asset. Ownership of the leased asset remains with the finance
lease company until the customer has fully repaid all debts under the finance lease
agreement. No one other than the finance lease company has the right to dispose of
the leased asset. During the lease term, the customer only has the right to use the asset
and is not allowed to sell, transfer, sublease, mortgage, pledge, invest with, or take
any actions that infringe upon the finance lease company’s ownership rights.
. Repurchase guarantee . If the customer defaults on payment obligations or breaches
the lease agreement, we are obligated to repurchase the products from the finance
lease company.
As of December 31, 2022, 2023 and 2024, our maximum exposure to such repurchase
guarantee was RMB17.4 million, RMB121.1 mill ion and RMB344.1 million, respectively.
During the Track Record Period and up to the Latest Practicable Date, we had not encountered
any instances requiring the fulfillment of guarantee obligations. We measured such repurchase
guarantees at their exp ected credit loss allowance and recorded them as liabilities under the
provision for financial guarantee issued. Such liabilities amounted to RMB92 thousand,
RMB492 thousand and RMB3,058 thousand as of December 31, 2022, 2023, and 2024,
respectively. We also recorded subsequent change s in the value of such repurchase guarantees as
impairment loss on financial guarantee issu ed, which amounted to RMB69 thousand, RMB400
thousand and RMB2,565 thousand in 2 022, 2023 and 2024, respectively.
MARKETING STRATEGY
W ea r ec o m m i t t e dt oe s t a b l i s h i n gastrong brand identity ‘‘Breton ( 博雷頓),’’ synonymous
with high-quality products and services.
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W ee n d e a v o rt om a k eB r e t o nt h ep r e f e r r e dc h o i c eacross various industries, particularly
targeting potential customers accustomed to tra ditional fuel-powered ma chinery. We offer trial
uses of our products, allowing customers to experience the economic and operational benefits
firsthand, which helps us build trust, gather valuable feedback, foster long-term relationships,
and generate word-of-mouth referrals. We st rategically target large and medium-sized
enterprises in regions with significant deman ds for engineering machinery. Positive feedback
from these enterprises enables them to endorse Br eton within their regions, further amplifying
our reach through word-of-mouth.
In addition, we employ a cross-selling method by promoting our loaders to existing
customers of our battery-elect ric wide-body dump trucks, and vice versa, to maximize sales
potential and enhance customer satisfaction thr ough a diverse product portfolio. We also utilize
our established loader distributor network to di stribute our dump trucks, and vice versa, thus
strengthening our market presence and sales efforts.
Additionally, our collaborations with key indus try authorities and institutions enhance our
brand’s market recognition. We have been working closely with Earth-Moving Machinery of the
Standardization Administration of China ( 全國土方機械標準化技術委員會)a n dC h i n a
Machinery Industry Federation ( 中國機械工業聯合會). Through these partnerships, we
actively contribute to the establishment of na tional safety technica l specifications for
earth-moving machinery, as well as industry standards for technical conditions and testing
methods for battery-electric wheeled loaders and wide-body dump trucks.
Our online marketing campaigns are executed through engaging video content distributed
across digital platforms such as our official websites, Weixin official accounts, and Toutiao ( 今
日頭條). By doing so, we not only expand our accessibil ity to end users but also cultivate interest
among potential customers.
Charging Solutions
We provide efficient charging solutions to m eet the rapid charging needs of our customers
across various application scenarios. Our batte ry-electric products u tilize direct current
charging piles that supply high-voltage direct current power to recharge vehicle batteries.
These products are compatible with standard direct current dual-connector charging piles and
also support our custom-developed four-connector charging piles. Designed specifically for our
700 kWh, 105-tonne wide-body dump trucks, our custom charging piles enable direct current
fast charging, delivering up to 1000A throug h four connectors. Customers can purchase
charging piles directly from us or opt for those f rom other charging equipment manufacturers
based on their preferences.
When selecting charging pile installation lo cations, customers prioritize safety and
operational efficiency. Safety is the primary consideration, with charging piles installed away
from areas with potential fire or explosion risks to protect personnel and property.
Additionally, customers choose locations that provide accessibility and meet the operational
needs of mining sites or other applications, allowing vehicles to park and charge conveniently
without disrupting regular workflows. Our charging piles are typically installed either at the
jobsite, provided the site meets the required ins tallation conditions, or at a location near the
jobsite.
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WARRANTY AND POST-SALE SERVICES
Warranty
We provide standard warranty terms to our customers. For our loaders, the warranty
coverage typically includes: (i) a one-year or 3,000-hour warranty for the entire loader, and (ii)
specific warranties covering critical components, such as (a) a five-year or 10,000-hour warranty
for non-water-cooled batteries and a five-y ear or 15,000-hour warranty for water-cooled
batteries, (b) a five-year or 15,000-hour warranty for motors, (c) a one-year or 3,000-hour
warranty for gearboxes, and (d) a five-year or 15,000-hour warranty for motor controllers.
For our dump trucks, the warranty coverage typically includes: (i) a six-month or
10,000-kilometer warranty for t he entire truck, and (ii) specific warranties covering critical
components, such as (a) a five-year warranty fo r batteries ranging from 980,000 to 1.96 million
kWh with a decay not exceeding 30%, (b) a two-year or 200,000-kilometer warranty for motors,
(c) a one-year or 60,000-kilometer warranty for gearboxes, and (d) a five-year or
200,000-kilometer warrant y for motor controllers.
For batteries, if our products are used as recommended and properly maintained, we
provide free repairs when a battery issue arises due to our design or manufacturing defects
within the warranty period. If defects are attributable to our battery supplier, the supplier will
be responsible for the repairs. After the warranty period, or if the issue is caused by improper
use or maintenance by the customer, the customer is responsible for the cost of repairs or
replacements.
We accrue warranty expenses for potential claims in connection with repair and
replacement of our products under the warranties we provide based on the sales volume and
the projected unit costs requi red for warranty services. In 2022, 2023 and 2024, our warranty
expenses amounted to RMB10.3 million, RMB13.4 million and RMB18.6 million, respectively,
representing 2.9%, 2.9% and 2.9% of the total revenue for the corresponding years.
Post-Sale Services
We strive to deliver all-round post-sale services that cater to the evolving needs of our
customers. Our post-sale services include:
. Inspection, maintenance and repair . We offer regular inspection, maintenance, and
repair services, conducted by our post-sale s ervice engineers. During these services, we
sell to our customers spare parts and accessories of our products, including chargers,
tires, steering gears, air filters, radiato rs, coolers, electronic fans, wiper blade
assemblies and air pressure sensors.
. Emergency rescue . Our emergency rescue services are a vailable 24/7, ensuring timely
assistance at any hour of the day or night.
. Product operation training service . We provide a variety of training services to ensure
customers can operate and maintain our produc ts effectively, including instructions
on the proper use and upkeep of our products to optimize performance and safety.
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. Machine operation reports . We provide in-depth reports on the performance and
operation of our products, offering insights into various metrics to help customers
optimize usage.
. Technical consultation and support .O u rt e a mo fe x p e r t si sa v a i l a b l ef o rt e c h n i c a l
guidance and support through multiple channels, including phone, real-time online
chat, and email. In addition, we conduct regular training sessions, provide technical
manuals, and offer on-site visits to address any issues or concerns, helping customers
fully leverage the capabilities of our products.
. Post-sale services empo wered by connectivity . Our post-sale services are enhanced by
the connectivity features of our products. We utilize OTA technology that enables
remote installment of software updates, e liminating the need fo r post-sale service
engineers to be onsite for updates and efficiently improving post-sale service.
Additionally, we can remotely analyze the operational data of our products to quickly
identify any fault points, allowing for swi ft and effective maintenance services.
Our Post-Sale Services Team
We provide regular training to our staff, distributors, and post-sale service providers to
ensure they are well-equipped to offer high-quality support to our customers. To facilitate
customer feedback, we maintain a dedicated custo mer service team that helps customers express
their opinions on our products and services to ensure the timely delivery of professional
assistance.
Our post-sale service engineers are knowledgeable about the structure, components and
functionalities of our products. Recognizing that most of our customers may not have the
expertise for product maintenance and inspecti on, we typically deploy our engineers directly to
the customers’ project sites, which ensures any issues with our products are promptly addressed.
If immediate resolution is not possible, our engineers report back to us for further action. As of
December 31, 2024, we had 42 p ost-sale service engineers.
Product Return and Exchange
We allow customers to return or exchange our products in accordance with applicable PRC
laws and regulations. See ‘‘Regulatory Over view — Regulations on Product Liability and
Consumer Rights Protection.’’ Additionally, we extend the option for component replacement
to our customers within our sales and service network.
Our product return and exchange process includes the following key steps:
. Application for return or exchange. Customers or distributors can initiate a return or
exchange request by stating the reasons, providing product details, and submitting
relevant documentation.
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. Application review. Upon receiving a request, our sales managers or engineers
promptly communicate with the customer or distributor to address any issues related
to product quality, service or suitability. If the initial discussion does not resolve the
issue, it is escalated to our customer service department for a more thorough
evaluation and to lead the return or exchange process.
. Demand confirmation. The customer service department quickly convenes an
inter-departmental meeting to assess the reasonableness of the request. They
urgently develop a resolution plan and negotiate with the customer or distributor.
If the customer’s needs cannot be met through technical solutions, commercial terms,
or additional services, the return or exchange is confirmed.
. Refund process. The sales and marketing team coordinates with the finance
department to manage the necessary procedures for issuing refunds.
We have implemented transparent customer cl aims processing procedures. Customers can
submit their claims along with relevant photographs directly to us. Once these claims are
approved by our team, we guarantee swift action by disbursing payments within ten business
days. Furthermore, we enter into warranty ag reements and specify the product return and
exchange terms in the supply ag reements to mitigate the potential cost arising from product
quality claims from our customers that are due to the quality issues of raw materials and
components provided by our suppliers.
During the Track Record Period and up to t he Latest Practicable Date, we did not
experience any material sales returns, product r ecalls or product liability claims that adversely
affected our business or financial condition. See ‘‘Risk Factors — Risks Relating to Our
Business and Industry — We have been and may become subject to product liability claims,
which could harm our financial condition if we a re not able to successfully defend against such
claims’’ for details on the risks related to product liability.
AWARDS AND RECOGNITIONS
During the Track Record Period and up to the Latest Practicable Date, our products,
technology, and innovations received prestigious awards and recognition, some of which are
highlighted below.
Year of Grant Award/Recognition Issuing Authority
2024 Shanghai Unicorn (Potential) Enterprise
to Receive Prioritized Service for 2024
(2024 年上海市重點服務獨角獸（潛力）
企業)
Shanghai Centre for Small
and Medium Enterprise
Development Services ( 上海
市中小企業發展服務中心)
2023 Top Ten Independent Innovative
Commercialization Projects of
High-Tech Achievements in Shanghai
for 2022
Shanghai Science and
Technology Committee
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Year of Grant Award/Recognition Issuing Authority
2023 Shanghai Science and Technology
‘‘Little Giant’’ (上海市科技小巨人)
Shanghai Science and
Technology Committee
2022 National ‘‘Key Little Giant’’
(國家級專精特新「重點小巨人」)
Ministry of Industry and
Information Technology of
the PRC, Shanghai
Coordination Office for
Promoting the
D e v e l o p m e n to fS m a l la n d
Medium Enterprises
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Since our inception, we have focused on transforming the traditional engineering
machinery industry with new energy solutions and contributing to carbon neutrality and
environmental protection. In line with this mission, we firmly believe in the importance of
adhering to the environmental, social, and governance (ESG) principles, and view them as one
of our fundamental responsibilities. By integrating the ESG principles into all aspects of our
business, we aim to create a low-carbon, environmentally friendly, and harmonious world.
Our Governance
Strong corporate governance is crucial for achieving our ESG objectives. In 2023, we
introduced the Breton Technology Co., Ltd. ESG Management Measures (Trial), establishing a
structured ESG management framework. This framework is coordinated by our Board of
Directors, with oversight from our management and ESG working group, and ensures
collaborations across our departments.
The Board of Directors primarily undertakes the following responsibilities: (i) formulating
policies and strategies concerning ESG management, (ii) evaluating, prioritizing, and managing
significant ESG-related matters and risks, (iii) establishing and ensuring the effectiveness of
appropriate ESG risk management and internal monitoring systems tailored to our business
operations, (iv) setting ESG-related objectiv es, regularly reviewing company performance
against these objectives, and approving ESG re ports, and (v) supervising, inspecting, and
assessing compliance with Listing Rules, particularly Appendix C2 of the Environmental,
Social, and Governance Reporting Guide (the ‘‘ESG Reporting Guidelines’’). Our secretary
office of the Board oversees ESG initiatives with in the governance domain, assisting the Board
of Directors in effective decision-making and oversight, ensuring transparency and
accountability in information disclosure and communication. Additionally, we have
established an internal audit department to coordinate the management of our internal
control systems. Our risk management system is overseen by relevant business departments,
responsible for identifying and qualitatively and quantitatively assessing risks within their
respective areas of expertise.
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The ESG working group is responsible for implementing specific ESG initiatives,
comprising heads of various functional departm ents, including production, human resources,
central research institute, public relations, sa les, and the secretary office of the Board. The
working group facilitates coordination am ong company departments, subsidiaries, and
third-party consulting firms, providing specific guidance on ESG initiatives within annual
objectives and compiling annual ESG reports. Each of our subsidiaries is required to designate a
dedicated individual responsible for ESG data management, ensuring timely updates,
organizing and archiving data, and providing data verification or source documentation. At
the end of each year, our subsidiaries compile all the annual submitted data, which is then
reviewed, signed, and submitted to the ESG working group by the respective subsidiary’s
responsible personnel.
Furthermore, we have engaged a reputable consulting firm as a third-party ESG advisor to
assist us in monitoring and aligning with ESG-rel ated policy requirements, as well as assessing
our performance in environmental protection and climate change mitigation.
ESG Material Topics
In line with the ESG Reporting Guidelines and the GRI Standards, we have conducted a
comprehensive assessment of ESG material topics, taking into account our industry, business
characteristics, and developmental status. Th is assessment process involves: (i) gathering
ESG-related topics based on our industry backgro und and core business activities, considering
inputs from the Board of Directors and various departments to preliminarily identify and screen
ESG topics closely related to our operations; ( ii) engaging in communication with stakeholders
and experts to assess the significant impact of ESG topics; and (iii) synthesizing internal and
external assessments of the significance of th e issues and aligning them with our strategic
considerations, and obtaining final approval of ESG material topics from the Board of
Directors and the ESG working group. We have identified, evaluated, and confirmed the
following material topics central to our ESG initiatives:
. Climate change. Climate change presents profound challenges affecting global
populations and will deeply impact production and livelihoods. Recognizing the
urgency of climate change, we actively engage in the new energy engineering
machinery industry to mitigate its environmental impacts and address potential
climate-related challenges.
. Resource consumption. Our new energy engineering machinery business relies on the
supply of natural resources such as electric ity and water. Against the backdrop of the
‘‘dual carbon’’ goal, resource consumption has garnered increased attention. We are
committed to adopting energy-saving and sustainable resource consumption measures
to address potential risks.
. Emissions control. Improper handling of emissions from our operations can negatively
impact the environment, resulting in legal and reputational risks. We have
implemented measures to lower greenhouse gas emissions, minimize the generation
of non-hazardous waste, and ensure the proper disposal of hazardous waste.
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. Supply chain management. Maintaining a stable and ESG-friendly supply chain is
crucial for our business. We have established a comprehensive supply chain
management system, recognizing that our suppliers’ engagement in ESG matters
also affects our ESG performance.
. Employee health and safety. We are committed to safeguarding our employees’ health
and safety, recognizing that accidents, improper operations, or noise pollution in our
business operations can pose risks. We continuously monitor and take preventive
measures to ensure our compliance with applicable laws and regulations related to
production safety and occupational health.
. Employee management and p rofessional development. Employee compensation,
benefits, training, and promotion mechanisms are critical for building a stable and
efficient team. We maintain and regularly update our systems and plans for employee
management and professional development to enhance employee satisfaction and
happiness, safeguard employees’ legal righ ts and interests, prioritize people, and
strengthen our competitive advantage.
Our ESG Contributions
Since our inception, we have upheld a development philosophy centered around green,
intelligent, efficient, and h armonious coexistence with nature. Leveraging innovative
technologies, we support carbon neutrality and fulfill our commitments to ESG initiatives
throughout our business operations. Traditional engineering machinery typically operates on
fossil fuels, emitting significant amounts of gre enhouse gases and harmful substances, posing
risks to the natural environment and the health of operators.
In alignment with the national ‘‘dual carbon’’ goals, we have been actively developing a
range of new energy engineering machinery products, substituting the energy source of
traditional fuel-driven engineering machinery wi th new energy, particularly electric power. This
switch results in a substantial reduction in carbon emissions throughout the lifecycle of our
engineering machinery, thereby effectively low ering societal carbon emissions. For example,
compared to conventional fuel models, our five-tonne battery-electric loader model, our
105-tonne battery-electric wide-body dump tru ck model in heavy-load uphill operations and in
heavy-load downhill operations can reduce car bon emissions by approximately 342.0 tonnes,
490.4 tonnes and 624.6 tonnes, respectively, over their lifecycles. In 2023 and 2024, our new
energy engineering machinery business contributed a total carbon reduction of 230.5 thousand
tonnes and 364.9 thousand tonnes respectively to society. As our new energy engineering
machinery business continues to develop, our contributions to societal carbon reduction and
carbon neutrality goals are set to increase.
According to the China Mobile Source Environmental Management Annual Report (2023),
engineering machinery is one of the main sources of atmospheric pollutant emissions. In 2022,
nationwide emissions of HC, NOx, and PM from loaders were 45,000 tonnes, 540,000 tonnes,
and 25,000 tonnes, respectively. Our new energy engineering machinery products do not emit
any air pollutant during operation, thus solving the problem of atmospheric pollutant emissions
generated by fuel-driven engineering machinery during diesel combustion. This significantly
contributes to the governance of atmospheric pollution.
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Furthermore, we are venturing into new business initiatives offering additional carbon
reduction benefits. For example, we are in the process of developing and commercializing a
proprietary direct current photovoltaic energy sy stem, which incorporates photovoltaic energy
generation, energy storage, and charging func tionalities. This servi ce will facilitate the
carbon-free generation of energy, further enha ncing carbon emission reductions throughout
the lifecycle of new energy engineering machinery. In December 2022, we initiated a pilot
photovoltaic energy station in Panzhihua, Sichuan, covering an area of 300 square meters, for
trial operations. It is equipped with approximately 41 kW of photovoltaic systems and 250 kWh
of energy storage systems. At maximum operation al capacity, this project is expected to save
40,000 kWh of electricity annually for corporate users, equivalent to 21.6 tonnes of carbon
emissions.
Identification, Assessment, Manag ement, and Mitigation of ESG Risks
We fully recognize the profound impact of climate change on human destiny and social
development and have fully integrated climate change and other ESG-related risks into our
business considerations. Under the supervis ion of the Board of Directors, we have engaged
department heads in assessing various ESG-related risks, focusing on their likelihood and
impact severity. Consequently, we have identifie d significant risks that may affect our business,
strategy, and financial reporting and have developed measures for risk identification,
assessment, managem ent, and mitigation.
Climate Risks
Among climate risk types, acute physical risks such as storms, floods, and fires may cause
damage to our office premises or production bases, as well as harm to our upstream raw
material suppliers and downstream industries such as factories, construction, and ports, thereby
affecting our business operations and threatening employee safety. Furthermore, as China
transitions from fossil fuel to low carbon energy sources, the energy landscape undergoes
ongoing transformation. This transition may entail the risk of encountering power outages and
the implementation of electricity rationing measures, potentially disrupting production and
operational continuity. Consequently, project timelines may be extended, and operating costs
could escalate. Additionally, societal expectatio ns for corporate environmental responsibility
continue to rise. If our new energy engineering machinery products cause adverse environmental
impacts during production and operation, causin g issues such as failure to establish a systematic
battery recycling mechanism, or improper handl ing of power battery recycling that leads to
environmental pollution, we may fa ce legal and reputational risks.
To address physical risks, we have established an emergency management system and
regularly organize emergency drills to respond to extreme weather and emergencies, prioritizing
employee safety and enhancing our risk resilie nce. To address transition risks, we have taken
proactive measures to renovate our energy infras tructure. Specifically, we are implementing the
installation of rooftop photovoltaic systems at our manufacturing plants to harness clean
energy, thereby reducing our dependence on traditional thermal power generation. In terms of
power batteries, we adhere to the principle of e asy disassembly in desi gn and development and
actively explore cooperation with battery recycling companies, battery manufacturers, and
battery banks to ensure proper recycling and disposal of power batteries.
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Supply Chain Risks
A stable and high-quality supply chain is essential for the smooth operation of our
business. Failure to select reliable suppliers may adversely affect our product quality, leading to
legal and reputational risks. Moreover, poor performance of suppliers in ESG issues may also
damage our reputation.
To address supply chain risks, we have est ablished a comprehensive supply chain
assessment system, employing a comprehensive approach to identify suppliers’ environmental
protection, human rights, and corporate governance risks, including internal risk assessment,
external environmental analysi s, data and statistical analysis , due diligence, and risk control
mechanisms. Based on thorough preliminary risk identification, we have established strict
supplier admission mechanisms, requiring suppli ers to hold relevant certifications, including
environmental certifications, to meet green envir onmental requirements. Emphasizing ethical
and environmental standards, we mandate third-party manufacturers’ compliance, ensuring
alignment with sustainability principles throughout the production process and conducting
routine audits to uphold performance standards. We foster robust partnerships with suppliers
dedicated to sustainable development and po ssessing well-established ESG frameworks.
Notably, one of our major suppliers was named to the ‘‘Top Ten ‘China ESG Model’’’ list by
China Media Group in 2023, and has delineated pr ecise carbon neutrality objectives, aiming to
achieve carbon neutrality in core operations by 2025 and across the entire value chain by 2035.
Furthermore, given the size and weight of engineering machinery, the logistics inherently
presents notable challenges and r isks. We prioritize safety and environmental considerations
throughout our logistics operations. Collaborating with reputable and compliant third-party
logistics providers, we ensure compliance with tra nsportation regulations across jurisdictions
along the logistics route, maintaining safety, reliability and operational efficiency. To minimize
our environmental impact, we optimize transpor tation routes to reduce carbon emissions and
actively minimize packaging material use, opting for biodegradable and recyclable options such
as paper cushioning pads and inflatable films instead of traditional plastic foam. We also
encourage our suppliers to adopt sustainable, eco-friendly packaging solutions.
Product Liability Risks
Product quality issues could lead to recalls, harming our reputation. Misleading product
information, or inadequate warranty and repai r services, can also impact our customer loyalty
or expose us to legal risks.
To address these risks, we maintain a strict quality management system and provide our
sales and marketing team with compliance train ing to ensure accurate information is delivered
to our customers. Our customer service department offers 24-hour support for product quality
and maintenance issues, maintaining our ESG reputation and sustainable development.
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Opportunities Associated with Climate Change
Against the backdrop of climate change, societal attention towards carbon emissions
continues to escalate, with markets increasingly favoring new energy and low-carbon
technologies. This presents significant development opportunities for companies specializing
in new energy engineering machinery. Our produc ts, reducing carbon emissions, align with the
low-carbon development trend and have significant market potential. Additionally, climate
change is poised to greatly boost the developme nt of the new energy industry. The operation of
new energy engineering machinery needs signifi cant electrical power, and new energy sources
such as solar and wind power can provide ample clean and sustainable energy for these
machines. The integration of new energy engi neering machinery with wind and solar energy
generation and storage technology will expand our business development space. Furthermore,
with the gradual establishment and development of carbon trading mechanisms, our
contributions to carbon reduction are expected to create additional carbon trading revenue.
Environment
We are committed to environmenta l sustainability and proacti vely monitor, analyze, and
control our resource consumption and pollutant emissions during business operations.
Resource Consumption
In our manufacturing and daily operations, the primary resources we consume are water
and electricity. The following table outlines indicators related to resource consumption during
the Track Record Period.
For the Year Ended December 31,
2022 2023 2024
Energy/Resource types
Electricity consumption kWh 726,302.24 695,555.09 1,194,345.27
By manufacturing plants kWh 559,376.44 548,305.91 1,030,899.40
By offices kWh 166,925.80 147,249.18 163,445.87
Intensity of electricity consumption
(kWh/number of employees)
3,051.69 3,024.15 3,210.6
Water consumption tonnes 5,971.15 5,888.49 14,282.38
By manufacturing plants tonnes 3,666.47 3,665.00 11,577.51
By offices tonnes 2,304.68 2,223.49 2,704.87
Intensity of water consumption
(tonnes/number of employees)
tonnes 25.09 25.60 38.39
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We emphasize resource management in manufacturing and office activities, aiming to
optimize our resource consumption structure and integrate sustainability into our daily
operations. We have set development goals for our main resource types:
Environmental sustainability metrics Our ESG development goals
Electricity consumption By 2028, 30% of our annual electricity utilized in
manufacturing plants will be sourced from
photovoltaic power systems.
Water consumption By 2028, our intensity of water consumption will
decrease by 5% compared to 2023.
These goals aim not just to reduce resource consumption, but also to decrease indirect
greenhouse gas emissions resulting from this consumption. To meet these objectives, we have
enacted several strategies to optimiz e resource use and reduce consumption:
. Renewable energy utilization. All our forthcoming manufacturing plants will actively
embrace the concept of green manufacturing, incorporating photovoltaic rooftops
into their infrastructure. Our manufacturing plant in Wuhan, Hubei, has registered its
rooftop photovoltaic installation, with p l a n st oi n s t a l ls i m i l a rs y s t e m si no u rn e w
manufacturing plant in Xiangtan, Hunan.
. Energy-efficient production. We utilize AGVs in our manufacturing lines to optimize
transport efficiency and reduce energy usage. Our use of variable frequency air
compressors and low-power LED lighting in workshops cuts down energy
consumption. We utilize a spray tower water circulation system to reuse the water
in our production. We also set water consumption quotas for products and
incorporate these into our manufacturi ng management and evaluation systems.
. Energy-efficient building. Our manufacturing plant buildings are designed for optimal
air tightness, surpassing the level III standa rd specified by current national standards.
We use energy-efficient construction materials, including thermal insulation for roofs,
porous hollow bricks and insulation mortar for external walls, and extruded
polystyrene boards for internal walls.
. Energy-efficient water supply and drainage. We use a zoning water supply model, with
differential compensation box-type non-negative pressure equipment for high zones.
Variable frequency pumps reduce electricity usage. Sanitary appliances adhere to the
Code for Design of Building Water Supply and Drainage ( 《建築給水排水設計標準》),
and we display water conservation posters to promote employee awareness.
. Energy-efficient electrical appliances. We use high-efficiency fluorescent lamps for
lighting, sound-controlled indoor lighting in staircases and corridors, and outdoor
lighting controlled by time and illumination conditions to conserve electricity.
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. Energy-efficient heating, ventilation, and air conditioning. We use high-efficiency,
energy-saving air conditioners, fans, a nd other equipment. Smart multi-connected
central air conditioning in offices allows real-time control based on occupancy,
reducing energy usage through centralized, intelligent systems. We also aim to
implement distributed combined heat, power, and cooling technology where possible
for efficient energy use.
. Other measures. We promote the use of public transportation and new energy vehicles,
offer incentives to our employees for the acquisition of new energy vehicles and
encourage green office practices.
Pollutant Emissions
Our manufacturing and office process does not directly emit carbon dioxide or other
harmful waste. Direct greenhouse gas emissions (Scope 1) mainly stem from on-road
transportation activities a ssociated with our operations, while indirect greenhouse gas
emissions (Scope 2) primarily result from the consumption of water, electricity, and other
energy sources within our facilities. We have iden tified the key activities that generate other
indirect greenhouse gas emissions (Scope 3), incl uding disposal of paper waste, fresh water and
sewage processing, business travel by employees, and upstream production of steel purchased by
our Company. Key indicators related to polluta nt emissions during the Track Record Period for
both manufacturing and office operations include:
For the Year Ended December 31,
Pollutant type 2022 2023 2024
Total greenhouse gas emission Tonnes of CO 2
equivalent
14,676.39 23,595.97 35,402.99
Greenhouse gas emission (scope 1) Tonnes of CO 2
equivalent
57.67 51.40 125.78
Greenhouse gas emission (scope 2) Tonnes of CO 2
equivalent
508.41 486.89 836.04
Greenhouse gas emission (scope 3) Tonnes of CO 2
equivalent
14,110.31 23,057.68 34,441.17
Intensity of greenhouse gas emission
(tonnes CO 2 equivalent/number of
employees)
61.67 102.59 95.17
Our current production processes do not produc e industrial wastewater, exhaust gases or
harmful solid waste. Instead, employee sewage is channeled to municipal wastewater networks
for treatment, and we primarily generate solid waste from employee household garbage,
managed through segregated collection, daily dis posal, and regular contracts with sanitation
departments. To handle oil pollution from production, we use centralized storage and
leak-proof pallets for prevention, and contaminated packaging and rags are disposed of
through qualified third-party services. To combat noise pollution, we mitigate assembly noise
using fixtures and noise-reducing tools an d manage testing noise with soundproof rooms.
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With the start of production at our manufacturing plant in Wuhan, Hubei, machine repair
services involving procedures such as painting and spray gun cleaning will emit volatile organic
compounds (VOCs). We employ treatments such as dry filtration, activated carbon
adsorption-desorption, and catalytic co mbustion to ensure VOCs emissions are above
national standards before atmospheric discharge. Hazardous waste such as paint residues and
activated carbon is also properly disposed of by qualified third parties.
As a manufacturer of new energy engineer ing machinery, we do not possess in-house
capabilities for battery production or recycling, which aligns with the standard practices of
other key players in the industry. We do not reuse batteries, instead, we will collaborate with
qualified third-party partners who specialize in end-of-life battery processing , to whom we will
transfer batteries designated for decommissioning and responsible disposal. We will rigorously
evaluate the credentials and technical expertise of our partners to ensure they can deliver
responsible and effective battery recycling solutions. The selection criteria typically includes the
possession of key qualifications such as a Hazardous Waste Operation License and a Renewable
Resources Operation License, as well as the avai lability of qualified technical personnel.
We implemented energy-saving measures to reduce carbon emissions from resource
consumption. In 2024, we plan to provide all emp loyees with specialized ESG training at least
twice. We proactively prevent major environmental incidents by developing emergency plans for
environmental pollution, with a dedicated leadership team responsible for coordinating
emergency actions. This plan clearly outlines the roles and responsibilities of key personnel in
the event of an environmental emergency, covering areas such as environmental monitoring,
information reporting, hazar d mitigation, and traffic control. Additionally, we have
implemented detailed regulations for the management of hazardous waste emissions,
encompassing all stages of our operations, including office, production, transportation, and
inventory management, ensuring proper waste classification and disposal.
To address potential safety risks during production, we have introduced stringent measures
to safeguard both personnel and the environment. These include the installation of
explosion-proof charging cabinets for lithium batteries, the use of leak-proof trays for oil
barrel transportation, the implementation o f fume purification systems during welding
operations, and the provision of mini fire stat ions in battery storage areas. These proactive
steps demonstrate our commitment to maintain ing a safe and environmentally responsible
production process.
Social
Employee Health and Safety
Our employees are pivotal to our business opera tions, and ensuring their health and safety
is a cornerstone of our long-term success. We have developed robust health and safety
protection systems, alongside a framework for o ccupational health and safety risk management.
Regular labor protection education and safety f acility maintenance are conducted under the
leadership of specialized personnel. We operate a standardized safety inspection system,
incorporating daily supervisory methods like spo t checks and patrols for real-time operational
monitoring. Routine safety environment inspections are conducted, with swift rectification of
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any non-compliance issues. We have obtaine d the ISO 45001 : 2018 occupational health and
safety management system certificate, and ISO 9001 : 2015 quality management system
certificate.
We have purchased employer liability insurance and accident insurance for employees, and
provide pre-employment physical examinations for each employee. For special occupations, we
provide additional occupational health exam inations annually. During the Track Record
Period, we organized two large-scale fire drills and crane injury drills to help employees enhance
safety awareness, learn to respond correctly to em ergencies, and ensure their safety. During the
T r a c kR e c o r dP e r i o da n du pt ot h eL a t e s tP r a c t i c a b l eD a t e ,w ed i dn o te n g a g ei na n yf o r mo f
child labor, forced labor, or coercion.
Employee Management and Professional Development
We maintain standardized employee management protocols, encompassing recruitment,
transitions from probation to permanent status, resignation or termination processes, and job
handovers, as detailed in our recruitment management system. Upholding fairness and equality,
we are committed to ensuring that every candidate has an equal opportunity throughout the
recruitment process. We ensure uniform salary, benefits, and advancement opportunities for all
employees, irrespective of gender, and actively o ppose discrimination. Generally, we determine
each employee’s compensation based on their qua lifications, experience, position, and tenure.
We are committed to providing competitive compensation packages to enhance our employees’
sense of fulfillment, thereby attracting and ret aining talents. We strive to create a diverse,
equitable, open, inclusive, and collaborative work environment. Effective communication
channels have been established, enabling em ployees to promptly report and express their
opinions on various human resource policies to HR managers, helping us continuously optimize
the workplace environment. We highly value the diversity of our team, which comprises
members from various ethnic backgrounds, such as Han, Kazakh, Hui, and Yi. We engage in the
recruitment of disabled employees for specific t asks that align with their capabilities, thus
fulfilling our corporate social responsibility by empowering them to reach their full potential
and improving their quality of life. During the Track Record Period and up to the Latest
Practicable Date, no complaints related to e mployee equality and diversity were received.
Additionally, for any dismissals that occur during our operations, we strictly adhere to the
Labor Contract Law of the People’s Republic of China and other relevant laws and regulations.
We follow the principles of fairness and transparency to protect employees’ legal rights,
minimize negative impacts on employees, the team, and the company, and ensure fairness and
respect throughout the dismissal process.
Our employee manual, detailing holidays, benefits, and rights is regularly updated. A labor
union is in place to safeguard employees’ rig hts. We also provide meal allowances, travel
allowances, festival benefits, medical examinations and other employee benefits. We regularly
organize team-building activities and distribute holiday benefits to employees in accordance
with regulations, enhancing team cohesion and a sense of belonging. Additionally, we conduct
regular training sessions to improve employee s’ overall skills and capabilities. Our core
management team has maintained stability, wit h no senior management departures occurring
from 2022 to 2024. Additionally, the educational qualifications and stability of our employees
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have maintained a consistent level. The followi ng table illustrates the proportion of employees
categorized by educational background during the Track Record Period:
For the Year Ended December 31,
2022 2023 2024
Doctor degree 2% 2% 2%
Master degree 12% 12% 11%
Bachelor degree 36% 38% 37%
College degree 23% 21% 20%
Below-college degree 28% 28% 30%
Total 100% 100% 100%
The following table illustrates the proportio n of employees categorized by years of service
during the Track Record Period:
For the Year Ended December 31,
2022 2023 2024
Below one year 47% 22% 29%
One to three years 41% 55% 38%
Three to five years 11% 21% 26%
Five to seven years 02 %7 %
Total 100% 100% 100%
Anti-Corruption
Understanding the detrimental impact of co rruption, we firmly oppose any corrupt
activities. Our integrity in employment manage ment system and an integrity committee embody
this stance. We continually update and release our ‘‘Implementation Rules for Integrity
Construction Management.’’ Relevant perso nnel receive anti-corruption training, and a
whistleblower mailbox, managed by our legal department, is available for reporting
non-compliant behaviors. For both our suppliers and our partners, we require adherence to
compliance standards and the signing of an agreement on professional integrity.
Social Responsibility
We actively pursue corporate social responsibility, aiming to forge a shared future among
our Company, society, and the environment. We col laborate with third-party finance lease firms
to introduce leasing solutions for new energy engineering machinery products, easing the
investment burden for downstream enterprises. B y eliminating the need for a substantial upfront
capital expenditure, downstream enterprises ca n significantly reduce cash flow pressure while
still gaining access to the equipment they need. This not only aids in achieving carbon neutrality
but also fosters high-quality development.
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Innovating in new energy, we are also developing intelligent technology for engineering
machinery. Our products, equipped with sel f-developed remote and autonomous operation
technology, improve safety and co mfort for machinery operators.
During the Track Record Period, we took proactive measures to address public events.
During the COVID-19 outbreak, we procured approximately 30,000 masks and other epidemic
prevention materials worth RMB20,000 for employees. Additionally, we implemented a
comprehensive and detailed health and safe ty plan, which included measures such as
mask-wearing, social distancing, freque nt hand washing, and regular disinfection.
Temperature screening points were establish ed at both factory and office locations, and
routine nucleic acid testing was conducted. We also maintained health records for all employees
to ensure proper management and ongoing monitoring of their well-being.
In response to national health directives, w e adopted a work-from-home model and set up
a dedicated emergency response team to provide e ssential supplies, such as daily necessities and
medications, and to assist employees with medical appointments. We also offered psychological
support and counseling services to help employees manage the stress and anxiety brought on by
the pandemic, ensuring their mental well-being.
Furthermore, we actively follow the prescribe d logistics reporting p rocedures, ensuring
that equipment shipments adhered to safety standards. QR codes were implemented for
workplace access control, and during the resumption of operations, we conducted thorough
safety inspections and environmental disinfect ion, obtaining necessary ap provals from relevant
authorities. Through these efforts, we not only prioritized the health of our employees but also
demonstrated our commitment to fulfilling our corporate social responsibility.
OUR CUSTOMERS
Our Major Customers
Our customers comprise direct sales customers and distributors of our products, primarily
located in China. In 2022, 2023 and 2024, the reve nue attributable to our five largest customers
f o re a c hy e a ro ft h eT r a c kR e c o r dP e r i o da m o u n t e dt oR M B 1 2 5 . 6m i l l i o n ,R M B 2 0 1 . 4m i l l i o n
and RMB276.2 million, respect ively, representing 34.9%, 43.4% and 43.5% of our total revenue
for the corresponding years. We became acquainte d with each of our five largest customers for
each year during the Track Record Period throug h our standard business development process
where our sales personnel in various regions iden tified and engaged with potential customers
and then reported these business leads to us.
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The following table sets forth details of our five largest customers in 2024 :
Ranking Customer Customer Background
Products
Provided
Business
Relationship
Since Revenue
%o f
Total
Revenue
Payment
Method
Registered
Capital Customer Type
(RMB in
thousands)
1 Customer A A new energy technology company
group headquartered in Hunan,
focusing on sales and leases of new
energy engineering machinery and
components. We own 15% of the
equity interests in this company. As
of December 31, 2024, this
company had assets of
approximately RMB98.3 million.
Loaders,
wide-body
dump trucks
and tractors
2024 86,936 13.7% Bank transfer RMB10.0
million
Associated
distributor
2 Customer B A new energy sales and service
company headquartered in Hebei.
We own 15% of the equity interests
in this company. As of December
31, 2024, this company had assets
of approximately RMB105.0
million.
Wide-body
dump trucks
2024 70,899 11.2% Bank transfer/
Commercial
draft
RMB10.0
million
Associated
distributor
3 Customer Group C A new energy technology company
group headquartered in Shanxi,
focusing on management of new
energy projects, and sales of new
energy engineering machinery. We
own 10.0% of the equity interests
in the parent company of the
group. The group recorded revenue
of more than RMB46.8 million in
2024.
Loaders and
tractors
2022 42,707 6.7% Bank transfer/
Commercial
draft
RMB30.0
million
Associated
distributor
4 Customer Group D A new energy technology company
group headquartered in Jiangsu,
focusing on sales and leases of new
energy engineering machinery and
components. We own 49% of the
equity interests in the parent
company of the group. The group
recorded revenue of more than
RMB31.8 million in 2024.
Loaders and
wide-body
dump trucks
2023 38,276 6.0% Bank transfer/
Commercial
draft
RMB33.0
million
Associated
distributor
5 Customer Group E A new energy technology company
group headquartered in Xinjiang,
focusing on sales and leases of new
energy engineering machinery and
components. The company has
approximately 400 employees
according to public information.
The controlling shareholder of the
group has registered capital of
RMB110.0 million.
Wide-body
dump trucks
2022 37,361 5.9% Bank transfer/
Commercial
draft
RMB10.0
million
Direct sales end
customer
Total 276,179 43.5
BUSINESS
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The following table sets forth details of our five largest customers in 2023 :
Ranking Customer Customer Background
Products
Provided
Business
Relationship
Since Revenue
%o f
Total
Revenue
Payment
Method
Registered
Capital Customer Type
(RMB in
thousands)
1 Customer Group E A new energy technology company
group headquartered in Xinjiang,
focusing on sales and leases of new
energy engineering machinery and
components. The company has
approximately 400 employees
according to public information.
The controlling shareholder of the
group has registered capital of
RMB110.0 million.
Wide-body
dump trucks
2022 47,445 10.2 Bank transfer/
Commercial
draft
RMB10.0
million
Direct sales end
customer
2 Customer Group D A new energy technology company
group headquartered in Jiangsu,
focusing on sales and leases of new
energy engineering machinery and
components. We own 49% of the
equity interests in the parent
company of the group. The group
recorded revenue of more than
RMB31.8 million in 2024.
Loaders and
wide-body
dump trucks
2023 45,457 9.8 Bank transfer/
Commercial
draft
RMB100.0
million
Associated
distributor
3 Customer Group C A new energy technology company
group headquartered in Shanxi,
focusing on management of new
energy projects, and sales of new
energy engineering machinery. We
own 10.0% of the equity interests
in the parent company of the
group. The group recorded revenue
of more than RMB46.8 million in
2024.
Loaders 2022 36,637 7.9 Bank transfer/
Commercial
draft
RMB30.0
million
Associated
distributor
4 Customer Group F A new energy technology company
group headquartered in Shaanxi,
focusing on sales and leases of new
energy engineering machinery. We
own 10% of the equity interests in
the parent company of the group.
The group recorded revenue of
more than RMB2.7 million in 2024.
Loaders 2022 36,169 7.8 Bank transfer/
Commercial
draft
RMB10.0
million
Associated
distributor
5 Customer Group G A new energy technology company
group headquartered in Xinjiang,
focusing on sales and leases of new
energy engineering machinery. We
owned 15% of the equity interests
in the parent company of the group
before we transferred our shares
and exited from the company in
October 2023. The group recorded
r e v e n u eo fm o r et h a nR M B 2 8 . 7
million in 2024.
Loaders 2022 35,739 7.7 Bank transfer/
Commercial
draft
RMB5.0
million
Independent
distributor
Total 201,447 43.4
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The following table sets forth details of our five largest customers in 2022 :
Ranking Customer Customer Background
Products
Provided
Business
Relationship
Since Revenue
%o f
Total
Revenue
Payment
Method
Registered
Capital Customer Type
(RMB in
thousands)
1 Customer Group E A new energy technology company
group headquartered in Xinjiang,
focusing on sales and leases of new
energy engineering machinery and
components. The company has
approximately 400 employees
according to public information.
The controlling shareholder of the
group has registered capital of
RMB110.0 million.
Wide-body
dump trucks
2022 27,248 7.6 Bank transfer/
Commercial
draft
RMB10.0
million
Direct sales end
customer
2 Customer Group H An engineering machinery company
group headquartered in Fujian,
focusing on sales of engineering
machinery. The group recorded
annual revenue of approximately
RMB500.0 million in recent years
according to its official website
source.
Loaders and
wide-body
dump trucks
2021 26,476 7.4 Bank transfer/
Commercial
draft
RMB10.0
million
Independent
distributor
3 Customer I An automobile sales and services
company established in Jiangsu,
focusing on sales of vehicles,
engineering machinery and their
accessories. The company has
approximately 150 employees
according to its official website.
Tractor trucks 2021 24,779 6.9 Bank transfer RMB10.0
million
Independent
distributor
4 Customer Group J A new energy technology company
group headquartered in
Guangzhou, focusing on sales of
new energy vehicles, engineering
machinery and their accessories.
The group has approximately 70
employees according to public
information.
Loaders 2022 23,947 6.6 Bank transfer RMB5.0
million
Direct sales end
customer
5 Customer Group K An automobile sales and services
company group headquartered in
Hebei, focusing on sales and
maintenance of vehicles and their
accessories. The company has
registered capital of RMB1.0
million.
Tractor trucks 2022 23,177 6.4 Bank transfer RMB1.0
million
Direct sales end
customer
Total 125,627 34.9
BUSINESS
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None of our five largest customers for each year during the Track Record Period were
connected persons. None of our Directors or their associates or, to the knowledge of our
Directors, any Shareholder with over 5% of the share capital of our Company had any interest
in any of our five largest customers for e ach year during the Track Record Period.
Among our five largest customers for each year during the Track Record Period, Customer
A, Customer B, Customer Group C, Customer Group D, and Customer Group F are our
associated distributors in which we hold minority equity interests as of the Latest Practicable
Date. See ‘‘Sales and Service Network — Distribution Channels — Our Distribution Network.’’
We also hold minority equity interest in a new energy technology company whose majority
shareholder is Customer I, one of our five largest customers in 2022. Our Directors confirm that
our sales to our five largest customers for each year during the Track Record Period were
conducted on standard commercial terms and negotiated on an arm’s length basis.
Salient Terms of Our Sales Agreements
We generally enter into standard sales agreements with both our direct sales customers and
distributors. There is no material difference among below salient terms of our sales agreements
with our direct sales customers, independent distributors or associated distributors. The salient
terms of such sales agreement are set forth as follows:
. Credit period. We generally offer a credit period ranging from one to six months to
our customers.
. Installment payment. We may allow certain customers t o make monthly installment
payments, with the installment period typically ranging from six months to 60
months.
. Deposit. Upon signing the agreement, customers are required to pay a specified
deposit amount, which is non-refundable if the sales agreement is terminated due to
the customer’s actions or if the customer unilaterally terminates the agreement.
. Product acceptance. Acceptance inspections should be carried out on the day the
product is delivered to the agreed-upon location. Customers are required to inspect
both the exterior and interior of the product. Failure to report any discrepancies
immediately will be deemed as acceptance of the product in its delivered condition.
. Warranty. Our warranties are provided accordin g to our quality warranty manual and
product specifications. See ‘‘— Warranty and Post-sale Services.’’
. Modification of the product. Customers are prohibited from modifying the product in
any way. Any damage resulting from modifications will be the responsibility of the
customer.
. Termination. We have the right to terminate the agreement if the customer’s payment
is overdue by more than 45 days.
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Salient Terms of Our Distribution Agreements
We generally enter into standard distribution agreements with our distributors. There is no
material difference between the salient terms of our distribution agreements with our
independent or associated distributors. The salient terms of such distribution agreements are
set forth as follows:
. Authorized distribution. Distributors are authorized to sell our products to end users
within a specified region. Distribution outside this designated area requires our
explicit consent.
. Exclusivity. Distributors are prohibited from selling new energy loaders, wide-body
dump trucks or tractor trucks from other manufacturers without our written consent.
However, there is no restriction on distributors selling other products from other
manufacturers.
. Sales target. W es e ts a l e st a r g e t sf o ro u rd i s t r i b u tors. These targets are intended as a
metric for evaluating the distributor’s p erformance and are meant to encourage the
distributor to actively engage in distribution activities. We do not require distributors
to make mandatory minimum purchases. We assess distributor’s performance based
on a comprehensive set of metrics includin g sales targets and reserve the right to
terminate the distribution agreements if the distributors fail to meet these sales
targets.
. Sales and payment. The distributors are required to upload their sales agreements with
end users to our system for record-k eeping immediately upon signing.
. Recovery of accounts payable . In the event of late payment, in addition to the overdue
amount, distributors are required to pay a default penalty based on a percentage of
the overdue accounts receivable amount. In cases of material default, we have the
right to terminate the agreement and seek compensation for any losses incurred.
. Duration . The duration of the distribution agreement is typically one year and can be
renewed upon mutual agreement of both parties.
. Termination. We have the right to terminate the distribution agreement if a distributor
commits a material breach of the agreement t erms. We may also negotiate termination
of the agreement upon the distributor’s re quest, provided all outstanding payments
are settled.
OUR SUPPLIERS
Our Major Suppliers
Our suppliers consist primarily of manufacturers who provide the raw materials and
components essential for our products, including motors, batteries, controllers, gearboxes,
thermal management parts, chassis and cabins. We purchase all of our raw materials and
components from suppliers in China. Aside from these manufacturers, we also purchase
software and IT services from technology companies.
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In 2022, 2023 and 2024, the aggregate purchases attributable to our five largest suppliers
f o re a c hy e a ro ft h eT r a c kR e c o r dP e r i o da m o u n t e dt oR M B 3 3 6 . 7m i l l i o n ,R M B 3 1 8 . 7m i l l i o n
and RMB347.4 million, respectively, repres enting 68.5%, 66.3% and 56.7% of our total
purchases for the corresponding years. Purchase s attributable to our single largest supplier
amounted to RMB174.1 million, RMB189.0 mil lion and RMB153 million for the same years,
accounting for 35.4%, 39.4% and 24.9% of our total purchases for the corresponding years. We
believe that we maintain strong and stable relationships with our major suppliers. The high
concentration of our suppliers exposes us to supply chain risks. See ‘‘Risk Factors — Risks
Relating to Our Business and Industry — Our supplier concentration exposes us to supply chain
risks, particularly concerning components of our products.’’
The following table sets forth detail s of our five largest suppliers in 2024 :
Ranking Supplier Supplier Background
Products
Purchased
Business
Relationship
Since
Purchase
Amount
% of Total
Purchase Payment Method
(RMB in
thousands)
1 Supplier Group A A leading new energy technology
company group headquartered in
Fujian and listed on Shenzhen Stock
Exchange, focusing on the
development and manufacturing of
batteries for electric vehicles and
energy storage systems
Power batteries 2018 152,914 24.9 Primarily bank
transfer and bills
2 Supplier Group B An off-highway vehicles and
engineering machinery manufacturer
headquartered in Shaanxi and listed
on Beijing Stock Exchange
Chassis 2019 140,024 22.8 Primarily bank
transfer and bills
3 Supplier C A technology company headquartered
in Jiangsu and listed on the National
Equities Exchange and Quotations,
focusing on development and
manufacturing of motors
Motor and
MCU
2020 20,745 3.4 Primarily bank
transfer and bills
4 Supplier D A new energy technology company
headquartered in Henan, focusing on
development and manufacturing of
lithium-ion power batteries and
battery management systems
Power batteries 2022 19,393 3.2 Primarily bank
transfer and bills
5 Supplier E An engineering machinery structural
components manufacturer
headquartered in Shandong
Frame
structural
parts and
accessories
2022 14,355 2.3 Primarily bank
transfer and bills
Subtotal 347,432 56.7
BUSINESS
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The following table sets forth detail s of our five largest suppliers in 2023 :
Ranking Supplier Supplier Background
Products
Purchased
Business
Relationship
Since
Purchase
Amount
% of Total
Purchase Payment Method
(RMB in
thousands)
1 Supplier Group A A leading new energy technology
company group headquartered in
Fujian and listed on Shenzhen Stock
Exchange, focusing on the
development and manufacturing of
batteries for electric vehicles and
energy storage systems
Power batteries 2018 188,995 39.4 Primarily bank
transfer and bills
2 Supplier Group B An off-highway vehicles and
engineering machinery manufacturer
headquartered in Shaanxi and listed
on Beijing Stock Exchange
Chassis 2019 91,413 19.0 Primarily bank
transfer and bills
3 Supplier F An engineering machinery components
manufacturer headquartered in
Fujian
Frame
structural
components
and
accessories
2020 15,586 3.2 Bank transfer
4 Supplier C A technology company headquartered
in Jiangsu and listed on the National
Equities Exchange and Quotations,
focusing on development and
manufacturing of motors
Motors and
micro control
units
2020 13,489 2.8 Primarily bank
transfer and bills
5 Supplier D A new energy technology company
headquartered in Henan, focusing on
development and manufacturing of
lithium-ion power batteries and
battery management systems
Power batteries 2022 9,206 1.9 Primarily bank
transfer and bills
Subtotal 318,688 66.3
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The following table sets forth detail s of our five largest suppliers in 2022 :
Ranking Supplier Supplier Background
Products
Purchased
Business
Relationship
Since
Purchase
Amount
% of Total
Purchase Payment Method
(RMB in
thousands)
1 Supplier Group A A leading new energy technology
company group headquartered in
Fujian and listed on Shenzhen Stock
Exchange, focusing on the
development and manufacturing of
batteries for electric vehicles and
energy storage systems
Power batteries 2018 174,062 35.4 Primarily bank
transfer and bills
2 Supplier G A branch office of a vehicle
manufacturer headquartered in
Hubei
Chassis 2019 70,501 14.3 Primarily bank
transfer and bills
3 Supplier Group B An off-highway vehicles and
engineering machinery manufacturer
headquartered in Shaanxi and listed
on Beijing Stock Exchange
Chassis 2019 44,565 9.1 Primarily bank
transfer and bills
4 Supplier F An engineering machinery components
manufacturer headquartered in
Fujian
Frame
structural
components
and
accessories
2020 32,487 6.6 Bank transfer
5 Supplier H A subsidiary of a lithium battery
manufacturing company listed on
Shenzhen Stock Exchange
Power batteries 2019 15,054 3.1 Primarily bank
transfer and bills
Subtotal 336,668 68.5
BUSINESS
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During the Track Record Period, none of our five largest suppliers for each year of the
Track Record Period were our connected persons. None of our Directors or their associates or,
to the knowledge of our Directors, any Shareholder with over 5% of the share capital of our
Company had any interest in any of our five largest suppliers for each year during the Track
Record Period.
Salient Terms of Our Supply Agreements
For critical raw materials and components used in our manufacturing process, we typically
enter into a one-year supply agreement with selected suppliers. The salient terms of our supply
agreement are set forth below:
. Credit period. We typically receive a credit period r anging from 30 to 60 days from our
suppliers.
. Product quality. Our suppliers are required to possess the requisite license and
certifications and are responsible for ensuring that their products meet the standards
set out in the agreements.
. Specification changes and outsourcing. Suppliers are prohibited from altering any
specifications stipulated in the supply agreement, such as raw materials, processing
technologies, and quality inspections, without our prior approval. In addition,
outsourcing work to third parties without our consent is not permitted.
. Pricing . The pricing for raw materials and com ponents is negotiated annually with
our suppliers. The agreed-upon prices typically cover all associated costs, including
packaging and logistics.
. Warranty. Suppliers are required to provide a warranty for the products sold to us,
guaranteeing free repair, replacement, o r return of all raw materials, parts, and
components within th e warranty period.
. Termination. We have the right to terminate the supply agreement under specific
circumstances, such as force majeure, a breach of material terms by the supplier, or
sustained difficulties in delivery.
OVERLAPPING OF OUR CUSTOMERS AND SUPPLIERS
In 2022, 2023 and 2024, we sold to and purchased from 38, 74 and 78 business partners,
respectively. These business partners were both our customers and suppliers (‘‘ Overlapping
Business Partners ’’). Among them, 20, 29 and 29 were primarily our customers, which means our
sales to these customers exceeded our purchases from them during the corresponding years.
Conversely, 18, 45 and 49 of them were primarily our suppliers, which means our purchases
from these suppliers exceeded our sales to them d uring the same years. During the Track Record
Period, four major scenarios contributed to the overlap between our customers and suppliers,
with the majority of cases arisin g from the first two scenarios.
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--- page 273 ---
. Repair and maintenance services procur ed from Overlapping Business Partners. During
the Track Record Period, we procured repair and maintenance services from
Overlapping Business Partners who were p rimarily our customers. These partners
have the necessary technical skills to repair or maintain engineering machinery. Given
our ongoing efforts to expand our sales and service network and our limited reach in
some geographic areas where our product s are used, we leverage the technical
capabilities of these Overlapping Business Partners to service our products sold to
others nearby.
. Sales of parts and accessories to Overlapping Business Partners. During the Track
Record Period, we sold parts and accessories of our products to Overlapping Business
Partners, who were primarily our suppliers and provided post-sale services to end
users in relation to our products.
. Customer referrals. During the Track Record Peri od, we paid referral fees to
Overlapping Business Partners, who were primarily our customers, for introducing
new customers to us. As a result, they acted as our suppliers of customer referral
services. Specifically, in 2022, two of our fi ve largest customers in that year, Customer
Group C and Customer Group J, referred new customers to us, for which we paid
them referral fees. Customer Group C, a new energy technology company group
headquartered in Shanxi, referred two leading coke enterprises in the region to us.
From these referrals, we sold two and fiv e loaders to these two new customers,
generating revenue of RMB1.4 million and RMB3.5 million, respectively. Customer
Group J, a new energy technology company headquartered in Guangdong, referred a
logistics company headquartered in Shanghai and a steel company headquartered in
Xinjiang. We sold two loaders to the logistics company and 11 loaders to the steel
company, recording revenue of RMB1.4 million and RMB4.5 million, respectively.
The referral fee was determined based on the d ifference between the final selling prices
of our products and our target selling prices, adjusted for any value-added tax
differences, which is in line with industry practice, according to CIC. In total, we paid
RMB0.5 million in referral fees to Customer Groups C and J in 2022. These referrals
were one-time arrangements.
. Sales of e-powertrain to one of the Overlapping Business Partners. During the Track
Record Period, we collaborated with Suppl ier G, a catalog company primarily acting
as our supplier, in the manufacturing and distribution of battery-electric tractor
trucks. See ‘‘ — Our Products — E-powertrain Kits for Battery-electric Tractor
Trucks.’’ In 2022, Supplier G purchased six e-powertrain kits from us which they then
a s s e m b l e di n t ot r a c t o rt r u cks that they later sold to o ther companies. This was a
one-off transaction based on Supplier G’s occasional business needs.
According to CIC, it is common in the new energy engineering machinery and tractor truck
industries for all participants along the supply chain, such as manufacturers, distributors, end
users, and component suppliers, to utilize eac h other’s engineering and post-sale service
capabilities within their resp ective regions, which facilitate s to provide timely and efficient
repair and maintenance services for products or components as needed. Additionally, it is
typical for existing customers to introduce new ones to manufacturers in exchange for referral
fees, and for suppliers of raw materials and components to purchase finished products from
their downstream manufacturers for their own use.
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In 2022, 2023 and 2024, our sales to Overlapping Business Partners who were primarily our
suppliers amounted to RMB2.8 million, RMB0.9 million and RMB1.1 million, respectively,
accounting for 0.8%, 0.2%, and 0.2% of our total revenue for the corresponding years, and our
purchases from them amounted to RMB71.4 million, RMB13.6 million and RMB47.3 million,
respectively, accounting for 14.5%, 2.8% and 7.7% of our total purchases during the
corresponding years.
In 2022, 2023 and 2024, our purchases from Ov erlapping Business Partners who were
primarily our customers amounted to RMB2.2 million, RMB5.0 million and RMB5.5 million,
respectively, accounting for 0.4%, 1.0% and 0.9% of our total purchase for the corresponding
years, and our sales to them amounted to RMB 107.1 million, RMB183.8 million and RMB331.9
million, respectively, accounting for 29.7% , 39.6% and 52.2% of our total revenue for the
corresponding years.
To the best knowledge of our Directors, during the Track Record Period, there were no
other overlaps between our customers and suppliers. Our Directors confirm that all transactions
with these customers and suppliers were conducted in the ordinary course of business and were
based on normal commercial terms and at arm’s length, and the sales to and purchases from
these entities were neither interconnected nor conditional upon each other.
THIRD-PARTY PAYMENT ARRANGEMENT
During the Track Record Period, we accepted p ayments made by third parties to settle the
amounts that several customers and distributors owed to us in connection with their purchases
of our products. In 2022, 2023 and 2024, the aggre gate amount settled thro ugh such third-party
payments was RMB7.5 million, RMB6.6 million and RMB6.2 million, respectively, representing
2.1%, 1.4% and 1.0% of our total revenue for the corresponding years. The number of
customers and distributors who settled payments through third-party ch annels, referred to as
‘‘Third-Party Settled Customers,’’ was nine in 2022, eight in 2023, and 15 in 2024. We have
ceased to accept any third-party payme nt starting from November 1, 2024.
We accept the above-mentioned third-party payments primarily to facilitate our collection
of the trade receivables. The third parties who made the payments to us under these third-party
payment arrangements during the Track Record Pe riod, referred to as ‘‘Third-Party Payers,’’
were primarily (i) the entities within the same corporate group or under common control with
the Third-Party Settled Customers who initiall y purchased the products from us, or individuals
who are the controlling shareholders of such Third-Party Settled Customers or their family
members, (ii) the third parties that subsequent ly acquired our products from the Third-Party
Settled Customers, and (iii) the entities that had other existing business relationship with the
Third-Party Settled Customers.
D u r i n gt h eT r a c kR e c o r dP e r i o da n du pt ot h eLatest Practicable Date, (i) we had not
encountered any disputes with , nor received any refund request from, any Third-Party Settled
Customer or Third-Party Payer, (ii) we had not been subject to any administrative penalties by
any PRC government authorities with respect to the third-party payment arrangements, and (iii)
the pricing, payment and other salient terms of the agreements we entered into with the
Third-Party Settled Customers were in line w ith our other customers not involved in the
Third-Party Payment Arrangement.
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D u r i n gt h eT r a c kR e c o r dP e r i o da n du pt ot h eL atest Practicable Date, (i) the third-party
payments we accepted were not intended to circumvent any applicable PRC tax laws and
regulations or other applicable PRC laws and regu lations, (ii) all payments we received from the
Third-Party Payers had been duly recorded according to the accoun ting procedures and policies,
(iii) we had fully paid all taxes applicable to the payments we received from the Third-Party
Payers according to applicable PRC tax laws and regulations, and (iv) we had not been subject
to any inquiry, investigation or administrative penalties by the competent government
authorities concerning the PRC tax laws and regulation as a result of the third-party
payments we received. Based on the foregoin g, as advised by our PRC Legal Advisor, the
third-party payments we accepted during the Track Record Period were in compliance with
imperative provisions of applicable PRC laws or regulations.
As advised by our PRC Legal Advisor and to the best knowledge of our Directors, during
the Track Record Period and up to the Latest Prac ticable Date, (i) our third-party payments are
backed by legitimate transaction and commerci ally reasonable arrangements, and there is no
concealment or misrepresentation of the origin or nature of any criminal proceeds or income
derived from such proceeds, which means these p ayments do not constitute money laundering,
nor do they involve any situation that would lead to criminal liability under applicable PRC
laws and regulations; (ii) we have established internal control systems to verify the authenticity,
legality and compliance of business activities involving third-party payments, such as sales and
collections; as a result, we have not used, and will not use, third-party payment arrangements to
circumvent PRC laws and regulations, and (iii) we have not engaged in any activities that would
violate Article 191 of the Criminal Law of the PRC, which pertains to the concealment or
misrepresentation of the origin and nature of criminal proceeds.
To manage the potential risks associated wit h third-party payments, we have implemented
an accounts receivable management policy wit h clear guidelines to manage third-party
payments, such as prohibiting unauthorized third-party payments, requiring the use of
entrusted payment agreements, and establishi ng evaluation and monitoring procedures for
third-party transactions. We require all parties involved in third-party payment arrangements,
including Third-Party Payers and Third-Party S ettled Customers, to si gn an entrusted payment
agreement with us. Under this agreement, (i) the Third-Party Payer, acting on behalf of the
Third-Party Settled Customer, will pay us the amounts owed by the Third-Party Settled
Customer, and (ii) any financial obligations or claims that arise betwe en the Third-Party Payer
and the Third-Party Settled Customer due to thi s payment arrangement are solely between those
two parties and do not involve us. Our risk management and finance departments are
responsible for evaluating the reasonableness and necessity of any third-party payments,
examining whether the payment amounts to be paid accurately reflect the outstanding amounts
owed to us, verifying the authenticity of the payments, and deciding on the authorization of the
third-party payment arrangement. They prompt ly report any unauthorized or unusual payments
made by Third-Party Payers on behalf of Third-Pa rty Settled Customers to the sales department
and senior management.
See ‘‘Risk Factors — Risks Relating to Our Business and Industry — We are subject to the
risks associated with third-party payments.’’
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COMPETITION
The new energy engineering machinery indu stry in China is large in size yet highly
competitive, and we have strategically focused on offering new energy solutions in substitution
for traditional fuel-powered engineering machinery.
We compete with both traditional engineering machinery companies expanding to the new
energy sector and pure-play new energy engineering machinery companies. The former generally
leverage their existing production lines and technological capabilities of traditional engineering
machinery to manufacture new energy engineering machinery. On the contrary, the latter
develop new energy engineering machinery thro ugh the forward engineering model with greater
flexibility. See ‘‘Industry Overview — China’s N ew Energy Engineering Machinery Industry.’’
To remain competitive in the market, we are committed to advancing our technological
innovations, expanding offerings of products and services, expanding our presence in
international and regional marke ts, strengthening manufacturing capabilities, and pursuing
strategic alliances and investments. See ‘‘— Our Strategies.’’
INTELLECTUAL PROPERTY
We believe the protection of our trademarks, copyrights, domain names, trade names,
trade secrets, patents and other proprietary rights is critical to our business. We implement
protective measures to protect our intellectual property, in addition to making trademark and
patent registration applications. We rely on a combination of trademark, fair trade practice,
copyright and trade secret protection laws and p atent protection, as well as confidentiality
procedures and contractual provisions to protect our intellectual property and our trademarks.
We also enter into confidentiality and invention assignment agreements with all of our
employees, and we rigorously co ntrol access to our proprietary technology and information. We
will actively monitor and pursue claims against any unauthorized use of our intellectual
property. We have developed proprietary technology, including patented technology, in a range
of areas, including remote and autonomous operation systems, electrical and electronic
architecture, VCU, thermal management, e-powertrain and battery systems.
As of December 31, 2024, our significant invest ment in incorporatin g advanced technology
into engineering machinery has yielded 131 issued patents and 82 pending patent applications.
As of December 31, 2024, we held 110 trademarks and 20 software copyrights in China. As of
the Latest Practicable Date, we were not involv ed in any litigation or arbitral proceedings in
respect of misappropriation or other violations o f third-party intellectu al property that could
have a material adverse effect on our business, results of operations or financial condition.
DATA PRIVACY AND PROTECTION
We have implemented a stringent data security management system to ensure compliance
with applicable laws and regulations and prevailing industry practices in the collection, usage,
storage, transmission and dissemination of data. During the Track Record Period and up to the
Latest Practicable Date, we had not been subject to any fines or other penalties due to
non-compliance with applicable data security laws or regulations. To the best of our knowledge,
we were not aware of any material data leakage or security breaches during the Track Record
P e r i o da n du pt ot h eL a t e s tP r a c t i c a b l eD a t e .
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Data Collection
We collect data in compliance with applicable laws and regulations. For personal data, we
gather and retain essential contact information when potential customers interact with us, such
as by completing a machine or vehicle reservation form on our website, entering into sales or
distribution agreements, or purchasing products.
Operational data for our products, comprising equipment-related information such as
product status and location, is collected through the VCU and the telematics box. Data
collected by the VCU is processed locally, and da ta from the telematics box is transmitted to us
via telematics. The transmitted data enables us to monitor product performance, detect current
or potential faults, and support our after-sale s services. We inform our customers about these
data collection functions and services through t he product manual and provide them with access
to the data through our platform. Such operational data does not include any personal
identifiers, biometric data, financial infor mation, or government-issued identification.
Our PRC legal advisor for cybersecurity and data privacy is of the view that our data
collection and processing activi ties comply with applicable PRC cybersecurity and data privacy
laws and regulations in all material respects, ba sed on the following grounds: (i) the operational
data we collect does not allow for the identification of individuals and, therefore, does not
qualify as personal data under applicable laws and regulations, meaning the explicit consent
requirements for personal information protection do not apply; (ii) in accordance with
applicable regulations and national standards for electric vehicles, manufacturers like us are
required to establish platforms to monitor and manage key vehicle information, such as battery
health and product status, and report this information to government authorities; and (iii) our
method of informing customers about the relevant data collection functions and services, as well
as providing access to the data through our platform, does not contravene any applicable PRC
cybersecurity and data privacy laws and regulations.
Our privacy policy details our data handling practices, including collection, processing,
sharing, storage and protection, and provides information on user rights, data retention periods,
and other legally required disclosures. Our dedi cated information secu rity task force oversees
the maintenance of our systems and infrastructure, ensuring that data handling complies with
legal standards and our internal policies.
Data Storage and Management
All data processing activities are conducted within China, and data is stored either on our
local servers or on cloud-storage platforms ope rated by third-party service providers within
China, in accordance with the applicable laws and regulations. We have established policies for
data storage and deletion that comply with legal limitations on data retention periods. We also
monitor and inspect the operation of our facilities and servers on a regular basis, reporting and
resolving possible problems in a timely manner.
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Data Protection Technology
We use a variety of technologies to protect th e data we collect from our customers, which
includes contracting third-p arty security services to enhance network and data security,
configuring network firewalls, installing antivirus software, and regularly conducting virus
scans. We monitor our network and system operations continuously to detect and resolve
vulnerabilities and security incidents promptly. Furthermore, we utilize encryption technologies
for storing and transmitting cu stomer data to ensure its confidentiality. As of the Latest
Practicable Date, we did not experience any mater ial network or data secu rity events that result
in severe disruption of our system and business.
EMPLOYEES
As of December 31, 2024, we had a total of 372 full -time employees. Substantially all of our
employees are based in China. The following table sets forth a detailed breakdown of our
employee composition categorized by function as of December 31, 2024 :
Function
Number of
Employees % of Total
Research and development 103 27.3%
Sales and marketing 83 22.3%
Manufacturing 97 26.1%
General and administration 89 23.9%
Total 372 100.0%
We utilize a variety of recruiting channels to sustain our robust talent pool and support our
continued growth. Our primary recruitment methods include online platforms, employment
agencies and referrals. We provi de a series of training for new employees, covering technological
knowledge, skills development, corporate cul ture, leadership and communication to prepare
them as future leaders of our Company.
To remain competitive and expand our talent pool, we offer attractive compensation
packages and a dynamic working environment. We believe that our commitment to fostering a
distinctive working culture will continue to attract more talent.
In compliance with applicable PRC laws and regulations, we participate in a variety of
government statutory employee benefit plans, including social insurance, namely pension
insurance, medical insurance, unemployment i nsurance, work-related injury insurance,
maternity insurance and housing funds. We make contributions to employee benefit plans at
specified percentages of the salaries, bonuses and certain allowances of our employees as
required by applicable PRC laws and regulations, up to an upper limit stipulated by the local
government regulations. Additionally, we provide employer’s liability insurance and
supplementary commercial accident insurance to enhance our employees’ coverage.
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We enter into standard labor contracts with a ll employees and require confidentiality and
non-compete agreements from our research and development staff as well as middle to senior
management. The non-compete agreements typica lly last for two years post-employment, with
compensation calculated based on a certain percentage of pre-departure salary during the
restricted period and paid monthly.
During the Track Record Period and up to the Latest Practicable Date, we had not
witnessed any major labor disputes with our existing or departing employees, which
demonstrate our efforts on maintaining good relationships with our employees.
Social Insurance and Housing Provident Funds
During the Track Record Period and up to the Latest Practicable Date, we did not make
contributions to social insurance and housing provident fund in full or at all for some of
employees in accordance with the applicable PRC laws and regulations. We started to make full
contribution to social insurance and housing provident fund for all but one of our employees in
July 2022, and for all of our employees in July 2024. The under-contribution and
non-contribution of social insurance within a prescribed 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 overdue amount. Pursuant to the applicable PRC laws and regulations, if there is any failure
to pay the full amount of housing provident fund as required, the housing provident fund
management center may require payment of the outstanding amount within a prescribed period.
If the payment is not made within such time li mit, an application may be made to the PRC
courts for compulsory enforcement.
The amount of shortfall of our social insurance contribution was RMB1.7 million, RMB13
thousand and RMB21 thousand, in 2022, 2023 an d 2024, respectively. As advised by our PRC
Legal Advisor, failure to make full and timely s ocial insurance payments may result in a daily
late payment fee of 0.05% of the overdue amoun t from the date of delay and may also lead to a
fine ranging from one to three times the overdue amount. The amount of shortfall of our
housing provident fund contribution was RMB0.5 million, RMB4 thousand and RMB10
thousand, in 2022, 2023 and 2024, respectively.
As advised by our PRC Legal Advisor, the lik elihood that we are subject to claims for
historical arrears or penalties related to our failure to make full social insurance and housing
provident fund contributions for our employees is low, considering that (i) the Ministry of
Human Resources and Social Security and the State Administration of Taxation have strictly
prohibited the centralized collection of historical shortfalls for social insurance and housing
provident fund contributions, (ii) during t he Track Record Period and up to the Latest
Practicable Date, we were not subject to any administrative penalties for violating labor
protection, social insurance or housing provident fund laws and regulations, (iii) during the
Track Record Period and up to the Latest Pract icable Date, we were generally in compliance
with the relevant laws and regulations regarding social insurance and housing provident funds,
and (iv) we have not received any notice of required back payments or employee complaints.
During the Track Record Period, we did not make provision for the shortfall for our
contributions to social insurance and housing provident fund.
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To the best of our knowledge, during the Track Record Period and up to the Latest
Practicable Date, no administrative action or penalty had been imposed on us by the relevant
regulatory authorities with respect to our social insurance and housing provident fund
contributions, nor had we received any order to settle the deficit amount. During the Track
Record Period and up to the Latest Practicable Date, we were not aware of any complaint filed
by our employees regarding our social security insurance and housing provident fund policy.
We have enhanced our internal control mea sures, including designating our human
resources department to review and monitor the reporting and contributions of social insurance
and housing provident fund on a regular basis, and have taken actions to make full
contributions for all of our employees. We will consult our PRC legal counsel on a regular
basis for advice on applicable PRC laws and regulations to keep us abreast of relevant
regulatory developments.
During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any penalties for the social insurance non-compliances and therefore did not incur
any penalties. Our Directors believe that the a bove-mentioned failures to fully comply with
applicable PRC laws and regulations would not ha ve a material adverse effect on our business
and results of operations, considering that: (i ) to our knowledge, we had not been subject to any
administrative penalties during the Track Recor d Period and up to the Latest Practicable Date;
and (ii) during the Track Record Period and up to the Latest Practicable Date, we had not
received any notification from the relevant gov ernment authorities re quiring us to pay for the
shortfalls or any overdue charges with respect to social insurance and housing provident funds.
See ‘‘Risk Factors — Risks Relating to Our Business and Industry — Non-compliance with
relevant regulations regarding social insurance and the housing provident fund may result in
penalties and have an adverse impact on our business, financial condition, results of operations
and prospects.’’
INSURANCE
During the Track Record Period and up to the Latest Practicable Date, we maintained
insurance policies relating to our business operations to safeguard against risks and unforeseen
events. We have secured a suite of commercial insurance policies to mitigate operational risks
and support both economic and social benefits . Our coverage includes accident insurance,
employer’s liability insurance, equipment ins urance, and transportation insurance. We believe
that the scope of coverage provided by these policies is adequate for our current operations and
aligns with standard commercial practices in our industry. See ‘‘Risk Factors — Risks Relating
to Our Business and Industry — Our insurance coverage strategy may not be adequate to
protect us from all business risks and cover al l of our potential losses.’’ During the Track
Record Period and up to the Latest Practicable Date, we had not made, nor been the subject of,
any material insurance claim.
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PROPERTIES
According to Chapter 5 of the Listing Rules and section 6(2) of the Companies (Exemption
of Companies and Prospectuses from Compliance with Provisions) Notice, this prospectus is
exempted from compliance with the require ments of section 342(1)(b) of the Companies
(Winding-Up and Miscellaneous Provisions) Ordinance in relation to paragraph 34(2) of the
Third Schedule to the Companies (Winding-Up and Miscellaneous Provisions) Ordinance which
require a valuation report with respect to all our interests in land or buildings, for the reason
that, as of the Latest Practicable Date, none of our properties had a carrying amount of 15% or
more of our consolidated total assets.
Owned Property
As of the Latest Practicable Date, we obtained l and use right certificates for three parcels
of land, located in Wuhan, Hubei, Lanxi, Zhejiang, and Xiangtan, Hunan, with site area of
approximately 66,642 square meters, 94,125 square meters, and 82,061 square meters,
respectively. We constructed o ur second loader manufacturing plant on our land located in
Wuhan, Hubei which commenced operations in August 2024 and are currently constructing
another loader manufacturing plant on our land located in Lanxi, Zhejiang. We intend to
establish a wide-body dump truck manufacturing and assembly plant in Xiangtan, Hunan. See
‘‘— Manufacturing — Our Manufacturing Plants.’’ Our PRC Legal Advisor has confirmed that
the use of our land does not contravene the use specified in the land use right certificates.
Leased Property
As of the Latest Practicable Date, we leased f our properties from third parties in the PRC,
with an aggregate gross floor area of approximately 20,641 square meters. These properties are
primarily used as manufacturing plants and warehouses. We will evaluate the possibility of
renewing these leases upon their expiry. The following table sets forth the details of our leased
properties:
Location Usage
Approximate
Gross Floor Area
(Square Meters) Lease Expiry Date
Zaozhuang, Shandong Manufacturing plant 4,755 July 31, 2026
Minhang, Shanghai Office pre mise 2,900 December 9, 2027
Yuyao, Zhejiang Manufacturing plant 12,986 April 30, 2028
Pursuant to the applicable PRC laws and regulations, both lessors and lessees must register
lease agreements with the relevant authorities and obtain property leasing filing certificates. As
of the Latest Practicable Date, our leases ha d not been registered with the governmental
authorities. The failure to regi ster and obtain the required certi ficates for these leases could
result in fines ranging from RMB1,000 to RMB10,000 per unfiled agreement. If such fines are
imposed, the maximum penalty we may be required to pay would be approximately RMB40,000
for the above three leased properties. See ‘‘Ri sk Factors — Risks Relating to Our Business and
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Industry — Any unanticipated lease terminations , as well as challenges in renewing existing
premises at favorable terms, could have a material adverse effect on our business.
Non-registration of lease agreem ents may subject us to fines.’’
During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any penalties arising from the non-registration of our lease agreements, nor had we
faced any disputes related to our leased propert ies. As advised by our PRC Legal Advisor, the
non-registration of our lease agreements does not affect the validity of these lease agreements.
We believe that such non-compliance is unlikely to have a material adverse effect on our
business operations or financial performance.
LITIGATIONS
We may be subject to various legal and administrative proceedings and claims and
investigations arising in the ordinary course of our business from time to time. See ‘‘Risk
Factors — Risks Relating to Our Business and Industry — We are, and may in the future be,
subject to legal and regulatory proceedings and/or investigations in the ordinary course of our
business.’’
During the Track Record Period, we had been s ubject to a product liability lawsuit as the
defendant, in which we refunded the customer the full purchase price of RMB2.9 million and
provided compensation of RMB180,000 to the c ustomer for property damages caused to a third
party. This litigation has not had a material impact on our business, results of operations or
financial condition. See ‘‘Risk Factors — Risks Relating to Our Business and Industry — We
have been and may become subject to product liability claims, which could harm our financial
condition if we are not able to success fully defend against such claims.’’
During the Track Record Period and up to t he Latest Practicable Date, we were not
involved in any material litigat ion, arbitration proceedings or ot her legal proceedings pending,
or to the best knowledge of our Directors, threatened against us that could have a material
adverse effect on our business, results of operations or financial condition.
COMPLIANCE WITH LAWS AND REGULATIONS
We are subject to a wide range of PRC laws and regulations in the ordinary course of
business. During the Track Record Period and up to the Latest Practicable Date, we had not
been and were not involved in any material non-compliance incidents that have led to fines,
enforcement actions, or other penalties which individually or in the aggregate, in the opinion of
our Directors, would have a material and adverse effect on our business, financial condition or
results of operations. During the Track Record Period and up to the Latest Practicable Date, we
had complied with the applicable PRC laws and regulations in all material respects.
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LICENSES AND PERMITS
As of the Latest Practicable Date, we had obtained all requisite licenses, permits and
approvals that are material to our operations and such licenses, permits and approvals were
valid and remain in effect with no material risk of being unable to be renewed upon expiration.
The table below sets forth the relevant details about the material licenses required for our
o p e r a t i o ni nt h eP R C :
License/Permit Holder Issuin g Authority Validity Period
Registration for Pollutant
Discharge from Fixed
Pollution Sources
(固定污染源排污登記)
Breton (Shandong) New
Energy Vehicle Co.,
Ltd. ( 博雷頓（山東）新能
源汽車有限公司), one of
our subsidiaries
— May 19, 2022 to
May 18, 2027
Road Transport Operation
License
(道路運輸經營許可證)
Breton (Shandong) New
Energy Vehicle Co.,
Ltd. ( 博雷頓（山東）新能
源汽車有限公司), one of
our subsidiaries
Administrative Approval Service
Bureau of Shanting District of
Zaozhuang ( 棗莊市山亭區行政
審批服務局)
March 19, 2025 to
March 18, 2029
RISK MANAGEMENT AND INTERNAL CONTROL
We are dedicated to establishing and maintaining a robust risk management and internal
control system. We have adopted and continually improve our internal control mechanisms to
ensure compliance with our business operations. Furthermore, we conduct periodic reviews of
the implementation of our risk management policies and internal control measures to ensure
their effectiveness and adequacy. We are commi tted to promoting a compliance culture and will
adopt policies and procedures on various compliance matters, including those related to the
Stock Exchange’s requirements on corporate g overnance and environmental, social and
governance matters. Our Board will be collectively responsible for the establishment and
operations of mechanisms in relation to corporate governance and environmental, social and
governance. Our Directors are involved in the f ormulation of such m echanisms and related
policies. We have adopted and implemented risk management policies in various aspects of our
business operations to address potential risks related to operations, information security,
intellectual property, and anti-corruption.
Business Operational Risk Management
Business operational risk refers to the risk of direct or indirect financial loss resulting from
incomplete or problematic internal processes, personnel mistakes, IT system failures, or external
events. We have established a series of inter nal procedures to manage such risks. We take a
comprehensive approach to operational risk management and implement a mechanism with
detailed and decentralized responsibilities, a long with clear rewards and punishment systems.
Our sales department, research center, production and operations department, procurement
department, human resources department, public relations department, legal department, risk
management department, finance department, customer service department, quality
department, secretary to the Board’s office, administrative department, IT department, and
internal audit department are collectively responsible for ensuring that our business operations
comply with internal procedures. In the event o f a major adverse occurrence, the matter will be
escalated to our senior management, and the B oard may need to take appropriate measures.
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Through effective business operational risk ma nagement, we expect to control operational risks
within a reasonable range by identifying, measur ing, monitoring, and containing operational
risks to reduce potential losses.
Anti-Corruption Risk Management
A n t i - c o r r u p t i o nr i s kr e f e r st ot h er i s ka s s o c iated with the use of cheating, bribery, or other
illegal measures for (i) the pursuit of improper personal benefits at the expense of our economic
interests and (ii) the pursuit of improper interests of our Company. We have established
anti-corruption risk management policies that prohibit any corrupt activities by employees,
whether for personal gain or improper interests. Our internal audit department is directly
responsible for anti-corruption risk manageme nt and has established an anti-corruption
committee comprising designated personnel fro m our human resources, internal audit, and legal
departments. We maintain a whistleblower mechanism to encourage the internal reporting of
suspicious activities. We have a zero-tolera nce policy for corruption and do not accept the
employment or promotion of individuals resp onsible for corruption incidents. We conduct
routine internal training and require all suppliers to sign anti-corruption commitments before
engagement.
Confidentiality Risk Management
Confidentiality risk arises when an employee breaches their confidentiality obligations by
disclosing our or our business partners’ trade secrets to third parties. Such actions could harm
our commercial interests and expose us to legal actions and reputational damage. To address
this, we have implemented a stringent confiden tiality agreement template that employees must
sign along with their employment contract befor e starting their roles. This agreement clearly
outlines their responsibilities t o protect confidential informat ion. We also provide training to
raise employee awareness of confidentiality, including regular security drills and simulated leak
scenarios to enhance vigilance. Furthermore, we have enacted a ‘‘Confidentiality Management
Policy’’ that defines the roles and responsibili ties of our confidentiality team, establishes
procedures for managing trade secrets and personnel handling sensitive information, and sets
forth disciplinary actions and rewards to reinforce compliance.
Business Partner Contract Fraud Risk Management
Contract fraud risk arises when business partn ers engage in fraudulent activities, such as
forging contracts, providing false information, o r concealing critical facts, which could mislead
us into signing unfavorable agreements and harm our interests. To mitigate this risk, we have
established a ‘‘Contract Management Policy’’ that defines procedures for drafting, reviewing,
and managing contracts. This policy includes a robust review process with multiple approval
checkpoints to prevent and cont rol contract risks effectively.
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Business Partner Product Quality Risk Management
Product quality risk arises when products or se rvices provided by business partners have
defects or quality issues, leading to customer dissatisfaction, harm to our brand image, and a
loss of competitive edge. To manage this ri s k ,w eh a v ei m p l e m e n t e dt h e‘ ‘ P r o c u r e m e n t
Management Policy’’ and the ‘‘Supplier Management Procedure’’ that specify supplier
management processes and the responsibilities of our relevant departments. Additionally, our
quality department annually maintains and updates our quality management system documents,
including inspection standards and quality co ntrol procedures, to ensure prompt responses to
quality issues. We have also introduced the ‘‘Quality Issue Accountability Policy’’ to define
responsibilities for quality problems and ensure accountability in addressing them.
Audit Committee and Board Oversight
To monitor the ongoing implementation of our risk management policies, 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 the Cor porate Governance Code. The Audit Committee
consists of three Directors, namely Dr. Jiang Bailing, Mr. YIM, Chi Hung Henry and Dr. Li
Xiaofu, with Dr. Jiang Bailing currently servi ng as the chairman. Dr. Jiang Bailing and Mr.
YIM, Chi Hung Henry have the appropriate profes sional experiences as required under Rules
3.10(2) and 3.21 of the Listing Rules. See ‘‘Directors, Supervisors and Senior Management —
Board Committees — Audit Committee.’’
Our internal audit department is responsible f or reviewing the effectiveness of internal
controls and for reporting issues identified, thereby improving our internal control system and
procedures by identifying failures and weaknesses on an ongoing basis. The internal audit
department reports any major issues identifi ed to the Audit Committee and Board in a timely
manner.
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The following discussion and our analysis should be read in conjunction with our
consolidated financial statements included in the Accountants’ Report in Appendix I, together
with the accompanying notes. Our consolidated financial statements have been prepared in
accordance with IFRS.
The following discussion and analysis contain f orward-looking statements that reflect our
current views with respect to future events and financial performance. These statements are
based on our assumptions and analysis in light of our experience and perception of historical
trends, current conditions and expected future de velopments, as well as other factors we believe
are appropriate under the circumstances. How ever, whether actual outcomes and developments
will meet our expectations and predictions depe nds on a number of risks and uncertainties, and
our actual results may differ materially from those anticipated in these forward-looking
statements as a result of certain factors. In evaluating our business, you should carefully
consider the information provided in this prospectus, including but not limited to the sections
headed ‘‘Forward-looking Statement,’’ ‘‘Risk Factors’’ and ‘‘Business.’’
For the purposes of this section, unless the cont ext otherwise requires, references to 2022,
2023 and 2024 refer to our fiscal years ended December 31 of such years, respectively.
OVERVIEW
We are a China-based provider of electric- powered engineering machinery. We design,
develop and commercialize battery-electric engineering machinery with autonomous capabilities
and provide intelligent operation services . According to CIC, we ranked third and seventh
among all manufacturers of new energy wide-body dump trucks and loaders in China, with a
market share of 18.3% and 3.8% in terms of shipments in 2024, respectively, being the only
pure-play manufacturer among the top manufacturers of these two types of new energy
engineering machinery. In 2024, we achieved a market share of 3.2% in the wide-body dump
truck market and 1.3% in the loader market in China, including both new energy and
fuel-powered machinery, in terms of revenue. W e also design and develop e-powertrain kits for
battery-electric tractor trucks and collaborate with manufacturers to bring these vehicles to
market.
During the Track Record Period, we generat ed most of our revenue from (i) sales of our
products, including battery-electric loaders , battery-electric wide-body dump trucks, and
battery-electric tractor trucks, as well as spare pa rts and accessories, (ii) rendering of services,
including repair, maintenance and trial-use services for our products, and (iii) other sources,
primarily consisting of rental income from the leasing of our products.
We had revenue of RMB360.1 million, RMB463.7 million and RMB635.5 million in 2022,
2023 and 2024, respectively. We r ecorded gross profit was RMB8.2 million, RMB9.3 million and
RMB36.8 million in 2022, 2023 and 2024, respect ively, representing a gross profit margin of
2.3%, 2.0% and 5.8% in the same years, respect ively. We had net loss of RMB178.1 million,
RMB229.4 million and RMB274.5 million in 202 2, 2023 and 2024, respectively. Our adjusted
net loss (a non-IFRS measure), was RMB142.6 million, RMB189.8 million and RMB217.6
million in the same years, respectively. See ‘‘— Description of Major Components of Our
Results of Operations — Non-IFRS Measures’’ for a reconciliation of our net loss to the
adjusted net loss (a non-IFRS measure).
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BASIS OF PREPARATION AND PRESENTATION
Our Company was established as a limited liability company in the PRC on November 28,
2016 and was converted into a joint stock company with a limited liability on November 23,
2022. Our consolidated financial statements for the Track Record Period have been prepared in
accordance with all applicable International Financial Reporting Standards (‘‘IFRS’’), which
collective term includes all applicable individual International Financial Reporting Standards,
International Accounting Standards (‘‘IASs’’) and Interpretations issued by the International
Accounting Standards Board (the ‘‘IASB’’).
The IASB has issued a number of new and revised IFRSs. For the purpose of preparing our
consolidated financial statements for the Track Record Period, we have adopted all applicable
new and revised IFRSs to the Track Record Period. The accounting policies set out in Note 2 to
the Accountants’ Report included in Appendix I to this prospectus have been applied
consistently throughout the Track Record Period, and we have not adopted any new standards
or interpretations that are not yet effective f or the Track Record Period. The revised and new
accounting standards and interpretations is sued but not yet effective for the Track Record
Period are set out in Note 33 to the Accountants’ Report in Appendix I to this prospectus.
MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business, results of operations and financial condition have been, and are expected to
continue to be, affected by the following significant factors.
General Factors
Our results of operations and financial condition are affected by general factors affecting
the new energy engineering machinery industry, primarily including:
. global and China’s macroeconomic conditions and the growth of engineering
machinery market in China;
. governmental policies, initiatives and in centives affecting China’s new energy
engineering machinery market;
. market acceptance of new energy engineering machinery;
. the competition in China’s new energy engineering machinery market; and
. technology developments for new energy engineering machinery.
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Specific Factors
While our business is influenced by the general factors set forth above, our results of
operations are more directly aff ected by specific factors relating to our business, primarily
including:
Our Ability to Generate Customer Demand and Grow Our Customer Base
Our results of operations depend significantly on our ability to increase sales volume of our
battery-electric loaders and wide-body dump trucks to customers. We strive to enhance our
brand recognition among target customers by consistently delivering upgradable and
cost-efficient products as well as superior cus tomer experiences. Our products have great
performance with reduced energy consumptio n and maintenance expenses, leading to lower
total costs during their entire lifecycle as compa red to the traditional fuel-powered counterparts,
making us well poised to capture market opportunities.
Furthermore, we intend to strategically expand and strengthen our international market
presence, primarily focusing on overseas mar kets with higher new energy penetration. We
believe we are well poised to expand our global reach to other countries and regions with rising
demand. Our product development expertise and rich product portfolio will enable us to offer
significant customization for diverse intern ational markets. As we continue to develop and
launch new models and expand our sales and service network, we anticipate rapid growth in our
customer base and revenue.
Competitiveness and Continued Expansion of Our Offerings of Products and Services
We believe we have established our brand in t he attractive customers and engineering
machinery market segments. However, our ability to grow revenue and expand margins will also
depend on our ability to develop and launch new offerings of products and services. We aspire
to accelerate the advancement of our flagship offerings by introducing battery-electric
wide-body dump trucks and loaders with greater payloads and battery capacities, especially
those equipped with our remote and autonomous operation technologies. We plan to
continuously introduce new models to expand our product portfolio and customer base to
address the evolving and diversified customer demand.
Leveraging our extensive technological and en gineering expertise across various products
and platforms, we have successfully expanded an d will continue to expand our offerings and
services. For example, in 2022, we were commiss ioned by a trucking company based in North
America to design and manufacture add-on e-powertr ains, allowing conventional diesel tractors
to operate as hybrids. In the second half of 2025, we plan to launch a 145-tonne range-extended
wide-body dump truck with a 724-kWh battery . In addition, we plan to introduce a 135-tonne
battery-electric wide-body dump truck with a battery exceeding 900 kWh in 2026. Both products
will incorporate an upgraded electrical and el ectronic architecture. Alongside expanding our
product range, we strive to offer a suite of scenario-specific products and services that
incorporate intelligent techno logies. In March 2023, we integrat ed our proprietary autonomous
system onto our BRT105E model and introduced our first-generation autonomous wide-body
dump trucks. We expect the continued expansion of our product portfolio to be a key factor to
drive our revenue growth.
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Our Ability to Manage Raw Material Costs Effectively
The fluctuations in the prices of raw materials and components, as well as other
production-related costs, have affected and will c ontinue to affect our profitability. Our results
of operations are significantly affected by the cost of raw materials and components, which
forms the majority of our cost of sales. In 2022, 2023 and 2024, our costs of raw materials and
components were RMB307.1 million, RMB399.1 m illion and RMB536.5 mil lion, respectively,
representing 87.3%, 87.8% and 89.6% of the total cost of sales in the corresponding periods.
We have experienced and may continue to experience cost fluctuations or disruptions in supply
of input materials, which could impact our financial performance.
The prices of raw materials and components are susceptible to significant price fluctuations
due to supply and demand trends in the commodities markets, transportation costs, government
regulations and tariffs, price controls, econo mic climate and other unforeseen circumstances.
The principal raw materials and components that we use in the production of our products are
batteries. The average price of LFP battery experienced a decrease from 2018 to 2021, an
increase in 2022, and a decrease si nce 2023. These fluctuations reflected the market demands for
LFP batteries. The average price of LFP battery is expected to maintain a decrease trend in the
near future, according to CIC. We manage our raw material costs by seeking competitive
procurement tenders, maintaining long-term relationships with key suppliers and selecting new
suppliers that offer competitive prices. See ‘‘Business — Our Suppliers — Our Major Suppliers.’’
We do not use financial instruments to hedge our raw material exposure. We expect the prices of
raw materials and components to continue to flu ctuate in the foreseeable future and our results
of operations will continue to be materially affected by such movements. See ‘‘Industry
Overview — Historical Trends of Prices on Ma jor Raw Materials and Components for New
Energy Engineering Machinery’’ and ‘‘Risk Factors — Risks Relating to Our Business and
Industry — We may encounter cost increases or disruptions in the supply of raw materials or
other components used in our products.’’
We have established long-term partnerships with many established suppliers. We expect
our unit production costs to reduce as we scale up our production capacity and achieve
economies of scale. We will continue to apply intelligent manufacturing technologies to optimize
our production process and enhance operation efficiency. We believe that, as a result of our
increased business scale, we can have a greater bargaining power with suppliers of raw materials
and components and obtain more favorable pricing and payment terms from them, which will
enable us to improve our profitability.
Our Ability to Enhance Technological Capabilities
We have been committed to in-house research and development of advanced technologies
since our inception. These technologies mainly f ocus on autonomous operating systems, VCU,
e-powertrain technologies, battery systems, elec trical and electronic architecture, thermal
management, and frame and chassis design. In 2022, 2023 and 2024, our research and
development costs were RMB44.9 million, RMB68.6 million and RMB81.7 million, respectively,
accounting for 12.5%, 14.8% and 12.9% of the tot al revenue, respectively. Our investment in
incorporating advanced technologies into engineering machinery has yielded 131 issued patents
and 82 pending patent applications as of December 31, 2024. We have dedicated significant
resources towards research and development, a nd our research and development staff accounted
for approximately 27.7% of our total emplo yees as of December 31, 2024. Our business and
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competitive position depend on our ability to retain or hire technology talents. We will continue
to recruit and retain talented software developers and engineers to escalate our continued
innovation in the key technologies. We expect our strategic focus on innovations will further
differentiate our products, further enhancing our competitiveness.
Our Ability to Execute Effective Sales , Marketing and Pricing Strategies
Effective sales and marketi ng are critical to our sales growth. We have established a
network of direct sales and distribution channels to carry out our sales and marketing strategies.
See ‘‘Business — Sales and Service Network.’’ We also seek to acquire new customers through
other channels, such as online and offline marketing activities. We plan to substantially raise
our brand awareness by connecting with our cust omers through rich digi tal experiences, trade
shows and exhibitions, and online marketing channels, such as engaging video content
distributed across digital platforms. We expect these activities will attract more customers and
generate new orders for us. See ‘‘Business — Marketing Strategy.’’
Our ability to price our products competitively and adjust our prices effectively is also
essential for us in acquiring customer orders. We price our products from both demand and
supply perspectives considering a variety of fa ctors, including the budget of our target
customers, the competitiveness of our products, our production costs, research and development
costs, and the gross profit we plan to achieve. We also adjust the prices of our existing product
models based on multiple factors, in particular the demand for our products and the prices of
our competitive products.
Our Ability to Maintain and Improve Operating Efficiency
Our results of operations are further affect ed by our ability to maintain and improve our
operating efficiency, as measured by our tota l operating expenses as a percentage of our
revenues. During the Track Record Period, our selling expenses were RMB46.9 million,
RMB58.0 million and RMB59.7 million in 2022, 2023 and 2024, respectively, which accounted
for 13.0%, 12.5% and 9.4% of our total revenue, res pectively. Our administrative expenses were
RMB59.4 million, RMB88.4 million and RMB109.3 million in 2022, 2023 and 2024,
respectively, representing 16.5%, 19.1% and 17.2% of our total revenue, respectively.
To improve our profitability, we aim to improve operating efficiency in key aspects of our
business, such as product development, supply chain, manufacturing, sales and marketing, and
post-sale services. We expect our selling expenses and administra tive expenses to increase for the
foreseeable future as our business continues to scale up. At the same time, we expect our selling
expenses and administrative expenses as per centage of revenue to decrease over time due to
economies of scale and improve d operational efficiency.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We have identified certain accounting policies t hat are significant to the preparation of our
financial statements. In the application of our accounting policies, our management is required
to make judgments, estimates and assumptions that affect the application of accounting policies
and reported amounts of assets, liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be
reasonable under the circumstances, the results of which form the basis of making the judgments
about the carrying values of assets and liabil ities that are not readily apparent from other
sources. Actual results may differ from the se estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future p eriods if the revision affects both current and
future periods.
Set forth below are accounting policies that w eb e l i e v ea r eo fc r i t i c a li m p o r t a n c et ou so r
involve the most significant estimates, assum ptions and judgments used in the preparation of
our financial statements. See Note 2 to the Accountants’ Report in Appendix I to this
prospectus for a description of other material accounting policy information.
Revenue Recognition
During the Track Record Period, we generat ed most of our revenue from (i) sales of our
products, including battery-electric loaders , battery-electric wide-body dump trucks, and
battery-electric tractor trucks, as well as spare parts and accessories, (ii) rental income from the
leasing of these products, and to a lesser extent, and (iii) providing maintenance and trial-use
services for our products.
We recognize revenue when control over a product or service is transferred to the
customer, or when the lessee has the right to use the asset, at the amount of promised
consideration we are expected to be entitled to , excluding those amounts collected on behalf of
third parties. We recognize reve nue after deducting any value added tax (‘‘VAT’’), other sales
taxes and trade rebates.
Where the contract contains a financing component that provides a significant financing
benefit to the customer for more than 12 months, we measure revenue at the present value of the
amount receivable, discounted using the discount rate that woul d be reflected in a separate
financing transaction with th ec u s t o m e r ,a n da c c r u ei n t e r e st income separately under the
effective interest method. Where the contract contains a financing component which provides a
significant financing benefit to us, we recogn ize the interest expense accreted on the contract
liability under the effective interest method as revenue under that contract. We take advantage
of the practical expedient in paragraph 63 of IFRS 15 and do not adjust the consideration for
any effects of a significant financing component if the period of financing is 12 months or less.
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Sale of Products
We recognize revenue when products are delivered to the customers’ premises which is
taken to be the point in time when the customer has accepted and taken possession of the goods
at the amount of promised consideration to whic h we are expected to be entitled. We recognize
revenue after deducting any VAT, other sales taxes, and trade rebates.
We do not recognize revenue that we will be en titled to when we satisfy the remaining
performance obligations for those we have a right to consideration from customers in an
amount that corresponds directly with the value to the customer of our performance completed
to date. We recognize revenue in the amount to which the Group has a right to invoice.
Rendering of Services
We recognize revenue from rendering of services , including maintenance service, trial-use
services, etc. over the period of the service.
Rental Income
We recognize rental income from operating leases in profit or loss on a straight-line basis
over the term of the lease. We recognize lease incentives granted as an integral part of the total
rental income, over the term of the lease. We recognize variable lease payments that do not
depend on an index or a rate as income in the accounting period in which they are earned.
Inventories
Inventories are assets which are held for sale in the ordinary course of business, in the
process of production for such sale or in the form of materials or supplies to be consumed in the
production process or in the rendering of services. We carry inventories at the lower of cost and
net realizable value.
We calculate cost using the weighted average cost formula, which comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the inventories to their
present location and condition. Net realizable val ue is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the estimated costs necessary to
make the sale.
When inventories are sold, we recognize the carrying amount of those inventories as an
expense in the period in which the related rev enue is recognized. We r ecognize the amount of
any write-down of inventories to net realizable value and all losses of inventories as the cost of
sales in the period the write-down or loss occurs. We recognize the amount of any reversal of
any write-down of inventories as a reduction in the amount of inventories recognized as an
expense in the period in which the reversal occurs. We recognize a right to recover returned
goods for the right to recover products from customers sold with a right of return.
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Trade and Other Receivables
We recognize a receivable when we have an unc onditional right to r eceive consideration,
and only the passage of time is required before payment of that consideration is due. If revenue
has been recognized before we have an unconditional right to receive consideration, we present
the amount as a contract asset.
We initially measure trade receivables that do not contain a significant financing
component at their transaction price. We initially measure trade receivables that contain a
significant financing component and other recei vables at fair value plus transaction costs.
We subsequently state all receivables at amor tized cost, using the effective interest method
and including an allowance for credit losses.
Property, Plant and Equipment
We state property, plant and equipment at cost less accumulated depreciation and
impairment losses.
Construction in progress represents property, plant and equipment under construction and
equipment pending installation, and is initially recognized at cost. Cost comprises cost of
materials, cost of labor, the initial estimate, w here relevant, of the costs of dismantling and
removing the items and restoring the site on w hich they are located, and an appropriate
proportion of production overheads and borrowing costs. We transfer the construction in
progress to property, plant and equipment when th e asset is substantially ready for its intended
use.
We recognize any gain or loss on disposal of an item of property, plant and equipment in
profit or loss. Any related revaluation surplus i s transferred from the revaluation reserve to
retained profits and is not reclassified to profit or loss.
We calculate depreciation to write off the co st of items of property, plant and equipment,
less their estimated residual value, if any, usin g the straight-line metho d over their estimated
useful lives, and we generally recognize d epreciation in profit or loss, as follows:
Categories
Estimated
useful life
Machinery and equipment 3–10 years
Office and other equipment 3–5 years
Lease vehicles 5 years
Leasehold improvement 2–6 years
Where parts of an item of property, plant and equipment have different useful lives, we
allocate the cost of the item on a reasonable bas is between the parts and each part is depreciated
separately. We review depreciation methods, useful lives and residual values at each reporting
date and adjust if appropriate.
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Credit Losses and Impairment of Assets
Credit Losses from Financial Instrumen ts, Contract Assets and Lease Receivables
We recognize a loss allowance for expected cred it losses (‘‘ECLs’’) on the following items:
. financial assets measured at amortized co st (including cash and cash equivalents,
bank deposits and trade receivables and oth er receivables, including loans to other
investments in equity, which are held for the collection of contractual cash flows
which represent solely paymen ts of principal and interest);
. contract assets as defined in IFRS 15; and
. lease receivables.
Other financial assets measured at fair value , including equity securities designated at
FVOCI (non-recycling), are not subject to the ECL assessment.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. We measure credit losses as the
present value of all expected cash shortfalls b etween the contractual and expected amounts.
We discount the expected cash shortfalls using the following discount rates where the effect
of discounting is material:
. fixed-rate financial assets, t rade and other receivables and contract assets: effective
interest rate determined at initial reco gnition or an approximation thereof;
. variable-rate financial assets: cur rent effective interest rate; and
. lease receivables: discount rate used in t he measurement of the lease receivable.
The maximum period considered when estimating ECLs is the maximum contractual
period over which we are exposed to credit risk.
In measuring ECLs, we take into account rea sonable and supportable information that is
available without undue cost or effort. This includes information about past events, current
conditions and forecasts of future economic conditions.
We measure ECLs on either of the following bases:
. 12-month ECLs: these are losses that are expected to result from possible default
events within the 12 months after the reporting date; and
. l i f e t i m eE C L s :t h e s ea r el o s s e st h a ta r ee x p e c t e dt or e s u l tf r o ma l lp o s s i b l ed e f a u l t
events over the expected lives of the i tems to which the ECL model applies.
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We always measure loss allowances for trade r eceivables and contract assets at an amount
equal to lifetime ECLs. We estimate ECLs on thes e financial assets using a provision matrix
based on our historical credit loss experience, adjusted for factors that are specific to the debtors
and an assessment of both the current and forecast general economic conditions at the reporting
date.
For all other financial instruments, we reco gnize a loss allowance equal to 12-month ECLs
unless there has been a significant increase in cred it risk of the financial in strument since initial
recognition, in which case we measure the loss allowance at an amount equal to lifetime ECLs.
Significant Increases in Credit Risk
In assessing whether the credit risk of a financial instrument has increased significantly
since initial recognition, we compare the risk of default occurring on the financial instrument
assessed at the reporting date with that assessed at the date of initial recognition. In making this
reassessment, we consider that a default event occurs when the borrower is unlikely to pay its
credit obligations to us in full, without recourse by us to actions such as realizing security (if any
is held). We consider both quantitative and qualitative information that is reasonable and
supportable, including historical experience and forward-looking information that is available
without undue cost or effort. In particular, the following information is taken into account
when assessing whether credit risk has increase d significantly since initial recognition:
. failure to make payments of principal or interest on their contractually due dates;
. an actual or expected significant deteriora tion in a financial instrument’s external or
internal credit rating (if available);
. an actual or expected significant deterioration in the operating results of the debtor;
and
. existing or forecast changes in the tec hnological, market, economic or legal
environment that have a significant adverse effect on the debtor’ sa b i l i t yt om e e ti t s
o b l i g a t i o nt ou s .
Depending on the nature of the financial instruments, we perform the assessment of a
significant increase in credit risk on either an individual basis or a collective basis. When the
assessment is performed on a collective basis, we group the financial instruments based on
shared credit risk characteristics, such as past due status and credit risk ratings.
We remeasure ECLs at each reporting date to re flect changes in the financial instrument’s
credit risk since initial recognition. We recognize any change in the ECL amount as an
impairment gain or loss in profit or loss. We recognize an impairment gain or loss for all
financial instruments with a corresponding ad justment to their carrying amount through a loss
allowance account, except for investments in debt securities that are measured at FVOCI
(recycling), for which the loss allowance is r ecognized in other comprehensive income and
accumulated in the fair value reserve (recycling).
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Credit-impaired financial assets
At each reporting date, we assess whether a fina ncial asset is credit-impaired. A financial
asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asse t have occurred. Evidence that a financial asset
is credit-impaired includes the following observable events:
. significant financial difficulties of the debtor;
. a breach of contract, such as a default or past due event;
. it is becoming probable that the borrower will enter into bankruptcy or other
financial reorganization;
. significant changes in the technological, m arket, economic or legal environment that
have an adverse effect on the debtor; or
. the disappearance of an active market for a se curity because of finan cial difficulties of
the issuer.
Write-off Policy
We write off (either partially or in full) the gross carrying amount of a financial asset,
contract asset or lease receivable to the extent that there is no realistic prospect of recovery. This
is generally the case when we determine that the debtor does not have assets or sources of
income that could generate sufficient cash flo ws to repay the amounts subject to the write-off.
We recognize subsequent recoveries of an asset t hat was previously written off as a reversal
of impairment in profit or loss in the period in which the recovery occurs.
Credit Losses from Financial Guarantees Issued
Financial guarantees are contracts that require the issuer (the guarantor) to make specified
payments to reimburse the beneficiary of the gua rantee (the holder) for a loss the holder incurs
because a specified debtor fails to make paym ent when due in accordan ce with the terms of a
debt instrument.
We initially recognize financial guarantees issued at fair value. The amount initially
recognized as deferred income is subsequently amortized in profit or loss over the term of the
guarantee as income.
We monitor the risk that the specified debtor will default on the contract and remeasure
the above liability at a higher amount when ECLs on the financial guarantees are determined to
be higher than the carrying amount in respect of the guarantees.
We measure a 12-month ECL unless the risk that the specified debtor will default has
increased significantly since the guarantee was issued, in which case we measure a lifetime ECL.
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As we are required to make payments only in the event of a default by the specified debtor
in accordance with the terms of the instrument that is guaranteed, we estimate an ECL based on
the expected payments to reimburse the holder for a credit loss that it incurs less any amount
that we expect to receive from the holder of the guarantee, the specified debtor or any other
party. We then discount the amount using the current risk-free rate adjusted for risks specific to
the cash flows.
Impairment of Other Non-current Assets
At each reporting date, we review the carrying amounts of our non-financial assets (other
than property carried at revalued amounts, investment property, inventories and other contract
costs, contract assets and deferred tax assets) t o determine whether there is any indication of
impairment. We estimate the asset’s recoverable amount if any such indication exists. We test
goodwill annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that
generate cash inflows from continuing use that are largely independent of the cash inflows of
other assets or cash-generating units (‘‘CGU(s)’’). We allocate goodwill arising from a business
combination to CGUs or groups of CGUs that are expected to benefit from the synergies of the
combination.
The recoverable amount of an asset or CGU is t he greater of its value in use and its fair
value less costs of disposal. Value in use is bas ed on the estimated future cash flows, which 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 or CGU.
We recognize an impairment loss if the carrying amount of an asset or CGU exceeds its
recoverable amount. We recognize impairment l osses in profit or loss. We allocate impairment
losses first to reduce the carrying amount of any goodwill allocated to the CGU, and then to
reduce the carrying amounts of the other assets in the CGU on a pro rata basis.
We do not reverse an impairment loss in respect of goodwill. For other assets, we reverse
an impairment loss only to the extent that the resulting carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no
impairment loss had been recognized.
During the Track Record Period, our Directors considered that the Group as a whole
constitutes a single cash-generating unit and assessed the impairment indication of the property,
plant and equipment, right-of-use assets and intangible assets at the end of reporting period by
reviewing internal and external sources of information. If any such indication exists, the asset’s
recoverable amount is estimated by using the value in use model. Value in use was calculated by
preparing discounted cash flows and any shortfall of the recoverable amount against the
carrying amounts would be recognized as impairment. Upon review of the aforesaid period-end
balance and assessment of the impairment indic ation for each respective period, the Group did
not make any impairment for the property, pla nt and equipment, right-of-use assets and
intangible assets in 2022, 2023 and 2024.
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Associates
An associate is an entity in which we have sign ificant influence, but not control or joint
control, over its management, including participation in the financial and operating policy
decisions.
We account for an investment in an associate in the consolidated financial statements
under the equity method, unless it is classified as held for sale (or included in a disposal group
that is classified as held for sale). Under the equi ty method, we initially record the investment at
cost, which is adjusted for any excess of our shar e of the acquisition-date fair values of the
investee’s identifiable net assets over the co st of the investment (if any). The cost of the
investment includes purchase price, other costs directly attributable to the acquisition of the
investment, and any direct investment into the associate that forms part of our equity
investment. Thereafter, we adjust the investmen t for the post-acquisition change in our share of
the investee’s net assets and any impairment loss relating to the investment. See Note 2(i)(iii) to
the Accountants’ Report in Appendix I to this prospectus for details. At each reporting date, we
assess whether there is any objective evidence that the investment is impaired. Any
acquisition-date consideration excess over cost, we recognize our share of the
post-acquisition, post-tax results of the inves tees and any impairment losses for the period in
the consolidated statements of profit or los s and other comprehensive income, whereas we
recognize our share of the post-a cquisition post-tax items of the i nvestees’ other comprehensive
income in the consolidated statements of profit or loss and other comprehensive income.
When our share of losses exceeds our interest in the associate, we reduce our interest to nil
and discontinue recognition of further loss except to the extent we have incurred legal or
constructive obligations or made payments on behalf of the investee. For this purpose, our
interest is the carrying amount of the investment under the equity method together with any
other long-term interests that in substance form part of our net investment in the associate (after
applying the ECL model to such other lo ng-term interests where applicable).
We eliminate unrealized gains a rising from transactions with equity-accounted investees
against the investment to the extent of our interest in the investee. We eliminate unrealized
losses in the same way as unrealized gains, but only to the extent there is no evidence of
impairment.
We account for investments in asso ciates using the equity method.
Other Investments in Equity Securities
We recognize or derecognize investments in equity securities on the date we commit to
purchase or sell the investment. We initially s tate the investments at fair value, plus directly
attributable transaction costs, except for t hose investments measured at fair value through
profit or loss (FVPL) for which transaction costs are recognized directly in profit or loss. For an
explanation of how we determine fair value of financial instruments, see Note 29(d) to the
Accountants’ Report in Appendix I to this prospectus for details.
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We subsequently account for investments as follows, depending on their classification:
We classify an investment in equity securiti es as FVPL unless the equity investment is not
held for trading purposes and on initial recognition of the investment, we make an irrevocable
election to designate the investment at FVOCI (n on-recycling) such that subsequent changes in
fair value are recognized in other comprehe nsive income. We make such elections on an
instrument-by-instrument basis but may only make if the investment meets the definition of
equity from the issuer’s perspective. Where suc h an election is made, the amount accumulated in
other comprehensive income remains in the fair value reserve (non-recycling) until the
investment is disposed of. At the time of disposal, the amount accumulated in the fair value
reserve (non-recycling) is transferred to retained earnings, which is not recycled through profit
or loss. We recognize dividends from an investment in equity securities, irrespective of whether
they are classified as FVPL or FVOCI, in profit o r loss as other income in accordance with the
policy with respect to the recognition of revenue and other income.
Critical Accounting Estimates and Judgments
The preparation of our historical financial information requires the use of accounting
estimates which, by definition, will seldom equal the actual results. Management also needs to
exercise judgement in applying our accounting policies.
Estimates and judgements are continually evaluated. They are based on historical
experience and other factors, including expectations of future events that may have a
financial impact on the entity and that are believed to be reasonable under the circumstances.
Depreciation and Amortization
Right-of-use assets, property, plant and equipment and intangible assets, are depreciated
or amortized on a straight-line basis over the est imated useful lives of the assets. We review the
estimated useful lives of the assets regularly in order to determine the amount of depreciation
a n da m o r t i z a t i o ne x p e n s e st ob er e c o r d e dd u r i ng any reporting period. The useful lives are
based on our historical experience with simila r assets. The depreciation and amortization
expenses for future periods are adjusted if there are material changes from previous estimates.
Impairment of Contract Asset s, Trade and Other Receivables
Our management determines the loss allowan ce for expected credit losses on trade and
other receivables based on an assessment of the present value of all expected cash shortfalls.
These estimates are based on the information about past events, current conditions and
forecasts of future economic conditions. Our management reassesses the loss allowance at each
reporting period end.
Net Realizable Value of Inventories
Net realizable value of inventories is the estimated selling price in the ordinary course of
business, less estimated distribution expenses and related taxes. These estimates are based on the
current market condition and historical experience of selling products of similar nature. Net
realizable value of inventories could change sig nificantly as a result of competitor actions in
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response to changes in market conditions. Any change in the assumptions would increase or
decrease the amount of inventories write-down or the related reversals of write-downs and affect
our profit or loss and net asset value.
Warranty Provisions
We make provisions under the warranties we give on sale of our products taking into
account our recent claim experience. As we continually upgrade our product designs and launch
new models, it is possible that the recent claim experience is not indicative of future claims that
w em a yr e c e i v ei nr e s p e c to fp a s ts a l e s .A n yi n c rease or decrease in the provision would affect
o u rp r o f i to rl o s si nf u t u r ey e a r s .
Financial Guarantee
We measure the financial guarantee contract at the higher of the initial recognized amount
and the expected credit loss allowance. As the i nitial fair value of the financial guarantees is
measured based on the future net cash outflow, these estimates are based on the information
about past events, current conditions and forecasts of future economic conditions.
IMPACT OF COVID-19 ON OUR OPERATIONS
The COVID-19 pandemic affected the global e conomy, new energy engineering machinery
industry and our business operations. The outbrea k resulted in nationwide restrictions on travel
and using public transport, and implementation of social distancing measures. While we faced
challenges, we had been able to ma nage these disruptions effectively due to strategic planning
and cooperation.
The outbreak led to restrictions that affected various aspects of business operations. The
operations of our Zaozhuang plant were halted for 16 days in October and November 2022. Due
to our adequate inventory reserves, this tempor ary shutdown did not significantly disrupt our
overall sales and delivery processes. During th e pandemic, we also shi fted to a work-from-home
model for two months in 2022. The remote work setup posed temporary challenges, particularly
impacting cross-regional communications and sales visit activities. With the help of the
government initiatives such as dedicated routes, the COVID-19 pandemic had little impact on
our logistics operations. The outbreak also had a suppressive effect on customer demand for our
products, however, the overall new energy engineering machinery market had continued to show
a growth trend during the COVID-19 pandemic. While the COVID-19 pandemic presented
substantial challenges, our strat egic preparations helped mitigate its impacts on our operations.
Despite the temporary disruption caused by the COVID-19 pandemic, we were able to achieve
significant growth. Our revenue increase d by 28.8% from RMB360.1 million in 2022 to
RMB463.7 million in 2023, and further increased by 37.0% to RMB635.5 million in 2024.
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DESCRIPTION OF MAJOR COMPONENTS OF OUR RESULTS OF OPERATIONS
The following table sets forth a summary of our consolidated statements of profit or loss
for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
Revenue RMB
%o f
Revenue RMB
%o f
Revenue
(in thousands, except for percentages)
Revenue 360,106 100.0 463,738 100.0 635,457 100.0
Cost of sales (351,934) (97.7) (454,459) (98.0) (598,618) (94.2)
Gross profit 8,172 2.3 9,279 2.0 36,839 5.8
Other net gain 121 0.1 4,500 1.0 24,617 3.9
Selling expenses (46,925) (13.0) (58,016) (12.5) (59,720) (9.4)
Administrative expenses (59,447) (16.5) (88,444) (19.1) (109,263) (17.2)
Research and development costs (44,855) (12.5) (68,562) (14.8) (81,707) (12.9)
Impairment loss on trade and other
receivables, contract assets and
financial guarantee issued
(1) (26,863) (7.5) (38,176) (8.2) (83,098) (13.1)
Loss from operations (169,797) (47.1) (239,419) (51.6) (272,332) (42.9)
Finance income 6,447 1.8 16,335 3.5 10,547 1.7
Finance costs (13,733) (3.8) (6,919) (1.5) (9,187) (1.4)
Share of results of associates (388) (0.1) 590 0.1 (3,485) (0.5)
Loss before taxation (177,471) (49.2) (229,413) (49.5) (274,457) (43.2)
Income tax (630) (0.2) (1) (0.0) (90) (0.0)
Loss for the year (178,101) (49.4) (229,414) (49.5) (274,547) (43.2)
Note:
(1) Represents the loss in the estimated amounts owing from trade and other receivables, contract assets and
financial guarantee issued.
Non-IFRS Measures
To supplement our consolidated financial statements which are presented under IFRS, we
also use adjusted net loss (a non-IFRS measure) as additional financial measures, which are not
required by, or presented in accordance with IF RS. We believe that such non-IFRS measure
facilitates comparisons of operating perfor m a n c ef r o mp e r i o dt op e r i o da n dc o m p a n yt o
company by eliminating potential impact of ce rtain items. We believe that such measure
provides useful information to investors an d others in understanding and evaluating our
consolidated results of operations in the same manner as they help our management. However,
our presentation of the adjusted net loss (a non-IFRS measure) may not be comparable to
similarly titled measures presented by other companies. The use of such non-IFRS measures has
limitations as analytical tools, and you should not consider them in isolation from, or as a
substitute for the analysis of, our results of operations or financial condition as reported under
IFRS.
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We define adjusted net loss (a non-IFRS measure) as loss for the year adjusted for (i)
equity-settled share-based payment expenses, (ii ) listing expenses, and (iii) interest expenses on
financial instruments issued to investors. Equity -settled share-based payment expenses consist
of non-cash expenses arising from granting restricted shares to eligible individuals under
employee restricted share plans. See Note 27 to the Accountants’ Report in Appendix I to this
prospectus for details. Listing expenses mainly include professional fees incurred in relation to
the Listing and the Global Offering. Interest e xpenses on financial instruments issued to
investors relate to the interest expenses incurre d after the issuance of our financial instruments
through which we granted preferred rights to cer tain investors to redeem their paid-in capital
for cash upon specified events. All our financial instruments had been converted into equity or
terminated during the Track Record Period as disclosed in Note 25 to the Accountants’ Report
in Appendix I to this prospectus.
The following table sets forth a reconciliation of our loss for the year to adjusted net loss (a
non-IFRS measure) for the years indicated.
For the Year Ended December 31,
2022 2023 2024
(RMB in thousands)
Loss for the year (178,101) (229,414) (274,547)
Adjusted for:
Equity-settled share-based payment
expenses 29,054 29,659 33,478
Listing expense — 9,686 23,463
Interest expenses on financial instruments
issued to investors 6,464 272 —
Non-IFRS measure:
Adjusted net loss for the year (142,583) (189,797) (217,606)
Revenue
During the Track Record Period, we generat ed revenue from (i) sales of our products,
including battery-electric wide-body dump truck s, battery-electric loade rs, battery-electric
tractor trucks, and spare parts and accessories, (ii) rendering of services, mainly including
repair, maintenance and trial-use services for our products as well as autonomy solutions, and
(iii) other sources, primarily consisting of re ntal income from the leasing of our products.
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The following table sets forth a breakdown of our revenue by business line for the years
indicated.
For the Year Ended December 31,
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Sales of products:
Battery-electric wide-body dump
trucks 76,290 21.2 126,456 27.3 364,588 57.4
Battery-electric loaders 183,730 51.0 281,154 60.6 224,197 35.3
Battery-electric tractor trucks 77,940 21.6 28,551 6.1 7,035 1.1
Spare parts and accessories 15,311 4.3 19,372 4.2 25,687 4.0
Subtotal 353,271 98.1 455,533 98.2 621,507 97.8
Rendering of services 485 0.1 2,794 0.6 3,187 0.5
Rental income 6,350 1.8 5,411 1.2 10,763 1.7
Total revenue 360,106 100.0 463,738 100.0 635,457 100.0
During the Track Record Period, we generated almost all of our revenue in China which
was RMB360.1 million, RMB454.9 million and RMB635.5 million in 2022, 2023 and 2024,
respectively, accounting for 100.0%, 98.1% and 1 00.0% of our total revenue, respectively. In
2023, we also generated revenue from exportin g business of RMB8.9 million, accounting for
1.9% of our total revenue for the same year.
Revenue from Sales of Products
Revenue from Sales of Products by Product Type
Battery-electric wide-body dump trucks
In 2022, 2023 and 2024, our revenue from sales o f battery-electric wide-body dump trucks
amounted to RMB76.3 million, RMB126.5 million and RMB364.6 million, respectively,
accounting for 21.2%, 27.3% and 57.4% of our total revenue, respectively.
The increase in revenue and revenue contribution of our battery-electric wide-body dump
trucks during the Track Record Period was primarily driven by the increase in the sales volume
of our dump trucks, attributable to (i) our intensified sales efforts, (ii) the introduction of new
products with improved functions, and (iii) our increased research and development efforts to
continually improve the performance, adaptability and reliability of our dump trucks. In August
2022, we launched the 105-tonne model BRT105E, which enabled heavy-load uphill operations.
In the second half of 2024, we launched the 120-tonne model BRT120E with a greater payload
and the 135-tonne range-extended model BRT135EZ. The introduction of these products
catered to the unmet needs of a broader market. The total sales volume of our battery-electric
dump trucks increased from 59 units in 2022 to 88 units in 2023, and further to 281 units in
2024. The average selling price of our dump tru cks increased from RMB1.3 million in 2022 to
RMB1.4 million in 2023, primarily due to the higher proportion of sales from new models in
2023, which commanded higher prices due to their larger payload and battery capacities. These
new models became the major choice among our cu stomers during the corresponding years. The
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average selling price of our battery-electric d ump trucks slightly d ecreased from RMB1.4
million in 2023 to RMB1.3 million in 2024, primar ily due to the decrease of average cost of sales
of our dump trucks, which allowed us to strategically adjust the selling prices to offer greater
value to our customers.
Battery-electric loaders
The sales of loaders are one of our major sources of revenue during the Track Record
Period. In 2022, 2023 and 2024, our revenue from s ales of battery-electric loaders amounted to
RMB183.7 million, RMB281.2 million and RMB224.2 million, respectively, accounting for
51.0%, 60.6% and 35.3% of our total revenue, respectively.
The increase in revenue from battery-electric loaders from 2022 to 2023 was primarily
driven by the increase in the sales volume of our loaders from 295 units in 2022 to 484 units in
2023, attributable to (i) our intensified sales e fforts, (ii) increased customer acceptance of
battery-electric loaders, and (iii) our incr eased research and development efforts that
contributed to the improvements in the performance, adaptability and reliability of our
loaders. The increase in revenue was negatively a ffected by a decrease in the average selling price
of our loaders, which decreased from RMB623 thousand in 2022 to RMB581 thousand in 2023.
The decrease in the average selling price from 2022 to 2023 resulted primarily from our strategic
decision to lower loader prices to capture early-stage opportunities in the new energy
engineering machinery market, along with fluctuations in raw material costs, while also
reflecting our ability to leverage technolog ical advancements and enhanced production
efficiency to reduce production costs for electric loaders, thus a llowing for more competitive
pricing. The revenue from battery-electric loade rs decreased from 2023 to 2024, primarily due to
the decrease in the sales volume and the reduced av erage selling price of o ur loaders. The sales
volume of our loaders decreased from 484 units in 2023 to 401 units in 2024, and the selling price
of our loaders decreased from RMB581 t housand in 2023 to RMB559 thousand in 2024,
primarily due to the intense market competition, especially from market players with established
positions in the traditional fuel-powered loader industry.
Battery-electric tractor trucks
We design, engineer, and manufacture the e-po wertrain kits for battery-electric tractor
trucks, supplying them to a catalog company with requisite vehicle manufacturing
qualifications. The catalog company then integr ates our e-powertrain kits into its chassis to
complete the assembly of tractor trucks. After t he assembly, we acquire these fully assembled
tractor trucks from the catalog company and subsequently distribute them to our customers. In
2022, 2023 and 2024, our revenue from sales of battery-electric tractor trucks amounted to
RMB77.9 million, RMB28.6 million and RMB7.0 million, respectively, accounting for 21.6%,
6.1% and 1.1% of our total revenue, respectively.
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The decrease in revenue and revenue contribution of our tractor trucks was primarily due
to (i) our strategic shift in focus toward batte ry-electric loaders and wide-body dump trucks,
which redirected most of our sales and research and development resources to these product
lines and consequently lowered tractor truck sales, and (ii) a reduction in selling prices of our
battery-electric tractor trucks to accelerate inve ntory turnover. This strategic shift was guided
by industry insights identifying growth opportunities and unmet demand in emerging
engineering machinery segments. Additionally, battery-electric loaders and wide-body dump
trucks have gained market acceptance due to th eir significant economic advantages, robust
performance and stability on demanding jobsites, and fast recharging capabilities. The total
sales volume of our tractor trucks was 148 units, 66 units and 27 units in 2022, 2023 and 2024,
respectively, and the average selling price of our tractor trucks was RMB527 thousand,
RMB433 thousand and RMB261 thousand in the corresponding years. Considering the
significant decrease in revenue of our tractor trucks, we had a gross loss margin for our sales of
tractor trucks in 2023 and 2024. See ‘‘Industry O verview — China’s New Energy Engineering
Machinery Industry — Key sectors of China’s new energy engineering mac hinery industry.’’
Spare parts and accessories
We sell spare parts and accessories, mainly including e-powertrains and charging piles, to
our customers. We also export add-on e-powertrains to North America. In 2022, 2023 and 2024,
our revenue from sales of spare parts and acces sories amounted to RMB15.3 million, RMB19.4
million and RMB25.7 million, respectively, accounting for 4.3%, 4.2% and 4.0% of our total
revenue, respectively. The increase in our revenue generated from sales of spare parts and
accessories from RMB15.3 million in 2022 to RMB 19.4 million in 2023 was primarily due to our
exports of add-on e-powertrains to a North A merica customer and the increased sales of
charging piles. The increase in our revenue gene rated from sales of spare parts and accessories
from RMB19.4 million in 2023 to RMB25.7 million in 2024 was primarily due to the increased
sales of charging piles in 2024.
Revenue from Sales of Products by Sales Channel
We employ direct sales and distribution ch annels to market our products and engage with
customers. This approach is designed to streamline the management and coordination of sales
and services, thereby ensuring the consistent provision of high-quality services and enhanced
customer satisfaction. We mainly rely on distribution channels for sales of our loaders and sell
wide-body dump trucks directly to our customers . See ‘‘Business — Sales and Service Network’’
for details on our sales strategy.
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The following table sets forth a breakdown of our revenue generated from sales of products
by sales channels for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
total
revenue RMB
%o f
total
revenue RMB
%o f
total
revenue
(in thousands, except for percentages)
Direct sales
End customers 127,611 35.4 140,220 30.2 227,287 35.8
Distributors
Associated distributors 5,214 1.4 101,918 22.0 108,336 17.0
Independent distributors 23,884 6.6 29,621 6.4 51,607 8.1
Subtotal 156,709 43.4 271,759 58.6 387,230 60.9
Sales through distributors
Associated distributors 30,191 8.4 76,112 16.4 179,854 28.3
Independent distributors 166,371 46.2 107,662 23.2 54,423 8.6
Subtotal 196,562 54.6 183,774 39.6 234,277 36.9
Revenue from sales of products 353,271 98.0 455,533 98.2 621,507 97.8
Direct sales
When a customer purchases our products eithe rf o rt h e i ro w nu s eo rf o rl e a s i n gt oo t h e r s ,
we treat the revenue from such transactions as revenue from direct sales. We had revenue from
direct sales of RMB156.7 million, RMB271.8 million and RMB387.2 million in 2022, 2023 and
2024.
We generate revenue from direct sales from two types of customers: (i) end customers who
use our products in their operations, such as p ower generation, mining, and infrastructure
construction, and (ii) distributors who use our products themselves or lease them to others.
Some distributors initially purchased our p roducts as end customers and later started
distributing our products, leveraging their local market connections upon recognizing the
economic potential of our battery-electric engineering machinery. In 2022, 2023 and 2024, our
revenue from direct sales to end customers was RMB127.6 million, RMB140.2 million and
RMB227.3 million, respectively.
During the Track Record Period, some associa ted distributors purchased our products to
lease to their clients or to provide machinery o peration services. Distributors acquire our
products for leasing because it provides a steady and predictable income stream, which helps
stabilize their cash flows and sustain ongoing reve nue. Leasing also deepens client relationships,
increasing their reliance on the distributors for future needs. Retaining ownership of the
products gives distributors greater control over the asset, allowing them to upgrade, maintain or
repurpose it as needed. Additionally, they can benefit from the machines’ residual value at the
end of the lease term. Some of the end customers a lso seek to lease engineering machinery rather
than purchase it, primarily due to commercial considerations and the desire to evaluate the
performance of new energy products. In 2 024, approximately 37.6% of our revenue from
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products sold to associated distributors was used for their leasing operations. In 2022, 2023 and
2024, our revenue from direct sales to associated distributors was RMB5.2 million, RMB101.9
million and RMB108.3 million, respectively.
Sales through distributors
When a distributor purchases our products as they are under contractual obligations to
resell or are reasonably expected to resell our products, the revenue derived from such
transactions is recorded as re venue from sales through distributors. The revenue from sales
through distributors decreased from RMB196. 6 million in 2022 to RMB183.8 million in 2023,
primarily because certain of our distributors ch ose to purchase our products and lease them to
their clients or to provide machinery operation s ervices, and the revenue generated from sales of
products to them was accounted for revenue from direct sales. The revenue from sales through
distributors increased from RMB183.8 million i n 2023 to RMB234.3 million in 2024, primarily
due to the growth of sales through associated distributors in line with our expansion of
distribution channels. The revenue generated fro m our sales through our associated distributors
was RMB30.2 million, RMB76.1 million and RMB179.9 million in 2022, 2023 and 2024,
respectively, and the revenue generated from our sales through other independent distributors
was RMB166.4 million, RMB107.7 million and RM B54.4 million in the corresponding years.
The significant increase in revenue generated from our sales through our associated distributors
from 2023 to 2024 was primarily driven by the addition of a key associated distributor, which
mainly operates in the mining and quarrying sect or and contributed a significant portion of our
wide-body dump truck sales in 2024.
Our revenue from sales through independen t distributors decreased from RMB166.4
million in 2022 to RMB107.7 million in 2023, pr imarily due to (i) a significant reduction in
revenue from tractor trucks, many of which were previously sold through independent
distributors, as we strategically shifted our primary focus to loaders and wide-body dump
trucks; and (ii) a higher percentage of wide-body dump trucks were sold directly by us rather
than through independent distributors in 2023. This revenue further decreased to RMB54.4
million in 2024, primarily because fewer la rge orders were made through independent
distributors in 2024 compared to 2023.
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Revenue from Sales of Products by Region
The following table sets forth a breakdown of our revenue from sales of products by region
of our customers’ registered office, in absolute amounts and as percentages of total revenue, for
the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
total
revenue RMB
%o f
total
revenue RMB
%o f
total
revenue
(in thousands, except for percentages)
Domestic Sales:
Northwestern China (1) 59,069 16.4 174,302 37.6 166,544 26.2
Northern China (2) 85,722 23.8 88,694 19.1 164,773 25.9
Central China (3) 25,874 7.2 30,698 6.6 136,718 21.5
Eastern China (4) 110,706 30.7 99,516 21.5 97,866 15.4
Southern China (5) 26,175 7.3 20,865 4.5 32,345 5.1
Southwestern China (6) 45,723 12.7 32,586 7.0 22,748 3.6
Northeastern China (7) 1 0.0 — — 513 0.1
Overseas Sales:
U.S. — — 8,872 1.9 — —
Revenue from sales of products 353,271 98.1 455,533 98.2 621,507 97.8
Note:
(1) Northwestern China consists of Shaanxi Province, Gansu Province, Qinghai Province, Ningxia Hui
Autonomous Region and Xinjiang Uygur Autonomous Region.
(2) Northern China consists of Beijing, Tianjin, Hebei Province, Shanxi Province and Inner Mongolia
Autonomous Region.
(3) Central China consists of Henan Province, Hubei Province and Hunan Province.
(4) Eastern China consists of Shandong Province, Jiangsu Province, Anhui Province, Zhejiang Province,
Fujian Province, Jiangxi Province and Shanghai.
(5) Southern China consists of Guangdong Province, Guangxi Zhuang Autonomous Region, Hainan
Province, Hong Kong, Macau Special Administrative Region and Taiwan Region.
(6) Southwestern China consists of Sichuan Province, Chongqing, Guizhou Province, Yunnan Province and
Tibet Autonomous Region.
(7) Northeastern China consists of Liaoning Province, Jilin Province and Heilongjiang Province.
Revenue from Rendering of Services
We record revenue from various services to our customers, including repair, maintenance
and trial-use services for our products as well as autonomy solutions. Our maintenance and
repair services are part of our post-sale service s facilitated by our seasoned post-sale service
engineers. We also provide trial-use services of our loaders, wide-body dump trucks and tractor
trucks to new customers with an aim to help them accept and get familiar with our innovative
products, with no or a low fee for marketing pur poses. We generate revenue if we charge any
fees for such trial-use services. We also generate service fees from providing autonomy solutions
as we began commercializing our remote and autonomous operation technologies in 2023. In
2022, 2023 and 2024, our revenue from renderin g of services amounted to RMB0.5 million,
RMB2.8 million and RMB3.2 million, respectively, accounting for 0.1%, 0.6% and 0.5% of our
total revenue, respectively.
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Revenue from Other Sources
We lease our loaders, wide-body dump trucks and tractor trucks and charging piles to our
customers and record rental income on a straigh t-line basis over the lease term accordingly. In
2022, 2023 and 2024, our rental income amounted to RMB6.4 million, RMB5.4 million and
RMB10.8 million, respectively, accounting for 1.8%, 1.2% and 1.7% of our total revenue,
respectively.
Cost of Sales
Our cost of sales consists primarily of (i) costs of raw materials and components procured
for the manufacturing of our products, (ii) impairment loss on inventory, (iii) warranty expenses
we accrue for potential claims to repair or replace our products under the warranties we provide
to our customers, (iv) staff costs consisting primarily of salaries, bonuses, social insurances,
housing provident funds and welfares for our manufacturing workforce, and (v) other costs
incurred during the manufacturing process.
Cost of Sales by Nature
The following table sets forth a breakdown of our cost of sales by nature, in absolute
amounts and as percentages of total revenue, for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
total
revenue RMB
%o f
total
revenue RMB
%o f
total
revenue
(in thousands, except for percentages)
Costs of raw materials and
components 307,084 85.3 399,097 86.1 536,495 84.4
Staff costs 3,093 0.8 6,644 1.4 9,087 1.4
Warranty expenses 10,304 2.9 13,449 2.9 18,609 2.9
Impairment loss on inventory 25,650 7.1 20,879 4.5 17,432 2.7
Others
(1) 5,803 1.6 14,390 3.1 16,996 2.7
Total cost of sales 351,934 97.7 454,459 98.0 598,618 94.2
Note:
(1) Consists primarily of rental fees of facilities, depreciation of machinery and equipment, water and
electricity costs, and travel expenses.
Costs of Raw Materials and Components
Our principal raw material and components procured for the manufacturing of our
products are LFP batteries, structural componen ts, motors, and controllers. We purchase all of
our raw materials and components from suppliers in China.
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In 2022, 2023 and 2024, our costs of raw materials and components amounted to
RMB307.1 million, RMB399.1 million and RMB536.5 million, respectively, accounting for
85.3%, 86.1% and 84.4% of our total revenue, respectively. The following table sets forth a
breakdown of our cost of raw materials and components by type, in absolute amounts and as
percentages of total revenue, for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
total
revenue RMB
%o f
total
revenue RMB
%o f
total
revenue
(in thousands, except for percentages)
LFP batteries 141,308 39.2 163,192 35.2 229,777 36.2
Structural components 101,479 28.2 149,532 32.2 239,654 37.7
Motors 20,221 5.6 24,607 5.3 28,231 4.4
Controllers 18,020 5.0 21,344 4.6 13,166 2.1
Others 26,056 7.2 40,422 8.7 25,667 4.0
Cost of raw materials and
components 307,084 85.3 399,097 86.1 536,495 84.4
The following table sets forth the sensitivi ty analysis on the impact on our loss before
taxation for the changes in cost of raw material s. Actual changes in our loss before taxation
resulting from an increase or decrease in the cost of raw materials may differ from the results of
the following sensitivity analysis.
Impact on Loss before Taxation
For the Year Ended December 31,
2022 2023 2024
(RMB in thousands)
Hypothetical fluctuations in cost of
raw materials
Increase of 5% (15,354) (19,955) (26,825)
Decrease of 5% 15,354 19,955 26,825
Increase of 10% (30,708) (39,910) (53,650)
Decrease of 10% 30,708 39,910 53,650
Increase of 20% (61,417) (79,819) (107,299)
Decrease of 20% 61,417 79,819 107,299
Impairment Loss on Inventory
We recognize the amount of any write-down of inventories to net realizable value and all
losses of inventories as an expense in the period t he write-down or loss occurs. The net realizable
value of inventories is the estimated selling price of inventories in the ordinary course of
business, less estimated costs of completion a nd the estimated costs necessary to make the sale.
These estimates are based on the market condition and historical experience of selling products
of similar nature.
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During the Track Record Period, we recorded im pairment losses on inventories as a result
of the decline in the net realizable value of our inventories, primarily due to (i) prolonged
inventory holding periods, as we increased our production in anticipation of the rising demand,
which resulted in a higher possibility that such aged inventory would become obsolete or its
value would diminish over time, and (ii) the decrease in selling prices of related products,
attributed to discounts provided during the trial use of our products that we offered to attract
new customers, primarily including companies in industries such as tunnel construction, coal
mining, and cement production. We expect to maintain our trial-use services to increase our
brand recognition and familiarize our customer s with our new energy engineering machinery.
In 2022, 2023 and 2024, our impairment loss on inventory amounted to RMB25.7 million,
RMB20.9 million and RMB17.4 million, respectively, accounting for 7.1%, 4.5% and 2.7% of
our total revenue, respectively. Due to our efforts to boost sales and manage inventory level, our
impairment loss on inventory decreased from RMB 25.7 million in 2022 to RMB20.9 million in
2023, and further to RMB17.4 million in 2024.
The table below sets forth a breakdown of impairment loss on inventory by types of our
products for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
total
revenue RMB
%o f
total
revenue RMB
%o f
total
revenue
(in thousands, except for percentages)
Battery-electric loaders 18,194 5.0 9,434 2.0 12,497 2.0
Battery-electric wide-body dump
trucks 2,922 0.8 9,039 2.0 3,308 0.5
Battery-electric tractor trucks 4,534 1.3 2,406 0.5 1,627 0.2
Impairment loss on inventory 25,650 7.1 20,879 4.5 17,432 2.7
Warranty Expenses
We provide warranties to our customers bas ed on the sales agreements with them at the
time of sale of machinery. Under the terms of our sales agreements, we rectify certain product
defects arising within predominantly six to 60 months from the date of sale. See ‘‘Business —
Warranty and Post-Sale Services — Warranty.’’
We accrue warranty expenses for potential claims in connection with repair and
replacement of our products under the product warranties we provide to our customers. We
make provision for warranty taking into account our experience of recent claims, historical
warranty data and weighting of all possible outco mes against their associated probabilities.
Warranty expenses are recorded as a component o f cost of sales in our consolidated statements
of profit or loss. We re-evaluate the adequacy of warranty accrual on a regular basis. The basis
for estimating warranty expenses is disclosed in Note 3(iv) and Note 26 to the Accountants’
Report in Appendix I to this prospectus.
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In 2022, 2023 and 2024, our warranty expenses amounted to RMB10.3 million, RMB13.4
million and RMB18.6 million, respectively, accounting for 2.9%, 2.9% and 2.9% of our total
revenue, respectively.
Cost of Sales by Product Type
The following table sets forth a breakdown of our cost of sales of products by product
type, in absolute amounts and as percentages of total revenue, for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
total
revenue RMB
%o f
total
revenue RMB
%o f
total
revenue
(in thousands, except for percentages)
Battery-electric loaders 195,722 54.4 292,936 63.2 240,033 37.8
Battery-electric wide-body dump
trucks 65,768 18.3 110,783 23.9 314,566 49.5
Battery-electric tractor trucks 75,527 21.0 33,227 7.2 8,663 1.4
Spare parts and accessories
(1) 13,622 3.8 16,308 3.5 24,904 3.9
Total 350,639 97.4 453,254 97.7 588,166 92.6
Note:
(1) Consists primarily of e-powertrains and charging piles.
Gross Profit and Gross Profit Margin
Our gross profit represents our total revenue less our total cost of sales, and our gross
profit margin represents gross profit divided by our total revenue, expressed as a percentage.
While we had experienced significant growth in our revenue during the Track Record Period, we
also recorded significant cost of sales as we are still in the early stage of production and
development to achieve economies of scale. As such, we had gross profit of RMB8.2 million,
RMB9.3 million and RMB36.8 million in 2022, 2023 and 2024, respectively, representing gross
profit margin of 2.3%, 2.0% and 5.8%, respectively. The following table sets forth our gross
profit and gross profit margin for the years indicated.
For the Year Ended December 31,
2022 2023 2024
Gross profit (RMB in thousands) 8,173 9,279 36,839
Gross profit margin (%) 2.3 2.0 5.8
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Gross Profit/(Loss) and Gross Profit/(Loss) Margin by Product Type
In 2022, 2023 and 2024, we recorded gross profit margin for sales of products was 0.7%,
0.5% and 5.4%, respectively.
The table below sets forth a breakdown of our g ross profit/(loss) and gross profit/(loss)
margin for sales of products by product type for the years indicated.
For the Year Ended December 31,
2022 2023 2024
Gross
Profit/
(Loss)
Gross
Profit/
(Loss)
Margin
(%)
Gross
Profit/
(Loss)
Gross
Profit/
(Loss)
Margin
(%)
Gross
Profit/
(Loss)
Gross
Profit/
(Loss)
Margin
(%)
(RMB in thousands, except for percentages)
Battery-electric wide-body dump
trucks 10,522 13.8 15,673 12.4 50,022 13.7
Battery-electric loaders (11,992) (6.5) (11,783) (4.2) (15,836) (7.1)
Battery-electric tractor trucks 2,413 3.1 (4,676) (16.4) (1,628) (23.1)
Spare parts and accessories
(1) 1,689 11.0 3,065 15.8 783 3.1
Total 2,632 0.7 2,280 0.5 33,341 5.4
Note:
(1) Spare parts and accessories primarily consist of e-powertrains and charging piles.
The gross profit margin of battery-electric wide-body dump trucks slightly decreased from
13.8% in 2022 to 12.4% in 2023, mainly due to the i ncreased impairment loss on battery-electric
wide-body dump truck inventory in 2023 associat ed with increased inventory balance by the end
of 2023. In addition, we recorded impairment lo ss that was associated with certain dump trucks
previously used for trials, which had been rema ined in our inventory for an extended period
following the conclusion of the trial use. The gro ss profit margin for battery-electric wide-body
dump trucks remained relatively stable at 13.7% in 2024.
Our gross loss margin of our loaders slightly decreased from 6.5% in 2022 to 4.2% in 2023,
primarily due to the decrease in impairment loss on battery-electric loaders during the same
years, attributable to our efforts to boost sales and manage inventory level. Our gross loss
margin of loaders increased from 4.2% in 2023 to 7.1% in 2024, primarily due to the reduced
average selling price of our loaders. For details, see’’ — Description of Major Components of
Our Results of Operations — Revenue — Reven ue from Sales of Products — Revenue from
Sales of Products by Product Type — Battery-electric loaders.’’
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For battery-electric tractor trucks, we had gross profit margin of 3.1% in 2022, and gross
loss margin of 16.4% and 23.1% in 2023 and 2024, respectively. Such decrease in the
profitability of battery-electric tractor truc ks was primarily because we reduced the selling
prices of our battery-electric tractor trucks to boost the sales of the inventory, which was
RMB527 thousand, RMB433 thousand and RMB261 thousand in 2022, 2023 and 2024,
respectively, as we strategically shifted our pr imary focus to battery-electric loaders and
wide-body dump trucks since 2021.
The gross profit margin of spare parts and accessories was 11.0%, 15.8% and 3.1% in
2022, 2023 and 2024, respectively. The significa nt decrease in the gross profit margin of spare
parts and accessories from 2023 to 2024 was prima rily due to the export of add-on e-powertrains
to a trucking company based in North America i n 2023, which recorded relatively higher profit
margin as compared to charging piles.
Impairment loss on inventory is directly tied to our business plans and influenced by
market fluctuations. We evaluate market demand and sales trends for each product to identify
potential declines in value. Such process includes reviewing historical sales data, current market
conditions and anticipated shifts in demand. Additionally, we incorporate market forecasts and
inventory levels to estimate potential impair ment loss for individual products, considering
factors such as obsolescence, excess in ventory and declining sales prices.
Gross Profit and Gross Profit Margin by Sales Channel
The following table sets forth a breakdown of our gross profit by sales channels, in
absolute amounts and as percentages of revenue, or gross profit margin, for the years indicated.
For the Year Ended December 31,
2022 2023 2024
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
(RMB in thousands, except for percentages)
Sale of products
Direct sales (1) 12,138 7.7 19,471 7.2 42,660 11.0
Sales through distributors (2) 16,144 8.2 3,688 2.0 8,113 3.5
Subtotal 28,282 8.0 23,159 5.1 50,773 8.2
Impairment loss on inventory (25,650) (20,879) (17,432)
Total 2,632 0.7 2,280 0.5 33,341 5.4
Notes:
(1) Represents the revenue from sales of products that are purchased by (i) end customers who use our
products in their operations, such as power generation, mining, and infrastructure construction, and (ii)
distributors who purchased our products to lease them to others or to provide machinery operation
services.
(2) Represents the revenue from sales of products that are purchased by distributors who contractually resell,
or are reasonably expected to resell, our products.
FINANCIAL INFORMATION
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The gross profit margin of products sold through direct sales was 7.7%, 7.2% and 11.0% in
2022, 2023 and 2024, respectively. The gross pr ofit margin through direct sales remained
relatively stable at 7.2% in 2023, compared to 7.7% in 2022. The increase of the gross profit
margin through direct sales from 7.2% to 11.0% from 2023 to 2024 was primarily because (i) we
recorded gross profit margin of 1.7% for direct sales of loaders to our associated distributors
purchasing our products to lease to their clients or to provide machinery operation services in
2024, compared to the gross loss margin of 4.5% in 2023, and (ii) the increase in gross profit
margin of direct sales of dump trucks to our associated distributors for lease or its own use from
15.9% in 2023 to 22.1% in 2024.
The gross profit margin of products sold through our distributors was 8.2%, 2.0% and
3.5% in 2022, 2023 and 2024, respectively. The decrease of the gross profit margin of products
sold through our distributors during the Track Record Period was primarily attributable to the
gross loss margin of tractor trucks sold to our associated distributors we recorded during the
Track Record Period, mainly resulting from their s ales strategy to clear tractor truck inventory.
FINANCIAL INFORMATION
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Key Sales Metrics by Customer Type
The table below sets forth the key metrics of our products by customer type for the years indicated.
For the Year Ended December 31,
2022 2023 2024
Revenue
Sales
Volume
Average
Selling Price
Gross
Profit/Loss
Margin (%) Revenue
Sales
Volume
Average
Selling Price
Gross
Profit/Loss
Margin (%) Revenue
Sales
Volume
Average
Selling Price
Gross
Profit/Loss
Margin (%)
(RMB in thousands, except for percentages and units for sales volume)
Battery-electric wide-body dump trucks
Distributors
A s s o c i a t e d d i s t r i b u t o r s ———— 1 9 , 1 1 51 6 1 , 1 9 5 1 5 . 5 197,089 156 1,263 14.8
Independent distributors 30,488 24 1,27 0 23.1 10,221 9 1,136 14.8 26,189 19 1,378 5.4
Third-party direct customers 45,802 35 1, 309 14.0 97,120 63 1,542 20.8 141,311 106 1,333 16.1
Total 76,290 59 17.6 126,456 88 19.5 364,589 281 14.6
Battery-electric loaders
Distributors
Associated distributors 34,394 58 593 ( 0.6) 152,410 279 546 (2.6) 83,801 135 621 1.2
Independent distributors 90,454 142 6 37 4.2 108,590 175 621 0.7 76,810 148 519 (6.2)
Third-party direct customers 58,882 95 620 4.4 20,154 30 672 4.1 63,586 118 539 0.7
Total 183,730 295 3.4 281,154 484 (0.8) 224,197 401 (1.5)
Battery-electric tractor trucks
Distributors
A s s o c i a t e d d i s t r i b u t o r s ———— 3 , 6 5 71 0 3 6 6 ( 7 . 7 ) 4 , 3 2 51 7 2 5 4 ( 2 . 8 )
Independent distributors 67,4 15 122 553 9.0 16,947 34 499 0.9 — — — —
Third-party direct customers 10,525 26 405 8.5 7,927 22 360 (27.0) 2,710 10 271 4.5
Total 77,940 148 8.9 28,551 66 (7.9) 7,035 27 (0.0)
FINANCIAL INFORMATION
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The decrease in gross profit margin of wide-body dump trucks sold through independent
distributors from 14.8% in 2023 to 5.4% in 2024 wa s primarily attributab le to the relatively
lower selling price of the 105E700 model offered t o a major customer, in light of its large order
size.
We recorded gross profit margin of battery-e lectric loaders sold through independent
distributors of 0.7% in 2023, which turned into gross loss margin of 6.2% in 2024, primarily due
to a decrease in the average selling price of our loaders, driven by the intensified market
competition. The difference in the gross profi t margins between battery-electric loaders sold
through independent distributors and those sold through associated distributors was mainly
attributable the variation in product mix. We pr imarily sell our five-tonne battery-electric
loader model to independent distributors, which carry a thinner gross profit margin as
compared to the six-tonne battery electric loader model mainly sold to our associated
distributors.
We expanded our scope of independent distributors to cover all three types of
battery-electric products in 2022. Additiona lly, we began partnering with associated
distributors for loader sales in 2022, subsequently extending their coverage to include
battery-electric wide-body dump truc ks and tractor trucks in 2023 and 2024.
The revenue generated from our third-party direct customers remained stable, which was
RMB127.6 million, RMB140.2 million in 2022 and 2023. The revenue generated from our
third-party direct customers significan tly increased from RMB140.2 million in 2023 to
RMB227.3 million in 2024, primarily due to a n increase in the revenue from sales of our
battery-electric dump trucks and load ers to third-party direct customers.
During the Track Record Period, the revenue generated from our sales to other
independent distributors was RMB190.3 million, RMB137.3 million and RMB106.0 million in
2022, 2023 and 2024, respectively. The revenue fro m independent distributors decreased from
2022 to 2023 mainly because our strategic transitio n significantly reduced sales of tractor trucks,
the revenue of which was primarily generated through independent distributors in 2022. The
revenue from independent distributors decreased from 2023 to 2024, mainly due to the
decreased sales of loaders in the face of the intense market competition.
During the Track Record Period, the revenue generated from sales to our associated
distributors, including revenue recorded as di rect sales and sales thr ough distributors, was
RMB35.4 million, RMB178.0 million and RMB288.2 million in 2022, 2023 and 2024,
respectively. We strategically initiated transact ions with associated distributors in 2022, which
a i m e dt os t r e n g t h e np a r t n e r s h i p sw i t ht h e s ea ssociated distributors f or enhanced commitment,
maintain high service standards and offer conti nuous support to strengthen the distributors’
credibility, and ultimately boost sales perfo rmance and expand market share. As our business
relationships with associated distributors m atured and expanded over time, the revenue from
sales to our associated distributors significantly increased from RMB35.4 million in 2022 to
RMB178.0 million in 2023, and further to RMB 288.2 million in 2024. We plan to continuously
leverage the expertise and networks of associa ted distributors and expect an increase in our
revenue generated from sales to associated distributors in the near future.
FINANCIAL INFORMATION
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All sales transactions with our associated distributors are conducted on standard
commercial terms and at arm’s length. Variat ions in the average selling prices for the same
type of products sold to associated distributors, independent distributors and third-party direct
customers can be attributed to factors such as regional market conditions, negotiated volume
discounts and tailored pricing strategies. For instance, as part of our strategic shift toward
battery-electric engineering machinery, we implemented price reductions to clear inventory of
battery-electric tractor trucks. Over the cour se of the year, we applied progressively larger
discounts, especially for bulk sales of tractor trucks. Additionally, in 2023, we sold tractor
trucks originally used for trials to customers pr ioritizing affordability in battery-electric
products, which further lowered the average selli ng price of tractor trucks in those transactions.
As the average selling price is calculated by dividing revenue from product sales by the
number of sold units, it may also be influenced by the applicable accounting standards, such as
that for the downstream transactions with th e equity-accounted investees. As set out in Note
2(d) to the Accountants’ Report in Appendix I to this prospectus, when the inventory of our
associated distributors has not been sold to a third party as of each reporting period end, the
unrealized sales and cost of sales arising from the transactions with the associated distributors
will be eliminated to the extent of our equity inte rest in such associated distributors. When the
associated distributors sell the inventory to a th ird party, the elimination adjustments will be
reversed. Consequently, the revenue recorded fr om sales to associated distributors may differ
from the selling price agreed in sales agreement s of the related products. Taking downstream
transactions into account, the s elling prices offered to associated distributors are generally
a l i g n e dw i t ht h o s eo f f e r e dt oo t h e rc u s t o m e r swith no material discrepancies. In 2024, we sold
battery-electric loaders to associated distribu tors at a higher average selling price, because our
associated distributors purchased a larger proportion of models with higher value.
Other Net Gain
Our other net gain consists primarily of (i) government grants, mainly including
governmental subsidies and tax rebates, (ii ) net gain on modification and termination of
some of our leases in Zhejiang, Hunan, and Shanghai, (iii) net gain or loss on disposal of a
manufacturing plant in Shanghai, and other facilities and equipment, (iv) loss on disposal of our
minority investment in Shanghai Huansheng New Technology Co., Ltd. in August 2022, (v)
dividends received from other investments and (vi) loss or gain on disposal or loss of significant
influence of associates. We recorded other net gain of RMB121 thousand, RMB4.5 million and
RMB24.6 million in 2022, 2023 and 2024, respectively.
Selling Expenses
Our selling expenses consist primarily of (i) staff costs consisting primarily of salaries,
bonuses, social insurances, housing provident funds, welfares and equity-settled share-based
payment for our sales and marketing personnel and post-sale service staff, (ii) travel expenses of
sales staff, (iii) business development expenses in relation to our customer a cquisition activities,
and (iv) shipping and logistical costs incurred to deliver our products to customers for trial-use
services.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our selling expenses in absolute amount and
as a percentage of our total revenue for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
Revenue RMB
%o f
Revenue RMB
%o f
Revenue
(in thousands, except for percentages)
Staff costs 31,734 8.8 41,433 8.9 38,510 6.1
Business development expenses 6,132 1.7 5,459 1.2 6,586 1.0
Travel expenses 4,812 1.3 6,516 1.4 6,517 1.0
Shipping and logistical costs 2,104 0.6 2,972 0.6 2,312 0.4
Others
(1) 2,143 0.6 1,636 0.4 5,795 0.9
Total 46,925 13.0 58,016 12.5 59,720 9.4
Note:
(1) Consists primarily of advertising and marketing expenses, rental expenses, service fees and other
miscellaneous items.
Administrative Expenses
Our administrative expenses consist primaril y of (i) staff costs consisting primarily of
salaries, bonuses, social insurances, housing provi dent funds, disability insurance, welfares and
equity-settled share-based payment for our admini strative and management personnel, (ii) legal,
consulting and other professional service fees incurred in relation to the Listing and the Global
Offering, (iii) rental expenses for office premis es, and depreciation and am ortization expenses in
connection with office supplies, and (iv) travel expenses of our management personnel.
The following table sets forth a breakdown of our administrative expenses in absolute
amount and as a percentage of our total revenue for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
Revenue RMB
%o f
Revenue RMB
%o f
Revenue
(in thousands, except for percentages)
Staff costs 43,405 12.1 54,899 11.8 57,827 9.1
Legal, consulting, and other
professional service fees 6,318 1.8 17,791 3.8 31,042 4.9
Rental, depreciation and
amortization expenses 2,978 0.8 4,734 1.0 6,738 1.1
Travel expenses 1,231 0.3 2,807 0.6 2,968 0.5
Others (1) 5,515 1.5 8,213 1.9 10,688 1.6
Total 59,447 16.5 88,444 19.1 109,263 17.2
Note:
(1) Consists primarily of office expenses, tax a nd surcharges, and other miscellaneous items.
FINANCIAL INFORMATION
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Research and Development Costs
Our research and development costs consist pri marily of (i) staff costs consisting primarily
of salaries, bonuses, social insurances, housing provident funds, welfares and equity-settled
share-based payment for our research and development personnel, (ii) costs of raw materials
and consumables used in product designs during research and development process, and (iii)
outsourcing costs representing service fees pr imarily for outsourced research and development
services in relation to digitaliza tion for our business and products.
The following table sets forth a breakdown of our research and development costs in
absolute amount and as a percentage of ou r total revenue for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
Revenue RMB
%o f
Revenue RMB
%o f
Revenue
(in thousands, except for percentages)
Staff costs 29,423 8.2 38,900 8.4 45,760 7.2
Costs of raw materials and
consumables 11,209 3.1 16,096 3.5 23,597 3.7
Outsourcing costs 474 0.1 9,553 2.1 5,746 0.9
Others (1) 3,749 1.1 4,013 0.8 6,604 1.0
Total 44,855 12.5 68,562 14.8 81,707 12.8
Note:
(1) Consists primarily of office supply expenses and travel expenses.
Impairment Loss on Trade and Other Receivabl es, Contract Assets and Financial Guarantee
Issued
Our impairment loss on trade and other receivabl es, contract assets and financial guarantee
issued mainly represents the loss in the es timated amounts owing from trade and other
receivables, contract assets and financial guarantee issued th at might be uncollectible. We
recorded impairment loss on trade and other receiva bles, contract assets and financial guarantee
issued of RMB26.9 million, RMB38.2 million and RMB83.1 million, in 2022, 2023 and 2024,
respectively.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our impairment losses recognized on trade
and other receivables, contract assets and financi al guarantee issued, in absolute amounts and as
percentages of total revenue, for the years indicated.
For the Year Ended December 31,
2022 2023 2024
RMB
%o f
Revenue RMB
%o f
Revenue RMB
%o f
Revenue
(in thousands, except percentages)
Impairment losses
recognized on:
Trade and other receivables 26,793 7.4 37,776 8.1 80,496 12.7
Financial guarantee issued 69 0.0 400 0.1 2,565 0.4
Contract assets — — — — 36 0.0
Total 26,862 7.5 38,176 8.2 83,097 13.1
Finance Income
Our finance income consists primarily of (i) interest income on financial assets measured at
amortized cost, (ii) interest income on loans t o third parties we collaborate with to develop
autonomous operation technologies, and (iii) interest income on sales under instalment
payment.
The following table sets forth a breakdown of our finance income for the years indicated.
For the Year Ended December 31,
2022 2023 2024
(RMB in thousands)
Finance income:
Interest income on financial assets measured
at amortized cost 141 8,205 3,011
Interest income on loans to third parties 150 8 —
Interest income on sales under instalment
payment 6,156 8,122 7,536
Total 6,447 16,335 10,547
Finance Costs
Our finance costs consist primarily of (i) interest expenses on loans and borrowings
including our bank loans and other borrowings from shareholders and investors, (ii) interest on
other borrowings, (iii) interest expenses on financi al instruments issued to investors, (iv) interest
on obligations arising from leaseback transactions , and (v) interest expense s on lease liabilities.
Interest expenses on financial instruments issued to investors relate to the interest expenses
incurred after the issuance of our financial in struments through which we granted preferred
rights to certain investors to redeem their paid-in capital for cash upon specified events. For
more details, see ‘‘— Indebtedness’’ and Note 25 to the Accountants’ Report in Appendix I to
this prospectus.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our finance costs for the years indicated.
For the Year Ended December 31,
2022 2023 2024
(RMB in thousands)
Finance costs:
Interest expenses on loans and borrowings 5,819 5,312 9,336
Interest expenses on other borrowings 984 — —
Interest expenses on financial instruments
issued to investors 6,464 272 —
Interest expenses on obligations arising from
leaseback 28 453 95
Interest expenses on lease liabilities 438 882 674
Less: interest expense capitalized into
property, plant and equipment — — (918)
Total 13,733 6,919 9,187
Share of Results of Associates
We collaborate with third-party partners to establish companies to engage in distributing
our products and hold a minority equity interest in each of such entities. We recognize net loss
or profit of these associated distributors in our consolidated statements of profit or loss based
on our respective equity interest in each entity . As a result, we recorded share of losses of
associates of RMB0.4 million and RMB3.5 m illion in 2022 and 2024, respectively, and we
recorded share of profits of asso ciates of RMB0.6 million in 2023.
Income Tax Expenses
Our income tax expenses consist primarily of income tax payable by our subsidiaries in the
PRC and overseas. We recorded income tax of RMB0.6 million, RMB1,381 and RMB90
thousand in 2022, 2023 and 2024, respectively.
PRC
Our Company obtained the High and New Tec hnology Enterprises status in 2019 and had
this status renewed in December 2022, and hence is entitled to a preferential enterprise income
tax rate of 15%. This preferential treatment could be extended for another three years upon
expiry. In addition, our Company was entitled to the benefit of being able to deduct research
and development costs at a rate of 175% during t he year from January 1, 2021 to September 30,
2022 and at a rate of 200% since October 1, 2022. Certain subsidiaries within our Group in the
PRC were entitled to a preferential PRC corporate income tax rate of 5% as they were
accredited as small and micro business.
Under the PRC Enterprise Income Tax Law and tax-related regulations, except for the
preferential treatments available to us as ment ioned above, subsidiaries within our Group were
subject to the statutory enterp rise income tax rate of 25% during the Track Record Period.
FINANCIAL INFORMATION
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Hong Kong
We have not made any provision for Hong Kong profits tax as we did not generate any
assessable profits in Hong Kong during the Track Record Period.
During the Track Record Period and up to the La test Practicable Date, we had no disputes
or unresolved tax issues wit h relevant tax authorities.
BUSINESS SUSTAINABILITY
Background
With the rapid development of the new energy engineering machinery industry, we
experienced solid revenue growth during the Tra ck Record Period, demonstrating our ability to
successfully commercialize our products and s ervices. Our revenue increased from RMB360.1
million in 2022 to RMB463.7 million in 2023, and further to RMB635.5 million in 2024,
representing a CAGR of 32.8% from 2022 to 2024.
Despite our rapid growth, our net loss widened during the Track Record Period. In 2022,
2023 and 2024, we recorded net loss of RMB178 .1 million, RMB229.4 million and RMB274.5
million, respectively, primarily a ttributable to the following factors:
. Substantial upfront investments. We are still in the early stage of product development
and commercialization, requiring continued substantial investments in these areas. In
addition, due to our limited commercialized product portfolio and the initial phase of
scaling operations, our revenue has not ye t reached a level sufficient to offset high
costs and expenses associated with the upfront investments, particularly research and
development expenses.
. Increased expenses during the Track Record Period. Despite the growth in revenue and
gross profit, our relatively thin gross profit margin is insufficient to fully offset rising
expenses. As we are proactively expanding our business operation, we incurred higher
administrative expenses and selling expenses. In addition, impairment loss on trade
and other receivables, contract assets an d financial guarantee issued continued to
increase from 2022 to 2024, in line with our business expansion.
. Early-stage market dynamics. The new energy engineering machinery remains in its
early stage of development and faces relatively low customer acceptance, as reflected
in the combined market size of new energy loaders and wide-body dump trucks being
RMB1.0 billion in terms of revenue in 2021. Competition in the new energy
engineering machinery market is intense. Existing industry players widely recognize
this market’s vast potential and rapid growth trajectory, driving aggressive efforts to
gain early market share, establish brand recognition and build competitive
advantages. To increase market penetration and capitalize on early-stage
opportunities, we implemented a penetration pricing strategy with lower
competitive price to boost sales and build a stronger market presence.
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. Rising raw material costs. The principal raw materials and components that we use in
the production of our products are batte ries. The average price of LFP battery
increased from RMB0.6 per watt-hour in 2021 to RMB0.9 per watt-hour in 2022, and
then decreased to RMB0.8 per watt-hour and RMB0.5 per watt-hour in 2023 and
2024, according to CIC. We pre-stocked L FP batteries as their price surged in 2022,
resulting in a relatively higher average procurement cost of LFP batteries during the
Track Record Period. Our cost of LFP batte ries increased from RMB141.3 million in
2022 to RMB163.2 million in 2023 and RMB229.8 million in 2024. As most of the
pre-stocked LFP batteries were utilized in 2022 and 2023, their impact on our cost of
sales and gross profit was mitigated in 2024 . However, we cannot assure that there
will be no material fluctuations in the pro curement prices of LFP batteries and other
raw materials and components in the future, which might further widen our net loss
margin.
. Strategic product focus. We strategically shifted our primary focus to battery-electric
loaders and wide-body dump trucks, to which we allocated most of our sales and
research and development resources. To a ccelerate inventory clearance of battery
electric tractor trucks and respond to the i ntensified competition, we reduced their
average selling price, which adversely impacted our financial performance during the
Track Record Period.
Going forward, we will strive to achieve profita bility and improve our operating cash flows
by (i) improving our sales performance; (ii) im proving gross profit margin; (iii) enhancing
operational efficiency; and (iv) improving the management of trade receivables. We expect to
record net profit and net operating cash inflow in the near future.
Strategies to Improve Our Sales Performance
Industry Growth and Market Opportunity
Due to the advancements of new energy engineering machinery, coupled with the
development of electrification technologies and implementation of environmental policies,
China’s new energy engineering machinery in dustry has been evolving and is expected to grow
rapidly in the next few years. According to CIC, the market size of major new energy
engineering machinery categories in China in t erms of revenue increased from RMB23.5 billion
in 2020 to RMB54.0 billion in 2024, representin g a CAGR of 23.2%, and is expected to increase
to RMB124.2 billion in 2029, representing a C AGR of 18.1%. The new energy penetration rate
of engineering machinery industry is currently modest, especially that of loaders and wide-body
dump trucks, but is expected to rise in the future. According to CIC, the additional procurement
cost of battery-electric loaders and wide-body dump trucks compared to fuel-powered products
can typically be recovered within approximate ly two years, thanks to the energy savings. The
economic advantages of new energy engineering mac hinery are anticipated to drive a substantial
increase in the penetration rate, which would b e further accelerated by the entry of additional
industry players. According to CIC, the new energy penetration rate of loader and wide-body
dump trucks in China was 21.7% and 9.0% in 202 4, respectively, and is expected to increase
significantly and reach 57.6% and 37.2% in 2029, respectively. As the new energy engineering
machinery products have been commercialized fo r several years, their economic viability and
advanced performance in different environmen ts have been tested and r ecognized by customers,
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which will facilitate a quicker acceptance of these products in the market in near future.
Therefore, we believe that new energy machin ery presents a compelling value proposition
compared to traditional fuel-powered counterpa rts, generating substantial market demand.
As a player in the new energy engineering machinery industry, our performance is closely
aligned with our industry’s upward trend and we believe we are well-positioned to capture the
opportunities in the rapid development of our industry. With a strong base of customer orders
and strategic cooperations with select key custom ers, we are assured of a stable customer base in
the short term, which enables us to expand reach and deliver products and services to a broader
range of customers across diverse applications, achieve a continual increase in product sales and
an increased market share.
Increasing Downstream Demands
As new energy technology advances and custo mer acceptance grows, downstream demands
for new energy engineering machinery are exp ected to grow in the future. Purchasers of our
battery-electric loaders and battery-electric wide-body dump trucks concentrated in the mining,
logistics and ports, industrial and manufacturi ng and construction industries. According to
CIC, the market size of major new energy engineering machinery categories in China’s mining,
logistics and ports, industrial and manufacturi ng, and construction industries reached RMB5.6
billion, RMB13.0 billion, RMB15.7 billion, and RMB4.7 billion in 2024, respectively, expected
to reach RMB25.5 billion, RMB23.8 billion, RM B27.6 billion, and RMB18.2 billion in 2029, at
a CAGR of 35.5%, 12.8%, 11.9%, and 31.3%, respectively.
Buoyed up by downstream demands, China’s new energy loader market and new energy
wide-body dump truck market, grew at a CA GR of 129.7% and 127.6% from 2020 to 2024,
respectively. As one of the leading players in these markets, we will leverage our leading position
to capture newly emerged demands, ensuring we remain a preferred choice in the increasing new
energy engineering machinery market.
Our Sales Strategies
Our sales strategies focus on retaining exis ting customers and maximizing the value of
existing customer relationships. We are dedicat ed to driving existing c ustomers to repurchase
our products from us or our distributors. Recur ring customers accounted for approximately
37.4% of our total customers during the Track R ecord Period. The average spend per recurring
customer increased from RMB8.6 million in 2022 to RMB9.5 million in 2023, and further to
RMB10.1 million in 2024. Collectively, these r ecurring customers contributed an aggregate
amount of RMB1,196.8 million in our revenue, accounting for 87.4% of our total revenue from
sales of new energy engineering machinery duri ng the Track Record Period. The focus on repeat
purchases ensures that we effectively deepen customer relationships while driving incremental
revenue growth.
During the Track Record Period, we strategic ally employed a targeted market expansion
initiative to facilitate broader market coverage across China. From 2018 to 2020, we began by
engaging with select mining and industrial cus tomers in Inner Mongolia , followed by market
expansion into Shanxi and Shaanxi.
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Our Sales Channels
Our sales model combines direct sales and distribution channels, which allows us not only
to establish high-touch customer interactions w ith customers across major industry verticals,
but also to penetrate both nationwide and region al markets swiftly. In 2022, 2023 and 2024, the
number of our direct sales customers was 65, 83 and 92, respectively, representing a CAGR of
19.0%. As of December 31, 2022, 2023 and 2024, the number of our distributors was 36, 44 and
38, respectively. As of December 31, 2024, our footprint spanned across 30 provinces and
municipalities in China, supported by a network of 38 distributors as of December 31, 2024, and
we will continue to expand our network in China and internationally.
We plan to grow and expand our customer base, covering both our distributors and end
customers, by (i) establishing regional servi ce hubs in first-tier cities across China to support
product displays, business devel opment, sales, training and warehousing, (ii) strengthening
regional marketing and expanding direct customer reach by participating in industry
conferences and exhibitions, (iii) expanding our distributor network to between 70 and 80
distributors, including approximately 20 associated distributors, and (iv) enhancing our sales,
marketing and customer service teams by recruiting additional personnel and providing them
with comprehensive trainings.
These sales efforts will enhance our sales performance and drive sustainable growth by
improving customer access, increasing market pe netration and fostering stronger customer
relationships.
Strategies to Improve Our Gross Profit Margin
Broaden and Refine Our Product Lineup
During the Track Record Period, we expanded our product lineup by introducing
battery-electric loaders and wide-body dump trucks that feature increased payload and battery
capacities or extended operational times. Additionally, we introduced engineering machinery
equipped with remote and autonomous operation c apabilities, which can navigate and perform
its tasks with reduced manual intervention. To further optimize our product portfolio we plan
to focus on developing, manufacturing and selling premium, technologically advanced products
with strong profit margin potential, which we believe will raise both the average selling price
and gross profit margin across our portfolio.
. Targeted sales for large-payload, high-capacity battery models with premium prices .W e
will strategically focus on increasing sales o f our large-payload, high-capacity battery
models to increase our market penetration and capitalize on rising demand. We expect
these large-payload, high-capacity battery models to comprise an increasing share of
our total sales.
o Battery-electric wide-body dump trucks: As the product line with higher gross
profit margins within our portfolio, revenue from the sales of battery-electric
wide-body dump trucks increased from RMB76.3 million in 2022 to RMB126.5
million in 2023 and further to RMB364.6 million in 2024, representing 21.2%,
27.3% and 57.4% of total revenue for the corresponding years.
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In the second half of 2024, we expanded our wide-body dump truck lineup with
the introduction of the 120-tonne model B RT120E, featuring a 724-kWh battery,
and the 135-tonne range-extended model BRT135EZ. Both models offer greater
payload capacities than the BRT105E, which remains the dominant model in our
lineup. These new models are priced around 15% higher than the BRT105E to
reflect their higher gross profit m argins and enhanced capabilities.
o Battery-electric loaders: In our loader lineup, the seven-tonne battery-electric
loaders are priced over 40% higher than the five-tonne models, while the
six-tonne battery-electric loaders are p riced approximately 30% higher than the
five-tonne models. Since the launch of the six-tonne battery-electric loader in
2022, sales volumes for this model were 12 units in 2022, 75 units in 2023, and
125 units in 2024, representing 4%, 15% and 31% of total loader sales volumes
for the respective years. We will inten sify our sales efforts for these new
products, and we believe these efforts will drive revenue growth and improve
gross profit margins.
. New product introduction . We aim to launch battery-electric wide-body dump trucks
with higher-capacity batteries and loaders with increased payloads. We believe we will
have a stronger pricing power due to the enhanced market competitiveness of our
products. In the second half of 2025, we plan to launch a 145-tonne range-extended
wide-body dump truck with a 724-kWh battery. In addition, we plan to introduce a
135-tonne battery-electric wide-body dump truck with a battery exceeding 900 kWh in
2026. Both products will incorporate an upgraded electrical and electronic
architecture.
. Product enhancement . We plan to continuously upgrade our products and services to
better meet our customers’ evolving needs and achieve greater satisfaction. Our strong
technological foundation enables a rapid research, development and
commercialization cycle for new products a nd services. For example, the research
and development cycle for our battery-electric loaders typically ranges from six to ten
months. To advance our product roadmap, we will refine our cross-platform
architecture to streamline our product dev elopment process and improve the overall
research and development efficiency. We plan to strengthen our development of
next-generation electrical and electron ic architecture, modu larized chassis and a
1000V high-voltage electrical system, wh ich will help ensure easy assembly and
optimization of products to meet the dynamic and evolving needs of our customers.
Advance Technology Development and Diversify Service Offerings
During the Track Record Period and up to t he Latest Practicable Date, we have made
advancements in the research, development and commercialization of remote and autonomous
operation technologies, including:
. Remote-control systems . We have developed and delivered first-generation
remote-control battery-electric loaders, equipped with remote-operated cockpits in
July 2023, and second-generation cabinless l oaders, equipped with long-range remote
control and advanced safety features such as obstacle detection, automatic avoidance,
and active braking in April 2024. As of the Latest Practicable Date, both models had
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been put into use at our customers’ jobsites, where the working conditions are
challenging due to the enclosed production environment for biofertilizers, which can
emit odors and high temperatures tha t may adversely affect human health.
. Autonomy solutions . We have developed and deliver ed our proprietary autonomous
operation system, which integrates an electri c drive-by-wire chassis, a multi-sensor
fusion perception system and a path planning and control system in January 2023. In
addition, we have first developed a safety warning and assistance control system
specifically for engineering machinery, f eaturing precise obstacle detection and
emergency stopping capabilities. As of the Latest Practicable Date, we provided
autonomy solutions to a customer by upgrading our existing wide-body dump truck
models.
. Collaborative operation solutions . We have developed an autonomous scheduling
software that facilitates intelligent coordination and scheduling of multiple unmanned
machines, and tested at a mining site in Xinjiang. Additionally, we have entered into
an agreement with a customer with respect to the research and development of
collaborative operation solutions in 2024. In addition, we have developed an
intelligent collaborative shipping operation technology, which enables one operator
to seamlessly and remotely operate multiple machines.
Building on these achievements, we plan to increase our investment in remote-control
systems, autonomy solutions, as well as autonomous scheduling and collaborative operation
technologies. We are exploring an increasing number of applications for remote-control and
autonomous operating technologies, focusing primarily on harsh work environments that
present risks to operators’ physical and mental w ell-being, such as mining sites with high dust
exposure and extreme noise levels.
Manage Costs of Raw Materials a nd Components Effectively
The major raw materials and components for manufacturing of our engineering machinery
include LFP batteries, structural components, motors, and controllers. The fluctuations in the
prices of raw materials and components, as well as other production-related costs, have affected
and will continue to affect our profitability. During the Track Record Period, we had witnessed
fluctuations in raw material and component prices, especially for the LFP batteries, which had
influenced our cost of sales.
The principal raw materials and components that we use in the production of our products
are batteries. The average price of LFP batte ry experienced a decrease from 2018 to 2021, and
an increase in 2022, and a decrease since 2023. Thes e fluctuations reflected the market demands
for LFP batteries. The average price of LFP batte ry is expected to maintain a decrease trend in
the near future, according to CIC. See ‘‘Indu stry Overview — Historical Trends of Prices on
Major Raw Materials and Components for New Energy Engineering Machinery.’’ In 2022, we
pre-stocked LFP batteries as their price surg ed, leading to a relatively higher cost of raw
materials recorded in 2022 and 2023. The average procurement price of LFP batteries in 2024
declined by 41% compared to that in 2022, refl ecting our improvement in cost efficiency.
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To secure stable supply and competitive prices, we usually have major suppliers and
secondary suppliers for our key raw materials and components, including LFP battery, motor
and gearbox. We are also proactively expanding our supplier network and broadening our
sourcing channels for certain key components to reduce reliance on certain suppliers. Due to our
increased business scale, we can have a greater bargaining power with suppliers of raw materials
and obtain more favorable pricing and paym ent terms from them, which will enable us to
improve our profitability. For example, we may enjoy favorable pricing terms offered by our
suppliers if we reach procurement threshold, which can lower our raw material procurement
costs. During the Track Record Period, we successfully obtained a more advantageous pricing
arrangement from our largest LFP battery supplie r, which allows us to enjoy favorable pricing
twice a year instead of annually. Furthermore, we are qualified for a three-tiered pricing policy
with major suppliers based on our purchase quantit ies of chassis, lifting systems, transmissions
and motors, enabling us to receive progressively better pricing as our purchase volumes increase.
We anticipate that the prices of materials related to our products, including lithium
carbonate used in batteries, structural materia ls, and other core components such as gearboxes
and electric motor controls, will remain stab le over the next year. For the next five years,
according to CIC, lithium carbonate prices are e xpected to gradually decline and steel prices to
remain stable, while costs for key components such as gearboxes and electric motor controls are
projected to decrease, provided t hat supply-demand dynamics and logistic costs remain steady.
We continue to actively monitor the cost fluctuations of our raw materials. To effectively
manage any potential cost fluctuations, we h ave established a tiered supplier system that
comprises secondary and tertiary suppliers. This system aims to ensure that we can swiftly
adjust our procurement strategies in response to changes in raw material prices or supply,
thereby stabilizing product costs and minimizi ng adverse fluctuations. Furthermore, we have
entered into framework strategic coopera tion agreements with more than 60% of our major
suppliers, including suppliers of LFP battery and other key raw materials, ensuring long-term
commitments and a reliable flow of raw material s and components and facilitating us to manage
our cost of sales and a reasonable level of inventory of raw materials. These framework strategic
cooperation agreements generally have a durati on ranging from two to five years and specify the
range of supply prices, with accurate procurem ent volumes determined through separate
procurement orders attached to each framewor k agreement. In particular, we will actively
diversify our network of suppliers as part of a strategic effort to reduce costs without
compromising the quality of our products.
Improve Manufacturing Efficiency
We plan to improve our manufacturing efficiency by increasing our in-house production
capacities and employing digital and automation technologies. We employ a hybrid
manufacturing method, which combines the benefits of both in-house production and
external collaboration to balance our core ma nufacturing competencies with economic
efficiency. In August 2020, we began to operate our Zaozhuang plant to produce
battery-electric loaders. We also previously undertook the manufacturing of e-powertrain kits
for battery-electric wide-body dump trucks and tractor trucks at our manufacturing plant in
Shanghai until September 2022 and relocated the manufacturing of these e-powertrain kits to
our Yuyao plant since October 2022. In 2022, 2023 and 2024, the capacity utilization rate of our
Zaozhuang plant was 68.8%, 56.0%, and 64.3%, respe ctively, and the capacity utilization rate
of the Shanghai plant and Yuyao plant was 94.5%, 79.5%, and 123.0%, respectively. We
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established a new loader manufacturing plant in Wuhan, Hubei, which commenced operation in
August 2024, and intend to establish another loade r manufacturing plant in Lanxi, Zhejiang and
a wide-body dump truck manufacturing and assembly plant in Xiangtan, Hunan. See ‘‘Business
— Manufacturing — Our Manufacturing Plants.’’
In addition, we plan to fully adopt automation systems in our new manufacturing plants
and deploy collaborative robots to improve our plants’ operational automation efficiency. As a
result, we expect to save approximately RMB3.0 million of labor costs each year in our
manufacturing plants when reaching designed production capacities. We believe these endeavors
will further improve our manufacturing efficiency, and consequently improve our profitability.
Enhance Inventory Management
We record impairment losses on inventories a s a result of the decline in the net realizable
value of our inventories. In 2022, 2023 and 2024, our impairment loss on inventory amounted to
RMB25.7 million, RMB20.9 million and RMB17.4 million, respectively, accounting for 7.1%,
4.5% and 2.7% of our total revenue for the corresponding years. Our inventories turnover days
achieved continuous decrease during the Track Record Period, which were 266 days, 226 days
and 161 days in 2022, 2023 and 2024.
To effectively manage our inventory levels, we employ strict control policies and an
inventory management system that allows for timely monitoring so that we can adjust our
inventory level based on existing orders and projected sales. In addition, our management,
procurement, sales, and financial departments will collaborate closely to enhance our inventory
management system. We have established a specia lized team dedicated to overseeing inventory
control, which will be a key performance indicator for us. CEO will lead monthly meetings with
our management to evaluate the status of inventory control and offer effective solutions for
long-term inventory. We will adopt a cautious approach towards raw material procurement,
focusing on small and frequent purchases to maintain optimal inventory levels. We disseminate
the latest inventory updates to the sales and marketing team on a monthly basis, ensuring
alignment with market deman ds to mitigate inventory obsolescence, prevent production
surpluses, and optimize inventory turnover days. Additionally, we will closely monitor the level
of finished goods inventory and seek the suitabl e strategies from sales and marketing team for
products with extended turnover periods. We conduct monthly follow-ups with sales personnel
to evaluate the sales performance of aged inventory items and apply flexible sales strategies to
manage and reduce these inventories. We also hold regular interdepartmental discussions to
review sales orders alongside procurement activities, promoting a coordinated approach to
inventory management that highlights our co mmitment to operational efficiency. We had
achieved continuous improvement in the management of our inventory during the Track Record
Period.
Reduce Warranty Expenses
We accrue warranty expenses for potential claims in connection with repair and
replacement of our products under the product warranties we provide to our customers. We
make provision for warranty taking into account our experience of recent claims, historical
warranty data and weighting of all possible outcomes against their associated probabilities.
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In 2022, 2023 and 2024, we accrued warranty expenses of RMB10.3 million, RMB13.4
million and RMB18.6 million, respectively, accounting for 2.9%, 2.9% and 2.9% of our total
revenue, respectively. The actual warranty e xpenses incurred during the same years were
RMB7.5 million, RMB9.1 million and RMB17.8 million, respectively, accounting for 2.1%,
2.0% and 2.8% of our total revenue, respectiv ely. With our accumulated experience, advanced
technologies, established relationship with our customers, prolonged operation history and scale
economies, we believe the accrual percentage of wa rranty expenses will decrease, which will lead
to an improved gross profit and ultimately improve our financial performance.
Improve Our Operation Efficiency
Due to our relatively smaller scale compared to other players in the new energy engineering
machinery industry, our growth has remained in a steady progression phase, and the full
realization of economies of scale is yet to be achieved. As our business continues to grow,
however, we expect that we would enjoy cost advantages from economies of scale.
As we expanded our customer base and market presence, we incurred a significant amount
of selling expenses and built a well-staffed sales and marketi ng team during the Track Record
Period. Going forward, we will regularly evaluate the performance and efficiency of our sales
and marketing personnel to ensure we meet our cost control targets. We will also maintain a
competitive yet reasonable commission structure for our sales and marketing team to drive
growth cost-effectively. With our established di stribution network, expanding customer base,
and enhanced brand recognition, we anticipate a reduction in selling expenses as a percentage of
revenue in the future.
In addition, with the rapid growth of our business, we incurred significant administrative
expenses and established a well-staffed manag ement team during the Track Record Period. We
believe that we can control our administrative expenses through effective management and a
streamlined corporate structure. By maintain ing an efficient team size, we aim to achieve a
cost-effective per capita output. As our business expands, we expect that the absolute amount of
administrative expenses will increase but the percentage of administrative expenses in our
revenue will decrease as we benefit from economies of scale and improved operational
efficiencies.
Improve the Management of Trade Receivables
We record impairment loss on trade and other receivables for the estimated amounts of
trade and other receivables that might be uncollectible. We recorded impairment loss on trade
and other receivables of RMB26.8 million, R MB37.8 million and RMB80.5 million, in 2022,
2023 and 2024, respectively. As of December 31, 2022, 2023 and 2024, we had trade and other
receivables of RMB257.8 million, RMB435.1 mi llion and RMB555.8 million, respectively.
Going forward, we will pay closer attention to the credit and payment progress of our
customers and evaluate the level of trade recei vables on a regular basis. For customers whose
payments are overdue, our risk control department will follow up with the customers to
accelerate the payment process. We believe these strategies will help us manage the trade
receivables more efficiently.
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The foregoing forward-looking statements a re based on numerous assumptions regarding
our present and future business strategies and the environment in which we will operate in the
future. These forward-looking statements involve known and unknown risks, uncertainties and
other factors, some of which are beyond our control, which may cause the actual results,
performance or achievements, or industry resul ts, to be materially different from any future
results, performance or achievements expressed or implied by these forward-looking statements.
See ‘‘Risk Factors’’ for related risks.
YEAR TO YEAR COMPARISON O F RESULTS OF OPERATIONS
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Revenue
Our revenue increased by 37.0% from RMB463.7 million in 2023 to RMB635.5 million in
2024, primarily attributable to an increase in our revenue generated from sales of wide-body
dump trucks, partially offset by a decrease in our revenue generated from sales of
battery-electric loaders and tractor trucks.
Sales of Products
Our revenue generated from sales of produc ts increased by 36.4% from RMB455.5 million
in 2023 to RMB621.5 million in 2024.
. Battery-electric wide-body dump trucks. Our revenue generated from sales of
battery-electric wide-body dump trucks increased by 188.3% from RMB126.5
million in 2023 to RMB364.6 million in 2024, primarily due to an increase in the
sales volume of our battery-electric wide-body dump trucks, which was partially offset
by a decrease of the average selling price of our loaders. The sales volume of
wide-body dump trucks rose from 88 units in 2023 to 281 units in 2024, primarily due
to our enhanced sales efforts. The average selling price of our battery-electric
wide-body dump trucks decreased from RMB1.4 million per unit in 2023 to RMB1.3
million per unit in 2024, primarily due to th e decrease of average cost of sales, which
allowed us to strategically adjust the sel ling prices to offer greater value to our
customers.
. Battery-electric loaders.Our revenue generated from sales of battery-electric loaders decreased
by 20.3% from RMB281.2 million in 2023 to RMB224.2 million in 2024, primarily due to the
decrease in the sales volume and average sell ing price of our battery-electric loaders.
The sales volume of our battery-electric l oaders decreased from 484 units in 2023 to
401 units in 2024, primarily due to the intensified market competition. The average
selling price of our loaders slightly decreased from RMB581 thousand per unit in 2023
to RMB559 thousand per unit in 2024, primarily due to the intense market
competition, especially from market players with established positions in the
traditional fuel-powered loader industry.
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. Battery-electric tractor trucks. Our revenue generated from sales of battery-electric
tractor trucks decreased by 75.4% from RM B28.6 million in 2023 to RMB7.0 million
in 2024, primarily due to the decrease in both sales volume and the average selling
prices. The sales volume of battery-electric tractor trucks decreased from 66 units in
2023 to 27 units in 2024, as we strategically shifted our primary focus to
battery-electric loaders and wide-body dump trucks and allocated most of our sales
and research and development resources. The average selling price of battery-electric
tractor trucks decreased from RMB433 thousand per unit in 2023 to RMB261
thousand per unit in 2024 to accelerate inven tory sales and adjust our pricing strategy
in response to the intensified competition.
. Spare parts and accessories. Our revenue generated from sales of spare parts and
accessories decreased by 32.6% from RMB1 9.4 million in 2023 to RMB25.7 million in
2024, primarily due to the increased sales of charging piles in 2024.
Rendering of Services
Our revenue generated from the rendering o f services increased by 14.1% from RMB2.8
m i l l i o ni n2 0 2 3t oR M B 3 . 2m i l l i o ni n2 0 2 4 ,i nl i n ew i t ht h ei n c r e a s eo fs a l e so fp r o d u c t s .
Revenue from Other Sources
Our revenue from other sources mainly comprised of rental income, which increased by
98.9% from RMB5.4 million in 2023 to RMB10. 8 million in 2024, primarily because certain
rental customers expanded its leasing of o ur battery-electric wide-body dump trucks.
Cost of Sales
Our cost of sales increased by 31.7% from RMB454.5 million in 2023 to RMB598.6 million
in 2024, primarily due to (i) a rise in costs of r aw materials and components as a result of a
substantial increase in the sales volume of our ba ttery-electric wide-body dump trucks, and (ii)
an increase in warranty expenses in line with the increasing warranty obligations accompanying
our increasing sales. The increase was parti ally offset by a decrease in impairment loss on
inventory, primarily attributable to our efforts to optimize our inventory structure.
Gross Profit and Gross Profit Margin
As a result of the foregoing, we had gross profit of RMB9.3 million and RMB36.8 million
in 2023 and 2024, respectively, with our over all gross profit margin of 2.0% and 5.8%,
respectively.
Other Net Gain
Our other net gain significantly increased from RMB4.5 million in 2023 to RMB24.6
million in 2024, primarily attributable to the recognition of gain on disposal or loss of
significant influence of as sociates of RMB16.3 million in 2024, resulting from the
reclassification of our interest in one associ ate to other investments based on the assessment
that we no longer have significant influence on that associate fol lowing its recent equity
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financing and the resignation of our board repr esentative. To a lesser extent, the increase is
attributable to an increase in government grants from RMB5.3 million to RMB8.3 million for
the subsidies we received.
Selling Expenses
Our selling expenses remained stable, which were RMB58.0 million and RMB59.7 million
in 2023 and 2024, respectively.
Administrative Expenses
Our administrative expenses increased by 23.6% from RMB88.4 million in 2023 to
RMB109.3 million in 2024, primarily due to (i) an increase in legal, consulting and other
professional service fees in relation to the Listi ng and Global Offering, (ii) an increase in staff
costs for our administrative and management personnel in relation to our share incentive plan,
and (iii) an increase in depreciation expenses due to the operation of our subsidiary in Wuhan,
Hubei Province.
Research and Development Costs
Our research and development costs increa sed by 19.2% from RMB68.6 million in 2023 to
RMB81.7 million in 2024, primarily due to an increase in staff costs as a result of the expansion
of our research and development team with the average headcounts from 93 to 102.
Impairment Loss on Trade and Other Receivables, Con tract Assets and Financial Guarantee Issued
Our impairment loss on trade and other receivabl es, contract assets and financial guarantee
i s s u e di n c r e a s e df r o mR M B 3 8 . 2m i l l i o ni n2 0 2 3t oR M B 8 3 . 1m i l l i o ni n2 0 2 4 ,p r i m a r i l yd r i v e n
by the increase in impairment loss on trade and o ther receivables, mainly due to increases in
trade receivables balances and the aver age aging of overdue trade receivables.
Finance Income
Our finance income decrea s e db y3 5 . 4 %f r o mR M B 1 6 . 3m i l l i o ni n2 0 2 3t oR M B 1 0 . 5
million in 2024, primarily due to a decrease in interest income on financial assets measured at
amortized cost in line with the decrease of our c ash and cash equivalents. See ‘‘— Discussion of
Certain Key Items on Consolidated Statement s of Financial Position — Assets — Cash and
Cash Equivalents’’ for details.
Finance Costs
Our finance costs increased by 32.8% from RMB6.9 million in 2023 to RMB9.2 million in
2024, primarily due to an increase in the interest expenses on loans and borrowings in line with
the increase of our bank loans. See ‘‘— Indebtedness — Loans and Borrowings’’ for details.
Share of Results of Associates
We recorded share of losses of associates of RM B3.5 million in 2024, compared to share of
profits of associates of RMB0.6 million in 2023, reflecting the loss of some of our associated
distributors.
FINANCIAL INFORMATION
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Income Tax
We recorded an income tax expense of RMB1,381 and RMB90 thousand in 2023 and 2024,
respectively.
Loss for the Year
As a result of the foregoing, our loss for the year increased from RMB229.4 million and
RMB274.5 million in 2023 and 2024, respectively.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
Revenue
Our revenue increased by 28.8% from RMB360.1 million in 2022 to RMB463.7 million in
2023, primarily attributable to an increa se in our revenue generated from sales of
battery-electric loaders and wide-body dump trucks, partially offset by a decrease in our
revenue generated from sales of battery-electric tractor trucks.
Sales of Products
Our revenue generated from sales of produc ts increased by 28.9% from RMB353.3 million
in 2022 to RMB455.5 million in 2023.
. Battery-electric loaders. Our revenue generated from sales of battery-electric loaders
increased by 53.0% from RMB183.7 mill ion in 2022 to RMB281.2 million in 2023,
primarily due to an increase in the sales volume of our battery-electric loaders, which
was partially offset by a decrease of the average selling price of our loaders. The sales
volume of our battery-electric loaders rose from 295 units in 2022 to 484 units in 2023,
primarily due to (i) our enhanced sales effort s, (ii) increased customers’ acceptance of
battery-electric loaders, and (iii) the impro vements in performance, adaptability and
reliability of our battery-electric loaders which satisfy customers’ demand. The
average selling price of our loaders dec reased from RMB623 thousand per unit in
2022 to RMB581 thousand per unit in 2023, resulted primarily from our strategic
decision to lower loader prices to capture early-stage opportunities in the new energy
engineering machinery market, along with fluctuations of raw material costs and
adjustments to our product portfolio.
. Battery-electric wide-body dump trucks. Our revenue generated from sales of
battery-electric wide-body dump trucks increased by 65.8% from RMB76.3 million
in 2022 to RMB126.5 million in 2023, primarily due to increases in both sales volume
and the average selling price. The sales volume of wide-body dump trucks increased
from 59 units in 2022 to 88 units in 2023, primarily due to (i) our enhanced sales
efforts, (ii) the increased sales volume o f models with greater payloads and battery
capacities, and (iii) the improvements in performance, adaptability and reliability of
our battery-electric wide-body dump trucks which satisfy customers’ demand. The
average selling price of battery-electri c wide-body dump trucks increased from
RMB1,293 thousand per unit to RMB1,437 thousand per unit because the models
with greater payloads and battery capaci ties generally have higher sales prices.
FINANCIAL INFORMATION
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. Battery-electric tractor trucks. Our revenue generated from sales of battery-electric
tractor trucks decreased by 63.4% from R MB77.9 million in 2022 to RMB28.6 million
in 2023, primarily due to the decreases in b oth sales volume and the average selling
prices. The sales volume of battery-electri c tractor trucks decreased from 148 in 2022
to 66 in 2023, as we strategically shifted our primary focus to battery-electric loaders
and wide-body dump trucks and allocated most of our sales and research and
development resources to these products. Th e average selling price of battery-electric
tractor trucks decreased from RMB527 thousand per unit in 2022 to RMB433
thousand per unit in 2023 because we reduced the selling prices of tractor trucks to
boost the sales of the inventory and adjust our pricing strategy in response to the
intensified competition in China’s ba ttery-electric tractor trucks market.
. Spare parts and accessories. Our revenue generated from sales of spare parts and
accessories increased by 26.5% from RMB15.3 million in 2022 to RMB19.4 million in
2023, primarily due to our exports of add -on e-powertrains to a North America
customer and the increased sales of charging piles.
Rendering of Services
Our revenue generated from the rendering of services significantly increased from RMB0.5
million in 2022 to RMB2.8 million 2023, primarily because we started offering intelligent mining
solutions to customers in 2023.
Revenue from Other Sources
Our revenue generated from oth er sources, mainly comprised of rental income, decreased
by 14.8% from RMB6.4 million in 2022 to RMB5.4 million in 2023, primarily as a result of our
increased sales efforts to attract c ustomers to purchase our products.
Cost of Sales
Our cost of sales increased by 29.1%, in line with the increase of our revenue, from
RMB351.9 million in 2022 to RMB454.5 million in 2023, primarily due to (i) the relatively
higher costs of LFP batteries, which were pre-stocked as their price surged, and (ii) our
increased manufacturing activi ties, which resulted in an increase in costs of raw materials and
components, which is in line with the growth of our sales. The increase was partially offset by a
decrease in impairment loss on inventory, primarily attributable to our efforts to optimize our
inventory structure.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit and gross profit margin remained stable in
2022 and 2023. Our gross profit was RMB8.2 million and RMB9.3 million in 2022 and 2023,
respectively, with our overall gross profit margin being 2.3% and 2.0%, respectively.
FINANCIAL INFORMATION
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Other Net Gain
Our other net gain significantly increa sed from RMB121 thousand in 2022 to RMB4.5
million in 2023, primarily attributable to (i) an increase in government grants from RMB2.1
million in 2022 to RMB5.3 million in 2023, reflecting the recognition and support we received
from the government, and (ii) losses of RMB1.4 million in connection with our disposals of our
equity interests in an associates and certain subsidiaries in 2022, while we did not have such
disposal in 2023.
Selling Expenses
Our selling expenses increased by 23.6% from RMB46.9 million in 2022 to RMB58.0
million in 2023, primarily due to (i) an increase in staff costs, driven by both the expansion of
our sales and marketing team with the average headcounts from 75 to 83, and larger
performance-based bonuses as a reward for their enhanced sales achievements in 2023, and (ii)
an increase in travel expenses attributable to our augmented marketing and promotional
endeavors.
Administrative Expenses
Our administrative expenses increased by 48.8% from RMB59.4 million in 2022 to
RMB88.4 million in 2023, primarily due to (i) an i ncrease in staff costs for our administrative
and management personnel due to the growing headcount with the average headcounts from 65
to 84, (ii) an increase in legal, consulting, an d other professional service fees primarily in
relation to the Listing and the Global Offering, a nd (iii) increased office expenses, business
development expenses, other taxes and surcharges in line with our business growth.
Research and Development Costs
Our research and development costs increa sed by 52.9% from RMB44.9 million in 2022 to
RMB68.6 million in 2023, primarily due to (i) a n increase in staff costs as a result of the
expansion of our research and development team with the average headcount from 73 in 2022 to
93 in 2023, (ii) an increase in outsourcing costs r eflecting our strategy to leverage outside
research and development resources to enhance d igitalization for our business and products,
and (iii) an increase in costs of raw materials and consumables used in the research and
development of new models for our battery-electric loaders and wide-body dump trucks, and
our intelligent engineerin g machinery technologies.
Impairment Loss on Trade and Other Receivables, Con tract Assets and Financial Guarantee Issued
Our impairment loss on trade and other receivabl es, contract assets and financial guarantee
issued increased by 42.1% from RMB26.9 m illion in 2022 to RMB38.2 million in 2023,
primarily attributable to the increase of our tr ade and other receivables, contract assets and
financial guarantee issued.
FINANCIAL INFORMATION
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Finance Income
Our finance income increased by 153.4 % from RMB6.4 million in 2022 to RMB16.3
million in 2023, primarily attributable to (i) an i ncrease in interest on financial assets measured
at amortized cost from RMB0.1 million to RMB8.2 million as a result of the increase of our
bank deposits in relation to our financing activities and (ii) an increase in interest income on
sales under instalment payment in line with our increased sales. See ‘‘History, Development and
Corporate Structure — Establishment and Maj or Shareholding Changes of Our Company’’ for
details on our financing activities.
Finance Costs
Our finance costs decreased by 49.6% from RM B13.7 million in 2022 to RMB6.9 million in
2023, primarily due to a decrease in our interest e xpenses on financial instruments issued to
investors from RMB6.5 million to RMB0.3 million as a result of the termination of these
financial instruments in August 2022, following which we fully settled such interest expenses in
March 2023.
Share of Results of Associates
We recorded share of profits of associates of RMB0.6 million in 2023, compared to share
of losses of associates of RMB0.4 million in 2022, reflecting that certain of our associated
distributors had improved their financial performance.
Income Tax
We had an income tax expense of RMB1,381 in 2023 as many of our subsidiaries were
loss-making in 2023. We had an income tax ex pense of RMB0.6 million in 2022 because some
interest expenses on financial instruments issued to investors of some subsidiaries were not
recognized as income tax deductible expenses.
Loss for the Year
As a result of the foregoing, our loss for the year increased from RMB178.1 million in 2022
to RMB229.4 million in 2023.
FINANCIAL INFORMATION
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DISCUSSION OF CERTAIN KEY ITEMS ON CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
The following table sets forth our consolidated balance sheets as of the dates indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
ASSETS
Non-current assets
Property, plant and equipment 17,562 97,301 165,303
Other investments 18,939 19,093 41,735
Right-of-use assets 11,479 86,096 106,559
Intangible assets 1,032 2,044 2,961
Interest in associates 3,716 23,259 28,482
Other non-current assets 46,908 62,565 73,660
Total non-current assets 99,636 290,358 418,700
Current assets
Inventories 294,544 268,675 259,023
Contract assets 860 342 1,322
Trade and other receivables 257,817 435,089 555,833
Pledged bank deposits 4,700 5,278 4,208
Cash and cash equivalents 270,260 422,072 199,254
Total current assets 828,181 1,131,456 1,019,640
Total assets 927,817 1,421,814 1,438,340
LIABILITIES
Current liabilities
Loans and borrowings 94,727 99,233 267,197
Financial instruments issued to investors 28,870 — —
Trade and other payables 156,975 294,908 374,539
Income tax payables 488 — —
Provision 7,549 12,257 16,472
Contract liabilities 15,197 13,740 3,655
Lease liabilities 2,383 7,037 3,222
Total current liabilities 306,189 427,175 665,085
Non-current liabilities
Loans and borrowings 56,648 53,994 85,116
Lease liabilities 8,300 15,444 2,606
Deferred tax liabilities 2,744 2,902 3,252
Total non-current liabilities 67,692 72,340 90,974
Total liabilities 373,881 499,515 756,059
Net assets 553,936 922,299 682,281
FINANCIAL INFORMATION
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Our net assets increased from RMB553.9 million as of December 3l, 2022 to RMB992.3
million as of December 31, 2023, primarily due to the issuance of ordinary shares (net of
transaction cost) of RMB567.6 million. Our net assets decreased from RMB992.3 million as of
December 31, 2023 to RMB682.3 million as of December 31, 2024, primarily due to (i) a
decrease in our cash and cash equivalents of R MB222.8 million, (ii) an increase in our current
loans and borrowings of RMB168.0 million, and (iii) an increase in our trade and other payables
of RMB79.6 million.
Assets
Inventories
Our inventories mainly represent raw materials, goods in transit, right to recover returned
goods, and finished goods. The following table sets forth our inventories as of the dates
indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
Raw materials 70,099 101,890 97,001
Finished goods 223,861 166,281 161,583
Right to recover returned goods 584 503 439
Inventories 294,544 268,675 259,023
Raw materials consist primarily of batteries, frames, tires, and other related components
used in our production. Finished goods represent our products that have been manufactured but
not yet been sold to customers. Right to recover r eturned goods represents the right to recover
products from customers sold with a right of return, which is recorded as inventory pursuant to
IFRS 15. The right to recover returned goods is measured at the former carrying amount of the
inventory less any expected costs to recover goods (including potential decreases in the value of
the returned goods). For details, see Note 2(u)(i) and Note 18 to the Accountants’ Report
included in Appendix I to this prospectus. Provi sion for inventories was made to net realizable
value and all losses of our inventories, mainly re presenting the shortfall between net realizable
value and the book value of the inventories due to the changes of market conditions.
Our inventories decreased by 3.6% from R MB268.7 million as of December 31, 2023 to
RMB259.0 million as of December 31, 2024, pri marily due to (i) a decrease in raw materials,
reflecting the effectiveness of o ur inventory reduction measures and the structure refinement of
our raw material inventory, and (ii) a decrease in finished goods in line with our increased sales.
Our inventories decreased by 8.8% from R MB294.5 million as of December 31, 2022 to
RMB268.7 million as of December 31, 2023, pri marily due to a decrease in finished goods,
which reflected the increased sales volume of our products.
FINANCIAL INFORMATION
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The following table sets forth our inventories turnover days for the years indicated.
As of December 31,
2022 2023 2024
Inventories turnover days (1) 266 226 161
Note:
(1) Average turnover days of inventories are equal to the average of the beginning and ending net inventory
balances of a year divided by cost of sales for that year and multiplied by the number of days in that year.
Our inventories turnover days decreased from 266 days in 2022 to 226 days in 2023,
primarily attributable to the growth of our sa les and our efforts to optimize our inventory
management. The relatively prolonged invent ory turnover days were primarily due to (i) we
pre-stocked key raw materials, par ticularly batteries, in respons e to the fluctuations of prices,
and (ii) we had pre-stocked finished products in preparation for the rising demand for new
energy engineering machinery. Our inventorie s turnover days decreased from 226 days in 2023
to 161 days in 2024, primarily attributable to our enhanced inventories management and
increased sales.
As of December 31, 2024, all the batteries we pre-stocked with high prices in our raw
materials had been consumed, and the majority o f the engineering machinery assembled with
high-priced pre-stocked batteries had been s uccessfully sold. As o f December 31, 2024, the
carrying value of the inventory of finished goods with pre-stocked batteries amounted to
RMB9.8 million. We have considered the r isks of impairment and have recognized an
impairment loss on these inventories of finish ed goods with pre-stock ed batteries of RMB5.1
million as of December 31, 2024, resulting in th e net realizable value of such inventory of
RMB4.7 million as of the same date.
The following table sets forth an aging analysis of our inventories (net) as of the date
indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
Within 1 year 252,196 221,464 231,020
1 to 2 years 30,403 29,331 17,220
2 to 3 years 9,119 11,244 7,498
More than 3 years 2,827 6,635 3,286
Total 294,544 268,675 259,023
FINANCIAL INFORMATION
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Particularly, the following table sets forth an aging analysis of our raw materials (net) as of
t h ed a t ei n d i c a t e d .
As of December 31,
2022 2023 2024
(RMB in thousands)
With 1 year 68,418 101,232 89,265
1 to 2 years 238 350 7,353
2 to 3 years 621 125 235
More than 3 years 822 183 149
Total 70,099 101,890 97,001
The following table sets forth an aging analysis of our finished goods (net) as of the date
indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
Within 1 year 183,193 119,730 141,316
1 to 2 years 30,165 28,981 9,867
2 to 3 years 8,498 11,119 7,262
More than 3 years 2,005 6,452 3,137
Total 223,861 166,281 161,583
To effectively manage our inventory, we pay particular attention to the models of vehicles
in inventory for over two years. As of December 31, 2024, the carrying value of these long-aging
inventories amounted to RMB29.3 million. We had made impairment loss on these long-aging
inventories of RMB18.9 million as of December 31, 2024, resulting in the net realizable value of
such inventory of RMB10.4 million as of the same date.
As of February 28, 2025, approximately RMB2 28.1 million, or 84.9% of our inventories
outstanding as of December 31, 2023 and RMB32.8 million, or 12.6% of our inventories
outstanding as of December 31, 2024, had been subse quently settled, respectively. In particular,
as of February 28, 2025, approximately RMB96. 0 million, or 94.2% of our raw materials
outstanding as of December 31, 2023 and approximately RMB2.9 million, or 3.0% of our raw
materials outstanding as of December 31, 2024, h ad been subsequently ut ilized. As of February
28, 2025, approximately RMB132.2 million, or 79.5% of our finished goods outstanding as of
December 31, 2023 and approximately RMB29. 8 million, or 18.5% of our finished goods
outstanding as of December 31, 2024, had been subsequently sold. On the balances of
inventories, we made provision of RMB38.6 million, RMB39.3 million and RMB30.1 million as
of December 31, 2022, 2023 and 2024, respectively.
FINANCIAL INFORMATION
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We believe there is no material recoverability issue for our inventories and sufficient
provision has been made because (i) our procurement of inventory is aligned with our order
backlogs and production plans, thereby minimizing the risk of low net realizable value, (ii) we
continuously optimize our inventory management policies, including but not limited to
procuring materials based on production schedules and regularly monitoring inventory levels to
ensure appropriate stock condi tions, and (iii) the impairment loss on inventory as of December
31, 2022, 2023, and 2024, accounted for 11.6%, 12.7%, and 10.4% of total inventory,
respectively, indicating a relativ ely stable percentage over time.
Trade and Other Receivables
Our trade and other receivables consist pri marily of (i) trade an d bill receivables that
represent amounts due from our customers in our ordinary course of business, (ii) prepayments
for purchase of raw materials and listing expenses, as well as other prepayments, such as bid
bonds, (iii) taxation recoverable, (iv) deposits we make for our leases, insurance and others, and
(v) other receivables.
The following table sets forth our trade and o ther receivables as of the dates indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
Trade receivables, net 233,417 374,089 446,327
Less: trade receivables due more
than one year (44,236) (48,259) (56,035)
189,181 325,830 390,292
Bill receivables 9,617 47,043 56,572
Deposits 76 10,590 5,414
Prepayments for purchase of raw materials 43,823 26,811 69,909
Taxation recoverable 6,863 18,911 27,574
Others
(1) 8,257 5,904 6,072
Total 257,817 435,089 555,833
Note:
(1) Consists primarily of prepaid expenses, prepayments for listing expenses, loans to third parties, interest
receivables and other receivables.
FINANCIAL INFORMATION
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Our trade and other receivabl es increased from RMB435.1 million as of December 31,
2023, to RMB555.8 million as of December 31, 2 024, primarily due to (i ) an increase in trade
receivables from RMB374. 1 million to RMB446.3 million in lin e with our increased sales, (ii) an
increase in prepayments for purchase of raw materials from RMB26.8 million to RMB69.9
million in relation to the greater demand for chassis and LFP batteries required for the
production of our wide-body dump trucks and (iii) an increase in bill receivables from RMB47.0
m i l l i o nt oR M B 5 6 . 6m i l l i o ni nl i n ew i t ho u ri n c r e a s e dr e v e n u ei n2 0 2 4 .T h ea m o u n tw a s
partially offset by a decrease in our deposits from RMB10.6 million to RMB5.4 million
primarily due to the settlement o f deposits for our land use right for a land parcel in Zhejiang.
Our trade and other receivables increased fr om RMB257.8 million as of December 31, 2022
to RMB435.1 million as of December 31, 2023, primarily due to (i) an increase in trade
receivables from RMB189.2 mil lion to RMB325.8 million and an increase in bill receivables
from RMB9.6 million to RMB47.0 million in line with our increased sales, (ii) an increase in
taxation recoverable from RMB6.9 million to RMB 18.9 million, and (iii) an increase in deposits
from RMB76 thousand to RMB10.6 million in relat ion to our land use right for a land parcel in
Zhejiang. The amount was partially offset by a d ecrease in our prepayments for purchase of raw
materials from RMB43.8 million to RMB26.8 million, primarily due to our greater bargaining
power with suppliers of raw material and improved inventory procurement and management
system.
As of December 31, 2022, 2023 and 2024, we had trade receivables due more than one year
of RMB44.2 million, RMB48.3 million and RMB56.0 million, respectively.
The following table sets forth our trade receivables turnover days for the years indicated.
As of December 31,
2022 2023 2024
Trade receivables turnover days
(1) 176 239 236
Note:
(1) Average turnover days of trade receivables are equal to the average of the beginning and ending net trade
receivable balances of a year divided by revenue for that year and multiplied by the number of days in that
year.
Our trade receivables turnov er days increased from 176 da ys in 2022 to 239 days in 2023,
primarily attributable to (i) an increase in s ales volume in the second half of 2023 due to our
sales efforts to leverage the development of new en ergy engineering machinery industry, (ii) an
increase in sales to customers who used the finance lease services to make the payment, which we
usually grant certain credit terms to the finance l ease companies, and (iii) our favorable credit
terms to secure customers. Our tra de receivables turnover days remained relatively stable at 236
days in 2024, representing a slight decrease compared to 239 days in 2023.
FINANCIAL INFORMATION
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The following table sets forth the aging analysis of trade receivables, based on the invoice
date and net of loss allowance, as of the dates as indicated:
As of December 31,
2022 2023 2024
(RMB in thousands)
Within 1 year 208,629 263,741 303,450
1 to 2 years 20,576 93,068 118,231
2 to 3 years 4,213 13,955 22,070
More than 3 years — 3,326 2,576
Total 233,418 374,090 446,327
The following table sets forth an aging ana lysis of our trade receivables based on the due
date and net of loss allowance, as of the date indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
Current (not past due) 147,474 238,487 227,224
Overdue less than 1 year 82,492 121,184 173,706
Overdue 1–2 years 3,415 14,240 45,231
Overdue 2–3 years 37 179 166
Total 233,418 374,090 446,327
FINANCIAL INFORMATION
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The following table sets forth the gross carrying amount, loss allowance and balance (net
of loss allowance) of our trade receivables outstanding for our related party customers and
independent customers as of the dates indicated.
Gross
Carrying
Amount
Loss
Allowance
Balance
(net of loss
allowance)
(RMB in thousands)
As of December 31, 2022
Trade receivables for related part y customers 15,069 (132) 14,937
Trade receivables for independent customers 262,553 (44,072) 218,481
Total 277,622 (44,204) 233,418
As of December 31, 2023
Trade receivables for related party c ustomers 129,307 (9,470) 119,837
Trade receivables for independent customers 321,762 (67,510) 254,252
Total 451,069 (76,979) 374,089
As of December 31, 2024
Trade receivables for related party c ustomers 220,164 (37,957) 182,207
Trade receivables for independent customers 382,988 (118,868) 264,120
Total 603,152 (156,825) 446,327
Loss allowances for trade receivables are alw ays measured at an amount equal to lifetime
expected credit losses (ECL). ECLs on these fin ancial assets are estimated using a provision
matrix based on our historical credit loss experience, adjusted for factors that are specific to the
debtors and an assessment of both the current and forecast general economic conditions at the
reporting date. During the Track Record Period, s ince there were changes in the business scale
and our expectations for the future economic co nditions, the expected credit loss rates were
adjusted in accordance with our accounting policy set out in Note 2(i) to the Accountants’
Report. The expected credit loss rate for all t ypes of our trade receivables during the Track
Record Period remained relatively stable. For details, see Note 29(a) to the Accountants’ Report
included in the Appendix I to this prospectus.
FINANCIAL INFORMATION
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The following table sets forth the settlement of our trade receivables, net of loss allowance,
as of February 28, 2025, outstanding as of December 31, 2023 and 2024, respectively.
Balance as of
December
31, 2023
Settlement as
of February
28, 2025
Balance as of
December
31, 2024
Settlement as
of February
28, 2025
(RMB in thousands)
Trade receivables for related
party customers 119,837 63,033 182,207 37,685
Trade receivables for
independent customers 254,252 117,445 264,120 25,794
Total 374,089 180,478 446,327 63,479
As of February 28, 2025, approximately RMB180.5 million, or 48.2% of our trade
receivables (net of loss allowa nce) outstanding as of Decembe r 31, 2023 and approximately
RMB63.5 million, or 14.2% of our trade receivables (net of loss allowance) outstanding as of
December 31, 2024, had been subsequently settl ed. Particularly, as of February 28, 2025,
RMB63.0 million, or 52.6% of ou r trade receivables (net of loss allowance) ou tstanding for
related parties as of December 31, 2023 and RMB 37.7 million, or 20.7% of our trade receivables
(net of loss allowance) outstand ing for our related party customers as of December 31, 2024 had
been subsequently settled. Also, RMB117.4 mi llion, or 46.2% of our trade receivables (net of
loss allowance) outsta nding for independent customers a s of December 31, 2023 and RMB25.8
million, or 9.8% of our trade receivables (net of loss allowance) outstanding for independent
customers as of December 31, 2024, had been subsequently settled.
The loss allowance on trade receivables amounted to RMB44.2 million, RMB77.0 million
and RMB156.8 million as of December 31, 2022, 2023 and 2024, respectively. In particular, the
loss allowance on trade receivables for our related party customers was RMB0.1 million,
RMB9.5 million and RMB38.0 million as of D ecember 31, 2022, 2023 and 2024, respectively,
and loss allowance on trade receivables for i ndependent customer s of RMB44.1 million,
RMB67.5 million and RMB118.9 million as of D ecember 31, 2022, 2023 and 2024, respectively.
We have established a comprehensive accoun ts receivable recovery process, with our risk
management department actively monitoring and pursuing repayments from customers through
various means. In the event of overdue payments, the department promptly analyzes the reasons
for the delay. If deemed manageable, we engage with the customer to provide a grace period and
reassess the repayment status upon its expiration. Should the customer still fail to settle the
payment, appropriate collection measures are ta ken. If the customer is assessed as unable to
repay, the recovery and asset disposal process is immediately initiated to mitigate potential
losses. Our Directors are of the view that there is no material recoverability issue for trade
receivables, and sufficient provision has been m ade, by taking into account our enhanced credit
risk management measures and understanding of the financial position of the customers.
FINANCIAL INFORMATION
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Pledged Bank Deposits
Our pledged bank deposits primarily repres ent the security deposits we provide to our
battery suppliers for our payments to them. Our pledged bank deposits increased from RMB4.7
million as of December 31, 2022, to RMB5.3 milli on as of December 31, 2023 primarily due to
the increased payment with bank draft to supp liers, which was in line with our increased
purchase from battery suppliers. Our pledged bank deposits decreased from RMB5.3 million as
of December 31, 2023 to RMB4.2 million as of Dece mber 31, 2024, primarily due to the release
of the bill we issued in 2023.
Cash and Cash Equivalents
Our cash and cash equivalents increased si gnificantly from RMB270.3 million as of
December 31, 2022, to RMB422.1 million as of De cember 31, 2023, primarily attributable to
proceeds we received from our equity financin g as well as bank loans and borrowings. The
increase was partially offset by our cash used i n operating activities in 2023. Our cash and cash
equivalents decreased from RMB422.1 million as of December 31, 2023, to RMB199.3 million
as of December 31, 2024, due to (i) the increased recei vables, and (ii) the increased investment in
intangible assets, property, plant and equipm ent, and land use rights. See ‘‘— Liquidity and
Capital Resources — Cash Flows.’’
Right-of-Use Assets
Our right-of-use assets primarily represent our leases of manufacturing bases, warehouses,
and office premises. Our right-of-use assets sign ificantly increased from RMB11.5 million as of
December 31, 2022, to RMB86.1 million as of Decem ber 31, 2023, primarily attributable to our
new leases in Zhejiang and Hunan, as well as our purchases of land use right in Zhejiang and
Hubei, all of which are planned for manufacturing, research and development, and general
office use. Our right-of-use assets further inc reased from RMB86.1 million as of December 31,
2023 to RMB106.6 million as of December 31, 2024 , primarily due to an increased in land use
rights associated with our Hunan plant.
Liabilities
Trade and Other Payables
Our trade and other payables include (i) trade payables due to third party suppliers in our
ordinary course of business, (ii) bills payables due to bank acceptance notes issued to our
suppliers with a maturity of six months, (iii) accrued payroll and other benefits for our
employees, (iv) VAT and sundry taxes payable, (v) interest payable in connection with our loans
and borrowings, financial instruments issued to investors, and lease liabilities, (vi) refund
liabilities arising from the right of return and sales rebate and (vii) other miscellaneous
payables.
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The following table sets forth our trade and other payables as of the dates indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
Trade payables due to third party suppliers 94,377 185,980 270,526
Bills payable — 11,000 10,000
Financial liabilities measured at amortised
cost 94,377 196,980 280,526
Other payables (1) 37,969 61,115 64,483
Accrued payroll and other benefits 17,112 22,253 19,881
VAT and sundry taxes payable 2,713 8,765 4,939
Interest payable — — —
Refund liabilities 4,804 5,795 4,710
Total 156,975 294,908 374,539
Note:
(1) Primarily consist of deposit for restricted shares, deposits, payables for purchase of property, plant and
equipment, commission expenses payable, governm ent grants payable, and other expense accruals.
Our trade and other payables increased by 27.0% from RMB294.9 million as of December
31, 2023, to RMB374.5 million as of December 31 , 2024, primarily due to an increase in trade
payables due to third party suppliers from RMB 186.0 million to RMB270.5 million in line with
our expansion of business scale.
Our trade and other payables increased by 87.9% from RMB157.0 million as of December
31, 2022 to RMB294.9 million as of December 31, 202 3, primarily attributable to (i) an increase
in trade payables due to third party suppliers from RMB94.4 million to RMB186.0 million in
line with our expansion of business scale, (ii) an increase in other payables from RMB38.0
million to RMB61.1 million, mainly resulting from an increase in payables for purchase of
property, plant and equipment in relation to the construction of our manufacturing plant in
Hubei in 2023, and (iii) an increase in VAT and sundry taxes payable from RMB2.7 million to
R M B 8 . 8m i l l i o ni nr e l a t i o nt ot h ei n c r e a s e ds a l e so fp r o d u c t s .
FINANCIAL INFORMATION
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The following table sets forth our trade payables turnover days for the years indicated.
As of December 31,
2022 2023 2024
Trade payables turnover days (1) 91 113 139
Note:
(1) Average turnover days of trade payables are equal to the average of the beginning and ending trade
payable balances of a year divided by cost of sales for that year and multiplied by the number of days in
that year.
Our trade payables turnover days increased from 91 days in 2022 to 113 days in 2023,
primarily attributable to (i) the extended credi t terms offered by our suppliers, and (ii) the
increased trade payables in line with our increased sales of products. Our trade payables
turnover days increased from 113 days in 2023 to 13 9 days in 2024, primarily attributable to our
increased procurement.
The following table sets forth an aging analysis of our trade payables based on the invoice
date as of the date indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
Within 1 year 93,403 179,562 265,049
1 year to 2 years 974 5,773 1,490
Over 2 years — 645 3,987
Total 94,377 185,980 270,526
The substantial increase in our trade payables over two years from RMB0.6 million as of
December 31, 2023 to RMB4.0 million as of Decem ber 31, 2024 was mainly associated with the
unresolved warranty settlements with certain suppliers. As of February 28, 2025, approximately
RMB180.3 million, or 96.9% of our trade payables outstanding as of December 31, 2023 and
RMB151.7 million, or 56.1% of our trade payab les outstanding as of December 31, 2024, had
been subsequently settled, respectively.
Contract Liabilities
Our contract liabilities primarily repres ent the prepayments we received from certain
customers for sales of our engineering machine ry and spare parts and accessories. Our contract
liabilities slightly decreased from RMB15. 2 million as of December 31, 2022 to RMB13.7
million as of December 31, 2023. Our contract liabilities decreased from RMB13.7 million as of
December 31, 2023 to RMB3.7 million as of Decem ber 31, 2024 with our execution of certain
contracts. As of February 28, 2025, approximately RMB0.7 million, or 20.2% of our contract
liabilities outstanding as of December 31, 2024, had been subsequently recognized as revenue.
FINANCIAL INFORMATION
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Loans and Borrowings
Our loans and borrowings consist of (i) loans from commercial banks in China, and (ii)
obligations arising from sale and leaseback tr ansactions. Our loans and borrowings slightly
increased from RMB151.4 million as of Dec ember 31, 2022 to RMB153.2 million as of
December 31, 2023, and further increased t o RMB352.3 million as of December 31, 2024,
primarily due to an increase in our long-term bank loans. See ‘‘— Indebtedness’’ for more details
about our loans and borrowings.
Financial Instruments Issued to Investors
Our financial instruments issued to investors represent proceeds from issuing our registered
capital to investors with certain preferred rights. Our financial instruments issued to investors
decreased from RMB28.9 million as of Decembe r 31, 2022 to nil as of December 31, 2023 and
remained nil as of December 31, 2024, as a result o f the termination of the redemption rights of
our investors in August 2022.
Current Assets and Current Liabilities
The following table sets forth our current assets and current liabilities as of the dates
indicated.
As of December 31,
As of
February 28,
2022 2023 2024 2025
(RMB in thousands)
(Unaudited)
Current assets
Inventories 294,544 268,675 259,023 281,156
Contract assets 860 342 1,322 168
Trade and other receivables 257 ,817 435,089 555,833 492,526
Pledged bank deposits 4,700 5,278 4,208 4,030
Cash and cash equivalents 270 ,260 422,072 199,254 138,755
Total current assets 828,181 1,131,456 1,019,640 916,634
Current liabilities
Loans and borrowings 94,7 27 99,233 267,197 288,843
Financial instruments issued
to investors 28,870 — — —
Trade and other payables 156,975 294,908 374,539 282,054
Income tax payables 488 — — —
Provisions 7,549 12,257 16,472 16,472
Contract liabilities 15,197 13,740 3,655 12,515
Lease liabilities 2,383 7,037 3,222 3,244
Total current liabilities 306,189 427,175 665,085 603,127
Net current assets 521,992 704,281 354,555 313,507
FINANCIAL INFORMATION
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Our net current assets decreased from RMB354.6 million as of December 31, 2024 to
RMB313.5 million as of February 28, 2025, due to a decrease in our current assets. Our current
assets decreased from RMB1,019.6 million as of December 31, 2024 to RMB916.6 million as of
February 28, 2025, primarily due to (i) a d ecrease of RMB63.3 million in trade and other
receivables and (ii) a decrease of RMB60.5 milli on in cash and cash equivalents, partially offset
by an increase of RMB22.1 million in inventories.
Our net current assets decreased from RMB704.3 million as of December 31, 2023 to
RMB354.6 million as of December 31, 2024, due to an increase in our current liabilities. Our
current liabilities increased from RMB427. 2 million as of December 31, 2023 to RMB665.1
million as of December 31, 2024, primarily due to (i) an increase of RMB168.0 million in current
loans and borrowings, and (ii) an increase of R MB79.6 million in trade and other payables.
Our net current assets increased from RM B522.0 million as of December 31, 2022 to
RMB704.3 million as of December 31, 2023, due to an increase in our current assets. Our
current assets increased from RMB828.2 milli on as of December 31, 2022 to RMB1.1 billion as
of December 31, 2023, primarily due to (i) an i ncrease of RMB177.3 million in trade and other
receivables, (ii) an increase of RMB151.8 milli on in cash and cash equivalents, and (iii) an
increase of RMB578 thousand in pledged bank deposits.
LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity have been pro ceeds from issuance of financial instruments
to investors, proceeds from issuance of or dinary shares, and proceeds from loans and
borrowings, which have historically been suffi cient to meet our working capital and capital
expenditure requirements.
Cash Flows
The following table sets forth our selected cash flow data for the years indicated.
For the Year Ended December 31,
2022 2023 2024
(RMB in thousands)
Net cash used in operating activities (290,421) (193,686) (269,951)
Net cash used in investing activities (22,628) (185,427) (135,705)
Net cash generated from financing activities 522,011 530,925 182,838
Net increase/(decrease) in cash and
cash equivalents 208,962 151,812 (222,818)
Cash and cash equivalents
at the beginning of the year 61,298 270,260 422,072
Cash and cash equivalents at the end
of the year 270,260 422,072 199,254
FINANCIAL INFORMATION
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Operating Activities
During the Track Record Period, we generated cash inflow from our operating activities
primarily through sales of products. Cash outflow from operating activities primarily comprises
the costs incurred in operation of our business.
We had net cash used in operating activities of RMB270.0 million in 2024. Our net cash
used in operating activities is calculated by adjusting our loss before taxation of RMB274.5
million by adding back non-cash items, consisting primarily of (i) equity-settled share-based
payment expenses of RMB33.5 million incurred i nr e l a t i o nt oo u ri n c e n t ive platforms, and (ii)
depreciation of our owned property, plant and equipment of RMB11.9 million, before the
changes in working capital. The changes in wo rking capital in 2024 primarily reflected an
increase in trade and other receivables of RMB131 .7 million in line with our increased sales,
partially offset by an increase in trade and other payables of RMB91.2 million, primarily due to
an increase in trade payables due to third party s uppliers in line with our expansion of business
scale.
We had net cash used in operating activities of RMB193.7 million in 2023. Our net cash
used in operating activities is calculated by adjusting our loss before taxation of RMB229.4
million by adding back non-cash items, consisting primarily of (i) equity-settled share-based
payment expenses of RMB29.7 million incurred i nr e l a t i o nt oo u ri n c e n t ive platforms, and (ii)
finance costs of RMB6.9 million, primarily in relation to the interest expenses on loans and
borrowings, before the changes in working ca pital. The changes in working capital in 2023
reflected primarily an increase in trade and ot her receivables of RMB161.6 million in line with
our increased sales, partially offset by an increase in trade and other payables of RMB121.2
million, primarily due to an increase in trade p ayables due to third party suppliers in line with
our expansion of business scale.
We had net cash used in operating activities of RMB290.4 million in 2022. Our net cash
used in operating activities is calculated by adjusting our loss before taxation of RMB177.5
million by adding back non-cash items, consisting primarily of (i) equity-settled share-based
payment expenses of RMB29.1 million incurred i nr e l a t i o nt oo u ri n c e n t ive platforms, and (ii)
finance costs of RMB13.7 million, primarily in relation to the interest expenses on loans and
borrowings, before the changes in working ca pital. The changes in working capital in 2022
reflected primarily (i) an increase in trade and o ther receivables of RMB124.0 million due to our
increased sales, and (ii) an increase in inventories of RMB76.0 million, primarily because we
increased our production based on our estimates of market demand for our products.
We expect to improve our net operating cash outflow positions by enhancing our
profitability and effectively managing our working capital, through the following measures:
. Improve profitability, mainly through: (i) growing our customer base and enhancing
our products and services to further boost the sales volume of our products and drive
the growth of our revenue; (ii) enhancing our inventory management, reducing our
warranty expenses, managing costs of raw materials and components and improving
manufacturing efficiency to improve our gross profit margins; and (iii) enhancing our
operational efficiency to achieve economies of scale. See ‘‘— Business Sustainability.’’
FINANCIAL INFORMATION
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. Expedite the recovering cycl e for receivables. Going forward, we will pay closer
attention to the credit and payment progress of our customers and evaluate the level
of trade receivables on a regular basis. Fo r customers whose payments are overdue,
our risk control department will follow up with the customers to accelerate the
payment process. We will continue to implement more measures to closely monitor
our receivables so that we can ensur e timely payment by our customers.
. Liaise with our suppliers for better payment terms to minimize the risk of cashflow
mismatch from making payments to our suppliers and receiving payments from our
customers.
. Improve our operational efficiency and ach ieve scale effect as our business grows. See
‘‘— Business Sustainability.’’
Investing Activities
O u rc a s hu s e di ni n v e s t i n ga c t i v i t i e sm a i nly relates to (i) payments for purchase of
property, plant and equipment, construction in pr ogress and intangible assets, (ii) payments for
purchase of land use rights, (iii) payments for inv estments in associates, and (iv) payments for
purchase of other investments.
Our net cash flows used in investing activities was RMB135.7 million in 2024, primarily
due to (i) payments for purchase of property, plant and equipment, construction in progress and
intangible assets of RMB80.9 million, (ii) paym ents for purchase of land use rights of RMB37.4
million and (iii) payment for investments in associates of RMB18.2 million.
Our net cash flows used in investing activities was RMB185.4 million in 2023, primarily
due to (i) payments for purchase of property, plant and equipment, construction in progress and
intangible assets of RMB94.9 million, (ii) paym ents for purchase of land use rights of RMB75.4
million, and (iii) payment for investments in s ix associates in an aggregate amount of RMB18.1
million, partially offset by proceeds from disp osal of property, plant and equipment of RMB1.3
million.
Our net cash flows used in investing activiti es was RMB22.6 million in 2022, primarily due
to (i) payments for purchase of property, plant and equipment, construction in progress and
intangible assets of RMB15.1 million, (ii) pa yments for purchase of other investments of
RMB7.1 million, and (iii) payments for our minority interest investments in six associates in an
aggregate amount of RMB6.2 million. These ca sh outflows were partially offset by (i) net
proceeds of RMB4.4 million from the repayment o f a loan that we made to a business partner to
facilitate our cooperation in the research and development of autonomous operation
technologies, and (ii) proceeds of RMB1.3 mil lion from the disposal of our minority equity
interest in Huansheng, one of our associates.
FINANCIAL INFORMATION
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Financing Activities
Our cash inflows from financing activities primarily comprise proceeds from issuing
financial instruments and ordinary shares to investors, and proceeds from loans and
borrowings. Our cash outflows used in financing activities mainly comprise repayments for
loans and borrowings.
We had net cash generated from financing activities of RMB182.8 million in 2024,
primarily due to proceeds from loans and borrow ings of RMB275.9 million, which was partially
offset by repayment of loans and borrowings of RMB77.0 million.
We had net cash generated from financing activities of RMB530.9 million in 2023,
primarily due to (i) proceeds from the issuance o f ordinary shares to a group of institutional
investors in an aggregate amount of RMB567.6 m illion in 2023 and (ii) proceeds from loans and
borrowings of RMB144.0 million. These cash inflows were partially offset by (i) repayment of
loans and borrowings of RMB142.3 million, (ii) settl ement for financial instruments to investors
of RMB29.1 million, and (iii) interest paid for interest-bearing borrowings of RMB5.6 million.
We had net cash generated from financing activities of RMB522.0 million in 2022,
primarily due to (i) proceed s from issuing ordinary shares to a g roup of institutional investors in
an aggregate amount of RMB378.0 million in N ovember 2022, (ii) proceeds from loans and
borrowings of RMB210.3 million, and (iii) proceeds from issuing our registered capital to
investors with certain preferred rights in an aggregate amount of RMB195.9 million. These cash
inflows were partially offset by (i) repayment of loans and borrowings in an amount of
RMB210.6 million, (ii) settlement for financial i nstruments to investors of RMB47.1 million and
(iii) interest paid for interest-bearing borrowings of RMB16.0 million.
Working Capital
We had negative operating cash flows during the Track Record Period. We may continue
to record negative cash flows from operating acti vities in the future, in which case our working
capital may be limited and our business, financial condition, results of operations and prospects
may be materially and adversely affected. See ‘‘Risk Factors — Risks Relating to Our Business
and Industry — We had net loss and net cash used in operating activities during the Track
Record Period, and may have net loss and net cash used in operating activities in the future.’’
Based on the cash and cash equivalents on hand, our operating cash flows, the available
financing facilities, and the estimated net pro ceeds available to us from the Global Offering, our
Directors are of the view, and the Joint Sponsors concur, that we have sufficient working capital
for our present requirements and for at least the next 12 months from the date of this
prospectus.
FINANCIAL INFORMATION
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INDEBTEDNESS
The following table sets forth a breakdown of our indebtedness as of the dates indicated.
As of December 31,
As of
February 28,
2022 2023 2024 2025
(RMB in thousands)
(Unaudited)
Current
Loans and borrowings 94,7 27 99,233 267,197 288,843
Financial instruments issued
to investors 28,870 — — —
Lease liabilities 2,383 7,037 3,222 3,244
Subtotal 125,980 106,270 270,419 292,086
Non-current
Loans and borrowings 56 ,648 53,994 85,116 84,887
Financial instruments issued
t o i n v e s t o r s ————
Lease liabilities 8,300 15,444 2,606 2,624
Subtotal 64,948 69,438 87,722 87,510
Total 190,928 175,708 358,141 379,597
Loans and Borrowings
Our loans and borrowings consist of (i) loans from commercial banks in China, and (ii)
obligations arising from sale and leaseback transactions. Our bank borrowing agreements
generally include specific financial covenants. In accordance with such covenants, except for
obtaining prior written consent from the bank, we may not engage in certain transactions,
including providing guarantees for third-parties exceeding a speci fic percentage of our net assets
or total assets, and entering into connected transactions valued above a defined percentage of
our net assets. Our loans and borrowings amounted to RMB151.4 million, RMB153.2 million,
RMB352.3 million and RMB373.7 million a s of December 31, 2022, 2023 and 2024, and
February 28, 2025, respectively, as a result of our demand for capital due to our business
development and expansion.
FINANCIAL INFORMATION
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As of the dates indicated below, our loans and borrowings were as follows:
As of December 31,
As of
February 28,
2022 2023 2024 2025
(RMB in thousands)
(Unaudited)
Bank loans 142,375 153,227 345,093 366,725
Obligations arising from sale
and leaseback transactions 9,000 — 7,220 7,004
Amounts due to related
p a r t i e s ————
Other borrowings — — — —
Total 151,375 153,227 352,313 373,729
As of the dates indicated below, our loans and borrowings were repayable as follows:
As of December 31,
As of
February 28,
2022 2023 2024 2025
(RMB in thousands)
(Unaudited)
Within 1 year 94,727 99,233 267,197 288,843
After 1 year but within 2 years 56,648 23,150 44,610 44,624
After 2 years but within
5 years — 30,844 40,506 40,263
Total 151,375 153,227 352,313 373,729
In 2023 and 2024, we did not fulfill certain non-financial covenants under our bank loan
facility agreements, which were classified as cu rrent liabilities with total amount of RMB32.2
million and RMB149.0 million as of December 31, 2023 and 2024. The covenants require us to
promptly notify the lending banks of any related party transactions whose total amount reaches
or exceeds 10% of our or the borrowing entity’s net assets. Such notifications should include the
relationship between the involved parties, the nature and terms of the transactions, the
transaction amount or corresponding ratio, pricing policies and other relevant details. We had
not received any demand notice for early repay ment of the relevant bank loans due to the
aforementioned breach of certain non-financial covenants as of the Latest Practicable Date.
Additionally, we have obtained written confirmation from each lending bank that such breach
will not affect further performance of the respe ctive loan agreements, trigger early payment,
impact our credit record or future business relationships with the lending banks, and that we
have not committed any other contractual violations. See Note 22 to the Accountants’ Report in
Appendix I to this prospectus for details.
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As of the dates indicated below, the interest rates per annum of our loans and borrowings
were as follows:
As of December 31,
As of
February 28,
2022 2023 2024 2025
Short-term loans One-year LPR
–0.65% –
+1.00%
or 3.00%–
4.70%/6.20%
One-year LPR
–0.65% –
+0.75%
or
3.00%–4.45%
One-year LPR
–0.65% –
+0.50%
or
2.80%–5.98%
One-year LPR
–0.65% –
+0.60%
or
2.45%–5.98%
Long-term loans 4.00%–6.20% 3.00%–4.35% 2.90%–5.98% 2.65%–5.98%
Note:
(1) LPR represents loan prime rate.
As of February 28, 2025, we had unutilized banking facilities of an aggregate of RMB270.0
million.
Financial Instruments Issued to Investors
Our financial instruments issued to investors represent preferred rights that we granted to
certain investors in connection with the registered capital subscribed by them to receive a
preference amount upon liquidation or require u s to redeem their paid-in capital. Our financial
instruments issued to investors decreased fro m RMB28.9 million as of December 31, 2022 to nil
as of December 31, 2023, and remained nil as of December 31, 2024, as the above-mentioned
preferred rights of our investors were terminate d in August 2022 and these financial liabilities
were derecognized and the carrying amount of these financial liabilities were reclassified to
equity thereafter. Our financial instruments iss ued to investors were nil as of February 28, 2025.
FINANCIAL INFORMATION
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Lease Liabilities
Our lease liabilities represent our obligation to make lease payments arising from our
leases of manufacturing bases, warehouses, and office premises. Our lease liabilities are
recognized at the commencemen td a t eo ft h el e a s ea tt h ep r e s e n tv a l u eo fl e a s ep a y m e n t st ob e
made over the term of the lease. As of the dates indicated below, our lease liabilities were:
As of December 31,
As of
February 28,
2022 2023 2024 2025
(RMB in thousands)
(unaudited)
Within 1 year 2,383 7,037 3,222 3,244
After 1 year but within
2 years 2,507 5,674 1,466 1,476
After 2 years but within
5 years 5,793 9,770 1,140 1,148
Total 10,683 22,481 5,828 5,868
Our lease liabilities increased from RMB10. 7 million as of December 31, 2022 to RMB22.5
million as of December 31, 2023, primarily attrib utable to our expanded leases of manufacturing
bases, warehouses, and office premises as our busine ss develops. Our lease liabilities decreased
from RMB22.5 million as of December 31, 2023 to RMB5.8 million as of December 31, 2024,
and remained relatively stable at RMB5.9 million as of February 28, 2025
Indebtedness Statement
Except as discussed above, as of February 28, 2025, being the indebtedness statement date,
we did not have any outstanding mortgages, charges, debentures, loan capital, debt securities,
loans, bank overdrafts or other similar indebtedness, finance lease or hire purchase
commitments, liabilities under acceptances (oth er than normal trade bill s), acceptance credits,
which are either guaranteed, unguaranteed, s ecured or unsecured, or guarantees or other
contingent liabilities.
Our Directors confirm that (i) as of the Lates t Practicable Date, there was no material
restrictive covenant in our indebtedness which could significantly limit our ability to obtain
future financing, and (ii) we did not have any material default on our indebtedness or breach of
covenant during the Track Record Period and up t o the Latest Practicable Date. Our Directors
further confirm that (i) 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, and (ii) there has not
been any material change in our indebtedness since February 28, 2025 and up to the date of this
prospectus. As of February 28, 2025, we did not have plans for other material external debt
financing.
FINANCIAL INFORMATION
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CONTINGENT LIABILITIES
We collaborate with finance lease compani es to offer finance lease services to our
customers who are willing to purchase our products but require financing options and provide a
repurchase guarantee to the finance lease companies under this arrangement. See ‘‘Business —
Sales and Service Network — Finance Lease Arra ngement.’’ As of December 31, 2022, 2023 and
2024, our maximum exposure to such guarantees was RMB17.4 million, RMB121.1 million and
RMB344.1 million, respectively and we did not incur any customer default during the Track
Record Period.
Save as disclosed above, as of the Latest Practicable Date, we did not have any material
contingent liabilities.
CAPITAL EXPENDITURE
Our capital expenditures during the Track Record Period were primarily related to
purchase of rights of land use, purchase of property, plant, equipment, construction in progress,
and intangible assets. Our capital expenditures were RMB15.1 million, RMB170.3 million and
RMB118.3 million, respectively, in 2022, 2023 and 2024. We intend to fund our future capital
expenditures with net proceeds from equity and debt financings and the cash on our
consolidated statements of financial position.
CAPITAL COMMITMENT
Our capital commitments are mainly related to purchase of property, plant and equipment
and intangible assets. As of December 31, 2022, we did not have any material capital
commitment. As of December 31, 2023, we had RMB101.3 million of capital expenditures
contracted for but not yet recognized, arising fr om construction contracts in relation to our
planned manufacturing plants in Zhejia ng and Hubei. As of December 31, 2024, we had
RMB36.0 million of capital expenditures contracted for but not yet recognized, arising from a
construction contract in relation to our manufacturing plant in Zhejiang.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
During the Track Record Period and up to the Latest Practicable Date, we did not have
any material off-balance sheet co mmitments or arrangements.
FINANCIAL INFORMATION
–3 5 1–


--- page 361 ---
KEY FINANCIAL INDICATORS
The following table sets forth our selected financial indicators for the years and as of the
dates indicated.
For the Year Ended December 31,
2022 2023 2024
Profitability indicators
Gross profit margin (1) 2.3% 2.0% 5.8%
Liquidity indicators
Current liquidity ratio (2) 270.5% 264.9% 153.3%
Gearing ratio (3) 67.5% 54.2% 110.8%
Inventories turnover days (4) 266 226 161
Trade receivables turnover days (5) 176 239 236
Trade payables turnover days (6) 91 113 139
Notes:
(1) Gross profit margin equals gross profit divided by revenue from continuing businesses for the year.
(2) Current liquidity ratio equals current assets as of the last day of the year divided by current liabilities as of
the last day of the year.
(3) Gearing ratio equals total liabilities (including current and non-current liabilities) divided by total equity
as of the last day of the year.
(4) Average turnover days of inventories is equal to the average of the beginning and ending net inventory
balances of a year divided by cost of sales for that year and multiplied by the number of days in that year.
(5) Average turnover days of trade receivables is equal to the average of the beginning and ending net trade
receivable balances of a year divided by revenue for that year and multiplied by the number of days in that
period.
(6) Average turnover days of trade payables is equal to the average of the beginning and ending trade payable
balances of a year divided by cost of sales for that year and multiplied by the number of days in that year.
MATERIAL RELATED PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time. For details about our
material related party transa ctions, see Note 32 to the Accountants’ Report included in
Appendix I to this prospectus and ‘‘Relationship with our Controlling Shareholders.’’
Our Directors are of the view that each of the material related party transactions set out in
Note 32 to the Accountants’ Report included in Appendix I to this Prospectus was conducted in
the ordinary course of business on an arm’s length basis and with normal commercial terms
between the relevant parties. Our Directors are also of the view that our material related party
transactions during the Track Re cord Period would not distort our track record results or cause
our historical results to become non- reflective of our future performance.
FINANCIAL INFORMATION
–3 5 2–


--- page 362 ---
FINANCIAL RISKS
Our activities expose us to a variety of financial risks, including credit risk, liquidity risk,
interest rate risk, and currency risk. Our ov erall risk management procedures focus on the
unpredictability of financial markets and seek to minimize potential adverse effects on our
financial performance.
Credit Risk
Our bank deposits are held with banks locat ed in the PRC which management believes are
of high credit quality. Accordingly, our credit risk is primarily attributable to trade and other
receivables.
In respect of trade receivables, i ndividual credit evaluations are performed on all customers
requiring credit over a certain amount. These evaluations focus on the customer’s past history of
making payments when due and current ability to pay and take into account information
specific to the customer as well as pertaining to the economic environment in which the
customer operates. Trade receivables under cr edit sales arrangement are normally due within
one to six months from the date of billing. Sales under instalment payment method generally
have payment periods ranging from six to 60 months. During the Track Record Period, only five
customers were granted an installment payment period of up to 60 months. None of these
customers were our associated distributors or related parties. We extended these longer
installment periods to encourage acceptance of our products during their early development
stages and to attract customers after evaluating and confirming their strong qualifications,
primarily because their application settings align with our initial objective of establishing typical
application scenarios, or to provide favorable t erms to well-qualified customers. The aggregate
sales to these five customers amounted to RMB7.4 million, RMB10.2 million, and RMB8.3
million in 2022, 2023 and 2024, respectively. Th e outstanding trade receivable balances from
these customers were RMB4.2 million, RMB12. 9 million, and RMB16.0 million as of December
31, 2022, 2023 and 2024, respectively.
We measure loss allowances for trade receivables and lease receivables at an amount equal
to lifetime ECLs, which is calculated usin g a provision matrix. According to our past
experience, the loss patterns of different customer groups are significantly different. We classify
customers into groups based on a number of factors including their ownership background and
financial strength, and the industries in which they operate, etc. We estimate loss allowance for
trade receivables for each of the custom er groups with similar loss patterns.
Further quantitative data in respect of our ex posure to credit risk are disclosed in Note 29
to the Accountants’ Report included in Appendix I to this prospectus.
Liquidity Risk
Our policy is to regularly monitor our liquidity requirements and our compliance with
lending covenants, to ensure that we maintain suffi cient reserves of cash a nd readily realizable
marketable securities and adequate committed lines of funding from major financial institutions
to meet our liquidity requirements in the short and longer term. Further quantitative data in
respect of our exposure to liquidity risk arising are disclosed in Note 29 to the Accountants’
Report included in Appendix I to this prospectus.
FINANCIAL INFORMATION
–3 5 3–


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Interest Rate Risk
Our interest rate risk arises primarily from bank loans. Borrowings issued at variable rates
a n da tf i x e dr a t e se x p o s eu st oc a s hf l o wi n t e r e st rate risk and fair value interest rate risk
respectively. As of December 31, 2022, 2023 and 2024, it is estimated that a general
increase/decrease of 100 basis points in interes t rates, with all other variables held constant,
would have increased/decreased our loss after t ax by approximately RMB1.9 million, RMB1.8
million and RMB3.6 million, respectively.
The sensitivity analysis above indicates th e instantaneous change in our profit after tax
(and retained profits) and other components of consolidated equity that would arise assuming
that the change in interest rates had occurred at the end of the reporting period and had been
applied to re-measure those financial instruments held by us which expose us to fair value
interest rate risk at the end of the reporting period.
Currency Risk
The functional currency of our subsidiaries in mainland China is RMB. Almost all of our
operating activities are carried out in the mainland China, with most of the transactions
denominated in RMB. We consider the risk of movements in exchange rates to be insignificant.
DIVIDENDS
We did not declare or pay any dividend dur ing the Track Record Period. Any future
determination to pay dividends will be made at the discretion of our Directors and may be based
on a number of factors, including our future operations and earnings, capital requirements and
surplus, general financial condition, contra ctual restrictions and other factors that our
Directors may deem relevant. We do not have a pre-determined dividend payout ratio.
Regulations in the PRC currently permit payment of dividends of a PRC company only out of
accumulated distributable after-tax profi ts less any recovery of accumulated losses and
appropriations to statutory and other reserves that it is required to make, as determined in
accordance with its articles of association and the accounting standards and regulations in
China. There is no assurance that dividends of such amount or any amount will be declared or
d i s t r i b u t e de a c hy e a ro ri na n yy e a r .
DISTRIBUTABLE RESERVES
As of December 31, 2024, we did not have any distributable reserves.
FINANCIAL INFORMATION
–3 5 4–


--- page 364 ---
LISTING EXPENSES
Listing expenses represent professional f ees, underwriting commissions, and other fees
incurred in connection with the Global Offering. The estimated total listing expenses (based on
the mid-point of the Offer Price range and assuming that the Over-allotment Option is not
exercised) for the Global Offering are approximately RMB80.1 million (equivalent to
approximately HK$86.2 million), accounting for approxim ately 36.8% of our gross proceeds.
The estimated total listing expenses consist of (i) underwriting-related expenses (including but
not limited to commissions and fees) of appro ximately RMB33.9 million (approximately
HK$36.5 million), and (ii) non-underwriting related expenses of approximately RMB46.2
million (approximately HK$49.7 million), which consist of fees and expenses of legal advisors
and Reporting Accountants of approximately RMB26.2 million (approximately HK$28.2
million), and other fees and expenses of appr oximately RMB20.0 million (approximately
HK$21.5 million). During the Track Record Peri od, RMB33.1 million (equivalent to HK$35.6
million) of the incurred listing expenses were charged to the consolidated statements of profit or
loss and other comprehensive income and RMB1.8 million (equivalent to HK$1.9 million) of the
incurred expenses were recognized to our consolidated statements of financial position. We
expect to incur additional listing expenses of approximately RMB10.8 million (equivalent to
approximately HK$11.7 million) which is expected to be charged in profit or loss subsequent to
the Track Record Period. Approximately RMB34.4 million (equivalent to HK$37.0 million) of
the estimated listing expenses is directly attr ibutable to the issue of Offer Shares and will be
recognized as a deduction in equity directly u pon the Listing. This calculation is subject to
adjustment based on the actual amount incurred or to be incurred.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of our adjusted net tangible assets is
prepared in accordance with Rule 4.29 of the Listing Rules and is set out below for the purpose
to illustrate the effect of the Global Offering on t he consolidated net tangible assets attributable
to Shareholders of our Company as of December 31, 2024 as if it had taken place on December
31, 2024.
The statement of unaudited pro forma adjuste d net tangible assets has been prepared for
illustrative purpose only and because of its hypothetical nature, it may not give a true picture of
our financial position had the Global Offering been completed as of December 31, 2024 or at
any future date.
Consolidated
net tangible
assets
attributable to
Shareholders of
the Company
as of December
31, 2024 (1)
Estimated net
proceeds from
the Global
Offering (2)
Unaudited pro
forma adjusted
net tangible
assets
attributable to
Shareholders of
the Company
Unaudited pro forma adjusted net
tangible assets attributable to
Shareholders of our Company
per Share (3)
RMB RMB (4) RMB RMB (4) HK$(4)
B a s e do na nO f f e rP r i c e
of HK$18.00 per
H Share 679,320,057 170,449,982 849,770,039 2.33 2.51
FINANCIAL INFORMATION
–3 5 5–


--- page 365 ---
Notes:
(1) Our consolidated net tangible assets attributab le to Shareholders as of December 31, 2024 is arrived at
after deducting intangible assets of RMB2,960,937 from the total equity attributable to Shareholders of
RMB682,280,994 as of December 31, 2024, as shown in the Accountants’ Report in Appendix I to this
prospectus.
(2) The estimated net proceeds from the Global Offering s are based on the indicative Offer Price of HK$18.00
per H Share and 13,000,000 H Shares expected to be issued under the Global Offering, after deduction of
the underwriting commissions and other listing related expenses paid or payable by our Company
(excluding the listing expenses of RMB33,149,491 charged to profit or loss prior to December 31, 2024),
and takes no account of any shares that may be issued upon issued upon exercise of the Over-allotment
Option or pursuant to the restricted shares scheme.
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to Shareholders per Share
is arrived at by dividing the unaudited pro forma adjusted net tangible assets attributable to Shareholders
of our Company by 364,709,265 Shares, being the number of shares expected following the completion of
the Global Offering (excluding 14,942,497 shares held for restricted shares scheme as shown in Note
28(f)(iv) to the Accountants’ Report set out in Appendix I to this prospectus), and does not take into any
shares which may be issued upon the exercise of the Over-allotment Option or pursuant to the restricted
shares scheme.
(4) For illustrative purpose, the estimated net proceeds from the Global Offering are converted from Hong
Kong dollar into Renminbi and the unaudited pro forma adjusted net tangible assets attributable to
Shareholders of our Company per Share is converted from Renminbi into Hong Kong dollar at the
exchange rate of HK$1.00 to RMB0.9289, the exc hange rate set by PBOC prevailing on the Latest
Practicable Date. No representation is made that Renminbi amount has been, could have been or may be
converted to Hong Kong dollars, or vice versa, at the rate or at any other date.
(5) No adjustment has been made to the unaudited pro forma adjusted net tangible assets attributable to
equity shareholder of our Company to reflect any trading results or other transactions entered into
subsequent to December 31, 2024.
See ‘‘Appendix II — Unaudited Pro Forma Financial Information.’’
NO MATERIAL ADVERSE CHANGE
Our Directors have confirmed that there has been no material adverse change in our
financial or trading position or prospects since December 31, 2024, being the end date of our
latest consolidated financial statements as set out in the Accountants’ Report included in
Appendix I to this prospectus, and up to the date of this prospectus.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, except as otherwi se disclosed in this prospectus, as of the
Latest Practicable Date, there are no circum stances that would give rise to a disclosure
requirement under Rules 13.13 to 13.19 of the Listing Rules.
FINANCIAL INFORMATION
–3 5 6–


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OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Chen, our founder, chairman of our Board,
executive Director and general manager, was entitled to exercise approximately 32.18% of the
voting rights in our Company through: (i) 31,101, 004 Shares (representing approximately 8.48%
of the voting rights in our Company) directly held by him, (ii) 84,502,397 Shares (representing
approximately 23.05% of the voting rights in our Company) held by Shanghai Fangao, our
incentive platform controlled by Mr. Chen as its general partner, and (iii) 2,370,189 Shares
(representing approximately 0.65% of the voting rights in our Company) held by Cloud Tribe
Yijin. As of the Latest Practicable Date, the general partner of Cloud Tribe Yijin was Cloud
Tribe Management, which was held as to 51% by Shanghai Yijin and 49% by Yijin Venture
Capital Management. Yijin Venture Capital M anagement was held as to approximately 51.76%
by Shanghai Yijin. Shanghai Yijin was held as to approximately 19.49% by Mr. Chen and
approximately 80.51% by Shanghai Yijin Man agement, whose general partner was Mr. Chen. A
simplified illustration of the aforemention ed ultimate beneficial and voting structure
immediately before the Global Offering is set out below:
Yijin Venture
Capital Management
 general partner
Cloud Tribe Management
Cloud Tribe Yijin
general partner
Our Company
19.49%80.51%
8.48%
23.05%
51%
51.76%
49%
0.65%
Shanghai Yijin
Management
general partner
Shanghai Fangao
Shanghai Yijin
Mr. Chen
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–3 5 7–


--- page 367 ---
Immediately after completion of the Global Offering (assuming that the Over-allotment
Option is not exercised), Mr. Chen will, by himself and through Shanghai Fangao and Cloud
Tribe Yijin, will control approximately 31.07% of the aggregate voting power of our enlarged
share capital. Therefore, upon completion of the Global Offering, Mr. Chen, Shanghai Fangao,
Cloud Tribe Yijin, Cloud Tribe Management, Shanghai Yijin, Yijin Venture Capital
Management, and Shanghai Yijin Management will constitute a group of our Controlling
Shareholders.
COMPETITION
Each member of our Controlling Shareholders has confirmed that he/it does not have any
interest in a business, apart from the business of the Group, which competes or is likely to
compete, directly or indirectly, with our business, which would require disclosure under Rule
8.10 of the Listing Rules.
INDEPENDENCE FROM OUR C ONTROLLING SHAREHOLDERS
Having considered the following factors, our Di rectors are satisfied that we are capable of
carrying out our business independently of our Controlling Shareholders and their respective
close associates after the Listing.
Management Independence
Our business is managed and conducted by our Board and senior management. Our Board
comprises of four executive Directors, two non -executive Directors and four independent
non-executive Directors. See ‘‘Directors, Superv isors and Senior Management’’ for more details
of our Directors and senior management.
Our Directors consider that our Board and senior management will function independently
from our Controlling Shareholders and their respective close associates because:
(a) each of our Directors is aware of fiduciary duties of a director which require, among
other things, that he/she must act for the benefit and in the best interest of our Group
and must not allow any conflict between his/her duties as a Director and his/her
personal interest;
(b) in the event that there is a potential conflict of interests arising out of any transaction
to be entered into between our Company and our Directors or their respective
associates, the interested Director(s) wil l abstain from voting at the relevant meeting
of our Board in respect of such transactions and shall not be counted in the quorum;
(c) our Board comprises of ten Directors and four of them are independent non-executive
Directors, which represents more than one-third of the members of our Board. This is
in line with the requirements as set out in the Listing Rules; and
(d) our daily management and operations are carried out by the senior management team
(comprising two executive Directors), all of whom have substantial experience in the
industry which our Company is engaged in, and will therefore be able to make
business decisions that are in the best interests of our Group.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 368 ---
Based on the above, our Directors are satisfie d that they are able to perform their roles in
our Company independently, and our Directors are of the view that we are capable of managing
our business independent from our Controlling Shareholders and their respective close
associates (other than ou rG r o u p )a f t e rt h eL i s t i n g .
Operational Independence
We are able to make all decisions on, and to carry out, our own business operations
independently. Our Company holds the relevant licenses and qualifications and owns the
relevant intellectual properties necessary to ca rry out our current business, and has sufficient
capital, facilities, equipment, technology and employees to operate our business independently
from our Controlling Shareholders and their respective close associates. See ‘‘Business —
Licenses and Permits’’ and ‘‘Statutory and General Information — B. Further Information
about our Business — 2. Intellectual Property Rights’’ in Appendix VI to this prospectus for
details. We have access to third parties independently from our Controlling Shareholders and
their respective close associates fo r sources of suppliers and customers.
Based on the above, our Directors are satisf ied that we are able to function and operate
independently from our Controlling Shareholders and their close associates after the Listing.
Financial Independence
We have established our own finance department with a team of financial staff, who are
responsible for financial control, accounting , reporting, group credit and internal control
functions of our Company, independent from our Controlling Shareholders and their respective
close associates. We are able to make financial decisions independently and our Controlling
Shareholders and their respective close associat es do not intervene with our financial matters.
We have also established an independent audit system, a standardized financial and accounting
system and a complete financial management syst em. In addition, we are capable of obtaining
financing from third parties at reasonable costs without relying on any guarantee or security
provided by our Controlling Shareholders or thei r close associates. For example, we completed
Series C+ Financing in March 2023, and raised R MB954.0 million. See ‘‘History Development
and Corporate Structure — Pre-IPO Investments’’ for details. As of the Latest Practicable Date,
there was no outstanding loan, advance, balance of non-trade nature due to or from, or pledge
or guarantee provided by our Controlling Shareholders or their respective associates, and we do
not intend to rely on any member of our Controlling Shareholders in the future.
Based on the above, our Directors are of the view that they and our senior management are
capable of carrying on our business independently of, and do not place undue reliance on our
Controlling Shareholders and their respe ctive close associates after the Listing.
CORPORATE GOVERNANCE MEASURES
Our Company will comply with the provisions of the Corporate Governance Code, which
sets out principles of good corporate governance.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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Our Directors recognize the importance of good corporate governance in protecting our
Shareholders’ interests. We would adopt the following measures to promote good corporate
governance and to avoid potential conflict of interests between our Group and our Controlling
Shareholders and their respective close associates:
(a) where a Shareholders’ meeting is to be held for considering proposed transactions in
which our Controlling Shareholders and their respective close associates has a
material interest, our Controlling Share holders will not vote on the resolutions and
shall not be counted in the quorum in the voting;
(b) our Company has established internal c ontrol mechanisms to identify connected
transactions. Upon Listing, if our Company enters into connected transactions with
our Controlling Shareholders and their respective associates, our Company will
comply with the applicable Listing Rules;
(c) we are committed that our Board should include a balanced composition with not less
than one-third of independent non-executive Directors to enable our Board to
effectively exercise independent judgment in its decision-making process and provide
independent advice to our Shareholders. We have appointed four independent
non-executive Directors and we believe our independent non-executive Directors
possess sufficient experience and they are free of any business or other relationship
which could interfere in any material mann er with the exercise of their independent
judgment and will be able to provide an impartial, external opinion to protect the
interests of our minority Shareholders. For details of our independent non-executive
Directors, see ‘‘Directors, Superviso rs and Senior Management — Directors —
Independent non-executive Directors’’ in this prospectus;
(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 Gram Capital Limited a s our compliance advi sor to provide advice
and guidance to us in respect of compliance with the Listing Rules, including various
requirements relating to directors’ duties and corporate governance, and inform us on
a timely basis of any amendment or supplement to the Listing Rules or applicable
laws and regulations in Hong Kong.
Based on the above, our Directors are satisfied that sufficient corporate governance
measures have been put in place to manage confli ct of interests that may arise between our
Group and our Controlling Shareholders and their respective close associates, and to protect
our minority Shareholders’ interests after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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OVERVIEW
The Board currently consists of ten Directors, including four executive Directors, two
non-executive Directors and four independent no n-executive Directors. The Directors serve for
a term of three years and shall be subject to re-election upon retirement. The Board is
responsible for and has the general power over the management and operation of our business,
including determining our business strategies an d investment plans, implementing resolutions
passed at our general meetings, and exercising ot her powers, functions and duties as conferred
by the Articles of Association. The Board also assumes the responsibilities for developing and
reviewing the policies and practices of th e Company on corporate governance, risk
management, internal control and compliance with legal and regulatory requirements.
The Supervisory Committee currently consis ts of three Supervisors, including one
employee representative Supervisor elect ed by our employees and two shareholder
representative Supervisors elected by our shareholders. The Supervisory Committee is
responsible for supervising the performance of duty of the Board and the senior management
of the Company and overseeing the financial, internal control and risk conditions of the
Company.
The senior management currently consists of two members who are responsible for our
day-to-day management and operation.
DIRECTORS
The following table sets forth the key inform ation about the Directors as at the Latest
Practicable Date.
Name Age Position Responsibilities
Date of the first
appointment as a
Director
Date of joining our
Group
Relationship with
other Directors,
Supervisors and
senior management
Mr. Chen
Fangming
(陳方明)
43 Executive
Director,
chairman of the
Board and
general
manager
Responsible for the
overall strategy
planning and making
key business and
operational decisions
of our Group
November 28,
2016
November 28,
2016
None
Dr. Qiu Debo
(邱德波)
61 Executive Director
and president
Responsible for the
overall management
August 30, 2022 August 10, 2021 None
Mr. Sun
Kanghua
(孫康華)
46 Executive Director
and chief
financial
director
Responsible for the
overall financial
management and
financial matters
November 5, 2022 August 1, 2019 None
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–3 6 1–


--- page 371 ---
Name Age Position Responsibilities
Date of the first
appointment as a
Director
Date of joining our
Group
Relationship with
other Directors,
Supervisors and
senior management
Ms. Yang Hui
(楊慧)
44 Executive
Director,
vice president
and director of
public relations
Responsible for
participating in major
decisions on our
Group’s operations
and development, and
the brand building and
public relations
matters
October 19, 2023 July 15, 2022 None
Mr. Cao Haiyi
(曹海毅)
44 Non-executive
Director
Responsible for
participating in major
decisions on our
Group’s operations
and development
February 4, 2023 February 4, 2023 None
Mr. Wang
Zhenkun
(王振坤)
59 Non-executive
Director
Responsible for
participating in major
decisions on our
Group’s operations
and development
October 19, 2023 October 19, 2023 None
Mr. Zhou
Yuan
(周元)
58 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
November 5, 2022 November 5, 2022 None
D r .L iX i a o f u
(李曉郛)
40 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
November 5, 2022 November 5, 2022 None
Dr. Jiang
Bailing
(江百靈)
53 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
November 5, 2022 November 5, 2022 None
M r .Y I M ,C h i
Hung
Henry
(嚴志雄)
64 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
April 2, 2024 April 2, 2024 None
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–3 6 2–


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Executive Directors
Mr. Chen Fangming ( 陳方明), aged 43, the founder of our Group, was appointed as our
executive Director in November 2016, and was th en appointed as the general manager of the
Company in July 2018. He was further appointed as a Director and the chairman of the Board in
October 2018. He was later re-designated as a n executive Director in April 2024, and is
primarily responsible for the over all strategy planning and making key business and operational
decisions of our Group. Mr. Chen currently holds various positions in our Group shown in the
table below.
Name of the companies Position
Date of
appointment
VOIE LACTEE ENERGIE S.A.S president February 2025
Breton Energy Technology Zambia Limited director January 2025
Breton Corporation director January 2025
Breton HK Holding Limited director January 2025
Breton (Beijing) Technology Co., Ltd.
(博雷頓（北京）科技有限公司)
executive director November 2024
Breton (Hong Kong) Technology Limited director November 2024
Breton (Wuhan) Technology Co., Ltd.
(博雷頓（武漢）科技有限公司)
the chairman of the
board and the
general manager
March 2023
Breton (Wuhan) New Energy Equipment
Co., Ltd. ( 博雷頓（武漢）新能源裝備有限公
司)
executive director March 2023
Breton (Lanxi) New Energy Engineering
M a c h i n e r yC o . ,L t d .(博雷頓（蘭溪）新能源
工程機械有限公司)
the chairman of the
board and the
general manager
January 2023
Breton (Hunan) Technology Co., Ltd.
(博雷頓（湖南）科技有限公司)
executive director and
the general manager
October 2022
Breton (Shandong) New Energy Vehicle Co.,
Ltd ( 博雷頓（山東）新能源汽車有限公司)
executive director and
the general manager
May 2020
Baipin (Shanghai) Intelligent Technology
Co., Ltd. ( 佰頻（上海）智能科技有限公司)
executive director and
general manager
July 2019
Breton (Shanghai) Intelligent Technology
Co., Ltd. ( 博雷頓（上海）智能科技有限公司)
executive director June 2019
Zhejiang Breton Technology Co., Ltd.
(浙江博雷頓科技有限公司)
executive director and
manager
April 2019
Inner Mongolia Breton Intelligent
Technology Co., Ltd. ( 內蒙古博雷頓智能科
技有限公司)
executive director and
manager
April 2019
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Mr. Chen has over ten years of experience in commerce, investment and business
management. Prior to joining our Group, Mr. Chen served as the chairman of the board and the
general manager of Shanghai Yijin from June 2009 to November 2016. During his tenure in
Shanghai Yijin, Mr. Chen led investment in over 20 companies covering new energy and
advanced manufacturing sectors. Prior to his tenure in Shanghai Yijin, Mr. Chen worked at
several private companies in Shanghai, whic h mainly engaged in commerce and investment
activities, and gained c onsiderable experience.
Mr. Chen obtained a bachelor’s degree in engineering mechanics from South China
University of Technology ( 華南理工大學) in July 2004. He was awarded the honorary Shanghai
May 1st Labor Medal ( 上海市五一勞動獎章) by the Shanghai Federation of Trade Unions ( 上海
市總工會) in December 2019.
Dr. Qiu Debo ( 邱德波), aged 61, joined our Group in August 2021 as a president and was
appointed as a Director in August 2022. He was lat er re-designated as an executive Director in
April 2024, and is primarily responsible for t he overall management. He also serves as an
executive director of our subsidiary, namely Breton (Wuhan) Technology Co., Ltd. ( 博雷頓（武
漢）科技有限公司) since March 2023.
Dr. Qiu has over 25 years of experience in bu siness management. He has been an executive
director since October 2017 at Shanghai Zhongmin Business Management Co., Ltd. ( 上海眾民商
業管理有限公司). From November 2005 to March 2016, he served as the party secretary, an
executive director, chief ex ecutive officer and president at Lonking Holdings Limited ( 中國龍工
控股有限公司), a company listed on the Stock Exchange (stock code: 3339). From August 1997
to October 2005, he served as a general man ager of Fujian Lonking Group Co., Ltd. ( 福建龍工
集團有限公司). From October 1992 to May 1997, he served as a section chief of publicity
department and director of the party committee office at Fujian Longgang Enterprise Group
Company ( 福建龍鋼集團).
Dr. Qiu obtained an associate’s degree in Chi nese language and literature from Fujian
Normal University ( 福建師範大學) in October 1986, a master’s degree in executive business
administration (EMBA) from Shanghai Jiaotong University ( 上海交通大學) in December 2006
and a doctorate degree in business administr ation (DBA) from Grenoble Graduate School of
Business through attending online courses i n France in May 2012. Dr. Qiu was awarded the
National Machinery Industry Excellent Entrepreneur ( 全國機械工業優秀企業家) by China
Machinery Industry Federation ( 中國機械工業聯合會) in June 2007. He was accredited as a
senior economist by Fujian Provincial Department of Human Resources and Social Security ( 福
建省人力資源和社會保障廳) in December 1999.
Mr. Sun Kanghua ( 孫康華), aged 46, was appointed as a Director in November 2022. He
was later re-designated as an executive Director in April 2024, and is primarily responsible for
the overall financial management and financia lm a t t e r s .H ea l s os e r v e sa sas u p e r v i s o ro fo u r
subsidiaries, namely Breton (Wuhan) Technology Co., Ltd. and Breton (Wuhan) New Energy
Equipment Co., Ltd. since March 2023.
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Mr. Sun has over ten years of experience in f inancial management. Prior to joining our
Group, Mr. Sun served as the chief financial mana ger of the intelligence department at Shanghai
Hi-Tech Control System Co., Ltd. ( 上海海得控制系統股份有限公司) from January 2016 to
August 2019. From January 2011 to January 2016, he served as a finance manager at KION
Baoli (Jiangsu) Forklift Co., Ltd. ( 凱傲寶驪（江蘇）叉車有限公司).
Mr. Sun received an associate’s degree in acco unting for foreign enterprises from Nanjing
University of Finance and Economics ( 南京財經大學) in June 2002. He obtained a master’s
degree in business administration (MBA) from Xi’an University of Science and Technology ( 西
安科技大學) in June 2013.
M s .Y a n gH u i(楊慧), aged 44, was appointed as a Director in October 2023. She was later
re-designated as an executive Director in Ap ril 2024, and is primarily responsible for
participating in major decisions on our Group’s operations and development, and the brand
building and public relations matters. She serves as the vice president and the director of public
relations of our Company since July 2022. She a lso serves as a director of our subsidiaries
namely Breton ESG Pte. Ltd. and Breton Energy Technology Zambia Limited since November
2023 and January 2025, respectively.
Ms. Yang has approximately ten years of experience in brand building and public relations
matters. Prior to joining our Group, Ms. Yang ser ved as the executive president of Shanghai
Yijin from May 2015 to September 2018, where s he also serves as the general manager since
September 2018.
Ms. Yang obtained a bachelor’s degree in English language and literature from Yantai
Normal University ( 煙台師範學院) (currently known as Ludong University ( 魯東大學)) in July
2002, and a master’s degree in journalism an d communication from Suzhou University ( 蘇州大
學) in June 2005.
Non-executive Directors
Mr. Cao Haiyi ( 曹海毅), aged 44, was appointed as a Director in February 2023 and is
primarily responsible for participating in major decisions on our Group’s operations and
development. He was later re-designated a s a non-executive Director in April 2024.
Mr. Cao has over ten years of experience in business management. Mr. Cao has served as a
vice-general manager of Hunan Caixin Fund Management Co., Ltd. ( 湖南省財信產業基金管理
有限公司) since April 2020, where he served as a director from April 2020 to July 2023. From
November 2014 to March 2020, he served as a general manager at equity finance department of
Chasing Securities Co., Ltd. ( 財信證券股份有限公司). From February 2011 to November 2014,
he served as an executive director at investment banking division of Guangzhou Securities Co.,
Ltd. ( 廣州證券股份有限公司) (currently known as CITIC Securities South China Company
Limited ( 中信證券華南股份有限公司)).
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Mr. Cao currently holds directorships and s upervisorship in the companies shown in the
table below:
Name of the companies Position
Date of
appointment
Hunan Pharmaceutical Group Co., Ltd. ( 湖
南醫藥集團有限公司)
director January 2023
Hunan Xinjinhao Camellia Oil Corp., Ltd.
(湖南新金浩茶油股份有限公司)
director February 2022
Landfar Bio-medicine Co., Ltd.
(南華生物醫藥股份有限公司), a company
listed on the Shenzhen Stock Exchange
(stock code: 000504)
director December 2021
Hunan Sangrui New Material Co., Ltd.
(湖南桑瑞新材料有限公司)
director October 2021
Malanshan Capital Management (Hunan)
Co., Ltd. ( 馬欄山資本管理（湖南）有限公司)
director September 2021
Sino Ic Leasing Co., Ltd. ( 芯鑫融資租賃有限
責任公司)
director August 2021
Hunan Stock Exchange Co., Ltd. ( 湖南股權
交易所有限公司)
director April 2021
Caihong Group (Shaoyang) Special Glass
Co., Ltd. ( 彩虹集團（邵陽）特種玻璃有限公
司)
director April 2021
Shenzhen Fortune Caixin Venture Capital
Management Co., Ltd. ( 深圳市達晨財信創
業投資管理有限公司)
supervisor August 2020
Shaoshan Huxiang Tourism Development
Co., Ltd.
(韶山湖湘旅遊開發有限公司)
director July 2020
Mr. Cao obtained a bachelor’s degree in inter national economics and a master’s degree in
finance from Hunan University ( 湖南大學) in June 2002 and June 2005, respectively.
Mr. Wang Zhenkun ( 王振坤), aged 59, was appointed as a Director in October 2023, and is
primarily responsible for participating in major decisions on our Group’s operations and
development. He was later re-designated a s a non-executive Director in April 2024.
Mr. Wang has over 30 years of experience in engineering and investment. He has served as
and is currently a member of the Party Committee, deputy general manager at equity finance
department of Changjiang Venture Capital Fund Management Co., Ltd. ( 長江創業投資基金管
理有限公司) since July 2023. From August 2021 to June 2023, he concurrently served as the
general manager at the first division of fund man agement, and an executive director and general
manager of Hubei Changjiang Changding P rivate Equity Fund Management Co., Ltd. ( 湖北省
長江長鼎私募基金管理有限公司). From December 2015 to March 2022, he served as a deputy
general manager of Hubei Changjiang Economy Belt Industrial Fund Management Co., Ltd. ( 湖
北省長江經濟帶產業基金管理有限公司) (currently known as Changjiang Industrial Investment
Private Equity Fund Management Co., Ltd. ( 長江產業投資私募基金管理有限公司)). From July
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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2014 to December 2015, he served as the gener al manager of Hengfeng Meilin Investment
Management Co., Ltd. ( 恒豐美林投資管理有限公司). From August 2006 to July 2014, he
successively served as the general manager, the secretary of the Party Committee and deputy
general manager of Wuhan Dongfeng Hongtai Holdings Group Co., Ltd. ( 武漢東風鴻泰控股集
團有限公司) (currently known as Dongfeng Hongtai Holdings Group Co., Ltd. ( 東風鴻泰控股集
團有限公司)). From October 2003 to August 2006, he served as the general manager of Wuhan
Shenlong Car Parts Co., Ltd. ( 武漢神龍轎車零部件股份有限公司). From April 1992 to October
2003, he worked at Dongfeng Chaoyang Diesel Company Limited ( 東風朝陽柴油機有限責任公
司) with his final position as a deputy general manager.
Mr. Wang currently holds directorships in the companies shown in the table below:
Name of the companies Position
Date of
appointment
Aotecar New Energy Technology Co., Ltd.
(奧特佳新能源科技股份有限公司),
a company listed on the Shenzhen Stock
Exchange (stock code: 002239)
chairman of the board
and director
July 2024
Hubei Changjiang Chegu Private Equity
Fund Management Co., Ltd. ( 湖北長江車
谷私募基金管理有限公司)
executive director January 2023
Hubei Huanggang Changjiang Venture
Capital Industry Fund Management Co.,
Ltd. ( 湖北黃岡長江創投產業基金管理有限
公司)
director April 2022
SiEngine Technology Co., Ltd.
(湖北芯擎科技有限公司)
director July 2021
Hubei Xiaomi Changjiang Industrial
Investment Fund Management Co., Ltd.
(湖北小米長江產業投資基金管理有限公司)
director May 2021
Mr. Wang obtained a bachelor’s degree in m echanical design and manufacturing from
Luoyang Engineering College ( 洛陽工學院) (currently known as Henan University of Science
and Technology ( 河南科技大學)) in July 1990. From March 2006 to January 2008, he studied
t h r o u g ho n - t h e - j o bl e a r n i n gi nT s i n g h u aU n i v ersity and obtained a master’s degree in business
administration in January 2008. He also obtained the certificate of senior engineer issued by the
personnel department of Dongfeng Chaoyang Diesel Company Limited in December 2002.
Independent Non-executive Directors
Mr. Zhou Yuan ( 周元), aged 58, was appointed as an independent Director in November
2022 and was redesignated as an independent non-executive Director in April 2024. He is
responsible for supervising and offering independent judgement to the Board.
Mr. Zhou has over 15 years of experience in business management. He has been a secretary
general of Green Energy Industry Development Association ( 綠色能源產業發展促進會)a n da
chairman of the board of Shanghai Jingyao Investment Co., Ltd. ( 上海晶耀投資有限公司)s i n c e
March 2015.
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Mr. Zhou currently holds directorships and other positions in the companies shown in the
table below:
Name of the companies Position
Date/period of
appointment
Shanghai HYP-ARCH Architectural Design
Consultant Co., Ltd. ( 上海霍普建築设計事
務所股份有限公司), a company listed on
the Shenzhen Stock Exchange (stock code:
301024)
independent director December 2024
Yuneng Technology Co., Ltd. ( 昱能科技股份
有限公司), a company listed on the
Shanghai Stock Exchange (stock code:
688348)
independent director September 2023
Chint New Energy Technology Co., Ltd.
(正泰新能科技股份有限公司)
independent director October 2023
Tonking New Energy Group Holdings
Limited ( 同景新能源集團控股有限公司), a
c o m p a n yl i s t e do nG r o w t hE n t e r p r i s e
Market of the Stock Exchange (stock code:
08326)
independent
non-executive
director
March 2017
Shanghai Ailing Exhibition Co., Ltd.
(上海艾靈會展有限公司)
executive director and
general manager
April 2013
Shanghai Jingyao Investment Co., Ltd.
(上海晶耀
投資有限公司)
executive director May 2010
Shanghai Aizhan Exhibition Service Co.,
Ltd. ( 上海艾展展覽服務有限公司)
executive director and
general manager
February 2006
Mr. Zhou obtained an associate’s degree in economics and management from Anhui
University of Technology ( 安徽工業大學) (previously known as East China University of
Metallurgy ( 華東冶金學院)) in July 1988.
D r .L iX i a o f u(李曉郛), aged 40, was appointed as an independent Director in November
2022 and was redesignated as an independent non-executive Director in April 2024. He is
responsible for supervising and offering independent judgement to the Board.
Dr. Li has been an associate professor in law at East China University of Political Science
and Law ( 華東政法大學) since July 2019, where he also served as a research assistant from June
2017 to June 2019.
Dr. Li obtained a bachelor’s degree in economi c law, a master’s degree in constitutional
and administrative law, and a doctorate degree in international law from East China University
of Political Science and Law in July 2007, June 2010 and June 2013, respectively. He also
obtained a master’s degree in legal institutions from University of Wisconsin-Madison in the
United States in August 2009 and a post-doctorate degree in applied economics from Shanghai
University of Finance and Economics ( 上海財經大學) in June 2017. He was selected into
Shanghai Youth Law and Legal Talent Pool ( 上海青年法學法律人才庫) by Shanghai Law
Society ( 上海市法學會) in January 2022.
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Dr. Jiang Bailing ( 江百靈), aged 53, was appointed as an independent Director in
November 2022 and was redesignated as an independent non-executive Director in April 2024.
He is responsible for supervising and offering independent judgement to the Board.
He has been an associate professor at Shanghai National Accounting Institute ( 上海國家會
計學院) since July 2013. From July 2009 to July 20 13, he was a lecturer at Shanghai National
Accounting Institute.
Dr. Jiang currently holds directorships in the listed companies shown in the table below:
Name of the companies Position
Date of
appointment
Sailvan Times Co., Ltd. ( 賽維時代科技股份
有限公司), a company listed on the
ChiNext Market of Shenzhen Stock
Exchange (stock code: 301381)
independent director May 2020
Pylon Technologies Co., Ltd. ( 上海派能能源
科技股份有限公司), a company listed on
the Science and Technology Innovation
Board of Shanghai Stock Exchange (‘‘SSE
STAR MARKET’’) (stock code: 688063)
independent director May 2020
In addition, he held directorships in the listed companies shown in the table below in the
last three years:
Name of the companies Position
Appointment
period
Ahwit Precision (Shanghai) Co., Ltd. ( 上海阿
為特精密機械股份有限公司), a company
listed on the Beijing Stock Exchange (stock
code: 873693)
independent director from November
2017 to
November
2023
Pengdu AGRICULTURE & ANIMAL
Husbandry Co., Ltd. ( 鵬都農牧股份有限公
司), a company listed on the Shenzhen
Stock Exchange (stock code: 002505)
independent director from May 2020
to April 2024
Trina Solar Co., Ltd. ( 天
合光能股份有限公
司), a company listed on the SSE STAR
MARKET (stock code: 688599)
independent director from February
2018 to April
2024
Dr. Jiang obtained a doctorate degree in accounting from Xiamen University ( 廈門大學)i n
June 2009. He was admitted as a fellow of the Insti tute of Public Accountants in the Australia
(FIPAAU) by Institute of Public Accountants in October 2019, and a fellow of the Institute of
Financial Accountants in the United Kingdom (FFAUK) by Institute of Public Accountants in
October 2019.
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M r .Y I M ,C h iH u n gH e n r y( 嚴志雄),a g e d6 4 ,w a sa p p o i n t e da sa ni n d e p e n d e n t
non-executive Director in April 2024. He is r esponsible for supervising and offering
independent judgement to the Board.
Mr. YIM has over 30 years of financial audit ing experience. From July 2004 to December
2021, he served as an audit partner of Ernst & Young, Ernst & Young Hua Ming LLP and its
predecessor firm Ernst & Young Hua Ming (collectively ‘‘Ernst & Young’’). From February
1991 to June 2004, he successively served various audit positions in Ernst & Young. He served as
an independent non-executive director of Guotai Junan Securities Co., Ltd. ( 國泰君安證券股份
有限公司) (currently known as Guotai Haitong Securities Co., Ltd. （國泰海通證券股份有限公
司）), a company listed on Stock Exchange (stock code: 2611) and on Shanghai Stock Exchange
(stock code: 601211) from May 2023 to April 2025. He has been serving as an independent
non-executive director of Yixin Group Limited ( 易鑫集團有限公司), a company listed on Stock
Exchange (stock code: 2858) from February 2025, and Beijing Tong Ren Tang Healthcare
Investment Co., Ltd. ( 北京同仁堂醫養投資股份有限公司) from June 2024, respectively.
Mr. YIM received his bachelor’s degree in social science from the University of Hong Kong
in November 1984. He has been a member of the Hong Kong Institute of Certified Public
Accountants since April 1988 and a fellow membe r of the Association of Chartered Certified
Accountants in the United Kingdom since June 1993.
SUPERVISORS
The following table sets forth the key information about the Supervisors.
Name Age Position Responsibilities
Date of
appointment as a
Supervisor
Date of joining our
Group
Relationship with
other Directors,
Supervisors and
senior management
Mr. Liu
Yudong
(劉昱東)
38 Supervisor Responsible for the
supervision of the
performance of our
Directors and members of
our senior management in
performing their duties to
our Company and
performing other
supervisory duties as a
Supervisor
August 16, 2021 August 16, 2021 None
Ms. Wang
Yanzhen
(王艷湞)
44 Supervisor Responsible for the
supervision of the
performance of our
Directors and members of
our senior management in
performing their duties to
our Company and
performing other
supervisory duties as a
Supervisor
November 5, 2022 October 11, 2021 None
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Name Age Position Responsibilities
Date of
appointment as a
Supervisor
Date of joining our
Group
Relationship with
other Directors,
Supervisors and
senior management
Ms. Sun
Wenxu
(孫文旭)
31 Supervisor Responsible for the
supervision of the
performance of our
Directors and members of
our senior management in
performing their duties to
our Company and
performing other
supervisory duties as a
Supervisor
November 5, 2022 March 21, 2019 None
Mr. Liu Yudong ( 劉昱東), aged 38, has served as a Supervisor since August 2021 and is
responsible for the supervision of the performa nce of our Directors and members of our senior
management in performing their duties to our Company and performing other supervisory
duties as a Supervisor.
He currently serves as a manager and legal representative at Guangzhou NextBigThing
Investment Management Co., Ltd. ( 廣州耐必信創業投資管理有限公司) since January 2020.
From January 2019 to January 2020, he served as a director of the strategic investment division
at Guangzhou Joyy Information Technology Co., Ltd. ( 廣州歡聚時代信息科技有限公司). He
successively served as an investment director, v ice president and partner at Beijing N5 Capital
Consulting Co., Ltd. ( 北京五岳天下投資諮詢有限公司) from December 2013 to November 2018.
From September 2010 to March 2013, he served as a senior investment manager at JD Capital
Co., Ltd. ( 昆吾九鼎投資管理有限公司).
Mr. Liu currently holds directorships in the companies shown in the table below:
Name of the companies Position
Date of
appointment
Suzhou Laimou Technology Co., Ltd. ( 蘇州
來牟科技有限公司) (previously known as
Beijing Laimou Innovation Technology
Co., Ltd. ( 北京來牟創新科技有限
公司))
non-executive director February 2023
Raycloud Fashion Co., Ltd. ( 北京睿雲時尚科
技發展有限公司)
non-executive director August 2021
Beijing Tweet Information Technology Co.,
Ltd. ( 北京推文信息科技有限公司)
non-executive director August 2021
Shenzhen Sound Heath Science and
Technology Co., Ltd. ( 深圳市聲希科技有限
公司)
non-executive director January 2020
Shenzhen Jungle Culture Communication
Co., Ltd. ( 深圳市叢林文化傳播有限公司)
non-executive director March 2018
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Mr. Liu obtained a bachelor’s degree in information and computing science from Hunan
University in June 2008 and a master’s degree in applied finance from Singapore Management
University in Singapore in May 2010. He also ob tained the Fund Practicing Qualification
Certificate ( 基金從業資格證書) from the Asset Management Association of China ( 中國證券投
資基金業協會) in May 2018.
Ms. Wang Yanzhen ( 王艷湞), aged 44, has served as a Supervisor since November 2022 and
is responsible for the supervision of the performance of our Directors and members of our
senior management in performing their duties to our Company and performing other
supervisory duties as a Supervisor. Ms. Wang has been an administration director since
October 2021 and a director of general manag ement department of the Company since May
2023.
Prior to joining our Group, she served as a vice president at Shanghai Deweisi Education
Training Co., Ltd. ( 上海德偉思教育培訓有限公司) from September 2019 to September 2021.
From May 2005 to September 2019, she successiv ely served in various positions including a
deputy director of the office, and a vice chairman of labor union of Lonking Shanghai
Machinery Co., Ltd. ( 龍工（上海）機械製造有限公司), and served as the general section chief of
the audit office at Lonking Holdings Limited.
Ms. Wang obtained an associate’s degree in law from Shandong Radio and TV University
(山東廣播電視大學) (currently known as Shandong Open University ( 山東開放大學)) in July
2001. She was accredited as an intermediate economist from Shanghai Municipal Human
Resources and Socia l Security Bureau ( 上海市人力資源
和社會保障局) in November 2014.
Ms. Sun Wenxu ( 孫文旭), aged 31, has served as a Supervisor since November 2022 and is
responsible for the supervision of the performa nce of our Directors and members of our senior
management in performing their duties to our Company and performing other supervisory
duties as a Supervisor. Ms. Sun has been a legal supervisor of the Company since March 2019.
Prior to joining our Group, she served as a le gal counsel manager at Law To (Shanghai)
Legal Consulting Co., Ltd. ( 律到（上海）法律諮詢有限公司) from April 2016 to December 2018.
Ms. Sun obtained an associate’s degree in hotel management from China University of
Labor Relations ( 中國勞動關係學院) in July 2012, a bachelor’s degree in law from East China
University of Political Science and Law in Janu ary 2021 and a master’s degree in international
law through online courses in We st Ukrainian National University in Ukraine in June 2023.
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SENIOR MANAGEMENT
The following table sets forth the key information about the senior management of the
Company.
Name Age Position Responsibilities
Date of
appointment as
senior management
Date of joining our
Group
Relationship with
other Directors,
Supervisors and
senior management
Mr. Chen
Fangming
(陳方明)
43 Executive
Director,
chairman of the
Board and
general
manager
Responsible for the
overall strategy
planning and making
key business and
operational decisions
of our Group
July 1, 2018 November 28,
2016
None
Dr. Qiu Debo
(邱德波)
61 Executive Director
and president
Responsible for the
overall management
August 10, 2021 August 10, 2021 None
For the biographical details of Mr. Chen and Dr. Qiu, see ‘‘— Directors.’’
GENERAL
As of the Latest Practicable Date, to the best of the knowledge, information and belief of
the Directors after having mad e all reasonable enquiries,
(i) save as disclosed above, none of the Directors, Supervisors or senior management has
held any directorship in any public company the securities of which are listed on any
securities market in Hong Kong or overseas during the three years immediately
preceding the date of this prospectus;
(ii) none of the Directors, Supervisors or members of the senior management of the
Company was related to any other Director s, Supervisors and members of the senior
management;
(iii) save as disclosed in ‘‘Statutory and General Information’’ set out in Appendix VI to
this prospectus, none of the Director s, Supervisors or general manager of the
Company held any interest in the Shares which would be required to be disclosed
pursuant to Part XV of the Securities and Futures Ordinance; and
(iv) there was no additional matter with respect to the appointment of the Directors or
Supervisors that needs to be brought to the attention of the Shareholders, and there
was no additional information relating to the Directors or Supervisors that is required
to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
As of the Latest Practicable Date, none of our Directors and their respective close
associates had any interest in any business which competes or is likely to compete, either directly
or indirectly with our Group’s business which would require disclosure under Rule 8.10 of the
Listing Rules.
Rule 3.09D of the Listing Rules
Each of our Directors confirmed that he or she (i) had obtained the legal advice referred to
under Rule 3.09D of the Listing Rules in March and April 2024 (as case may be), and (ii)
understood his or her obligations as a director of a listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of our independent non-executive Directors had confirmed (i) his independence as
regards each of the factors referred to in Rules 3. 13(1) to (8) of the Listing Rules; (ii) that he had
no past or present financial or other interest i n the business of the Company or its subsidiary or
any connection with any core connected person of the Company under the Listing Rules as of
the Latest Practicable Date; and (iii) that t here were no other factors that may affect his
independence at the time of his appointments. Each of our independent non-executive Directors
will inform us and the Stock Exchange as soon as practicable if there is any subsequent change
of circumstances which may affect his independence.
JOINT COMPANY SECRETARIES
The Company has appointed Mr. Liu Xingyu ( 劉星宇) and Ms. Shum Kit Han ( 岑潔嫺)a s
our joint compan y secretaries.
Mr. Liu Xingyu ( 劉星宇), aged 42, was appointed as one of our joint company secretaries in
March 2024. He serves as the secretary of the Boar d and a supervisor of our subsidiaries, namely
Breton (Shandong) New Energy Vehicle Co., Ltd., Breton (Hunan) Technology Co., Ltd., and
Breton (Lanxi) New Energy engi neering Machinery Co., Ltd., since May 2020, October 2022,
and January 2023, respectively.
Mr. Liu has over ten years of experience in f inancial management. Prior to joining our
Group, Mr. Liu was the secretary of the board and the chief financial officer at Kingstone
Semiconductor Joint Stock Company Ltd. fr om March 2018 to March 2020. He worked at
Shanghai Boxi Electric Co., Ltd. ( 上海博璽電氣股份有限公司) as the general manager, the
secretary of the board, and the chief finance manager from April 2016 to July 2017. From July
2012 to February 2016, he served as a deputy regional financial manager at East China Regional
Company ( 恒大地產集團有限公司華東區域公司). From October 2009 to June 2012, he served as
the director of the financial department at Zhumao Construction Machinery Trading
(Shanghai) Co., Ltd. ( 住貿工程機械商貿（上海）有限
公司).
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Liu obtained a bachelor’s degree in accounting in June 2005 from Hunan Agricultural
University ( 湖南農業大學). He also obtained the certificate of Certificated Public Accountant
(non-practice) issued by the Chinese institute of Certified Public Accountants ( 中國註冊會計師
協會) in March 2020 and the certificate of Interm ediate Accountant issued by Ministry of
Human Resources and Social Security of the People’s Republic of China ( 中華人民共和國人力
資源和社會保障局) in May 2009.
Ms. Shum Kit Han ( 岑潔嫺) was appointed as one of our joint company secretaries in
M a r c h2 0 2 4 .S h ec u r r e n t l ys e r v e sa sam a n a g e ro fcorporate services of Tricor Services Limited,
a member of Vistra Group. She is responsibl e for providing corporate secretarial and
compliance services to listed companies.
Ms. Shum has over 10 years of experience in com pany secretary and corporate governance
field. She obtained her master’s degree in Profe ssional Accounting and Corporate Governance
in July 2015 and her bachelor’s degree in Englis h for Professional Communication in November
2005, both from the City University of Hong Kong. She also obtained her executive diploma in
Anti-Money Laundering and Counter-Terrorist Financing from the University of Hong Kong
School of Professional and Continuing Educa tion in October 2022, and a diploma in Spanish as
a foreign language in May 2023.
Ms. Shum is a Chartered Secretary, a Chartered Governance Professional, a fellow member
of both The Hong Kong Chartered Governance Institute and The Chartered Governance
Institute in the United Kingdom, and a member of the executive committee of the Mexican
Chamber of Commerce in Hong Kong.
BOARD COMMITTEES
We have established four Board Committees in accordance with the relevant PRC laws and
regulations, the Articles of Association and t he Corporate Governance Code, namely the Audit
Committee, the Nomination Committee, the Rem uneration and Appraisal Committee and the
Strategy Committee.
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 the Corporate Governance Code. The
Audit Committee consists of three Directors, n amely Dr. Jiang Bailing, Mr. YIM, Chi Hung
Henry and Dr. Li Xiaofu, with Dr. Jiang Bailing currently serving as the chairman. Dr. Jiang
Bailing and Mr. YIM, Chi Hung Henry have the appropriate professional experiences as
required under Rules 3.10(2) and 3.21 of the Listing Rules. The primary duties of the Audit
Committee include, but are not limited to, the following:
(i) proposing the appointment or change of external auditors to our Board, monitoring
the independence of external auditors and evaluating their performance;
(ii) examining the financial information of the Company and reviewing financial reports
and statements of the Company;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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(iii) examining the financial reporting system, the risk management and internal control
system of the Company, overseeing their rationality, efficiency and implementation
and making recommendations to our Board; and
(iv) dealing with other matters th at are authorized by the Board.
Nomination Committee
We have established a Nomination Commi ttee with written terms of reference in
compliance with Rule 3.27A of the Listing Rules and paragraph B.3 of the Corporate
Governance Code. The Nomination Committee consists of three Directors, namely Dr. Li
Xiaofu, Ms. Yang Hui and Dr. Jiang Bailing, with Dr. Li Xiaofu currently serving as the
chairman. The primary duties of the Nomination Committee include, but are not limited to, the
following:
(i) conducting extensive search and providing our Board with suitable candidates for our
Directors, general managers and other members of the senior management;
(ii) reviewing the structure, size and composition of our Board (including but not limited
to, gender, age, cultural and educational background, ethnicity, skills, knowledge and
experience) at least annually, assisting our Board in maintaining a board skills matrix
and making recommendations on any propos ed changes to the Board to complement
the Company’s corporate strategy;
(iii) researching and developing standards a nd procedures for the election of our Board
members, general managers and members of the senior management, and making
recommendations to our Board;
(iv) assessing the independence of the independent non-executive Directors;
(v) supporting our Company’s regular evaluation of our Board’s performance; and
(vi) dealing with other matters th at are authorized by the 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 the Corporate
Governance Code. The Remuneration and Appraisal Committee consists of three Directors,
namely Mr. Zhou Yuan, Mr. Chen and Dr. Jiang Ba iling, with Mr. Zhou Yuan currently serving
as the chairman. The primary duties of the Remun eration and Appraisal Committee include, but
are not limited to, the following:
(i) advising our Board on the overall remuneration plan and structure of our Directors
and senior management and the establishment of transparent and formal procedures
for determining the remuneration policy of the Company;
(ii) monitoring the implementation of the remuneration system of the Company;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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(iii) making recommendations on the remuneration packages of our Directors and senior
management; and
(iv) other duties conferred by our Board.
Strategy Committee
The Strategy Committee consists of three Di rectors, namely Mr. Chen, Dr. Qiu Debo and
Mr. Zhou Yuan, with Mr. Chen currently serving as the chairman. The Strategy Committee is
mainly responsible for reviewing and advising on long-term strategies and major investment
plan of the Company.
CORPORATE GOVERNANCE CODE
The Company is committed to achieving a high standard of corporate governance with a
view to safeguarding the interests of our Shareholders. To accomplish this, the Company
intends to comply with the Corporate Governance Code set out in Appendix C1 to the Listing
Rules and the Model Code for Securities Transactions by Directors of Listed Issuers set out in
Appendix C3 to the Listing Rules after the Listing.
Pursuant to code provision C.2.1 of Part 2 of the Corporate Governance Code, companies
listed on the Stock Exchange are expected to comply with, but may choose to deviate from the
requirement that the responsibilities between the chairman and the general manager should be
segregated and should not be performed by the same individual. We do not have a separate
chairman and general manager, and Mr. Chen currently performs these two roles. The Board
believes that vesting the roles of both the chai rman and general manager in the same person has
the benefit of ensuring consistent leadership within our Group and enables more effective and
efficient overall strategic planning for our Group. The Board considers that the balance of
power and authority for the present arrangemen t will not be impaired and this structure will
enable the Company to make and implement decisions promptly and effectively. The Board will
continue to review and consider splitting the roles of the chairman of the Board and the general
manager of the Company if and when it is appropriate taking into account the circumstances of
our Group as a whole.
BOARD DIVERSITY POLICY
We have adopted the board diversity policy which sets out the objective and approach for
achieving and maintaining the diversity of the Board in order to enhance its effectiveness. In
accordance with the board diversity policy, the Company seeks to achieve board diversity by
taking into account a number of factors, including but not limited to gender, age, cultural and
educational background, professional experien ce, skills, knowledge and/or length of service.
The ultimate selection of Board ca ndidates will be based on merit and potential contribution to
our Board having due regard to the benefits of diversity on the Board and also the specific needs
of the Company without focusing on a single diversity aspect. Our Directors have a balanced
mix of knowledge and skills, including overall ma nagement and strategic development as well as
knowledge and experience in areas such as investment and business management. They obtained
degrees in various areas includ ing engineering mechanics, MBA, journalism and communication
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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and accounting. Furthermore, our Board has a diverse age and gender representation. Our
Board currently comprises one female Director and nine male Directors, ranging from 40 years
old to 64 years old.
With regards to gender diversity on the Board, we recognize the particular importance of
gender diversity. We have taken and will continue to take steps to promote and enhance gender
diversity at all levels of the Company, including but without limitation at our Board and senior
management levels. We will maintain a focus on gender diversity when recruiting staff at the mid
to senior level so as to develop a pipeline of p otential female successors to our Board. Our
Group will also identify and sel ect several female individuals with a diverse range of skills,
experience and knowledge in different fields from time to time, and maintain a list of such
female individuals who possess qualities to become our Board members, which will be reviewed
by our nomination committee periodically to maintain gender diversity of our Board. Taking
into account our existing business model and specific needs as well as the different background
of our Directors, the composition of our Board satisfies our board diversity policy.
Upon the Listing, the Nomination Committee w ill from time to time discuss and agree on
expected goals to ensure board diversity, and review and, where necessary, update the board
diversity policy to ensure that the policy remains effective. The Company will disclose the
biographical details of each Director and report on the implementation of the board diversity
policy (including whether we have achieved board diversity) in its annual corporate governance
report.
DIRECTORS’ AND SUPERVISORS’ REMUNERATION AND REMUNERATION OF THE
FIVE HIGHEST-PAID INDIVIDUALS
The Directors, Supervisors and senior man agement members who receive remuneration
from the Company are paid in the forms of salaries and other benefits in kind, discretionary
bonuses, retirement benefit scheme contributi ons and share-based payment. The remuneration
of the Directors, Supervisors and senior management members is determined with reference to
the remuneration paid by comparable companies and the achievement of major operating
indicators of the Company.
The aggregate amount of remuneration (incl uding salaries and other benefits in kind,
discretionary bonuses, retirement benefit sche me contributions and share-based payment) and
other benefits in kind paid to the Directors and Supervisors for the years ended December 31,
2022, 2023 and 2024 amounted to RMB4.9 millio n, RMB17.6 million and RMB23.1 million,
respectively. The aggregate amount of remuneration (including salaries and other benefits in
kind, discretionary bonuses, retirement benefit sc heme contributions and share-based payment)
and other benefits in kind incurred by the five highest-paid individuals (including one, two and
two Directors and Supervisors, respectively) of our Group for the years ended December 31,
2022, 2023 and 2024 amounted to RMB24.7 mill ion, RMB28.3 million and RMB27.5 million,
respectively.
Under the current compensation arrangement, we estimate th e total compensation before
taxation, including estimated share-based comp ensation, to be accrued to our Directors and our
Supervisors for the year ending December 31, 2025 to be approximately RMB8.3 million. The
actual remuneration of Directors and Supervisors in 2025 may be different from the expected
remuneration.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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For the years ended December 31, 2022, 202 3 and 2024, there were one, two and two
Directors and Supervisors among the five highest paid individuals, respectively. The total
emoluments for the remaining individuals among the five highest paid individuals amounted to
RMB15.5 million, RMB9.0 million and RMB8.5 million, for the years ended December 31,
2022, 2023 and 2024, respectively.
We confirmed that during the Track Record Period, no remuneration was paid by the
Company to, or receivable by, our D irectors, Supervisors or the fi ve highest paid individuals as
an inducement to join or upon joining the Company or as compensation for loss of office in
connection with the management positions of the Company or any subsidiary of the Company.
During the Track Record Period, none of our Directors or Supervisors waived any
remuneration. Save as disclosed above, no other payments have been paid, or are payable, by
the Company or our subsidiary to our Directors, Sup ervisors or the five highest-paid individuals
during the Track Record Period.
COMPLIANCE ADVISOR
The Company has appointed Gram Capital Limited as our Compliance Advisor in
compliance with Rules 3A.19 of the Listing Rules. The Compliance Advisor will provide us with
guidance and advice as to compliance with the Listing Rules and other applicable laws, rules,
codes and guidelines. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance Advisor will
advise the Company in certain circumstances including:
(i) before the publication of any regulatory announcement, circular or financial report;
(ii) where a transaction, which might be a notifiable or connected transaction, is
contemplated, including share issues, sales or transfers of treasury shares and share
repurchases;
(iii) where we propose to use the proceeds fro m the Global Offering in a manner different
from that detailed in this prospectus or wher e our business activities, developments or
results deviate from any forecast, estimate or other information in this prospectus;
and
(iv) where the Stock Exchange makes an inquiry to the Company in accordance with Rule
13.10 of the Listing Rules.
Pursuant to Rule 3A.24 of the Listing Rules, the Compliance Advisor will, on a timely
basis, inform the Company of any amendment or supplement to the Listing Rules that are
announced by the Stock Exchange. The Complian ce Advisor will also inform the Company of
any new or amended law, regulation or code in Hong Kong applicable to us, and advise us on
the continuing requirements under the Listing Rules and applicable laws and regulations.
The term of the appointment will commence on the Listing Date and is expected to end on
the date on which the Company complies with Rule 13.46 of the Listing Rules in respect of our
financial results for the first full fin ancial year commencing after the Listing.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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BEFORE THE COMPLETION OF THE GLOBAL OFFERING
As of the Latest Practicable Date, the issued share capital of our Company was
RMB366,651,762 comprising 366,651,762 Sh ares with a nominal value of RMB1.00 each,
categorized as follows:
Description of Shares
Number of
Shares
Approximate
percentage of
the total share
capital of our
Company
(%)
Domestic Shares in issue 348,626,221 95.08
Unlisted Foreign Shares in issue 18,025,541 4.92
Total 366,651,762 100.00
UPON THE COMPLETION OF THE GLOBAL OFFERING
Immediately following the completion of the Global Offering and conversion of Domestic
Shares and Unlisted Foreign Shares into H Shares , assuming that the Over-allotment Option is
not exercised, the share capital of our Company will be as follows:
Description of Shares
Number of
Shares
Approximate
percentage of
the total share
capital of our
Company
(%)
Domestic Shares in issue 138,410,231 36.46
Unlisted Foreign Shares in issue – –
H Shares to be converted from Domestic Shares 210,215,990 55.37
H Shares to be converted from Unlisted Foreign Shares 18,025,541 4.75
H Shares to be issued under the Global Offering 13,000,000 3.42
Total 379,651,762 100.00
SHARE CAPITAL
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Immediately following the completion of the Global Offering and conversion of Domestic
Shares and Unlisted Foreign Shares into H Shares , assuming that the Over-allotment Option is
fully exercised, the share capital of our Company will be as follows:
Description of Shares
Number of
Shares
Approximate
percentage of
the total share
capital of our
Company
(%)
Domestic Shares in issue 138,410,231 36.27
Unlisted Foreign Shares in issue – –
H Shares to be converted from Domestic Shares 210,215,990 55.09
H Shares to be converted from Unlisted Foreign Shares 18,025,541 4.72
H Shares to be issued under the Global Offering 14,950,000 3.92
Total 381,601,762 100.00
RANKING
The H Shares, to be issued following the completion of the Global Offering and converted
from the Unlisted Shares, and the Unlisted Shares are ordinary Shares in the share capital of the
Company, and are considered as one class of Sha res. Apart from certain qualified domestic
institutional investors in the PRC, qualifi ed PRC investors under the Shanghai-Hong Kong
Stock Connect and the Shenzhen-Hong Kong Stock Connect and other persons entitled to hold
H Shares pursuant to the relevant PRC laws and regulations or upon approval by any
competent authorities, H Share s generally may not be subscribed for by, or traded between,
investors of the PRC. H Shares may only be subs cribed for and traded in Hong Kong dollars.
Unlisted Shares and H Shares are regarded as one class of Shares under our 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, as the case may be. In addition to cash, dividends may be distributed in the form of
Shares.
SHARE CAPITAL
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CONVERSION OF UNLISTED SHARES INTO H SHARES
The Unlisted Shares comprise Domestic Shares and Unlisted Foreign Shares which are
currently not listed or traded on any stock exchange.
According to the regulations by the CSRC and our Articles of Association, the holders of
these Unlisted Shares may, at their own option, authorize the Company to apply to the CSRC
for conversion of their respective Unlisted Shares to H Shares upon the Global Offering, and
such converted Shares may be listed and traded o n an overseas stock exchange provided that the
conversion, listing and trading of such conver ted Shares have been approved by the securities
regulatory authorities of the State Council. Additionally, such conversion, trading and listing
shall meet any requirement of internal approval process and in all respects comply with the
regulations prescribed by the securities regu latory authorities of the State Council and the
regulations, requirements and procedures prescr ibed by the relevant ove rseas stock exchange.
If any of the Unlisted Shares are to be converted, listed and traded as H Shares on the
Stock Exchange, the approvals of any internal approval process and/or the relevant PRC
regulatory authorities, including the CSRC, and the approval of the Stock Exchange are
necessary for such conversion. Based on the pro cedures for the conversion of Unlisted Shares
into H Shares as set forth below, we will apply for the listing of all or any portion of the
Unlisted Shares on the Stock Exchange as H Share s in advance of any proposed conversion after
the Global Offering to ensure that the conversion process can be completed promptly upon
notice to the Stock Exchange an d delivery of Shares for entry on the H Share register. As the
listing of additional Shares after the Listing on the Stock Exchange is ordinarily considered by
the Stock Exchange to be a purely administrative matter, it does not require such prior
application for listing at the time of our listing in Hong Kong. No Shareholder voting is
required for the conversion of such Unlisted Shares or the listing and trading of such converted
Shares on an overseas stock exchange. Any application for listing of the converted shares on the
Stock Exchange after our initial listing is subject to prior notification by way of announcement
to inform our Shareholders and the public of any proposed conversion.
After all the requisite approvals have been obtained, the relevant Unlisted Shares will be
withdrawn from the Share register, and the Compa ny will re-register such Shares on the H Share
register maintained in Hong Kong and instruct the H Share Registrar to issue H Share
certificates. Registration on the H Share regis ter of the Company will be on the conditions that
(i) the H Share Registrar lodges with the Stock Ex change a letter confirming the proper entry of
the relevant H Shares on the H Share register and the due dispatch of H Share certificates; and
(ii) the admission of the H Shares to be traded on the Stock Exchange complies with the Listing
Rules and the General Rules of HKSCC and the HKSCC Operational Procedures in force from
time to time. Until the converted Shares are re -registered on the H Share register of the
Company, such Shares would not be listed as H Shares. For details of our existing Shareholders’
proposed conversion of Unlisted Shares into H Shares, see ‘‘History, Development and
Corporate Structure — Capitalizatio n of Our Company’’ in this prospectus.
SHARE CAPITAL
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DOMESTIC PROCEDURES
The Full Circulation Participating Shareholders may only deal in the Shares upon
completion of the below arrangement procedures for the registration, deposit and transaction
settlement in relation to the conversion and listing:
(i) We will appoint CSDC as the nominal holder to deposit the relevant securities at
CSDC (Hong Kong), which will then deposit the securities at HKSCC in its own
name. CSDC, as the nominal holder of the Full Circulation Participating
Shareholders, shall handle all custody, maintenance of detailed records,
cross-border settlement and corporate a ctions, etc. relating to the converted H
Shares for the Full Circulation Participating Shareholders;
(ii) We will engage a domestic securities company (the ‘‘Domestic Securities Company’’)
to provide services such as the transmission of sale orders and trading messages in
respect of the converted H Shares. The Domestic Securities Company will engage a
Hong Kong securities company (the ‘‘Hong Kong Securities Company’’) for
settlement of share transactions. We will make an application to CSDC, Shenzhen
Branch for the maintenance of a detailed record of the initial holding of the converted
H Shares held by our Shareholders. Meanwhile, we will submit applications for a
domestic transaction commission code and abbreviation, which shall be confirmed by
CSDC, Shenzhen Branch as authorized by Shenzhen Stock Exchange (‘‘SZSE’’);
(iii) The SZSE shall authorize Shenzhen Securities Communication Co., Ltd. to provide
services relating to transmission of tradin g orders and trading messages in respect of
the Converted H Shares between the Domestic Securities Company and the Hong
Kong Securities Company, and the real-ti me market forwarding services of the H
Shares;
(iv) According to the Notice of the SAFE o n Issues Concerning the Foreign Exchange
Administration of Overseas Listing ( 《國家外匯管理局關於境外上市外匯管理有關問題
的通知》), the Full Circulation Participating Shareholders that held Domestic Shares
shall complete the overseas shareholding registration with the local foreign exchange
administration bureau before the Shares are sold, and after the overseas shareholding
registration, open a specified bank account for the holding of overseas shares by
domestic investors at a domestic bank with relevant qualifications and open a fund
account for the H Share ‘‘Full Circulation’’ at the Domestic Securities Company. The
Domestic Securities Company shall open a securities trading account for the H Share
‘‘Full Circulation’’ at the Hong Kong Securities Company; and
(v) The Full Circulation Participating Shareholders shall submit trading orders of the
Converted H Shares through the Domestic Securities Company. Trading orders of the
Full Circulation Participating Shareholders for the relevant Shares will be submitted
to the Stock Exchange through the securities trading account opened by the Domestic
Securities Company at the Hong Kong Secu rities Company. Upon completion of the
transaction, settlements between each of the Hong Kong Securities Company and
CSDC (Hong Kong), CSDC (Hong Kong) and CSDC, CSDC and the Domestic
Securities Company, and the Domestic Secu rities Company and the Full Circulation
Participating Shareholders, will all be conducted separately.
SHARE CAPITAL
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As a result of the conversion, the shareholding of the relevant Full Circulation
Participating Shareholders in our share capital registered shall be reduced by the number of
Domestic Shares and Unlisted Foreign Shares converted and increased by the number of H
Shares so converted.
A Shareholder holding Domestic Shares not converted into H Shares can work with the
Company according to the Articles of Association and follow the procedures set out in this
prospectus to convert the Domestic Shares into H Shares after the Listing if they want, provided
that such conversion of Domestic Shares into and listing and trading of H Shares will be subject
to the approval of the relevant PRC regulatory authorities, including the CSRC, the approval of
the Stock Exchange and the satisfaction of the public float requirement under the Listing Rules
by the Company.
RESTRICTIONS OF SHARE TRANSFER
In accordance with the PRC Company Law, the shares issued prior to any public offering
of shares by a company cannot be transferred within 12 months from the date on which such
publicly offered shares are listed and traded on the relevant stock exchange. As such, the Shares
issued by the Company prior to the issue of H Shares will be subject to such statutory restriction
on transfer within a period of o ne year from the Listing Date.
Our Directors, Supervisors and members of the senior management of the Company shall
declare their shareholdings in the Company and any changes in their shareholdings. Shares
transferred by our Directors, Supervisors a nd members of the senior management each year
during their term of office shal l not exceed 25% of their total respective shareholdings in the
Company. The Shares that the aforementioned persons held in the Company cannot be
transferred within 12 months from the date on which the Shares are listed and traded, nor within
half a year after they leave their positions in the Company. The Articles of Association may
contain other restrictions on the transfer of t he Shares held by our Directors, Supervisors and
members of senior management of the Company.
CIRCUMSTANCES UNDER WHICH GENERAL MEETING IS REQUIRED
For details of circumstances under which our Shareholders’ general meetings are required,
see ‘‘Appendix V — Summary of Articles of Association.’’
SHARE CAPITAL
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As far as our Directors are aware, immediately following the completion of the Global
Offering (assuming that the Over-allotment Op tion is not exercised) and the conversion of the
Unlisted Shares into H Shares, the following persons will have an interest and/or short position
in the Shares or underlying Shares of our Company which will be required to be disclosed to our
Company pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or will be,
directly or indirectly, interested in 10% or mo re of the nominal value of any class of our share
capital carrying rights to vote in all circumstances at general meetings of our Company:
As of the Latest Practicable Date
Immediately following the completion of the
Global Offering (assuming the Over-allotment Option
is not exercised) and the conversion of the
Unlisted Shares into H Shares
Name of Shareholder Nature of interest
Number and
description of the
Shares
Approximate
percentage of
interest in the
Company
Number and
description of the
Shares
Approximate
percentage of
interest in the
Unlisted Shares/
H Shares (as
appropriate)
(1)
Approximate
percentage of
interest in the
Company (1)
(%) (%) (%)
Mr. Chen (2) Interest in controlled
corporation
86,872,586
Domestic Shares
23.69 42,251,198
Domestic Shares
30.53 11.13
44,621,388
HS h a r e s
18.50 11.75
Beneficial owner 31,101,004
Domestic Shares
8.48 15,550,502
Domestic Shares
11.24 4.10
15,550,502
HS h a r e s
6.45 4.10
Shanghai Fangao (2) Beneficial owner 84,502,397
Domestic Shares
23.05 42,251,198
Domestic Shares
30.53 11.13
42,251,199
HS h a r e s
17.51 11.13
Zhongding No.5 (3) Beneficial owner 23,420,841
Domestic Shares
6.39 23,420,841
HS h a r e s
9.71 6.17
Shanghai Dingxiao (3) Interest in controlled
corporation
23,420,841
Domestic Shares
6.39 23,420,841
HS h a r e s
9.71 6.17
Shanghai Dingman (3) Interest in controlled
corporation
23,420,841
Domestic Shares
6.39 23,420,841
HS h a r e s
9.71 6.17
Ningbo Dingji (3) Interest in controlled
corporation
23,420,841 Domestic
Shares
6.39 23,420,841
HS h a r e s
9.71 6.17
Ningbo Dingyan (3) Interest in controlled
corporation
23,420,841 Domestic
Shares
6.39 23,420,841
HS h a r e s
9.71 6.17
Yin Junping
(尹軍平)(3)
Interest in controlled
corporation
23,420,841 Domestic
Shares
6.39 23,420,841
HS h a r e s
9.71 6.17
Yan Li (3) Interest in controlled
corporation
25,762,926
Domestic Shares
7.03 25,762,926
HS h a r e s
10.68 6.79
Shanghai Zhongdi (4) Interest in controlled
corporation
25,167,493
Domestic Shares
6.86 25,167,493
HS h a r e s
10.43 6.63
Li Tongzuan (4) Interest in controlled
corporation
25,167,493
Domestic Shares
6.86 25,167,493
HS h a r e s
10.43 6.63
Shanghai Junhuai (4) Interest in controlled
corporation
25,167,493
Domestic Shares
6.86 25,167,493
HS h a r e s
10.43 6.63
Zhang Huixian (4) Interest in controlled
corporation
25,167,493
Domestic Shares
6.86 25,167,493
HS h a r e s
10.43 6.63
Xiangtan Caixin (5) Beneficial owner 20,959,674
Domestic Shares
5.72 13,623,788
Domestic Shares
9.84 3.59
7,335,886
HS h a r e s
3.04 1.93
SUBSTANTIAL SHAREHOLDERS
–3 8 5–


--- page 395 ---
As of the Latest Practicable Date
Immediately following the completion of the
Global Offering (assuming the Over-allotment Option
is not exercised) and the conversion of the
Unlisted Shares into H Shares
Name of Shareholder Nature of interest
Number and
description of the
Shares
Approximate
percentage of
interest in the
Company
Number and
description of the
Shares
Approximate
percentage of
interest in the
Unlisted Shares/
H Shares (as
appropriate) (1)
Approximate
percentage of
interest in the
Company (1)
(%) (%) (%)
Hunan Caixin (5) Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 13,623,788
Domestic Shares
9.84 3.59
7,335,886
HS h a r e s
3.04 1.93
Xiangtan Chanxing (5) Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 13,623,788
Domestic Shares
9.84 3.59
7,335,886
HS h a r e s
3.04 1.93
Caixin Financial (5) Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 13,623,788
Domestic Shares
9.84 3.59
7,335,886
HS h a r e s
3.04 1.93
Hunan Provincial
People’s
Government
(5)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 13,623,788
Domestic Shares
9.84 3.59
7,335,886
HS h a r e s
3.04 1.93
Xiangtan Industrial (5) Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 13,623,788
Domestic Shares
9.84 3.59
7,335,886
HS h a r e s
3.04 1.93
Xiangtan SASAC (5) Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 13,623,788
Domestic Shares
9.84 3.59
7,335,886
HS h a r e s
3.04 1.93
Xiangtan Zhenxiang (5) Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 13,623,788
Domestic Shares
9.84 3.59
7,335,886
HS h a r e s
3.04 1.93
Changjiang
Automobile
Valley
(6)
Beneficial owner 20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Valley Private
Equity (6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Hubei Industrial
Investment (6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Wuhan Economic
Development (6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
SUBSTANTIAL SHAREHOLDERS
–3 8 6–


--- page 396 ---
As of the Latest Practicable Date
Immediately following the completion of the
Global Offering (assuming the Over-allotment Option
is not exercised) and the conversion of the
Unlisted Shares into H Shares
Name of Shareholder Nature of interest
Number and
description of the
Shares
Approximate
percentage of
interest in the
Company
Number and
description of the
Shares
Approximate
percentage of
interest in the
Unlisted Shares/
H Shares (as
appropriate) (1)
Approximate
percentage of
interest in the
Company (1)
(%) (%) (%)
Changjiang Industry
Investment (6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Hubei SASAC (6) Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Wuhan Financial
Development (6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Innovation
Collaboration (6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Wuhan Economic
Development
Industry
Investment
(6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Hannan SASAC (6) Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Xu Qitong (6) Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Hubei Industry
Investment (6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Changjiang Industry
Investment Group
Co., Ltd.
(6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Wuhan Economic
Development
Investment Co.,
Ltd. (6)
Interest in controlled
corporation
20,959,674
Domestic Shares
5.72 10,479,837
Domestic Shares
7.57 2.76
10,479,837
HS h a r e s
4.34 2.76
Huzhou Qingyun (7) Beneficial owner 19,373,720
Domestic Shares
5.28 19,373,720
HS h a r e s
8.03 5.10
SUBSTANTIAL SHAREHOLDERS
–3 8 7–


--- page 397 ---
As of the Latest Practicable Date
Immediately following the completion of the
Global Offering (assuming the Over-allotment Option
is not exercised) and the conversion of the
Unlisted Shares into H Shares
Name of Shareholder Nature of interest
Number and
description of the
Shares
Approximate
percentage of
interest in the
Company
Number and
description of the
Shares
Approximate
percentage of
interest in the
Unlisted Shares/
H Shares (as
appropriate) (1)
Approximate
percentage of
interest in the
Company (1)
(%) (%) (%)
Shanghai Puchao (7) Interest in controlled
corporation
19,373,720
Domestic Shares
5.28 19,373,720
HS h a r e s
8.03 5.10
Mu Lei (7) Interest in controlled
corporation
19,373,720
Domestic Shares
5.28 19,373,720
HS h a r e s
8.03 5.10
Xiao Zhen (7) Interest in controlled
corporation
19,373,720
Domestic Shares
5.28 19,373,720
HS h a r e s
8.03 5.10
Ningbo Baili Yihe (7) Interest in controlled
corporation
19,373,720
Domestic Shares
5.28 19,373,720
HS h a r e s
8.03 5.10
Han Ruichen (7) Interest in controlled
corporation
19,373,720
Domestic Shares
5.28 19,373,720
HS h a r e s
8.03 5.10
Shanghai Jifang (8) Beneficial owner 14,942,497
Domestic Shares
4.08 7,471,248
Domestic Shares
5.40 1.97
7,471,249
HS h a r e s
3.10 1.97
Liu Xingyu (8) Interest in controlled
corporation
14,942,497
Domestic Shares
4.08 7,471,248
Domestic Shares
5.40 1.97
7,471,249
HS h a r e s
3.10 1.97
Jinhua Boleidun (9) Beneficial owner 13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Jinhua Innovation (9) Interest in controlled
corporation
13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Jinhua Guokong (9) Interest in controlled
corporation
13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Puhua Tianqin (9) Interest in controlled
corporation
13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Jinhua Jintou (9) Interest in controlled
corporation
13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Jinhua SASAC (9) Interest in controlled
corporation
13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Shen Qinhua (9) Interest in controlled
corporation
13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Lanxi Juli (9) Interest in controlled
corporation
13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Lanxi SOCO (9) Interest in controlled
corporation
13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Lanxi SASAO (9) Interest in controlled
corporation
13,973,116
Domestic Shares
3.81 13,973,116
Domestic Shares
10.10 3.68
Lin Ziting Beneficial owner 10,305,170
Domestic Shares
2.81 9,274,653
Domestic Shares
6.70 2.44
1,030,517
HS h a r e s
0.43 0.27
SUBSTANTIAL SHAREHOLDERS
–3 8 8–


--- page 398 ---
Notes:
(1) The calculation is based on the total number of 138,410,231 Unlisted Shares and 241,241,531 H Shares in
issue upon Listing comprising (i) an aggregate of 228,241,531 Shares to be converted from the Unlisted
Shares and (ii) 13,000,000 Shares to be issued pursuant to the Global Offering (without taking into
account the H Shares which may be issued upon the exercise of the Over-allotment Option) and the
conversion of the Unlisted Shares into H Shares.
(2) Among the 86,872,586 Shares, (i) 84,502,397 Shares are directly held by Shanghai Fangao; and (ii)
2,370,189 Shares are directly held by Cloud Tribe Yijin.
As of the Latest Practicable Date, Mr. Chen was the general partner of Shanghai Fangao.
Besides, as of the Latest Practicable Date, the general partner of Cloud Tribe Yijin was Cloud Tribe
Management, which was held as to 51% by Shanghai Yijin and 49% by Yijin Venture Capital
Management. Yijin Venture Capital Management was held as to approximately 51.76% by Shanghai
Yijin. Shanghai Yijin was held as to approximately 19.49% by Mr. Chen and approximately 80.51% by
Shanghai Yijin Management, whose general partner was Mr. Chen.
Therefore, by virtue of SFO, Mr. Chen was deemed to be interested (i) the 84,502,397 Shares held by
Shanghai Fangao and (ii) the 2,370,189 Shares held by Cloud Tribe Yijin.
(3) Among the 25,762,926 Shares, (i) 23,420,841 Shares are directly held by Zhongding No. 5; and (ii)
2,342,085 Shares are directly held by Zhongding Qinglan.
As of the Latest Practicable Date, (i) Shanghai Dingxiao Enterprise Management Consulting Center
(Limited Partnership) ( 上海鼎蕭企業管理諮詢中心（有限合夥）) (‘‘Shanghai Dingxiao’’) was the general
partner of Zhongding No.5; (ii) Shanghai Dingman Enterprise Management Co., Ltd. ( 上海鼎蔓企業管理
有限公司) (‘‘Shanghai Dingman’’) was the general partner of Shanghai Dingxiao, Ningbo Dingji Venture
Capital Partnership (Limited Partnership) ( 寧波鼎集創業投資合夥企業（有限合夥）) (‘‘Ningbo Dingji’’)
was a limited partner of Shanghai Dingxiao holding a pproximately 60.83% partnership interests therein,
and Ningbo Dingyan Venture Capital Partnership (Limited Partnership) ( 寧波鼎嚴創業投資合夥企業（有
限合夥）) (‘‘Ningbo Dingyan’’) was a limited partner of Shanghai Dingxiao holding approximately 37.78%
partnership interests therein; (iii) Shanghai Dingman was the general manager of Ningbo Dingji, and Yin
Junping was a limited partner of Ningbo Dingji holding 66.25% partnership interests therein; (iv)
Shanghai Dingman was the general manager of Ningbo Dingyan, and Yan Li was a limited partner of
Ningbo Dingyan holding approximately 66.49% partnership interests therein; and (v) Shanghai Dingman
was owned as to 52.88% by Yan Li.
Besides, as of the Latest Practicable Date, (i) Shanghai Dingying Investment Management (Limited
Partnership) ( 上海鼎迎投資管理中心（有限合夥）
) (‘‘Shanghai Dingying’’) was the general partner of
Zhongding Qinglan; and (ii) Yan Li was the general partner of Shanghai Dingying.
Therefore, by virtue of SFO, (i) Yan Li was deemed to be interested in 23,420,841 Shares held by
Zhongding No. 5, and 2,342,085 Shares held by Zhongding Qinglan; and (ii) each of Shanghai Dingxiao,
Shanghai Dingman, Ningbo Dingji, Ningbo Dingyan, and Yin Junping was deemed to be interested in
23,420,841 Shares held by Zhongding No. 5.
(4) Among the 25,167,493 Shares, (i) 8,519,491 Shares are directly held by Zibo Naying; (ii) 7,934,981 Shares
are directly held by Fujian Diquan; (iii) 4,590,953 Shares are directly held by Jiaxing Tongneng; and (iv)
4,122,068 Shares are directly held by Jiaxing Dixin.
As of the Latest Practicable Date, the general partner of each of Jiaxing Dixin, Fujian Diquan, Jiaxing
Tongneng and Zibo Naying was Shanghai Zhongdi Investment Co., Ltd. (‘‘Shanghai Zhongdi’’), which in
turn was owned as to 39% by Li Tongzuan and 38% by Shanghai Junhuai Investment Management
Group Co. Ltd. (‘‘Shanghai Junhuai’’). Shanghai Junhuai was owned as to 61.8% by Zhang Huixian.
Therefore, by virtue of SFO, each of Shanghai Zhongdi, Li Tongzuan, Shanghai Junhuai and Zhang
Huixian was deemed to be interested in a total of 25,167,493 Shares.
(5) As of the Latest Practicable Date, (i) Hunan Caixin Fund Management Co., Ltd. ( 湖南省財信產業基金管
理有限公司) (‘‘Hunan Caixin’’) and Xiangtan Chanxing Private Equity Fund Management Co., Ltd. ( 湘潭
產興私募股權基金管理有限責任公司) (‘‘Xiangtan Chanxing’’) were general partners of Xiangtan Caixin;
(ii) Hunan Caixin was wholly-owned by Hunan Caixin Financial Holding Group Co., Ltd. ( 湖南財信金融
控股集團有限公司) (‘‘Caixin Financial’’), which was in turn wholly-owned by Hunan Provincial People’s
Government ( 湖南省人民政府); and (iii) Xiangtan Chanxing was wholly-owned by Xiangtan Industrial
Investment Development Group Co., Ltd. ( 湘潭產業投資發展集團有限公司) (‘‘Xiangtan Industrial’’),
SUBSTANTIAL SHAREHOLDERS
–3 8 9–


--- page 399 ---
which was owned as to 90% by State-owned Assets Supervision and Administration Commission of
Xiangtan Municipal People’s Government ( 湘潭市人民政府國有資產監督管理委員會) (‘‘Xiangtan
SASAC’’).
Besides, as of the Latest Practicable Date, (i) Xiangtan Zhenxiang State Owned Assets Management and
Investment Co., Ltd. ( 湘潭振湘國有資產經營投資有限公司) (‘‘Xiangtan Zhenxiang’’) was a limited partner
of Xiangtan Caixin holding approximately 49.98% of the partnership interests therein, which in turn was
wholly-owned by Xiangtan Industrial.
Therefore, by virtue of SFO, each of Hunan Caixin, Xiangtan Chanxing, Caixin Financial, Hunan
Provincial People’s Government, Xiangtan Industrial, Xiangtan SASAC and Xiangtan Zhenxiang was
deemed to be interested in the 20,959,674 Shares held by Xiangtan Caixin.
(6) As of the Latest Practicable Date, (i) Hubei Changjiang Automobile Valley Private Equity Fund
Management Co., Ltd. ( 湖北長江車谷私募基金管理有限公司) (‘‘Valley Private Equity’’) was the general
partner of Changjiang Automobile Valley; (ii) Valley Private Equity was owned as to 51% by Hubei
Changjiang Industrial Investment Private Fund Management Co., Ltd. ( 湖北長江產投私募基金管理有限
公司) (‘‘Hubei Industrial Investment’’), and 40% by Wuhan Economic Development Synergetic Private
Fund Management Co., Ltd. ( 武漢經開協同私募基金管理有限公司) (‘‘Wuhan Economic Development’’);
(iii) Hubei Industrial Investment was wholly-owned by Changjiang Industry Investment Group Co., Ltd.
(長江產業
投資集團有限公司) (‘‘Changjiang Industry Investment’’), which was in turn wholly-owned by
State-owned Assets Supervision and Administration Commission of Hubei Provincial People’s
Government ( 湖北省人民政府國有資產監督管理委員會) (‘‘Hubei SASAC’’); (iv) Wuhan Economic
Development was owed as to 49% by Wuhan Economic Development Financial Development Co., Ltd.
(武漢經開金融發展有限公司) (‘‘Wuhan Financial Development’’), and 41.2% by Innovation
Collaboration (Wuhan) Capital Management Co., Ltd. ( 創新協同（武漢）資本管理有限公司)
(‘‘Innovation Collaboration’’); (v) Wuhan Finan cial Development was wholly-owned by Wuhan
Economic Development Industry Investment Group Co., Ltd. ( 武漢經開產業投資集團有限公司)
(‘‘Wuhan Economic Development Industry Investment’’), which was in turn wholly-owned by
State-owned Assets Supervision and Administration Commission of Wuhan Economic and
Technological Development Zone (Hannan District) ( 武漢經濟技術開發區（漢南區）國有資產監督管理
局)
(‘‘Hannan SASAC’’); and (vi) Innovation Collaboration was owned as to 87.8% by Xu Qitong.
Besides, as of the Latest Practicable Date, (i) Hubei Changjiang Industry Investment Fund Co., Ltd. ( 湖北
長江產業投資基金有限公司) (‘‘Hubei Industry Investment’’) was a limited partner of Changjiang
Automobile Valley holding approximately 49.92% of the partnership interests therein, which in turn
was wholly-owned by Changjiang Industry Investment.
As of the Latest Practicable Date, Wuhan Economic Development Investment Co., Ltd. ( 武漢經開投資有
限公司) was a limited partner of Changjiang Automob ile Valley holding approximately 33.33% of the
partnership interests therein, which in turn was wholly-owned by Wuhan Economic Development
Industry Investment.
Therefore, by virtue of SFO, each of Valley Private Equity, Hubei Industrial Investment, Wuhan
Economic Development, Changjiang Industry Investment, Hubei SASAC, Wuhan Financial
Development, Innovation Collaboration, Wuhan Economic Development Industry Investment, Hannan
SASAC, Xu Qitong, Hubei Industry Investment, and Wuhan Economic Development Investment Co.,
Ltd. was deemed to be interested in the 20,959,674 Shares held by Changjiang Automobile Valley.
(7) As of the Latest Practicable Date, (i) Shanghai Puchao Private Fund Management Co., Ltd. ( 上海普超私
募基金管理有限公司) (‘‘Shanghai Puchao’’) was the general partner of Huzhou Qingyun; (ii) Shanghai
Puchao was owned as to 51.00% by Mu Lei and 49.00% by Xiao Zhen; and (iii) Ningbo Baili Yihe Energy
Co., Ltd. ( 寧波百利怡和能源有限公司) (‘‘Ningbo Baili Yihe’’) was a limited partner of Huzhou Qingyun
holing approximately 82.02% of the partnership interests therein, which in turn was owned as to 95% by
Han Ruichen ( 韓瑞辰). Therefore, by virtue of SFO, each of Shanghai Puchao, Mu Lei, Xiao Zhen,
Ningbo Naili Yihe and Han Ruichen was deemed to be interested in the 19,373,720 Shares held by Huzhou
Qingyun.
(8) As of the Latest Practicable Date, Liu Xingyu was the general partner of Shanghai Jifang. Therefore, by
virtue of SFO, Liu Xingyu was deemed to be interested in the 14,942,497 Shares held by Shanghai Jifang.
(9) As of the Latest Practicable Date, (i) Jinhua Innovation Investment Development Co., Ltd. ( 金華市創新投
資發展有限公司) (‘‘Jinhua Innovation’’) was the general partner of Jinhua Boleidun; (ii) Jinhua
Innovation was owned as to 46.67% by Jinhua Guokong Asset Management Co., Ltd. ( 金華市國控資產
管理有限公司
) (‘‘Jinhua Guokong’’), and 41.33% by Zhejiang Puhua Tianqin Equity Investment
Management Limited Corporation ( 浙江普華天勤股權投資管理有限公司) (‘‘Puhua Tianqin’’); (iii)
SUBSTANTIAL SHAREHOLDERS
–3 9 0–


--- page 400 ---
Jinhua Guokong was wholly-owned by Jinhua Jintou Group Co., Ltd. ( 金華市金投集團有限公司)
(‘‘Jinhua Jintou’’), which was in turn owned as to approximately 93.61% by State-owned Assets
Supervision and Administration Commission of Jinhua Municipal People’s Government ( 金華市人民政府
國有資產監督管理委員會) (‘‘Jinhua SASAC’’); (iv) Puhua Tianqin was owed as to 72% by Shen Qinhua
(沈琴華).
Besides, as of the Latest Practicable Date, (i) Lanxi Juli Industrial Fund Investment Co., Ltd. ( 蘭溪市聚力
產業基金投資有限公司) (‘‘Lanxi Juli’’) was a limited partner of Jinhua Boleidun holding 35% of the
partnership interests therein, which in turn was wholly-owned by Lanxi State-owned Capital Operation
Co., Ltd. ( 蘭溪市國有資本運營有限公司) (‘‘Lanxi SOCO’’); and (ii) Lanxi SOCO was owned as to 90% by
State-owned Assets Supervision and Administration Office of Lanxi Municipal People’s Government ( 蘭
溪市人民政府國有資產監督管理辦公室) (‘‘Lanxi SASAO’’).
Therefore, by virtue of SFO, each of Jinhua Innovation, Jinhua Guokong, Puhua Tianqin, Jinhua Jintou,
Jinhua SASAC, Shen Qinhua, Lanxi Juli, Lanxi SOCO, and Lanxi SASAO was deemed to be interested in
the 13,973,116 Shares held by Jinhua Boleidun.
Save as disclosed above, our Directors are not aware of any person who will, immediately
following the completion of the Global Offering (assuming that the Over-allotment Option is
not exercised) and the conversion of the Unlisted Shares into H Shares, have any interest and/or
short position in the Shares or underlying shares of our Company which will be required to be
disclosed to our Company pursuant to the provisions of Divisions 2 and 3 of Part XV of the
SFO, or who is, directly or indirectly interested in 10% or more of the nominal value of any
class of share capital carrying rights to vote i n all circumstances at general meeting of our
Company or any other member of our Group.
SUBSTANTIAL SHAREHOLDERS
–3 9 1–


--- page 401 ---
FUTURE PLANS
See ‘‘Business — Our Strategies’’ for a detaile d description of our future business plans and
strategies.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$147.8 million, after deducting estimated u nderwriting commissions, fees and expenses
payable by us in connection with the Global Offering, assuming an Offer Price of HK$18.0 per
Offer Share, and assuming the Over-allotment Option is not exercised.
We currently intend to apply the net proceeds f rom the Global Offering for the following
purposes:
. Approximately 40% of the net proceeds, or HK$59.1 million, is expected to be
invested in technology advancement and the development of new products and
services.
(i) Approximately 20% of the net proceeds, or HK$29.5 million, will be used to
develop a suite of scenario-specific p roducts and solutions equipped with
intelligent technologies , alongside advanced systems such as an AI-powered
expert service support system, automate d operating systems utilizing cloud and
edge computing, and a roadside system for autonomous cluster operations. To
this end, our plan includes:
a) Establishing eight laboratories over the next three years in Shanghai, Hubei
Province, Hunan Province, and Hong Kong, focusing on testing, simulation
and model training to calibrate and fine-tune sensors, simulate real-world
operation scenarios for autonomous machinery, and develop and train
machine learning models for a wide range of applications.
b) Procuring equipment and software essential for laboratory setup, including
calibration and testing equipment for various sensors (such as LiDAR,
radar and cameras), simulation tools for autonomous loaders and
wide-body dump trucks, Hardware-in- Loop testing equipment, servers for
algorithm development, training, and data storage, and test rigs and
electronic component fabrication equipment for autonomous system
development and testing.
c) Recruiting research and devel opment specialists focused on the
development of autonomous operations, machine learning, data analytics,
and algorithm development, requiring candidates with bachelor’s or higher
degrees and relevant working experience.
Specifically, we plan to use approximat ely 18.1% and 1.9% of the net proceeds,
or HK$26.7 million and HK$2.8 million for the development of such products
and solutions equipped with intelligent technologies in 2025 and 2026,
respectively.
FUTURE PLANS AND USE OF PROCEEDS
–3 9 2–


--- page 402 ---
(ii) Approximately 10% of the net proceed s, or HK$14.8 million, will be used for the
research and engineering of a 1,000V high -voltage electrical system to enhance
the overall operational efficiency of our machinery, leading to reduced charging
times and lowered costs associated with th e electrification system. We intend to
purchase high-voltage testing equipment and systems, specifically designed for
power distribution supply in high-volt age platform testing, and for testing
components and systems within these pla tforms. We also plan to recruit research
and development specialists with relevan t expertise in high-voltage electrical
system. Specifically, we plan to use a pproximately 7.4% and 2.6% of the net
proceeds, or HK$11.0 million and HK$3. 8 million for the development of such
1,000V high-voltage electrical system in 2025 and 2026, respectively.
(iii) Approximately 10% of the net proceed s, or HK$14.8 million, will be used for the
development and ongoing optimization of new product models designed for the
mining, steel plant, and port operations. Our initiatives include the development
of a new lineup featuring augmented payload and battery capacities and/or
utilize alternative energy sources such as hydrogen and methanol to extend
o p e r a t i o n a lt i m e s .S pecifically, we anticipa te launching a 145-tonne
range-extended wide-body dump truck with a 724-kWh battery in the second
half of 2025 and a 135-tonne battery-electric wide-body dump trucks with a
battery exceeding 900 kWh in 2026. Specifically, we plan to use approximately
5.6% and 4.4% of the net proceeds, or HK$8.3 million and HK$6.5 million for
the development and optimization of new product models in 2025 and 2026,
respectively.
. Approximately 40% of the net proceeds, or HK$59.1 million, is expected to be used
for the establishment of manufacturing plants and the procurement of essential
machinery to enhance our manufacturing ca pabilities. We expect to achieve greater
operational efficiency and ensure a more consistent standard of production quality
than would be possible through outsourcing or retrofitting existing facilities. See
‘‘Business — Manufacturing — Our Manufacturing Plants — Plants Under
Construction.’’
Specifically, we plan to use approximate ly 28.6% and 11.4% of the net proceeds, or
HK$42.3 million and HK$16.8 million, to cover the construction costs for our
battery-electric wide-body dump truck manufacturing and assembly plant in
Xiangtan, Hunan to be incurred in 2025, 2026, respectively. We plan to complete
the construction for Xiangtan plant by t he end of 2025 and expect to gradually make
construction payments unti l the first quarter of 2027.
. Approximately 10% of the net proceeds, or HK$14.8 million, is expected to expand
our sales and services network and enhance our brand awareness.
FUTURE PLANS AND USE OF PROCEEDS
–3 9 3–


--- page 403 ---
(i) Approximately 5% of the net proceeds, or HK$7.4 million, will be invested in
expanding our sales and service network across China and enhancing our service
capabilities. Specifically, we plan to: (a) establish large sales and service centers
in six regional service hubs i n major first-tier cities, i ncluding Urumchi, Erdos,
Xi’an, Chengdu, Guangzhou, and Zhengzhou, which will serve multiple
functions, including product displays, business development, regional sales,
post-sale service management, staff and d istributor training and warehousing of
spare parts and accessories. We establish these hubs in major cities to support
and to collaborate with a larger network of service centers that are
geographically closer to our customers i n the northwestern, northern, eastern,
southwestern and southern regions of China, respectively; (b) expand our
distribution network to between 70 and 80 distributors within the next two to
three years, including around 20 associa ted distributors, along with providing
comprehensive onboarding training for these distributors, (c) organize annual
regional conferences and workshops to highlight the technical specifications and
benefits of our products and services, (d) introduce systematic training programs
for distributors to improve their service quality and capabilities; and (e)
collaborate with local service providers to set up six local service centers across
China to offer product training, spare parts, accessories, and post-sale services to
end users.
(ii) Approximately 5% of the net proceeds, or HK$7.4 million, will be used to
expand our international presence and bolster our sales and marketing efforts. In
response to the growing demand and the global recognition of China’s new
energy engineering machinery, we plan to establish sales and service centers
abroad and extend our distribution network worldwide. We plan to initiate this
expansion by recruiting local business professionals into our distribution
network, thereby establishing sales and service centers staffed with dedicated
marketing and operational teams to provide customer and post-sale services.
Additionally, in China and abroad, we intend to: (a) execute promotional
campaigns on mainstream s ocial media to directly connect with end users and
customers, thereby broadening our bran d awareness; (b) invest in outdoor and
billboard advertising to enhance brand visi bility, prioritizing strategic locations
in transportation hubs and public areas wit h high foot traffic; and (c) participate
in exhibitions, expos, and forums to directly engage with potential customers and
encourage personal interactions.
. Approximately 10% of the net proceeds, or HK$14.8 million, is expected to be used
for working capital and ge neral corporate purposes.
FUTURE PLANS AND USE OF PROCEEDS
–3 9 4–


--- page 404 ---
If the net proceeds from the Global Offering exceed the above funding requirements and,
to the extent permitted by applicable laws and regulations, we will use the surplus funds for
working capital. If we urgently need the funds fo r the above purposes, but cannot immediately
obtain the net proceeds from the Global Offering , we will use self-raised funds to meet the
relevant funding requirements and replace these self-raised funds with the net proceeds from the
Global Offering when the proceeds become available to us. If the net proceeds of the Global
Offering are not immediately applied to the above purposes, we will only deposit those net
proceeds into short term interest-bearing accounts at licensed commercial banks and/or other
authorized financial institutions (as defined under the Securities and Futures Ordinance or
applicable laws and regulations in other jurisdictions).
If the Over-allotment Option is exercised in full, the net proceeds that we will receive will
be approximately HK$182.9 million at the Offer P rice of HK$18.0 per Offer Share. In the event
that the Over-allotment Option is exercised, w e intend to apply the additional net proceeds to
the above purposes in the proportions stated above.
If any part of our plan does not proceed as planned for reasons such as changes
government policies that would render any of our plans not viable, or the occurrence of force
majeure events, our directors will carefully ev aluate the situation and may reallocate the net
proceeds from the Global Offering.
We will issue an appropriate announcement if there is any material change to the above
proposed use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
–3 9 5–


--- page 405 ---
THE CORNERSTONE INVESTMENTS
We have entered into cornerstone investment agreements (each a ‘‘ Cornerstone Investment
Agreement ’’, and together the ‘‘ Cornerstone Investment Agreements ’’) with the cornerstone
investors set out below (each a ‘‘ Cornerstone Investor ’’, and together the ‘‘ Cornerstone
Investors ’’), pursuant to which the Cornerstone Investors have agreed to, subject to certain
conditions, subscribe for such number of Offe r Shares (rounded down to the nearest whole
board lot of 200 H Shares) which may be purchas ed at the Offer Price with an aggregate amount
of approximately HK$63.11 million (exclusiv e of brokerage, SFC transaction levy, AFRC
transaction levy and Stock Exchange trading fee) (the ‘‘ Cornerstone Investments ’’).
The Company is of the view that, (i) the Cornerstone Investments will ensure a reasonable
size of solid commitment at the beginning of the marketing period of the Global Offering and
will provide confidence to the market; and (ii) leveraging on the Cornerstone Investors’
background and investment experience, the Cornerstone Investments will help raise the profile
of the Company and to signify that such investors have confidence in our business and prospect.
The Cornerstone Investments will form part of the International Offering, and 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 for
by the Cornerstone Investors will rank pari passu in all respects with the fully paid H Shares in
issue following the completion of the Global Offering and to be listed on the Stock Exchange.
The Offer Shares to be subscribed for by the Cornerstone Investors will be counted towards the
public float of the Company under Rule 8.08 of the Listing Rules.
Immediately following the completion of the Global Offering, (i) none of the Cornerstone
Investors will become a substantial shareholder of the Company; (ii) none of the Cornerstone
Investors will have any Board representation in the Company solely by virtue of its cornerstone
investment; and (iii) equity interests in the Company being beneficially owned by the three
largest public Shareholders will be less than 50% for the purpose of Rule 8.08(3) of the Listing
Rules. Further, the Overall Coordinators and the Company can adjust the allocation of the
number of Offer Shares to be subscribed by the Cornerstone Investors in their sole and absolute
discretion for the purpose of satisfying Rule 8.08(3) of the Listing Rules which provides that no
more than 50% of the Shares in public hands on the Listing Date can be beneficially owned by
the three largest public Shareholders.
To the Company’s best knowledge, (i) each of the Cornerstone Investors is an Independent
Third Party; (ii) each of the Cornerstone Inves tors is independent of the other Cornerstone
Investor, the Group, its connected persons and their respective associates, and is not existing
Shareholder or close associates of the Group; (iii) none of the Cornerstone Investors is
accustomed to taking instructions from the C ompany, the Directors, the Supervisors, the
Company’s chief executive, the Controlling Shareholders, substantial Shareholders or existing
Shareholders or any of its subsidiaries or their r espective close associates in relation to the
acquisition, disposal, voting, or other dispositi on of H Shares registered in its name or otherwise
held by it; and (iv) none of the subscription for the relevant Offer Shares by the Cornerstone
Investors is financed by the Company, the Dire ctors, the Supervisors, the Company’s chief
executive, the Controlling Shareholders, substantial Shareholders or existing Shareholders or
any of its subsidiaries or their respective close associates.
CORNERSTONE INVESTORS
–3 9 6–


--- page 406 ---
As confirmed by each of the Cornerstone Investors, they made their own independent
decisions to enter into the Cornerstone Investment Agreements, and their subscriptions under
the Cornerstone Investments would be financed by their own internal resources. Except the sole
shareholder of HK Xinwei (as defined below), none of the Cornerstone Investors or their
shareholder(s) are listed on any stock exchanges. The Cornerstone Investors have also
confirmed that all necessary approvals have be en obtained with respect to the Cornerstone
Investments and that no specific approval fr om any stock exchange (if relevant), their
shareholders or other regulatory authorities is required for the Cornerstone Investments. Other
than a guaranteed allocation of the relevant Offer Shares at the Offer Price, the Cornerstone
Investors do not have any preferential right s in the Cornerstone Investment Agreements
compared with other public Shareholders. Other than the Cornerstone Investment Agreements,
there are no side agreements or arrangements between us 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 guara nteed allocation of th e relevant Offer Shares at the Offer Price.
The consideration of the Cornerstone Investments will be settled by the Cornerstone Investors
before the Listing Date.
The total number of Offer Shares to be subscribed for by the Cornerstone Investors under
the Cornerstone Investments may be affected by reallocation of the Offer Shares between the
International Offering and the Hong Kong Public Offering in the event of over-subscription
under the Hong Kong Public Offering, as described in the paragraphs headed ‘‘Structure of the
Global Offering — The Hong Kong Public Offering — Reallocation and Clawback’’ in this
prospectus. The number of Offer Shares to be acquired by each Cornerstone Investor may be
deducted on a pro rata basis in accordance with the terms of the Cornerstone Investment
Agreements to satisfy the public demands under the Hong Kong Public Offering, after taking
into account the requirements under Appendix F1 to the Listing Rules as well as the discretion
of the Overall Coordinators (for themselves and on behalf of the International Underwriters) to
exercise the Over-allotment Option. Details of t h ea c t u a ln u m b e ro fO f f e rS h a r e st ob ea l l o c a t e d
to each of the Cornerstone Investors will be disclosed in the allotment results announcement to
be issued by the Company on or around May 6, 2025.
Pursuant to the Cornerstone Investment Agreements, the Company and the Overall
Coordinators (for themselves and on behalf of the International Underwriters) have the
discretion to effect a delayed delivery of the Offer Shares to be subscribed for by each of the
Cornerstone Investors on a date later than the L isting Date, subject to the conditions contained
therein. Such delayed delivery arrangement is in place to facilitate the o ver-allocation in the
International Offering. There w ill be no delayed delivery if ther e is no over-allocation in the
International Offering. Where delayed delivery takes place, (i) there would be delayed delivery
of Offer Shares to some of the Cornerstone Investors based on commercial negotiations with the
Cornerstone Investors; (ii) the d elayed delivery date should be no l ater than three business days
following the last day on which the Over-allotment Option may be exercised; (iii) no extra
payment will be made to the relevant Cornerstone Investors for the purpose of the delayed
delivery arrangement; and (iv) each of the Co rnerstone Investors has agreed that it shall
nevertheless pay for the relevant Offer Shares at or before 8 : 00 a.m. on the Listing Date. As
such, there will not be any deferred settlemen t in payment by the Cornerstone Investors. The
maximum number of Offer Shares that could be subject to the delayed delivery arrangement is
the maximum number of H Shares to be allotted under the Over-allotment Option, i.e. 1,950,000
H Shares. For details of the Over-allotment O ption and the stabilization action by the
CORNERSTONE INVESTORS
–3 9 7–


--- page 407 ---
Stabilizing Manager, please refer to the paragraphs headed ‘‘Structure of the Global Offering —
Over-allotment Option’’ and ‘‘Structure of the Global Offering — Stabilization’’ in this
prospectus, respectively.
The table below sets out details of the Cornerstone Investments:
Based on the Offer Price of HK$18.0
Assuming the
Over-allotment Option
is not exercised
Assuming the
Over-allotment Option
is fully exercised
Cornerstone Investor
Subscription
amount
Number of
Offer Shares
to be
acquired (4)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
HK Xinwei
(as defined below)
HK$38.5
million (1) 2,117,400 16.29% 0.56% 14.16% 0.55%
Changfeng Fund
(as defined below)
HK$25.0
million (2) 1,388,800 10.68% 0.37% 9.29% 0.36%
Total
HK$63.5
million (3) 3,506,200 26.97% 0.92% 23.45% 0.92%
Notes:
(1) Inclusive of brokerage, SFC transaction levy, AFRC transaction levy and the Stock Exchange trading fee.
(2) Exclusive of brokerage, SFC transaction levy, AFRC transaction levy and the Stock Exchange trading fee.
(3) The aggregate amount that will be used to purchase the Offer Shares at the Offer Price is approximately
HK$63.11 million (exclusive of brokerage, SFC tran saction levy, AFRC transaction levy and Stock
Exchange trading fee).
(4) Rounded down to the nearest whole board lot of 200 H Shares.
THE CORNERSTONE INVESTORS
The information about our Cornerstone Inves tors set forth below has been provided by the
Cornerstone Investors in connection w ith the Cornerstone Investments.
HK XINWEI
HongKong Xinwei Electronic Co., Limited ( 香港欣威電子有限公司)( ‘ ‘HK Xinwei ’’) is a
limited company incorporated under the laws o f Hong Kong in November 2008 and is primarily
engaged in the sales of electronic products and the procurement of raw materials. As of the
Latest Practicable Date, HK Xinwei was wholly owned by Sunwoda Electronic Co., Ltd. ( 欣旺
達電子股份有限公司)( ‘ ‘Sunwoda Electronic ’’), a company listed on the Shenzhen Stock
Exchange (stock code: 300207) and primarily f ocusing on the lithium-ion battery industry.
The Company became acquainted with HK Xinwei in its ordinary course of business through
the Company’s business network.
CORNERSTONE INVESTORS
–3 9 8–


--- page 408 ---
Changfeng Fund
Changfeng Growth Equity Fund OFC ( 長風成長股票開放式基金型公司)( ‘ ‘Changfeng
Fund ’’) is a private open-ended fund company established in Hong Kong in August 2024 as
an umbrella fund governed by the SFO, which is primarily engaged in equity investment. The
investment manager of Changfeng Fund is Changfeng Asset Management Limited ( 長風資產管
理有限公司)( ‘ ‘Changfeng Asset ’’), a company established in Hong Kong in 2018 and licensed by
the SFC to carry on Type 4 (Advising on Securiti es) and Type 9 (Asset Management) regulated
activities in Hong Kong. As of the Latest Practi cable Date, Changfeng Asset was wholly owned
by Changfeng Financial Holdings Limited ( 長風金融控股有限公司), an Independent Third
Party. To the Company’s best knowledge, the sub-fund under Changfeng Fund that will
participate in the Global Offering has seven investors as its limited partners. Save as Yanlin Co.,
Limited, which is directly wholly owned by Pan Beilin ( 潘碚林) and holds more than 30% of the
interest in the sub-fund, none of the remaining investors holds 30% or more than 30% of the
interest in the sub-fund. The Company became acquainted with Changfeng Fund through the
introduction of the Underwriters, and did not have any prior relationship with Changfeng
Fund.
CLOSING CONDITIONS
The subscription obligation of each of the Cornerstone Investors under the Cornerstone
Investment Agreements is subject to, among other things, the following closing conditions (as
t h ec a s em a yb e ) :
(a) the underwriting agreements for the Hong Ko ng Public Offering and the International
Offering being entered into and having become effective and unconditional (in
accordance with their respective original t erms or as subsequently waived or varied by
agreement of the parties thereto) by no later than the time and date as specified in
these underwriting agreements, and neither of the aforesaid underwriting agreements
having been terminated;
(b) the Offer Price having been agreed upon between the Company and the Overall
Coordinators (for themselves and on behalf of the underwriters of the Global
Offering);
(c) the Listing Committee of the Stock Exchange having granted the Listing of, and
permission to deal in, the H Shares (including the H Shares subscribed for by each of
the Cornerstone Investors) 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;
(d) no laws shall have been enacted or promu lgated by any governmental authority which
prohibits the consummation of the transactions contemplated in the Global Offering
or in the Cornerstone Investment Agreements and there shall be no orders or
injunctions from a court of competent jurisdiction in effect precluding or prohibiting
consummation of such transactions; and
CORNERSTONE INVESTORS
–3 9 9–


--- page 409 ---
(e) the respective representations, warranties, undertakings, acknowledgements and
confirmations of each of the Cornerstone Investor under the Cornerstone
Investment Agreements are accurate and complete in all respects and not
misleading or deceptive and that there is no material breach of such Cornerstone
Investment Agreements on the part of the Cornerstone Investors.
RESTRICTIONS ON DISPOSALS B Y THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed th at it will not, whether directly or indirectly,
at any time during the period of nine months from the Listing Date (the ‘‘ Lock-up Period ’’),
dispose of any of the Offer Shares they have subscr ibed for pursuant to the relevant Cornerstone
Investment Agreements, save for in certain limite d circumstances, such as transfers to any of its
wholly-owned subsidiaries which will be bound by the same obligations of such Cornerstone
Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
–4 0 0–


--- page 410 ---
HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
CMB International Capital Limited
CCB International Capital Limited
China Galaxy International Securi ties (Hong Kong) Co., Limited
Citrus Securities Limited
TradeGo Markets Limited
SPDB International Capital Limited
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis. The International Offeri ng is expected to be fully underwritten by the
International Underwriters.
The Global Offering comprises the Hong Kong Public Offering of initially 1,300,000 Hong
Kong Offer Shares and the International Offering of initially 11,700,000 International Offer
Shares, subject, in each case, to reallocation on the basis as described in the section headed
‘‘Structure of the Global Offering’’ in this prospectus as well as to the Over-allotment Option (in
the case of the International Offering).
HONG KONG UNDERWRITING ARRANGEMENTS
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agr eement, our Company is offering initially
1,300,000 Hong Kong Offer Shares for subscription by the public in Hong Kong at the Offer
Price on and subject to the terms and conditions of this prospectus.
Subject to (a) the Stock Exchange granting approval for the listing of, and permission to
deal in, the H Shares to be issued and sold pursuant to the Global Offering (including any
additional H Shares which may be issued and/or sold pursuant to the exercise of the
Over-allotment Option) as mentioned herein and such approval not having been withdrawn, and
(b) to certain other conditions set out in the Hong Kong Underwriting Agreement, the Hong
Kong Underwriters have agreed severally and not jointly to subscribe or procure subscriptions
for their respective applicable proportions of the Hong Kong Offer Shares now being offered
but which are not taken up under the Hong Kong Public Offering on the terms and conditions
set out in this prospectus and the Hong Kong Underwriting Agreement. The Hong Kong
Underwriting Agreement is conditional on, among other things, the International Underwriting
Agreement having been executed and becoming unconditional and not having been terminated
in accordance with its terms.
UNDERWRITING
–4 0 1–


--- page 411 ---
Grounds for Termination
The Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters) shall be entitled by giving written notice to us to terminate the Hong
Kong Underwriting Agreement with immediate effect if any of the events set out below occur
p r i o rt o8 : 0 0a . m .o nt h eL i s t i n gD a t e :
(a) there shall develop, occur, exist or come into effect:
(i) any event, or series of events, or circumstance in the nature of force majeure
(including, without limitation, any acts of government, declaration of a national
or international emergency or war, ca lamity, crisis, epidemic, pandemic,
large-scale outbreak, escalation, mutation or aggravation of diseases
(including, without limitation, COVID- 19, Severe Acute Respiratory Syndrome
(SARS), swine or avian flu, H5N1, H1 N1, H7N9, Ebola virus, Middle East
respiratory syndrome and such related/mutated forms and the escalation of such
disease, but excluding such epidemic, pandemic and infectious disease subsisting
as of the date of the Hong Kong Underwriting Agreement which have not
materially escalated thereafter), strikes, lock-outs, fire, explosion, flooding,
tsunami, earthquake, volcanic eruption, civil commotion, riots, rebellion, public
disorder, acts of war, outbreak or escalation of hostilities (whether or not war is
declared), acts of God, or acts of terrorism (whether or not responsibility has
been claimed), paralysis in government operations, interruptions or delays in
transportation in or directly affectin g Hong Kong, the PRC or the United States
(each a ‘‘Relevant Jurisdiction’’ and coll ectively, the ‘‘Relevan t Jurisdictions’’);
or
(ii) any change or development involvin g a prospective change, or any event or
circumstances likely to result in any change or development involving a
prospective change, in any national or international financial, economic,
political, military, industrial, legal, fiscal, regulatory, or market conditions
(including, without limitation, conditions in the stock and bond markets, money
and foreign exchange mark ets, the interbank markets and credit markets) in or
directly affecting any of the Relevant Jurisdictions; or
(iii) 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
York Stock Exchange, the NASDAQ Global Market, the Shanghai Stock
Exchange or the Shenzhen Stock Exchange; or
(iv) any general moratorium on commercial banking activities in any of the Relevant
Jurisdictions (declared by the relevant com petent authority) or any disruption in
commercial banking or foreign exchang e trading or securities settlement or
clearance services, procedures or matters in or directly affecting any of the
Relevant Jurisdictions; or
(v) any new laws or any change in existing laws, in each case, in or affecting any of
the Relevant Jurisdictions; or
UNDERWRITING
–4 0 2–


--- page 412 ---
(vi) the imposition of economic sanctions in whatever form, directly or indirectly, by,
or for, any of the Relevant Jurisdictions; or
(vii) any change or development involvin g a prospective change or amendment in or
affecting taxation or foreign exchange control, currency exchange rates or
foreign investment regulations (including, without limitation, a material
devaluation of the United States dollar, the Hong Kong dollar or RMB
against any foreign currencies, a change in the system under which the value of
the Hong Kong dollar is linked to that of the United States dollar), or the
implementation of any exchange control, in any of the Relevant Jurisdictions or
affecting an investment in the Offer Shares; or
(viii) any litigation or claim of any third party, regulatory or administrative or
investigative action being threaten ed, instigated or announced against any
member of the Group or any Director or Supervisors; or
(ix) the chairman, chief executive officer, any Director, Supervisor or any other
member of senior management of the Company vacating his or her office; or
(x) a contravention by any member of the Group or any Director of the Listing
Rules or any applicable laws; or
(xi) a prohibition on the Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares (including any additional H Shares that
may be issued or sold pursuant to the exercise of the Over-allotment Option)
pursuant to the terms of the Global Offering; or
(xii) any non-compliance of this prospectus (or any other documents used in
connection with the contemplated offer and sale of the Offer Shares), the
CSRC Filings (as defined in the Hong Kong Underwriting Agreement) or any
aspect of the Global Offering with the L isting Rules, the CSRC Rules or any
other applicable laws; or
(xiii) other than with the prior written consent of the Joint Sponsors, the issue or
requirement to issue by our Company of any supplement or amendment to this
prospectus (or to any other documents in connection with the offer and sale of
the Offer Shares) pursuant to the Companies Ordinance or the Companies
(Winding Up and Miscellaneous Provisions) Ordinance or the Listing Rules or
upon any requirement or request of the Stock Exchange, the SFC and/or the
CSRC; or
(xiv) any order or petition for the winding up of any member of our Group or any
composition or arrangement made by any member of our Group with its
creditors or a scheme of arrangement e ntered into by any member of our Group
or any resolution for the winding-up of any member of our Group or the
appointment of a provisional liquidato r, receiver or manager over all or part of
the material assets or undertaking of any member of our Group or anything
analogous thereto occurring in respect of any member of our Group,
UNDERWRITING
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which, individually or in the aggregate, in the sole and absolute opinion of the Joint
Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters):
(A) has or will have or may have a Material Adverse Change (as defined in the Hong
Kong Underwriting Agreement); or
(B) has or will have or may have a material adverse effect on the success of the
Global Offering or the level of applications of the Offer Shares under the Hong
Kong Public Offering or the level of inte rest under the International Offering; or
(C) makes or will make or may make it inadvisable, inexpedient or impracticable for
the Global Offering to proceed or to mark et the Global Offering or the delivery
or distribution of the Offer Shares on the terms and in the manner contemplated
by the Offering Documents (as defined in the Hong Kong Underwriting
Agreement); or
(D) has or will have 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 has come to the notice of the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters):
(i) any statement contained in this prospectus, the CSRC Filings and/or in any
notices, announcements, advertisements, communications or other documents
issued by or on behalf of our Company in connection with the Hong Kong Public
Offering (including any supplement or amendment thereto) was, when it was
issued, untrue, incorrect, inaccurate , incomplete in any material respects,
deceptive, or misleading in any respect, unless such untrue, incorrect,
inaccurate or misleading statement has been properly rectified by our
Company in a timely manner, or that any f orecast, estimate, expression of
opinion, intention or expectation contained in this prospectus and/or any
notices, announcements, advertisements, communications or other documents
issued by or on behalf of our Company in connection with the Hong Kong Public
Offering (including any supplement or amendment thereto) is not fair and honest
and based on reasonable grounds or reasonable assumptions, when taken as a
whole; or
(ii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute an omission
from, or misstatement in, any of the Offering Documents, any notices,
announcements issued by or on behalf of the Company in connection with the
Hong Kong Public Offering and/or the CSRC Filings; or
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--- page 414 ---
(iii) any breach of any of the obligations imposed upon any party to the Hong Kong
Underwriting Agreement or the International Underwriting Agreement (other
than upon any of the Hong Kong Underwriters or the International
Underwriters), as applicable; or
(iv) any event, act or omission which gives or is likely to give rise to any liability of
any of the Indemnifying Parties (as defined under the Hong Kong Underwriting
Agreement) pursuant to clause 12 of th e Hong Kong Underwriting Agreement;
or
(v) any breach of, or any event or circums tance rendering untrue or incorrect or
misleading in any respect, any of the warranties as defined under the Hong Kong
Underwriting Agreement; or
(vi) any Material Adverse Change; or
(vii) the approval by the Listing Committe eo ft h el i s t i n go f ,a n dp e r m i s s i o nt od e a l
in, the H Shares to be issued or sold (including any additional H Shares that may
be issued or sold pursuant to the exercise of the Over-Allotment Option) under
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
(viii) any expert specified in this prospectus (other than any of the Joint Sponsors),
whose consent is required for the issue of this prospectus with the inclusion of its
reports, letters or opinions and references to its name included in the form and
context in which it respectively appears, has withdrawn its consent to the issue of
this prospectus with the inclusion of its reports, letter 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
(ix) that our Company withdraws this prospectus (and/or any other documents
issued or used in connection with the Global Offering) or the Global Offering; or
(x) a material portion of the orders placed or confirmed in the book building
process, or of the investment commitments made by any cornerstone investors
under agreements signed with such cornerstone investors, have been withdrawn,
terminated or cancelled, or any Cornerstone Investment Agreement is
terminated.
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UNDERTAKINGS TO THE STOCK EXCHANGE PURSUANT TO THE LISTING RULES
Undertakings by Our Company
Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange
that, no further Shares or securities convertible into equity securities of our Company (whether
or not of a class already listed) shall be issued or form the subject of any agreement to such issue
within six months from the Listing Date (whether or not such issue of Shares or securities will be
completed within six months from the Listing Date), except for the issue of Shares or securities
pursuant to the Global Offering (including any exercise of the Over-allotment Option) or under
any of the circumstances provided under Rule 10.08 of the Listing Rules.
Undertakings by our Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, each of the Controlling Shareholders has
undertaken to the Stock Exchange and to us that, except pursuant to the Global Offering
(including the Over-allotment Option), it/he/she will not, and shall procure that the relevant
registered holder(s) shall not, without the prior written consent of the Stock Exchange or unless
otherwise in compliance with the applicable requirement of the Listing Rules:
(a) in the period commencing on the date by r eference to which disclosure of it/his/her
shareholding in our Company is made in this prospectus and ending on the date which
is six months from the Listing Date, dispose of, nor enter into any agreement to
dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the Shares in respect of which any of the Controlling Shareholders is
shown by this prospectus to be the beneficia l owner (the ‘‘Relevant Securities’’); or
(b) in the period of a further six months commencing on the date on which the period
referred to in paragraph (a) above expires, dispose of, nor enter into any agreement to
dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the Relevant Securities if, immediately following such disposal or
upon the exercise or enforcement of such options, rights, interests or encumbrances,
it/he/she will cease to be a controlling shareholder (as defined in the Listing Rules) of
our Company or a member of the group of controlling shareholders of our Company
or would together with the other Controlling Shareholders cease to be controlling
shareholders of our Company.
Note 2 to Rule 10.07(2) of the Listing Rules provides that Rule 10.07 does not prevent any
of the Controlling Shareholders from using any of the Relevant Securities as security (including
a charge or pledge) in favor of an authorized institution (as defined in the Banking Ordinance
(Chapter 155 of the Laws of Hong Kong, the ‘‘Banking Ordinance’’)) for a bona fide commercial
loan.
UNDERWRITING
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Further, pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, each of the Controlling
Shareholders has further undertaken to the Sto ck Exchange and to us that, within the period
commencing from the date by reference to which d isclosure of its shareholdings in our Company
is made in this prospectus and ending on the da te which is 12 months from the Listing Date,
it/he/she will:
(a) upon pledging or charging any of the Relevant Securities in favor of an authorized
institution (as defined in the Banking Ordinance) for a bona fide commercial loan
pursuant to Note (2) to Rule 10.07(2) of the Listing Rules, immediately inform us of
such pledge or charge together with the number of the Relevant Securities so pledged
or charged; and
(b) upon receiving indica tions, either verbal or written, from the pledgee or chargee that
any of the pledged or charged securities will be disposed of, immediately inform us of
such indications.
In accordance with Note 3 to Rule 10.07(2) of the Listing Rules, we will inform the Stock
Exchange as soon as we have been informed of the above matters (if any) by any of the
Controlling Shareholders, and will disclose such matters in accordance with the publication
requirements under Rule 2.07C of the Listing Rules as soon as possible after being so informed.
UNDERTAKINGS PURSUANT TO THE HON G KONG UNDERWRITING AGREEMENT
Undertaking by Our Company
We have also undertaken to each of the Joint Sponsors, 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, issue and sale of
the Offer Shares pursuant to the Global Offering (including pursuant to any exercise of the
Over-allotment Option), during the period commencing on the date of the Hong Kong
Underwriting Agreement and ending on, and including, the date that is six months after the
Listing Date (the ‘‘First Six-Month Period’’), we will not without the prior written consent of the
Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) and unless in compliance with the requirements of the Listing Rules and only
after the consent of any relevant PRC Authority (if so required) has been obtained:
(a) 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 subscr ibe for or purchase, grant or purchase any
option, warrant, contract or right to allot, issue or sell, or otherwise transfer or
dispose of or create an Encumbrance (as defined in the Hong Kong Underwriting
Agreement) over, or agree to transfer or di spose of or create an Encumbrance over,
either directly or indirectly, conditional ly or unconditionally, any H Shares or other
equity securities of our Company and our major subsidiaries (as set out in section
UNDERWRITING
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headed ‘‘History, Development and Corporate Structure’’) (except that the lock-up
restriction in the Hong Kong Underwriting Agreement shall not restrict the allotment
or issue, the offer to allot or issue, or the c ontract or agreement to allot or issue, of
shares or equity interest for financing purpose by the major subsidiaries), or any
interest in any of the foregoing (including, without limitation, any securities
convertible into or exchangeable or exerc isable for, or that represent the right to
receive, or any warrants or other rights to purchase, any H Shares or other equity
securities of our Company and our major subsidiaries), or deposit any H Shares or
other equity securities of our Company and our major subsidiaries, 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 economic consequences of ownership of any H Shares or other equity
securities of our Company and our major subsidiaries or any interest in any of the
foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for, or repre sent the right to receive, or any warrants
or other rights to purchase, any H Shares or other equity securities of our Company
and our major subsidiaries); or
(c) enter into any transaction with the same economic effect as any transaction specified
in paragraphs (a) or (b) above; or
(d) offer to or agree to or announce any intention to effect any transaction specified in
paragraphs (a), (b) or (c) above,
in each case, whether any of the transactions speci fied in paragraphs (a), (b) or (c) above is to be
settled by delivery of the H Shares or other equity securities of our Company and our major
subsidiaries, or in cash or otherwise (whether or not the issue of such H Shares or other equity
shares or securities of our Company and our major subsidiaries will be completed within the
First Six-Month Period).
We have further undertaken that, in the event that, during the period of six months
commencing on the date on which the First Six-Month Period expires (the ‘‘Second Six-Month
Period’’), we enter into any of the transactions specified in paragraphs (a), (b) or (c) above or
offer to or agree to or announce any intention to effect any such transaction, we will take all
reasonable steps to ensure that such agreement or announcement (as the case maybe) will not
create a disorderly or false market in the Shares of our Company.
Each of the Controlling Shareholders has und ertaken to each of the Joint Sponsors, the
Overall Coordinators, the Joint Global Coordin ators, the Joint Bookrunners, the Joint Lead
Managers, the Hong Kong Underwriters and the Capital Market Intermediaries to procure us to
comply with the undertakings above.
UNDERWRITING
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Undertaking by the Controlling Shareholders
Each of the Controlling Shareholders has jointly and severally undertaken to each of our
Company, the Joint Sponsors the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital
Market Intermediaries that, without the prior written consent of the Joint Sponsors and the
Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and except
pursuant to the Global Offering (including pursuant to the Over-allotment Option) or permitted
by Note 2 and 3 to Rule 10.07 of the Listing Rules or using his/its interests in our Company in
any way that is permitted by the Listing Rules and only after the consent of any relevant PRC
Authority (as defined in the Hong Kong Underwriting Agreement) (if so required) has been
obtained it/he will not, and will procure that the relevant registered holder(s), any nominee or
trustee holding on trust for it/him and the companies controlled by it/him will not, at any time
during the First Six-Month Period:
(a) sell, offer to sell, contract or agree to se ll, 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, grant or agree to grant any
option, right or warrant to purchase or subscribe for, lend or otherwise transfer or
dispose of or create an Encumbrance (as defined in the Hong Kong Underwriting
Agreement) over, or agree to transfer or di spose of or create an Encumbrance over,
either directly or indirectly, conditionally or unconditionally, any Shares or other
equity securities of our Company or any legal or beneficial interests therein (including
any securities convertible into or exchange able or exercisable for or that represent the
right to receive, or any warrants or other rights to purchase, any Shares (the
‘‘Locked-up Securities’’)), or deposit any Shares or other equity 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 economic consequences of ownership of any Locked-up Securities; or
(c) enter into any transaction with the same economic effect as any transaction specified
in paragraphs (a) or (b) above; or
(d) offer to or agree to or announce any intention to effect any transaction specified in
paragraphs (a), (b) or (c) above,
in each case, whether any of the transactions speci fied in paragraphs (a), (b) or (c) above is to be
settled by delivery of Shares or other securities of our Company, in cash or otherwise (whether
or not the settlement or delivery of such Shares or other securities will be completed within the
First Six-Month Period).
Further, each of the Controlling Shareholders has jointly and severally undertaken to each
of our Company, the Joint Sponsors, the Overall C oordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital
Market Intermediaries that it/he will not, during the Second Six Month Period, enter into any of
the transactions specified in paragraphs (a), (b ) or (c) above or offer to or agree to contract to or
publicly announce any intention to effect any such transaction if, immediately following any
sale, transfer or disposal or upon the exercise or enforcement of any option, right, interest or
UNDERWRITING
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Encumbrance pursuant to such transaction, it/he will cease to be a controlling shareholder of
the Company or a member of a group of the controlling shareholders of the Company or would
together with the other controlling shareholders cease to be ‘‘controlling shareholders’’ of the
Company.
Until the expiry of the Second Six-Month period, in the event that any of the Controlling
Shareholders has entered into any of transaction specified in paragraphs (a), (b) or (c) above or
offers to or agrees to or announces any intention to effect any such transaction, it/he will take
all reasonable steps to ensure that it/he will not create a disorderly or false market in the
securities of our Company.
The above undertakings by the Controlling Shareholders do not prevent it/him/her from
using the Shares or other securities of our Company beneficially owned by it/him/her as security
(including a charge or a pledge) in favor of an authorized institution (as defined in the Banking
Ordinance) for a bona fide commercial loan, provided that at any time during the First
Six-Month Period and the Second Six-Month Period:
(a) upon pledging or charging any Shares or other securities of our Company beneficially
owned by it/him in favor of an authorized institution (as defined in the Banking
Ordinance) for a bona fide commercial loan, it/he shall immediately inform us, the
Joint Sponsors and the Overall Coordinators in writing of such pledge or charge
together with the number of Shares or other securities (or interest therein) of our
Company so pledged or charged; and
(b) upon receiving indications, either verbal or written, from any pledgee or chargee that
any of the pledged or charged Shares or othe r securities (or interest therein) of our
Company will be disposed of, it/he shall immediately inform us, the Joint Sponsors
and the Overall Coordinators in writing of such indications.
Indemnity
We and the Controlling Shareholders have each jointly and severally agreed to indemnify,
among others, each of the Joint Sponsors, 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 or incur in
connection with, among others, the Global Offering.
INTERNATIONAL OFFERING
International Underwriting Agreement
In connection with the International Offering, it is expected that we will enter into the
International Underwriting Agreement with, among others, the International Underwriters.
Under the International Underwriting Agreement and subject to the Over-allotment Option and
certain conditions set out therein, the International Underwriters, will agree severally and not
jointly to purchase, or procure subscribers or purchasers for, the International Offer Shares
being offered pursuant to the International Offering.
UNDERWRITING
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It is expected that the International Underwri ting Agreement may be terminated on similar
grounds as the Hong Kong Underwriting Agreement. Potential investors should note that in the
event that the International Underwriting Agr eement is not entered into, the Global Offering
will not proceed. See the section headed ‘‘Structu re of the Global Offering — The International
Offering.’’
Over-allotment Option
We expect to grant the Over-allotment Option to the International Underwriters,
exercisable by the Overall Coordinators on behalf of the International Underwriters at any
time from the date of the International Underwri ting Agreement until 30 days after the last day
for lodging applications under the Hong Kong Public Offering, to require us to issue and allot,
up to an aggregate of additional 1,950,000 H Share s, representing in aggregate approximately
15% of the Offer Shares initially available unde r the Global Offering at the Offer Price to cover
over-allocations, if any, in the International Offering. Please refer to the paragraph headed
‘‘Structure of the Global Offering — Over-allotment Option’’ in this prospectus.
COMMISSION AND EXPENSES
Total Commission and Expense
All Capital Market Intermediaries particip ating in the Global Offering will receive an
aggregate underwriting commission of a fixed fee (‘‘Fixed Fee’’) of 14.23% of the aggregate
proceeds from the Global Offering (excluding any proceeds from the exercise of any
Over-allotment Option) (‘‘Gross Proceeds’ ’). In addition, our Company may, at its sole
discretion, pay to all Capital Market Intermediaries an aggregate incentive fee (‘‘Discretionary
Fee’’) of up to 6.66% of the Gross Proceeds. Assuming the Discretionary Fee is paid in full, the
ratio of Fixed Fee and Discretionary Fee pa yable is approximately 68.1%: 31.9%. For
unsubscribed Hong Kong Offer Shares reallocated to the International Offering, we will pay an
underwriting commission at the rate applicab le to the International Offering and such
commission will be paid to the relevant International Underwriters and not the Hong Kong
Underwriters.
Assuming the Over-allotment Option is not ex ercised at all and based on the Offer Price of
HK$18.0 per Offer Share, the aggregate underwrit ing commissions and fees, together with the
listing fees, SFC transaction levy, the Stock Exc hange trading fee, AFRC tr ansaction levy, legal
and other professional fees, printing and other expenses payable by us relating to the Global
Offering are estimated to amount to ap proximately HK$86.2 million in total.
Joint Sponsors’ Fee
The aggregate amount of sponsor fee payable by us to the Joint Sponsors is US$1,000,000.
ACTIVITIES BY SYNDICATE MEMBERS
The Hong Kong Underwriters and International Underwriters (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 or stabilizing process.
UNDERWRITING
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The Syndicate Members and their affiliates ar e diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of commercial
and investment banking, brokerage, funds man agement, 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 Memb ers and their respective a ffiliates may purchase,
sell or hold a broad array of investments and acti vely 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, secu rities and/or instruments of 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 the Shares, the activities of the Syndicate Members and their affiliates could
include acting as agent for buyers and sellers of the Shares, entering into transactions with those
buyers and sellers in a principal capacity, including as a lender to initial purchasers of the Shares
(which financing may be secured by the Shares) i n the Global Offering, proprietary trading in
the Shares, and entering into over the counter or listed derivative transactions or listed or
unlisted securities tran sactions (including issuing securities such as derivative warrants listed on
a stock exchange) which have as their underly ing assets, assets including the Shares. Such
transactions may be carried out as bilateral agree ments or trades with selected counterparties.
Those activities may require hedging activity by tho se entities involving, di rectly or indirectly,
the buying and selling of the Shares, which may have a negative impact on the trading price of
the Shares. All such activities could occur in Hong Kong and elsewhere in the world and may
result in the Syndicate Members and their affiliates holding long and/or short positions in the
Shares, in baskets of securities or indices including the Shares, in units of funds that may
purchase the Shares, or in derivatives related to any of the foregoing.
In relation to issues by Syndicate Members or th eir affiliates of any lis ted securities having
the Shares as their underlying securities, whe ther on the Stock Exchange or on any other stock
exchange, the relevant rules of the exchange ma y require the issuer of those securities (or one of
its affiliates or agents) to act as a market maker o r liquidity provider in the security, and this
will also result in hedging activity in the Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period
described in the section headed ‘‘Structure of the Global Offering’’ in this prospectus. Such
activities may affect the market price or value of the Shares, the liquidity or trading volume in
the Shares and the volatility of their share price, 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 (other than the Stabilizing Manager or any person acting for
it) must not, in connection with the distribution of the Offer Shares, effect any
transactions (including issuing or entering into any option or other derivative
transactions relating to the Offer Shares) whether in the open market or otherwise,
with a view to stabilizing or maintaining the market price of any of the Offer Shares at
levels other than those which might otherwise prevail in the open market; and
UNDERWRITING
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(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 res pective affiliates have, from time to time,
provided and expect to provide in the future investment banking and other services to our
Company and our respective affiliates, for whic h such Syndicate Members or their respective
affiliates have received or will recei ve customary fees and commissions.
HONG KONG UNDERWRITERS’ INTERESTS IN OUR COMPANY
Save as disclosed in this prospectus, and save for its obligations under the Hong Kong
Underwriting Agreement, as of the Latest Practicable Date, none of the Hong Kong
Underwriters has any shareholding in any member of our Group or any right or option
(whether legally enforceable or not) to purchase or subscribe for or to nominate persons to
purchase or subscribe for securities in any member of our Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement and/or the International
Underwriting Agreement.
JOINT SPONSORS’ INDEPENDENCE
Each of the Joint Sponsors satisfies the independence criteria set out in Rule 3A.07 of the
Listing Rules.
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:
(i) the Hong Kong Public Offering of 1,300, 000 Offer Shares in Hong Kong as described
below in the paragraph headed ‘‘— The Hong Kong Public Offering’’; and
(ii) the International Offering of an aggregat e of initially 11,700,000 Offer Shares outside
t h eU n i t e dS t a t e si nr e l i a n c eo nR e g u l a t i o nSo ro t h e ra v a i l a b l ee x e m p t i o nf r o m ,o ri n
transactions not subject to, the registration requirements of the U.S. Securities Act.
At any time from the date of the International Underwriting Agreement until 30 days
after the last day for the lodging of applications under the Hong Kong Public
Offering, the Overall Coordinators, as representatives of the International
Underwriters, have an option to require us to issue and allot up to 1,950,000
additional Offer Shares, representing 15% of the initial number of O f f e rS h a r e st ob e
offered in the Global Offering, at the Offer Price to, among other things, cover
over-allocations in the International Offering, if any. If the Over-allotment Option is
exercised in full, the additional Offer Shares will represent approximately 0.5% of our
Company’s enlarged share capital immediately following the completion of the Global
Offering and the exercise of the Over-al lotment Option. In the event that the
Over-allotment Option is exercised, a press announcement will be made.
Investors may apply for Offer Shares under the Hong Kong Public Offering or apply for or
indicate an interest for Offer Shares under the International Offering, but may not do both.
The Offer Shares will represent approximatel y 3.4% of the enlarged issued share capital of
our Company immediately after completion of the Global Offering without taking into account
the exercise of the Over-allotment Option. If the Over-allotment Option is exercised in full, the
Offer Shares will represent approximately 3.9% o f the enlarged issued share capital immediately
after completion of the Global Offering and the exercise of the Over-allotment Option, as set
out in the paragraph headed ‘‘— The International Offering — Over-allotment Option’’ below.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering may be subject to reallo cation as described in the paragraph headed ‘‘—
The Hong Kong Public Offering — Reallocation and Clawback’’ below.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares Initially Offered
Our Company is initially offering 1,300,000 Offer Shares for subscription by the public in
Hong Kong at the Offer Price, representing 10.0% of the total number of Offer Shares initially
available under the Global Offering.
STRUCTURE OF THE GLOBAL OFFERING
–4 1 4–


--- page 424 ---
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as
to institutional and professional investors. The Hong Kong Offer Shares will represent
approximately 0.3% of our Company’s registered s hare capital immediately after completion of
the Global Offering, assuming that the Over-allotment Option is not exercised.
Professional investors generally include brokers, dealers, companies (including fund
managers) whose ordinary business involves deali ng in shares and other securities and corporate
entities which regularly invest in shares and other securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set out in the
paragraph headed ‘‘— The International Offering — Conditions of the Hong Kong Public
Offering’’ below.
Allocation
Allocation of Offer Shares to investors under the Hong Kong Public Offering will be based
solely on the level of valid applications recei ved 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 hig her allocation than others who have applied
for the same number of Hong Kong Offer Shares, an d those applicants who are not successful in
the ballot may not receive any Hong Kong Offer Shares.
The total number of Offer Shares initially available under the Hong Kong Public Offering
(after taking account of any reallocation referred to below) is to be divided equally into two
pools with any odd lots being allocated to pool A for allocation purposes. The Offer Shares in
pool A will be allocated on an equitable basis to applicants who have applied for Offer Shares
with an aggregate subscription price of HK$5 million (excluding the brokerage, SFC transaction
levy, Stock Exchange trading fee and AFRC trans action levy payable) or less. The Offer Shares
in pool B will be allocated on an equitable basis to applicants who have applied for Offer Shares
with an aggregate subscription price of more than HK$5 million (excluding the brokerage, SFC
transaction levy, Stock Exchange trading fee and AFRC transaction levy payable) and up to the
total value in pool B. Investors should be aware that applications in pool A and applications in
pool B may receive different allocation ratios. If Offer Shares in one (but not both) of the pools
are undersubscribed, the surplus Offer Shares will be transferred to the other pool to satisfy
demand in this other pool and be allocated accordingly. For the purpose of this paragraph only,
the ‘‘price’’ for Offer Shares means the price paya ble on application therefore (without regard to
the Offer Price as finally determined). Applicant s can only receive an allocation of 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 Offer Shares initially comprised in
the Hong Kong Public Offering (i.e. 650,000 Offer Shares) are liable to be rejected.
STRUCTURE OF THE GLOBAL OFFERING
–4 1 5–


--- page 425 ---
Reallocation and Clawback
The allocation of Offer Shares between the Hong Kong Public Offering and the
International Offering is subj ect to reallocation. In the even t that the International Offer
Shares are fully subscribed or ov ersubscribed, if the number of Offer Shares validly applied for
in the Hong Kong Public Offering represents (i) 15 times or more but less than 50 times, (ii) 50
times or more but less than 100 times, and (iii) 100 times or more, of the number of Hong Kong
Offer Shares initially available under the Hon g Kong Public Offering, the total number of Hong
Kong Offer Shares available under the Hong Kong Public Offering will be increased to
3,900,000, 5,200,000 and 6,500,000 Hong Kong Offe r Shares, respectively, representing 30% (in
the case of (i)), 40% (in the case of (ii)) and 50% ( in the case of (iii)), respectively, of the total
number of Offer Shares initially available under the Global Offering (before any exercise of the
Over-allotment Option). The above reallocation is being referred to in this prospectus as
‘‘Mandatory Reallocation’’. In such cases, the number of Offer Shares allocated in the
International Offering will be correspondingly reduced, in such manner as the Overall
Coordinators deem appropriate, and such additional Offer Shares will be reallocated to Pool
Aa n dP o o lB .
If the Hong Kong Offer Shares are not fully subs cribed and the International Offer Shares
are fully subscribed or oversubscribed, the Overall Coordinators have the authority to reallocate
all or any unsubscribed Hong Kong Offer Shares to the International Offering, in such
proportions as the Overall Coordinators deem appropriate. If both the Hong Kong Offer Shares
and the International Offer Shares are unders ubscribed, the Global Offering will not proceed
unless the shortfall is taken up by the Underwriters.
In addition to any Mandatory Reallocation which may be required, the Overall
Coordinators may, at their discretion, reallo cate Offer Shares initi ally allocated for the
International Offering to the Hong Kong Public O ffering to satisfy valid applications in Pool A
and Pool B under the Hong Kong Public Offering. In the event that (i) the International Offer
Shares are undersubscribed and the Hong Kong Offer Shares are fully subscribed or
oversubscribed irrespective of the number of times; or (ii) the International Offer Shares are
fully subscribed or oversubscribed and the Hong Kong Offer Shares are fully subscribed or
oversubscribed as to less than 15 times of the number of Hong Kong Offer Shares initially
available under the Hong Kong Public Offering, up to 1,300,000 Offer Shares may be
reallocated to the Hong Kong Public Offering from the International Offering, so that the total
number of the Offer Shares available under the Hong Kong Public Offering will be increased to
2,600,000 Offer Shares, representing 20% of the number of the Offer Shares initially available
under the Global Offering (before any exercise of the Over-allotment Option and in case of such
reallocation, the final Offer Price should be HK$18.0 per Offer Share as stated in this
prospectus).
Applications
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 have not applied for or taken up,
or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
Offer Shares under the International Offering, and such applicant’s application is liable to be
STRUCTURE OF THE GLOBAL OFFERING
–4 1 6–


--- page 426 ---
rejected if the said undertaking and/or confir mation is breached and/or untrue (as the case may
be) or he/she/it has been or will be placed or allocated Offer Shares under the International
Offering.
The listing of the Offer Shares on the Stock E xchange is sponsored by the Joint Sponsors.
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the Offer Price of HK$18.0 per Offer Share in addition to any
brokerage, SFC transaction levy, Stock Excha nge trading fee and AFRC transaction levy
payable on each Offer Share. Further details are set out below in the section headed ‘‘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 International Offer Shares Offered
The International Offering will consist of a n aggregate of 11,700,000 Offer Shares to be
initially offered by us, representing 90.0% of the total number of Offer Shares initially available
under the Global Offering (subject to reallocation and the Over-allotment Option).
Allocation
The International Offering will include selec tive marketing of Offer Shares to institutional
and professional investors and other investor s anticipated to have a sizeable demand for such
Offer Shares. Professional investors generally include brokers, dealers, companies (including
fund managers) whose ordinary business involve s dealing in shares and other securities and
corporate entities which regularly invest in shares and other securities. Allocation of Offer
Shares pursuant to the International Offering will be effected in accordance with the
‘‘book-building’’ process described in the paragraph headed ‘‘— The International Offering —
Pricing of the Global Offering’’ below and based on a number of factors, including the level and
timing of demand, the total size of the relevant investor’s invested assets or equity assets in the
relevant sector and whether or not it is expected that the relevant investor is likely to buy further
Offer Shares, and/or hold or sell its Offer Shares, after the listing of the Offer Shares on the
Stock Exchange. Such allocation is intended to result in a distribution of the Offer Shares on a
basis which would lead to the establishment of a solid professional and institutional shareholder
base to the benefit of our Company and our Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require
any investor who has been offered Offer Shares u nder the International Offering, and who has
made an application under the Hong Kong Public Offering to provide sufficient information to
the Overall Coordinators so as to allow them to identify the relevant application under the
Hong Kong Public Offering and to ensure that it is excluded from any application of Offer
Shares under the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
–4 1 7–


--- page 427 ---
Reallocation
The total number of Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the clawback arrangement described in the subsection headed
‘‘— The Hong Kong Public Offering — Reallocation and Clawback’’ above, the exercise of the
Over-allotment in whole or in part and/or any r eallocation of unsubscribed Offer Shares
originally included in the Hong Kong Public Offering.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, we are expected to grant an Over-allotment Option
to the International Underwriters exercisable by the Overall Coordinators on behalf of the
International Underwriters.
Pursuant to the Over-allotment Option, the Overall Coordinators have the right,
exercisable at any time from the date of the International Underwriting Agreement until 30
days after the last day for the lodging of applications under the Hong Kong Public Offering, to
require our Company to issue and allot up to 1,950,000 additional Offer Shares, representing
15% of the initial Offer Shares, at the same price per Offer Share under the International
Offering to cover, among other things, over-allo cation in the International Offering, if any, on
the same terms and conditions as the Offer Shares that are subject to the Global Offering.
If the Over-allotment Option is exercised in fu ll, the additional Offer Shares will represent
approximately 0.5% of our Company’s enlarged share capital immediately following the
completion of the Global Offering and the exercise of the Over-allotment Option. In the event
that the Over-allotment Option is exe rcised, an announcement will be made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the
securities in the secondary market, during a specified period of time, to retard and, if
possible, prevent, any decline in the market price of the securities below the Offer Price. In Hong
Kong and certain other jurisdictions, the price at which stabilization is effected is not permitted
to exceed the Offer Price.
In connection with the Global Offering, the Stabilizing Manager or any person acting for
it, on behalf of the Underwriters, may over-allocate or effect short sales or any other stabilizing
transactions with a view to stabilizing or maintaining the market price of the H Shares at a level
higher than that which might otherwise prevail in the open market. Short sales involve the sale
by the Stabilizing Manager of a greater number o f H Shares than the Underwriters are required
to purchase in the Global Offering. ‘‘Covered’’ short sales are sales made in an amount not
greater than the Over-allotment Option, if any. The Stabilizing Manager may close out the
covered short position by either exercising the Over-allotment Option to purchase additional H
Shares or purchasing H Shares in the open market. In determining the source of the H Shares to
close out the covered short position, the Stabi lizing Manager will consider, among others, the
price of H Shares in the open market as compared to the price at which they may purchase
STRUCTURE OF THE GLOBAL OFFERING
–4 1 8–


--- page 428 ---
additional H Shares pursuant to the Over-allotment Option. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or retarding a decline in the
market price of the H Shares while the Global Offering is in progress.
Any market purchases of the H Shares may be effected on any stock exchange, including
the Stock Exchange, any over-the-counter market or otherwise, provided that they are made in
compliance with all applicable laws and regulatory requirements. However, there is no
obligation on the Stabilizing Manager or any person acting for it to conduct any such stabilizing
activity, which if commenced, will be done at the ab solute discretion of the Stabilizing Manager
and may be discontinued at any time. Any such stabilizing activity is required to be brought to
an end within 30 days after the last day for the lodging of applications under the Hong Kong
Public Offering. The number of the H Shares th at may be over-allocated will not exceed the
number of the H Shares that may be sold under the Over-allotment Option, if any, namely,
1,950,000 H Shares, which is 15% of the number of Offer Shares initially available under the
Global Offering, in the event that the whole or part of the Over-allotment Option is exercised.
In Hong Kong, stabilizing activities must be carried out in accordance with the Securities
and Futures (Price Stabilizing) Rules. Stabilizing actions permitted pursuant to the Securities
and Futures (Price Stabilizing) Rules include:
(a) over-allocation for the purpose of preventing or minimizing any reduction in the
market price;
(b) selling or agreeing to sell the H Shares so as to establish a short position in them for
the purpose of preventing or minimizing any deduction in the market price;
(c) subscribing, or agreeing to subscribe, for the H Shares pursuant to the Over-allotment
Option in order to close out any position established under (a) or (b) above;
(d) purchasing, or agreeing to purchase, the H Shares for the sole purpose of preventing
or minimizing any reduction in the market price;
(e) selling the H Shares to liquidate a long position held as a result of those purchases;
and
(f) offering or attempting to do anything described in (b), (c), (d) and (e) above.
Stabilizing actions by the Stabilizing Manager, or any person acting for it, will be entered
into in accordance with the laws, rules and regulations in place in Hong Kong on stabilization.
In order to effect stabilization actions, the Sta bilizing Manager will arrange cover of up to
an aggregate of 1,950,000 H Shares, representin g up to 15% of the initial Offer Shares, through
delayed delivery arrangements with each of the Cornerstone Investors. The delayed delivery
arrangements relate only to the delay in the del ivery of the Offer Shares to such Cornerstone
Investor and the consideration for the Offer Shares allocated to such Cornerstone Investor will
be settled before the Listing Date. If such delay ed delivery arrangements are not effected, no
stabilizing actions will be undertaken by the Stabilizing Manager and the Over-Allotment
Option will not be exercised.
STRUCTURE OF THE GLOBAL OFFERING
–4 1 9–


--- page 429 ---
As a result of effecting transactions to stabilize or maintain the market price of the H
Shares, the Stabilizing Manager, or any person acting for it, may maintain a long position in the
H Shares. The size of the long position, and the period for which the Stabilizing Manager, or
any person acting for it, will maintain the long position is at the discretion of the Stabilizing
Manager and is uncertain. In the event that the St abilizing Manager liquidates this long position
by making sales in the open market, this may lead to a decline in the market price of the H
Shares.
Stabilizing action by the Stabilizing Manager, or any person acting for it, is not permitted
to support the price of the H Shares for longer than the stabilizing period, which begins on the
day on which trading of the H Shares commences on the Stock Exchange and ends on the
thirtieth day after the last day for the lodging of applications under the Hong Kong Public
Offering. The stabilizing period is expected to end on Friday, May 30, 2025. As a result, demand
for the H Shares, and their market price, may fall after the end of the stabilizing period. These
activities by the Stabilizing Manager may stab ilize, maintain or otherwise affect the market
price of the H Shares. As a result, the price of the H Shares may be higher than the price that
otherwise may exist in the open market. Any st abilizing action taken by the Stabilizing
Manager, or any person acting for it, may not necessarily result in the market price of the H
Shares staying at or above the Offer Price either during or after the stabilizing period. Bids for
or market purchases of the H Shares by the Stabilizing Manager, or any person acting for it,
may be made at a price at or below the Offer Price and therefore at or below the price paid for
the H Shares by purchasers. A public announcement in compliance with the Securities and
Futures (Price Stabilizing) Rules will be made within seven days of the expiration of the
stabilizing period.
Over-Allocation
Following any over-allocation of H Shares in connection with the Global Offering, the
Stabilizing Manager (or any person acting for it) may cover such over-allocations by exercising
the Over-allotment Option in full or in part, by using H Shares purchased by the Stabilizing
Manager (or any person acting for it) in the s econdary market at prices that do not exceed the
Offer Price or a partial exercise of the Over-al lotment Option or a combination of these means.
PRICING AND ALLOCATION
The International Underwriters will be soliciting from prospective investors indications of
interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as ‘‘book-building’’, is expected to continue up to, and to
cease on or around, the last day for lodging applications under the Hong Kong Public Offering.
The Offer Price will be HK$18.0 per Offer Share unless otherwise announced, as further
explained below, not later than the morning of the last day for lodging applications under the
Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
–4 2 0–


--- page 430 ---
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the Offer Price of HK$18.0 per Offer Share plus 1.0%
brokerage, 0.0027% SFC transaction levy, 0.0 0565% Stock Exchange trading fee and AFRC
transaction levy of 0.00015%, amounting to a total of HK$3,636.31 for one board lot of 200
Shares.
Reduction in Offer Price and/or Number of Offer Shares
The Overall Coordinators, for themselves and on behalf of the Underwriters, may, where
considered appropriate, based on the level of int erest 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 offered in the Global Offering and/or the Offer Price below
that 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 a case, our Company 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 posted on the website of the Stock Exchange (
http://www.hkexnews.hk )
and on the website of our Company ( www.breton.top) notices of the reduction. Upon issue of
such a notice, the number of Offer Shares offered in the Global Offering and/or the Offer Price
will be final and conclusive and the Offer Price, if agreed upon by the Overall Coordinators, on
behalf of the Underwriters, and our Company, will be fixed within such revised Offer Price. Our
Company will also, as soon as practicable following the decision to make such change, issue a
supplemental prospectus updating investors of the change in the number of Offer Shares being
offered under the Global Offering and/or the O ffer Price. The Global O ffering must first be
canceled and subsequently relaunched on FINI pursuant to the supplemental prospectus.
Applicants should have regard to the possibility that any announcement of a reduction in
the number of Offer Shares being offered under the Global Offering and/ or the Offer Price may
not be made until the day which is the last day for lodging applications under the Hong Kong
Public Offering. Such notice will also include confirmation or revision, as appropriate, of the
Global Offering statistics as currently set out in this prospectus, and any other financial
information which may change as a result of such reduction. In the absence of any such notice
so published, the Offer Price, if agreed upon with our Company and the Overall Coordinators,
for themselves and on behalf of the Underwriters, will under no circumstances be set outside the
Offer Price as stated in this prospectus. Howev er, if the number of Offer Shares and/or the Offer
Price is reduced, applicants under the Hong Kong Public Offering will be entitled to withdraw
their applications unless positive confirma tions from the applicants to proceed are received.
In the event of a reduction in the number of Offer Shares being offered under the Global
Offering, the Overall Coordinators (for thems elves and on behalf of the Underwriters) may at
their discretion reallocate the number of Offer Shares to be offered under the Hong Kong Public
Offering and the International Offering in accordance with Chapter 4.14 of the Guide for New
Listing Applicants published by the Stock Exchange and paragraph 4.2 of Practice Note 18 of
the Listing Rules, provided that the number of Offer Shares comprised in the Hong Kong Public
Offering shall not be less than 10% of the total number of Offer Shares in the Global Offering.
The Offer Shares to be offered in the Internationa l Offering and the Offer Shares to be offered in
the Hong Kong Public Offering may, in certain circumstances, be reallocated as between these
offerings at the discretion of the Overall Coordinators (for themselves and on behalf of the
Underwriters).
STRUCTURE OF THE GLOBAL OFFERING
–4 2 1–


--- page 431 ---
The net proceeds of the Global Offering accr uing to our Company (after deduction of
underwriting commissions and other expenses payable by our Company in relation to the
Global Offering, assuming the Over-allotment Option is not exercised) are estimated to be
approximately HK$147.8 million at the Offer Price per Offer Share of HK$18.0.
Announcement of Offer Price and Basis of Allocations
The Offer Price, an indication of the level of interest in the International Offering, the basis
of allocation of Offer Shares available under the Hong Kong Public Offering and identification
document numbers of successful applicants under the Hong Kong Public Offering are expected
to be made available in a variety of channels in the manner described in the section headed
‘‘How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share Certificates
and Refund Monies’’ in this prospectus.
HONG KONG UNDERWRITING AGREEMENT
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms of the Hong Kong Underwriting Agreement and is conditional upon the
International Underwriting Agreement b eing signed and becoming unconditional.
Our Company expects to enter into the International Underwriting Agreement relating to
the International Offering on or around Friday, May 2, 2025.
These underwriting arrangements, and the respective Underwriting Agreements, are
summarized in the section headed ‘‘Underwriting’’.
H SHARES WILL BE ELIGIBLE FOR CCASS
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS. If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and
our Company complies with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible secu rities by HKSCC for deposit, clear ance 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 tra nsactions between participants of the Stock
Exchange is required to take place in CCASS on the second settlement day after any trading
day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
CONDITIONS OF THE HONG KONG PUBLIC OFFERING
Acceptance of all applications for Offer Shares pursuant to the Hong Kong Public Offering
will be conditional on:
(a) the Listing Committee of the Stock Exchange granting listing of, and permission to
deal in, the Offer Shares being offered pursuant to the Global Offering (including the
additional Offer Shares which may be made available pursuant to the exercise of the
Over-allotment Option, if any) (subject only to allotment);
STRUCTURE OF THE GLOBAL OFFERING
–4 2 2–


--- page 432 ---
(b) the execution and delivery of the International Underwriting Agreement on or around
Friday, May 2, 2025; and
(c) the obligations of the Underwriters under each of the respective Underwriting
Agreements becoming and remaining unconditional and not having been terminated
in accordance with the terms of the respective agreements.
If, for any reason, the Offer Price is not agreed between our Company and the Overall
Coordinators (for themselves and on behalf of the Underwriters), the Global Offering will not
proceed and will lapse.
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 its terms.
If the above conditions are not fulfilled or wai ved prior to the times and dates specified, the
Global Offering will lapse and th e Stock Exchange will be notifi ed immediately. Notice of the
lapse of the Hong Kong Public Offering will be published by our Company on the websites of
the Stock Exchange at
www.hkexnews.hk and our Company at www.breton.top on the next day
following such lapse. In such eventuality, all application monies will be returned, without
interest, on the terms set out in the section he aded ‘‘How to Apply for Hong Kong Offer Shares
— D. Despatch/Collection of H Share Certifica tes and Refund Monies’’. In the meantime, all
application monies will be held in (a) separate bank account(s) with the receiving banks or other
licensed bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws
of Hong Kong) (as amended).
H Share certificates for the Offer Shares ar e expected to be issued on Tuesday, May 6,
2025, but will only become valid evidence of title at 8 : 00 a.m. on Wednesday, May 7, 2025,
provided that (i) the Global Offering has become unconditional in all respects and (ii) the right
of termination as described in the section hea ded ‘‘Underwriting — Hong Kong Underwriting
Arrangements — Hong Kong Public Offering — Grounds for Termination’’ has not been
exercised.
DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8 : 00
a.m. in Hong Kong on Wednesday, May 7, 2025, it is expected that dealings in the H Shares on
the Stock Exchange will commence at 9 : 00 a.m. on Wednesday, May 7, 2025.
The H Shares will be traded in board lots of 200 H Shares each and the stock code of the H
Shares will be 1333.
STRUCTURE OF THE GLOBAL OFFERING
–4 2 3–


--- page 433 ---
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.breton.top .
The contents of this prospectus are identic al 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.
Set out below are procedures through which you can apply for the Hong Kong Offer
Shares electronically. We will not provide any physical cha nnels to accept any application for
the Hong Kong Offer Shares by the public.
If you are an intermediary, broker or agent, please remind your customers, clients or
principals, as applicable, that this prospect us is available online at the website addresses
above.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit
you are applying for:
(a) are 18 years of age or older; and
(b) have a Hong Kong address (for the HK eIPO White Form service only).
Unless permitted by the Listing Rules, you cannot apply for any Hong Kong Offer
Shares if you or the person(s) for whose benefit you are applying for:
(a) are an existing Shareholder or close associates; or
(b) are a Director or a Supervisor or chief executive officer of the Company or any
of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9 : 00 a.m. on Friday, April 25,
2025 and end at 12 : 00 noon on Wednesday, April 30, 2025 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 4–


--- page 434 ---
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application
Channel Platform Target Investors Application Time
HK eIPO
White Form
service
www.hkeipo.hk Investors who would like
to receive a physical 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
Friday, April 25, 2025
to 11 : 30 a.m. on
Wednesday, April 30,
2025, Hong Kong
time.
The latest time for
completing full
payment of application
monies will be 12 : 00
noon on Wednesday,
April 30, 2025, Hong
Kong time.
HKSCC EIPO
channel
Your broker or custodian
who is a HKSCC
Participant will submit an
EIPO application on your
behalf through HKSCC’s
FINI system in
accordance with your
instruction
Investors who would not
like to receive a physical
H Share certificate.
Hong Kong Offer Shares
successfully applied for
will be allotted and issued
i nt h en a m eo fH K S C C
Nominees, deposited
directly into CCASS and
credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the
earliest and latest time
for giving such
instructions, as this
m a yv a r yb yb r o k e ro r
custodian.
The HK eIPO White Form service and the HKSCC EIPO channel are facilities subject
to capacity limitations and potential service interruptions and you are advised not to wait
until the last day of the application period to apply for Hong Kong Offer Shares.
For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instructions given by you or for your benefit through
the HK eIPO White Form service to make an application for Hong Kong Offer Shares, an
actual application shall be deemed to have been made. If you are a person for whose benefit
the electronic application instructions a r eg i v e n ,y o us h a l lb ed e e m e dt oh a v ed e c l a r e dt h a t
only one set of electronic application instructions has been given for your benefit. If you are
an agent for another person, you shall be deem ed to have declared that you have only given
one set of electronic application instructions for the benefit of the person for whom you are
an agent and that you are duly authorized to give those instructions as an agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 435 ---
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.
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
You
must provide the following information with your application:
For Individual Applicants For Corporate Applicants
. Full name(s) 2 a ss h o w no ny o u r
identity document
. Identity document’s issuing country
or jurisdiction
. Identity document type, with order
of priority:
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
. Identity document number
. Full name(s)
2 as shown on your
identity document
. Identity document’s issuing country
or jurisdiction
. Identity document type, with order
of priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration
certificate; or
iv. Other equivalent document;
and
. Identity document number
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Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a valid
e-mail address, a contact telephone number and a Hong Kong address. You are also required to
declare that the identity 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.
4. The maximum number of joint account holders on FINI is capped at 4 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:
(a) control the composition of the board of directors of the company;
(b) control more than half of the voting power of the company; or
(c) 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 Overall Coordinators, as our agents, have discretion to
consider whether to accept it on any conditio ns we think fit, including evidence of the
attorney’s authority.
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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 : 200
Permitted number of
Hong Kong Offer
Shares for
application and
amount payable on
application/
successful allotment
: 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 Offer Price is HK$18.0 per Offer Share.
If you are applying through the HKSCC EIPO
channel, you are required to pre-fund your
application based on the amount specified by
your broker or custodian, as determined based on
the applicable laws and regulations in Hong Kong.
You are responsible for complying with any such
pre-funding requirement imposed by your broker
or custodian with respect to the Hong Kong Public
Offer Shares you applied for.
By instructing your broker or custodian to apply
for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if
you are joint applicants, each of you jointly and
severally) are deemed to have instructed and
authorized HKSCC to c ause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange payment of the final
Offer Price, brokerage, SFC transaction levy, the
Stock Exchange trading fee and the AFRC
transaction levy by debiting the relevant nominee
bank account at the Designated Bank for your
broker or custodian.
If you are applying through the HK eIPO White
Form service, you may refer to the table below for
the amount payable for the number of Hong Kong
Offer Shares you have selected. You must pay the
respective amount payable on application in full
upon application for the Hong Kong Offer Shares.
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No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
200 3,636.31 4,000 72,726.12 20, 000 363,630.60 160,000 2,909,044.80
400 7,272.61 5,000 90,907.66 30, 000 545,445.90 180,000 3,272,675.40
600 10,908.92 6,000 109,089.18 40, 000 727,261.20 200,000 3,636,306.00
800 14,545.22 7,000 127,270.71 50, 000 909,076.50 300,000 5,454,459.00
1,000 18,181.54 8,000 145,452.25 60, 000 1,090,891.80 400,000 7,272,612.00
1,200 21,817.83 9,000 163,633.76 70, 000 1,272,707.10 500,000 9,090,765.00
1,400 25,454.14 10,000 181,815.30 80,000 1,454,522.40 650,000 (1) 11,817,994.50
1,600 29,090.45 12,000 218,178. 35 90,000 1,636,337.70
1,800 32,726.75 14,000 254,541. 42 100,000 1,818,153.00
2,000 36,363.05 16,000 290,904. 48 120,000 2,181,783.60
3,000 54,544.59 18,000 327,267. 55 140,000 2,545,414.20
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong
Kong Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is successful, brokerage will be paid to the
Exchange Participants (as defined in the Listing Rules) or to the HK eIPO White Form Service
Provider (for applications made through the application channel of the HK eIPO White Form
Service Provider) while the SFC 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
You or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying
investor in your application as required under the paragraph headed ‘‘ — A. Applications
for Hong Kong Offer Shares — 3. Information Required to Apply’’ in this section. If you
are suspected of submitting or cause to submit more than one application, all of your
applications will be rejected.
Multiple applications made either through (i) the HK eIPO White Form service, (ii)
HKSCC EIPO channel, or (iii) both 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 for any Offer Shares.
The H Share Registrar would record all app lications into its system and identify
suspected multiple applications with identical names and identification document numbers
according to the Best Practice Note on Tr eatment 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.
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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):
(a). undertake to execute all relevant documents and instruct and authorize us and/or
the Overall Coordinators, as our agents, to execute any documents for you and
to do on your behalf all things necessary to register any Hong Kong Offer Shares
allocated to you in your name or in the name of HKSCC Nominees as required
by the Articles of Association, and (if you are applying through the HKSCC
EIPO channel) to deposit the allotted Hong Kong Offer Shares directly into
CCASS for the credit of your designated HKSCC Participant’s stock account on
your behalf;
(b). 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;
(c). (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;
(d). confirm that you are aware of the res trictions on offers and sales of the Offer
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;
(e). 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;
(f). agree that the Joint Sponsors, the Joint Global Coordinators, the Overall
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters, any of their or the Company’s respective directors, officers,
employees, partners, agents, advisors and any other parties involved in the
Global Offering (the ‘‘Relevant Pers ons’’), the H Share Registrar and HKSCC
will not be liable for any information and representations not in this prospectus
and any supplement to it;
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(g). 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 applicat i o nt ou s ,t h eR e l e v a n tP e r s o n s ,t h eH
Share Registrar, HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and
any other statutory regulatory or gover nmental bodies or otherwise as required
by laws, rules or regulations, for the purposes under the paragraph headed ‘‘—
G. Personal Data — 3. Purposes and 4. T ransfer of personal data’’ in this
section;
(h). 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 b ecause of an innocent misrepresentation;
(i). 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 th et i m ea n di nt h em a n n e ra ss p e c i f i e di n
the paragraph headed ‘‘— B. Publication of Results’’ in this section;
(j). confirm that you are aware of the situations specified in the paragraph headed
‘‘— C. Circumstances In Which You Wi ll Not Be Allocated Hong Kong Offer
Shares’’ in this section;
(k). 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;
(l). 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;
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(m). confirm that (a) your application or HKSCC Nominees’ application on your
behalf is not financed directly or indirectly by the Company, any of the directors,
chief executives, substantial shareholder(s) or existing shareholder(s) of the
Company or any of its subsidiaries or any o f their respective close associates; and
(b) you are not accustomed or will not be accustomed to taking instructions from
the Company, any of the directors, chief executives, substantial shareholder(s) or
existing shareholder(s) of the Company or any of its subsidiaries or any of their
respective close associates in relation to the acquisition, disposal, voting or other
disposition of the Shares registered in your name or otherwise held by you;
(n). warrant that the information you have provided is true and accurate;
(o). confirm that you understand that we and the Overall Coordinators will rely on
your declarations and representations in deciding whether or not to allocate any
Hong Kong Offer Shares to you and that you may be prosecuted for making a
false declaration;
(p). agree to accept Hong Kong Offer Shares applied for or any lesser number
allocated to you under the application;
(q). 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;
(r). (if the application is made for your own benefit) warrant that no other
application has been or will be made for your benefit by giving electronic
application instructions to HKSCC directly or indirectly or through the
application channel of the HK eIPO White Form Service Provider or by any
one as your agent or by any other person; and
(s). (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent
for or for the benefit of that person or by that person or by any other person as
agent for that person by giving electronic application instructions to HKSCC and
the HK eIPO White Form Service Provider and (2) you have due authority to
give electronic application instructions on behalf of that other person as its agent.
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B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfull y allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website From the ‘‘Allotment Results’’
page at www.hkeipo.hk/
IPOResult (or
www.tricor.com.hk/ipo/result )
with a ‘‘search by ID’’ function.
24 hours, from 11 : 00 p.m. on
Tuesday, May 6, 2025 to 12 : 00
midnight on Monday, May 12,
2025 (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
www.hkeipo.hk/IPOResult or
www.tricor.com.hk/ipo/result .
The Stock Exchange’s website at
www.hkexnews.hk and our
website at www.breton.top
which will provide links to the
above mentioned websites of
t h eHS h a r eR e g i s t r a r .
No later than 11 : 00 p.m. on
Tuesday, May 6, 2025 (Hong
Kong time).
Telephone +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 7, 2025
to Monday, May 12, 2025
(Hong Kong time) on a
Business Day
For those applying through HKSCC EIPO channel, you may also check with your
broker or custodian from 6 : 00 p.m. on Friday, May 2, 2025 (Hong Kong time)
HKSCC Participants can log into FINI and r eview the allotment result from 6 : 00
p.m. on Friday, May 2, 2025 on a 24-hour basis and should report any discrepancies on
allotments to HKSCC as soon as practicable.
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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.breton.top by no later than 11 : 00 p.m. on
T u e s d a y ,M a y6 ,2 0 2 5( H o n gK o n gt i m e ) .
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
You should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Your application or the application 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 Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accep t 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:
(a) within three weeks from the closing date of the application lists; or
(b) 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:
(a) you make multiple applications or suspected multiple applications. You may
refer to the paragraph headed ‘‘— A. Applications for Hong Kong Offer Shares
— 5. Multiple Applications Prohibited’’ in this section on what constitutes
multiple applications;
(b) your application instruction is incomplete;
(c) your payment (or confirmation of funds, as the case may be) is not made
correctly;
(d) the Underwriting Agreements do not become unconditional or are terminated;
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(e) we or the Overall Coordinators believe t hat by accepting your application, it or
we would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Hong Kong Offer 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 banks will collect the portion of these funds required to settle each HKSCC
Participant’s actual Hong Kong Public Offer Share allotment from their Designated Bank.
6. 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 behal f in settling payment for your allotted Hong
Kong Offer 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 Global 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 extr eme 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
You 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 a t 8 : 00 a.m. on Wednesday, May 7, 2025 (Hong
Kong time), provided that the Global Offering has become unconditional and the right of
termination described in the section headed ‘‘Unde rwriting’’ has not been exercised. Investors
who trade H Shares prior to the receipt of H Share certificates or the H Share certificates
becoming valid 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 3
For application of
500,000 Hong Kong
O f f e rS h a r e so rm o r e
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 7,
2 0 2 5( H o n gK o n gt i m e )
If you are an individual, you
must not authorise any
other person to collect for
you. If you are a corporate
applicant, your authorised
representative must bear a
letter of authorization from
your corporation stamped
with your corporation’s
chop.
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
Both individuals and
authorised representatives
must produce, at the time of
collection, evidence of
identity acceptable to the H
Share Registrar.
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
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HK eIPO White Form service HKSCC EIPO channel
For application of less
than 500,000 Hong
Kong Offer Shares
Your 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 6, 2025
Refund mechanism for surplus application monies paid by you
Date Wednesday, May 7, 2025 Subject to the arrangement
between you and your
broker or custodian
Responsible party H Share Registrar Your broker or custodian
Application monies paid
through single bank
account
HK eIPO White Form e-Auto
payment instructions to
your designated bank
account
Your broker or custodian will
a r r a n g er e f u n dt oy o u r
designated bank account
subject to the arrangement
between you and it
Application monies paid
through multiple bank
accounts
Refund cheque(s) will be
dispatched to the address as
specified in your
application instructions by
ordinary post at your own
risk
3 Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning and/or an
‘‘extreme conditions’’ announcement issued after a super typhoon in force in Hong Kong in the morning on
Tuesday, May 6, 2025 rendering it impossible for the relevant H Share certificates to be despatched to HKSCC
in a timely manner, the Company shall procure the H Shar e Registrar to arrange for delivery of the supporting
documents and H Share certificates in accordance with t he contingency arrangements as agreed between them.
You may refer to ‘‘— E. Bad Weather Arrangements’’ in this section.
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E. BAD WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, April 30, 2025 if, there is:
(a) a tropical cyclone warning signal number 8 or above;
(b) a black rainstorm warning; and/or
(c) Extreme Conditions,
(collectively, ‘‘Bad Weather Signals’’),
in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Wednesday,
April 30, 2025.
Instead they will open between 11 : 45 a.m. and 12 : 00 noon and/or close at 12 : 00
noon on the next Business Day which does not have Bad Weather Signals in force at any
time between 9 : 00 a.m. and 12 : 00 noon.
Prospective investors should be aware that a postponement of the opening/closing of
the application lists may result in a delay in the listing date. Should there be any changes to
the dates mentioned in the section headed ‘‘Expected Timetable’’ in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.breton.top of the revised timetable.
If a Bad Weather Signal is hoisted on Tuesday, May 6, 2025, the H Share Registrar
will make appropriate arrangements for the delivery of the H Share certificates to the
CCASS Depository’s service counter so that they would be available for trading on
Wednesday, May 7, 2025.
If a Bad Weather Signal is hoisted on Tuesday, May 6, 2025, for application of less
than 1,000,000 Hong Kong Offer Shares, the des patch of physical H Share certificate(s)
will be made by ordinary post when the post office re-opens after the Bad Weather Signal is
lowered or cancelled (e.g. in the afternoo n of Tuesday, May 6, 2025 or on Wednesday, May
7, 2025).
If a Bad Weather Signal is hoisted on Wednesday, May 7, 2025, 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 t he H Share Registrar’s office after the Bad Weather
Signal is lowered or cancelled (e.g. in the afternoon of Wednesday, May 7, 2025 or on
Thursday, May 8, 2025).
Prospective investors should be aware tha t if they choose to receive physical H Share
certificates issued in their own name, th ere may be a delay in receiving the H Share
certificates.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 3 8–


--- page 448 ---
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 fo r 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 settlem ent 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.
You 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 Collect ion Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving banks and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving applic ation 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 State ment informs the applicant for, and holder
of, Hong Kong Offer Shares, of the policies and practices of the Company and the H Share
R e g i s t r a ri nr e l a t i o nt op e r s o n a ld a t aa n dt h ePersonal Data (Privacy) Ordinance (Chapter
486 of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to
ensure that personal data supplied to the Company or its agents and the 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 3 9–


--- page 449 ---
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of
the Company or the H Share Registrar to effect tr a n s f e r so ro t h e r w i s er e n d e rt h e i rs e r v i c e s .
It may also prevent or delay registration or transfers of Hong Kong Offer Shares which you
have successfully applied for and/or the dispa tch of H Share certificate(s) to which you are
entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever means)
for the following purposes:
(a) processing your application and refund cheque and HK eIPO White Form e-Auto
Refund payment instruction(s), where a pplicable, verification of compliance
with the terms and application procedures set out in this prospectus and
announcing results of allocation of Hong Kong Offer Shares;
(b) compliance with applicable laws and regulations in Hong Kong and elsewhere;
(c) registering new issues or transfers into or out of the names of the holders of the
H Shares including, where applicable, HKSCC Nominees;
(d) maintaining or updating the register of members of the Company;
(e) verifying identities of applicants for a nd holders of the H Shares and identifying
any duplicate applications for the H Shares;
( f ) f a c i l i t a t i n gH o n gK o n gO f f e rS h a r e sb a l l o t i n g ;
(g) establishing benefit entitlements of holders of the H Shares, such as dividends,
rights issues, bonus issues, etc.;
(h) distributing communications from the Company and its subsidiaries;
(i) compiling statistical information and profiles of the holder of the H Shares;
(j) disclosing relevant information to facilitate claims on entitlements; and
(k) any other incidental or associated purposes relating to the above and/or to
enable the 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
–4 4 0–


--- page 450 ---
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the
applicants for and holders of Hong Kong Offer Shares will be kept confidential but the
Company and the H Share Registrar may, to th e 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:
(a) the Company’s appointed agents such a s financial advisors, receiving banks and
overseas principal share registrar;
(b) 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);
(c) any agents, contractors or third-party service providers who offer
administrative, telecomm unications, computer, payment or other services to
the Company or the H Share Registrar in connection with their respective
business operation;
(d) 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
(e) any persons or institutions with which the holders of Hong Kong Offer Shares
have or propose to have dealings, such as their bankers, solicitors, accountants
or brokers etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants
and holders of Hong Kong Offer Shares for as long as necessary to fulfil 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 the 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. The 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 d ata should be addressed to the Company and
the H Share Registrar, at their registered address disclosed in the section headed
‘‘Corporate information’’ in this prospect us or as notified from time to time, for the
attention of the company secretary, or the H Share Registrar for the attention of the
privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 4 1–


--- page 451 ---
The following is the text of a report set out on pages I-1 to I-90, received from the Company’s
reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the purpose of
incorporation in this Prospectus.
ACCOUNTANTS’ REPORT ON HISTORI CAL FINANCIAL INFORMATION TO THE
DIRECTORS OF BRETON TECHNOLOGY CO., LTD., CHINA INTERNATIONAL
CAPITAL CORPORATION HONG KONG SECURITIES LIMITED AND CMB
INTERNATIONAL CAPITAL LIMITED
Introduction
We report on the historical financial info rmation of Breton Technology Co., Ltd. (the
‘‘Company’’) and its subsidiari es (together, the ‘‘Group’’) set out on pages I-4 to I-90, which
comprises the consolidated statements of financial position of the Group, and the statements of
financial position of the Company as at 31 Decem ber 2022, 2023 and 2024, and the consolidated
statements of profit or loss and other comprehensive income, the consolidated statements of
changes in equity and the consolidated statements of cash flows, for each of the years ended 31
December 2022, 2023 and 2024 (the ‘‘Relevant P eriods’’), and material accounting policy
information and other explanatory information (together, the ‘‘Historical Financial
Information’’). The Historical Financial Information set out on pages I-4 to I-90 forms an
integral part of this report, which has been prepared for inclusion in the prospectus of the
Company dated 25 April 2025 (the ‘‘P rospectus’’) in connection with the initial listing of shares
of the Company on the Main Board of The Stock Exchange of Hong Kong Limited.
Directors’ responsibility for H istorical Financial Information
The directors of the Company are responsible for the preparation of Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation and
presentation set out in Note 1 to the Historical Financial Information, and for such internal
control as the directors of the Company determine is necessary to enable the preparation of the
Historical Financial Information that is free fr om material misstatement, whether due to fraud
or error.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1–


--- page 452 ---
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 (the ‘‘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 Informatio n 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’ judgement, including the assessment of risks of material misstatement of
the Historical Financial Information, whet her due to fraud or error. In making those risk
assessments, the reporting accountants consid er 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 and presentation set out in Note 1 to the Historical Financial
Information in order to design procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our
work also 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 I nformation gives, for the purpose of the
accountants’ report, a true and fair view of the Company’s and the Group’s financial position as
at 31 December 2022, 2023 and 2024, and of the Gr oup’s financial performance and cash flows
for the Relevant Periods in accordance with the basis of preparation and presentation set out in
Note 1 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2–


--- page 453 ---
Report on matters under the Rules Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited and the Companies (Winding U p and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to Note 28(e) to the Historical Financial Information which states that no
dividends have been paid by the Company in respect of the Relevant Periods.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
25 April 2025
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3–


--- page 454 ---
HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The consolidated financial statements of the Group for the Relevant Periods, on which the
Historical Financial Information is based, were audited by KPMG Huazhen LLP Shanghai
Branch ( 畢馬威華振會計師事務所（特殊普通合夥）上海分所) in accordance with Hong Kong
Standards on Auditing issued by the HKICPA (the ‘‘Underlying Financial Statements’’).
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4–


--- page 455 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
(Expressed in Renminbi)
Year ended 31 December
Note 2022 2023 2024
RMB RMB RMB
Revenue 4(a) 360,106,324 463,738,031 635,456,675
Cost of sales (351,933,806) (454,459,056) (598,617,808)
Gross profit 8,172,518 9,278,975 36,838,867
Other net gain 5 120,577 4,500,292 24,617,295
Selling expenses (46,924,828) (58,016,399) (59,720,401)
Administrative expenses (59,447,075) (88,443,974) (109,264,136)
Research and development costs (44,855,133) (68,561,547) (81,706,535)
Impairment loss on trade and other receivables,
contract assets and financial guarantee issued 29(a) (26,862,692) (38,175,686) (83,097,852)
Loss from operations (169,796,633) (239,418,339) (272,332,762)
Finance income 6(a) 6,446,942 16,335,180 10,547,318
Finance costs 6(a) (13,732,638) (6,919,281) (9,186,683)
Share of results of associates 16 (388,109) 590,290 (3,485,038)
Loss before taxation 7 (177,470,438) (229,412,150) (274,457,165)
Income tax 7(a) (630,315) (1,381) (90,315)
Loss for the year (178,100,753) (229,413,531) (274,547,480)
Other comprehensive income for the year (after tax and
reclassification adjustments)
Items that will not be reclassified to profit or loss:
Equity investments at fair value through other
comprehensive income — net movement in fair
value reserves (not recycling) 28(d) 8,231,482 473,649 1,051,297
Total comprehensive income for the year (169,869,271) (228,939,882) (273,496,183)
Loss per share
— Basic and diluted 10 (0.64) (0.66) (0.78)
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5–


--- page 456 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in Renminbi)
As at 31 December
Note 2022 2023 2024
RMB RMB RMB
Non-current assets
Property, plant and equipment 11 17,562,118 97,300,665 165,302,591
Other investments 12 18,938,509 19,093,387 41,734,716
Right-of-use assets 13 11,478,519 86,095,828 106,559,158
Intangible assets 14 1,031,705 2,043,947 2,960,937
Interest in associates 16 3,716,353 23,259,475 28,482,306
Other non-current assets 17 46,908,046 62,564,890 73,659,816
99,635,250 290,358,192 418,699,524
Current assets
Inventories 18 294,544,210 268,674,561 259,023,074
Contract assets 19(a) 860,350 342,400 1,322,200
Trade and other receivables 20 257,817,225 435,089,460 555,832,631
Pledged bank deposits 21(a) 4,700,000 5,278,000 4,208,000
Cash and cash equivalents 21(a) 270,260,321 422,072,291 199,254,000
828,182,106 1,131,456,712 1,019,639,905
Current liabilities
Loans and borrowings 22 94,727,178 99,233,327 267,197,051
Financial instruments issued to investors 25 28,869,927 — —
Trade and other payables 23 156,975,313 294,907,720 374,539,060
Income tax payables 487,875 — —
Provision 26 7,548,860 12,257,128 16,471,700
Contract liabilities 19(b) 15,196,543 13,740,178 3,655,027
Lease liabilities 24 2,383,426 7,037,225 3,222,155
306,189,122 427,175,578 665,084,993
Net current assets 521,992,984 704,281,134 354,554,912
Total assets less current liabilities 621,628,234 994,639,326 773,254,436
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6–


--- page 457 ---
As at 31 December
Note 2022 2023 2024
RMB RMB RMB
Non-current liabilities
Loans and borrowings 22 56,648,421 53,994,198 85,115,763
Lease liabilities 24 8,299,710 15,443,878 2,605,537
Deferred tax liabilities 2,743,827 2,901,710 3,252,142
67,691,958 72,339,786 90,973,442
Net assets 553,936,276 922,299,540 682,280,994
Capital and reserves
Paid-in capital 28(b) — — —
Share capital 28(c) 326,479,054 366,651,762 366,651,762
Reserves 28(f) 227,457,222 555,647,778 315,629,232
Total equity 553,936,276 922,299,540 682,280,994
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7–


--- page 458 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
(Expressed in Renminbi)
As at 31 December
Note 2022 2023 2024
RMB RMB RMB
Non-current assets
Property, plant and equipment 11 2,132,365 1,961,580 1,555,098
Other investments 12 16,212,736 15,876,268 40,147,141
Right-of-use assets 13 7,754,129 6,177,018 6,850,280
Intangible assets 1,031,705 2,043,947 2,960,937
Interests in subsidiaries 15 107,511,063 632,801,063 1,017,716,063
Interests in associates 16 2,212,746 21,231,584 26,393,716
Other non-current assets 17 2,473,895 7,401,204 24,062,473
139,328,639 687,492,664 1,119,685,708
Current assets
Inventories 18 17,202,811 18,684,007 36,891,286
Contract assets 160,450 — —
Trade and other receivables 20 485,125,864 609,677,973 516,594,978
Pledged bank deposits 21(a) 4,700,000 5,100,000 4,030,000
Cash and cash equivalents 21(a) 268,612,984 164,643,976 35,799,184
775,802,109 798,105,956 593,315,448
Current liabilities
Loans and borrowings 22 91,907,758 99,233,327 243,801,191
Financial instruments issued to investors 25 28,869,927 — —
Trade and other payables 23 63,466,553 207,248,194 350,144,090
Provisions 749,592 1,215,986 4,477,961
Contract liabilities 3,773,301 86,189 1,172,972
Lease liabilities 24 1,384,710 1,444,253 2,726,437
190,151,841 309,227,949 602,322,651
Net current assets/(liabilities) 585,650,268 488,878,007 (9,007,203)
Total assets less current liabilities 724,978,907 1,176,370,671 1,110,678,505
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8–


--- page 459 ---
As at 31 December
Note 2022 2023 2024
RMB RMB RMB
Non-current liabilities
Loans and borrowings 22 50,467,842 23,150,398 44,200,000
Lease liabilities 24 6,107,082 4,662,830 8,503,896
Deferred tax liabilities 2,687,384 2,722,431 3,105,249
Total non-current liabilities 59,262,308 30,535,659 55,809,145
Net assets 665,716,599 1,145,835,012 1,054,869,360
Capital and reserves
Paid-in capital 28(b) — — —
Share capital 28(c) 326,479,054 366,651,762 366,651,762
Reserves 28(f) 339,237,545 779,183,250 688,217,598
Total equity 665,716,599 1,145,835,012 1,054,869,360
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9–


--- page 460 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in Renminbi)
Attributable to equity shareholders of the Company
Note Paid-in capital Share capital
Shares held for
the Restricted
Share Scheme Share premium C apital reserve Other reserve
Fair value
reserve
Accumulated
losses
Total
(deficit)/
equity
RMB RMB RMB RMB RMB RMB RMB RMB RMB
(Note 28(b)) (Note 28(c)) (Note 28(f)(iv)) (Note 28(f)(i)) (Note 28(f)(ii)) (Note 28(f)(iii)) (Note 28(f)(v))
Balance at 1 January 2022 126,663,600 — — — 226,655,617 (499,590, 000) — (236,957,774) (383,228,557)
Changes in equity for 2022 :
Loss for the year — — — — — — — (178,100,753) (178,100,753)
Other comprehensive income 28(d) — — — — — — 8,231,482 — 8,231,482
Total comprehensive income — — — — — — 8, 231,482 (178,100,753) (169,869,271)
Capital injection by investors 28(b) 10,000,000 — (11,600,000) — 6,000,000 — — — 4,400,000
Issuance of financial
instruments to investors
with preferred rights, net
of transaction cost 28(b) 8,894,400 — — — 187,047,336 — — — 195,941,736
Recognition of financial
instruments with preferred
rights 25(a) — — — — — (394,968,000) — — (394,968,000)
Termination of financial
instruments with preferred
rights 25(a) — — — — — 894,558,000 — — 894,558,000
Conversion into a joint stock
company 28(c) (145,558,000) 300,000,000 — 1 3,283,150 (436,047,344) — — 268,322,194 —
Issuance of ordinary shares, net
of transaction cost 28(c) — 26,479,054 — 351,569,490 — — — — 378,048,544
Equity-settled share-based
payment 27 — — — — 29,053,824 — — — 29,053,824
Balance at 31 December 2022 — 326,479,054 (11,600,000) 364,852,640 12,709,433 — 8,231,482 (146,736,333) 553,936,276
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 0–


--- page 461 ---
Attributable to equity shareholders of the Company
Note Share capital
Shares held for
the Restricted
Share Scheme Share premium Capital reserve
Fair value
reserve
Accumulated
losses Total equity
RMB RMB RMB RMB RMB RMB RMB
(Note 28(c)) (Note 28(f)(iv)) (Note 28(f)(i)) (Note 28(f)(ii)) (Note 28(f)(v))
Balance at 1 January
2023 326,479,054 (11,600,000) 364,852,640 12,709,433 8,231,482 (146,736,333) 553,936,276
Changes in equity for
2023 :
L o s s f o r t h e y e a r ————— ( 2 2 9 , 4 1 3 , 5 3 1 ) ( 2 2 9 , 4 1 3 , 5 3 1 )
Other comprehensive
i n c o m e 2 8 ( d ) ———— 4 7 3 , 6 4 9 — 4 7 3 , 6 4 9
Total comprehensive
i n c o m e ———— 4 7 3 , 6 4 9 ( 2 2 9 , 4 1 3 , 5 3 1 ) ( 2 2 8 , 9 3 9 , 8 8 2 )
Issuance of ordinary
shares, net of
transaction cost 28(c) 40,172,708 — 527,471,603 — — — 567,644,311
Equity-settled
share-based payment 27 — — — 29,658,835 — — 29,658,835
Balance at 31 December
2023 366,651,762 (11,600,000) 892,324,243 42,368,268 8,705,131 (376,149,864) 922,299,540
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 1–


--- page 462 ---
Attributable to equity shareholders of the Company
Note Share capital
Shares held for
the Restricted
Share Scheme Share premium Capital reserve
Fair value
reserve
Accumulated
losses Total equity
RMB RMB RMB RMB RMB RMB RMB
(Note 28(c)) (Note 28(f)(iv)) (Note 28(f)(i)) (Note 28(f)(ii)) (Note 28(f)(v))
Balance at 1 January
2024 366,651,762 (11,600,000) 892,324,243 42,368,268 8,705,131 (376,149,864) 922,299,540
Changes in equity for
2024 :
L o s s f o r t h e y e a r ————— ( 2 7 4 , 5 4 7 , 4 8 0 ) ( 2 7 4 , 5 4 7 , 4 8 0 )
Other comprehensive
i n c o m e 2 8 ( d ) ———— 1 , 0 5 1 , 2 9 7 — 1 , 0 5 1 , 2 9 7
Total comprehensive
i n c o m e ———— 1 , 0 5 1 , 2 9 7 ( 2 7 4 , 5 4 7 , 4 8 0 ) ( 2 7 3 , 4 9 6 , 1 8 3 )
Equity-settled
share-based payment 27 — — — 33,477,637 — — 33,477,637
Balance at 31 December
2024 366,651,762 (11,600,000) 892,324,243 75,845,905 9,756,428 (650,697,344) 682,280,994
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 2–


--- page 463 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Renminbi)
Year ended 31 December
Note 2022 2023 2024
RMB RMB RMB
Operating activities:
Cash used in operations 21(b) (296,622,508) (209,662,211) (280,385,466)
Interest received 6,344,314 16,894,261 10,547,318
Income tax paid (142,440) (917,707) (112,644)
Net cash used in operating activities (290,420,634) (193,685,657) (269,950,792)
Investing activities:
Payments for purchase of property, plant and
equipment, construction in progress and intangible
assets (15,078,385) (94,875,873) (80,894,068)
Payments for purchase of land use rights — (75,439,025) (37,385,770)
Proceeds from disposal of property, plant and
equipment — 1,255,872 197,082
Proceeds from disposal of investments in associates 1,300,000 858,222 —
Proceeds from disposal of other investment — — 200,000
Payment for investments in associates (6,186,000) (18,126,340) (18,155,375)
Loan repaid by a third party 4,400,000 900,000 —
Payment for purchase of other investments (7,063,200) — —
Dividends received from other investments — — 333,000
Net cash used in investing activities (22,627,585) (185,427,144) (135,705,131)
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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Year ended 31 December
Note 2022 2023 2024
RMB RMB RMB
Financing activities:
Proceeds from loans and borrowings 21(c) 210,300,000 144,043,800 275,913,369
Repayment of loans and borrowings 21(c) (210,648,945) (142,335,600) (77,033,310)
Settlement for financial instruments to investors 25(b) (47,124,008) (29,142,110) —
Interest paid for interest-bearing borrowing 21(c) (15,991,550) (5,620,883) (9,225,996)
Proceeds from the issuance of financial instruments to
investors, net of transaction cost 195,941,736 — —
Proceeds from the issuance of ordinary shares, net of
transaction cost 378,048,544 567,644,311 —
Payment of listing expenses — — (1,081,090)
Capital contributions by investors 16,000,000 — —
Capital element of lease rentals paid 21(c) (4,076,625) (2,782,258) (5,061,759)
Interest element of lease rentals paid 21(c) (438,409) (882,489) (673,582)
Net cash generated from financing activities 522,010,743 530,924,771 182,837,632
Net increase/(decrease) in cash and cash equivalents 208,962,524 151,811,970 (222,818,291)
Cash and cash equivalents at beginning of the year 61,297,797 270,260,321 422,072,291
Cash and cash equivalents at end of the year 21(a) 270,260,321 422,072,291 199,254,000
The accompanying notes form part of the H istorical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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NOTES TO THE HISTORICAL FINANCIAL INFORMATION
(Expressed in Renminbi unless otherwise indicated)
1 BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL INFORMATION
Breton Technology Co., Ltd. (the ‘‘Company’’) ( 博雷頓科技股份公司) was established as a limited liability
Company in Shanghai, the People’s Republic of China (the ‘‘PRC’’) on 28 November 2016. The Company was
converted into a joint stock company with a limited liability on 23 November 2022.
During the Relevant Periods, the Company and its subsidiaries (the ‘‘Group’’) are principally engaged in
research, development, manufacturing and sale of new energy industrial vehicles in the PRC.
The financial statements of the Company and the subsidiaries of the Group for which there are statutory
requirements were prepared in accordance with the relevant accounting rules and regulations applicable to entities in
the countries in which they were incorporated and/or established. The statutory financial statements of the Company
for the years ended 31 December 2022 and 2023 were prepared in accordance with the Accounting Standards for
Business Enterprises issued by the Ministry of Finance of the PRC and audited by Gongzheng Tianye Certified Public
Accountants (SGP)* ( 公証天業會計師事務所（特殊普通合夥）上海分所) and Shenzhen Zhongqi Certified Public
Accountants (GP)* ( 深圳中啟會計師事務所（普通合夥）) respectively. The statutory financial statements of the
Company for the year ended 31 December 2024 have not been issued as at the date of this report.
At the date of the report, the Company has direct or indirect interests in the following principal subsidiaries, all
of which are private companies.
Proportion of
ownership interest
Name of company
Place of
incorporation/
establishment and
kind of legal entity
Date of
incorporation/
establishment
Issued and paid-in
capital
Directly
held by the
Company
Indirectly
held by the
Company Principal activities
Zhejiang Breton Technology
Co., Ltd.
(（浙江博雷頓科技有限
公司）, formerly known as
Zhejiang Boju Technology
Co., Ltd. ‘‘浙江博矩科技有
限公司’’)*/**
The PRC, limited
liability company
12 April 2019 RMB100 million/
RMB60 million
100% — Manufacturing,
research and sales
of new energy
vehicles
Breton (Shandong) New
Energy Vehicle Co., Ltd.
(博雷頓（山東）新能源汽車
有限公司)*/**
The PRC, limited
liability company
25 May 2020 RMB330 million/
RMB145
million
100% — Manufacturing,
research and sales
of new energy
loaders
Breton (Hunan) Technology
Co., Ltd. ( 博雷頓（湖南）科
技有限公司)*/**
The PRC, limited
liability company
12 October 2022 RMB300 million/
RMB300
million
100% — Manufacturing,
research and sales
of new energy
wide-body dump
trucks
Breton (Lanxi) New Energy
Engineering Machinery
Co., Ltd.( 博雷頓（蘭溪）
新能源工程機械有限
公司)*/**
The PRC, limited
liability company
28 January 2023 RMB200 million/
RMB200
million
100% — Manufacturing,
research and sales
of new energy
loaders
Breton (Wuhan) Technology
Co., Ltd. ( 博雷頓（武漢）科
技有限公司)*/**
The PRC, limited
liability company
01 March 2023 RMB300 million/
RMB300
million
100% — Research and sales of
new energy loaders
Inner Mongolia Breton
Intelligent Technology
Co., Ltd.
(內蒙古博雷頓智能科技有
限公司)*/**
The PRC, limited
liability company
07 January 2019 RMB20 million/
RMB0.85
million
100% — Sales of new energy
tractor trucks
APPENDIX I ACCOUNTANTS’ REPORT
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Proportion of
ownership interest
Name of company
Place of
incorporation/
establishment and
kind of legal entity
Date of
incorporation/
establishment
Issued and paid-in
capital
Directly
held by the
Company
Indirectly
held by the
Company Principal activities
Baipin (Shanghai) Intelligent
Technology Co., Ltd.
(佰頻（上海）智能科技有限
公司)*/***
The PRC, limited
liability company
02 July 2019 RMB40 million/
RMB40 million
100% — Research and
development of
automotive
technology, new
energy technology
and automation
technology
Breton (Shanghai) Intelligent
Technology Co., Ltd.
(（博雷頓（上海）智能科技有
限公司）, formerly known as
Linju (Shanghai) Power
Technology Co., Ltd.
臨矩（上海）動力科技有限
公司)*/**
The PRC, limited
liability company
25 June 2019 RMB10 million/
RMB7.4025
million
100% — Research and
development of
automotive
technology, new
energy technology,
and automation
technology
Breton (Wuhan) New Energy
Equipment Co., Ltd. ( 博雷
頓（武漢）新能源裝備有
限公
司)*/**
The PRC, limited
liability company
01 March 2023 RMB100 million/
RMB60 million
— 100% Manufacturing,
research and sales
of new energy
tractor trucks
Breton (Beijing) Technology
Co., Ltd. ( 博雷頓（北京）
科技有限公司)*/**
The PRC, limited
liability company
25 November
2024
RMB20 million/
RMB10 million
100% — Sales of new energy
engineering
machinery
* The official names of the above entities are in Chinese. The English names are for identification purpose
only.
** No audited financial statements have been prepared for these entities during the Relevant Periods.
*** The statutory financial statements for Baipin (S hanghai) Intelligent Technology Co., Ltd. for the year
ended 31 December 2023 was audited by Shanghai Victo r Voyage Certified Public Accountants Co., Ltd.
(上海錦航會計師事務所有限責任公司). No statutory financial statements were prepared for the years
ended 31 December 2022 and 2024.
All companies comprising the Group have adopted 31 December as their financial year end date.
The Historical Financial Information has been prepared in accordance with all applicable IFRS Accounting
Standards as issued by the International Accounting Standa rds Board (‘‘IASB’’). Further details of the material
accounting policy information adopted are set out in Note 2.
The IASB has issued a number of new and revised IFRS Accounting Standards. For the purpose of preparing
this Historical Financial Information, the Group has adopted all applicable new and revised IFRS Accounting
Standards to the Relevant Periods, except for any new standards or interpretations that are not yet effective for the
Relevant Periods. The revised and new accounting standards and interpretations issued but not yet effective for the
Relevant Periods are set out in Note 33.
The Historical Financial Information also complies with the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’).
The accounting policies set out below have been applied consistently to all periods presented in the Historical
Financial Information.
The Historical Financial Information is presented in Renminbi (‘‘RMB’’).
APPENDIX I ACCOUNTANTS’ REPORT
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2 MATERIAL ACCOUNTING POLICIES
(a) Basis of measurement
The measurement basis used in the preparation of the consolidated financial statements is the historical
cost basis except that the following assets and liabilities are stated at their fair value as explained in the
accounting policies set out below:
— Other investments in equity securities (see Note 2(e));
— Derivative financial instruments (see Note 2(s)).
(b) Use of estimates and judgments
The preparation of the consolidated financial statements in conformity with IFRSs requires management
to make judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed t o be reasonable under the circumstances, the results of
which form the basis of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estim ate is revised if the revision affects only that period, or
in the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRSs that have significant effect on the financial
statements and major sources of estimation uncertainty are discussed in Note 3.
(c) Subsidiaries and non-controlling interests
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences until the date on which control ceases.
Intra-group balances and transactions, and any unrealised income and expenses (except for foreign
currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealised losses
resulting from intra-group transactions are eliminated in the same way as unrealised gains, but only to the extent
that there is no evidence of impairment.
For each business combination, the Group can elect to measure any non-controlling interests (‘‘NCI’’)
either at fair value or at the NCI’s proportionate share of the subsidiary’s net identifiable assets. NCI are
presented in the consolidated statement of financial position within equity, separately from equity attributable
to the equity shareholders of the Company. NCI in the results of the Group are presented on the face of the
consolidated statement of profit or loss and the consolidated statement of profit or loss and other
comprehensive income as an allocation of the total profit or loss and total comprehensive income for the
year between NCI and the equity shareholders of the Company. Loans from holders of NCI and other
contractual obligations towards these holders are present ed as financial liabilities in the consolidated statement
of financial position in accordance with Notes 2 (n), (o) or (t) depending on the nature of the liability.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as
equity transactions.
When the Group loses control of a subsidiary, it derecognises the assets and liabilities of the subsidiary,
and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss.
Any interest retained in that former subsidiary is measured at fair value when control is lost.
APPENDIX I ACCOUNTANTS’ REPORT
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In the Company’s statement of financial position, an investment in a subsidiary is stated at cost less
impairment losses (see Note 2(i)(iii)).
(d) Associates
An associate is an entity in which the Group or Company has significant influence, but not control or
joint control, over its management, including participation in the financial and operating policy decisions.
An investment in an associate is accounted for in the c onsolidated financial statements under the equity
method, unless it is classified as held for sale (or included in a disposal group that is classified as held for sale).
Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Group’s
share of the acquisition-date fair values of the investee’s identifiable net assets over the cost of the investment (if
any). The cost of the investment includes purchase price, other costs directly attributable to the acquisition of
the investment, and any direct investment into the associate that forms part of the Group’s equity investment.
Thereafter, the investment is adjusted for the post acquisition change in the Group’s share of the investee’s net
assets and any impairment loss relating to the investm ent (see note 2(i)(iii)). At each reporting date, the Group
assesses whether there is any objective evidence that the investment is impaired. Any acquisition-date
consideration excess over cost, the Group’s share of the post-acquisition, post-tax results of the investees and
any impairment losses for the period are recognised in the consolidated statements of profit or loss and other
comprehensive income, whereas the Group’s share of the post-acquisition post-tax items of the investees’ other
comprehensive income is recognised in the consolidated statements of profit or loss and other comprehensive
income.
When the Group’s share of losses exceeds its interest in the associate, the Group’s interest is reduced to nil
and recognition of further losses is discontinued except to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of the investee. For this purpose, the Group’s interest is
the carrying amount of the investment under the equity method together with any other long-term interests that
in substance form part of the Group’s net investment in the associate (after applying the ECL model to such
other long-term interests where applicable (see Note 2(i)(i)).
Unrealised gains arising from transactions with equity-accounted investees are eliminated against the
investment to the extent of the Group’s interest in the in vestee. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent there is no evidence of impairment.
In the Company’s statements of financial position, investments in associates are accounted for using the
equity method.
(e) Other investments in equity securities
The Group’s policies for investments in equity securities, other than investments in subsidiaries and
associates, are set out below:
Investments in equity securities are recognised/derecognised on the date the Group commits to
purchase/sell the investment. The investments are ini tially stated at fair value, plus directly attributable
transaction costs, except for those investments measured at fair value through profit or loss (FVPL) for which
transaction costs are recognised directly in profit or loss. For an explanation of how the Group determines fair
value of financial instruments, see Note 29(d). These investments are subsequently accounted for as follows,
depending on their classification:
An investment in equity securities is classified as FVPL unless the equity investment is not held for trading
purposes and on initial recognition of the investment the Group makes an irrevocable election to designate the
investment at FVOCI (non-recycling) such that subsequent changes in fair value are recognised in other
comprehensive income. Such elections are made on an instrument-by-instrument basis, but may only be made if
the investment meets the definition of equity from the issuer’s perspective. Where such an election is made, the
amount accumulated in other comprehensive income remains in the fair value reserve (non-recycling) until the
investment is disposed of. At the time of disposal, the amount accumulated in the fair value reserve
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 469 ---
(non-recycling) is transferred to retained earnings. It is not recycled through profit or loss. Dividends from an
investment in equity securities, irrespective of whether classified as at FVPL or FVOCI, are recognised in profit
or loss as other income in accordance with the policy set out in Note 2(u)(v).
(f) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses (see
Note 2(i)(iii)).
Construction in progress represents property, plant and equipment under construction and equipment
pending installation, and is initially recognised at cost. Cost comprises cost of materials, direct labour, the initial
estimate, where relevant, of the costs of dismantling and removing the items and restoring the site on which they
are located, and an appropriate proportion of production overheads and borrowing costs (see Note 2(w)). The
construction in progress is transferred to property, plant and equipment when the asset is substantially ready for
its intended use.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Any related revaluation surplus is transferred from the revaluation reserve to retained profits and is not
reclassified to profit or loss.
Depreciation is calculated to write off the cost of items of property, plant and equipment, less their
estimated residual value, if any, using the straight-line method over their estimated useful lives, and is generally
recognized in profit or loss, as follows:
Buildings 20 years
Machinery and equipment 3–10 years
Office and other equipment 3–5 years
Lease Vehicles 5 years
Leasehold improvement 2–6 years
Where parts of an item of property, plant and equipment have different useful lives, the cost of the item is
allocated on a reasonable basis between the parts and each part is depreciated separately. Depreciation methods,
useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(g) Intangible assets (other than goodwill)
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Expenditure on development activities is capitalised if the product or process is technically and commercially
feasible and the Group has sufficient resources and the intention to complete development. The expenditure
capitalised includes the costs of materials, direct labour, and an appropriate proportion of overheads and
borrowing costs, where applicable (see Note 2(w)). Capitalised development costs are stated at cost less
accumulated amortisation and impairment losses (se e Note 2(i)(iii)). Other development expenditure is
recognised as an expense in the period in which it is incurred.
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation
(where the estimated useful life is finite) and impairmen t losses (see Note 2(i)(iii)). Expenditure on internally
generated goodwill and brands is recognized as an expense in the period in which it is incurred.
Amortisation of intangible assets with finite useful liv es is charged to profit or loss on a straight-line basis
over the assets’ estimated useful lives. The following inta ngible assets with finite useful lives are amortised from
the date they are available for use and their estimated useful lives are as follows:
Software 5 years
Amortisation methods, and useful lives are reviewed at each reporting date and adjusted if appropriate.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 470 ---
Intangible assets are not amortised while their useful lives are assessed to be indefinite. Any conclusion
that the useful life of an intangible asset is indefinit e is reviewed annually to determine whether events and
circumstances continue to support the indefinite useful life assessment for that asset. If they do not, the change
in the useful life assessment from indefinite to finite is accounted for prospectively from the date of changes and
in accordance with the policy for amortisation of intangible assets with finite lives as set out above.
(h) Leased assets
At inception of a contract, the Group assesses whether the 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. Control is conveyed where the customer has both the right to direct the use of the
identified asset and to obtain substantially all of the economic benefits from that use.
(i) As a lessee
Where the contract contains lease component(s) and non-lease component(s), the Group has elected
not to separate non-lease components and accounts for each lease component and any associated
non-lease components as a single lease component for all leases.
At the lease commencement date, the Group recogn ises a right-of-use asset and a lease liability,
except for short-term leases that have a lease term of 12 months or less and leases of low-value assets
which, for the Group are primarily leased apartment for employees. When the Group enters into a lease in
respect of a low-value asset, the Group decides whether to capitalise the lease on a lease-by-lease basis.
The lease payments associated with those leases whi ch are not capitalised are recognised as an expense on
a systematic basis over the lease term.
Where the lease is capitalised, the lease liability is initially recognised at the present value of the
lease payments payable over the lease term, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, using a relevant incremental borrowing rate. After initial
recognition, the lease liability is measured at amortised cost and interest expense is calculated using the
effective interest method. Variable lease payments that do not depend on an index or rate are not included
in the measurement of the lease liability and hence are charged to profit or loss in the accounting period in
which they are incurred.
The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which
comprises the initial amount of the lease liability plus any lease payments made at or before the
commencement date, and any initial direct costs incu rred. Where applicable, the cost of the right-of-use
assets also includes an estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, discounted to their present value, less any lease
incentives received. The right-of-use asset is subseque ntly stated at cost less accumulated depreciation and
impairment losses (see Notes 2(f) and 2(i)(iii)).
The initial fair value of refundable rental deposits is accounted for separately from the right-of use
assets in accordance with the accounting policy applicable to investments in debt securities carried at
amortised cost (see Note 2(i)(i)). Any difference between the initial fair value and the nominal value of the
deposits is accounted for as additional lease payments made and is included in the cost of right-of-use
assets.
The lease liability is remeasured when there is a change in future lease payments arising from a
change in an index or rate, or there is a change in the Group’s estimate of the amount expected to be
payable under a residual value guarantee, or there is a change arising from the reassessment of whether the
Group will be reasonably certain to exercise a purchase, extension or termination option. When the lease
liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 471 ---
The lease liability is also remeasured when there is a change in the scope of a lease or the
consideration for a lease that is not originally provided for in the lease contract (‘‘lease modification’’)
that is not accounted for as a separate lease. In this case the lease liability is remeasured based on the
revised lease payments and lease term using a revised discount rate at the effective date of the
modification. The only exceptions are rent concessions that occurred as a direct consequence of the
COVID-19 pandemic and met the conditions set out in paragraph 46B of IFRS 16 Leases .I ns u c hc a s e s ,
the Group has taken advantage of the practical expedient not to assess whether the rent concessions are
lease modifications, and recognised the change in consideration as negative variable lease payments in
profit or loss in the period in which the event or condition that triggers the rent concessions occurred.
In the consolidated statement of financial position, the current portion of long-term lease liabilities
is determined as the present value of contractual payments that are due to be settled within twelve months
after the reporting period.
(ii) As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance
lease or an operating lease. A lease is classified as a finance lease if it transfers substantially all the risks
and rewards incidental to the ownership of an underlying assets to the lessee. If this is not the case, the
lease is classified as an operating lease.
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. The rental income from
operating leases is recognised in accordance with Note 2(u)(ii).
When the Group is an intermediate lessor, the sub-leases are classified as a finance lease or as an
operating lease with reference to the right-of-use asset arising from the head lease. If the head lease is a
short-term lease to which the Group applies the exemption described in Note 2(h)(i), then the Group
classifies the sub-lease as an operating lease.
(i) Credit losses and impairment of assets
(i) Credit losses from financial instruments, contract assets and lease receivables
The Group recognises a loss allowance for expected credit losses (‘‘ECLs’’) on the following items:
— financial assets measured at amortised cost (including cash and cash equivalents, bank
deposits and trade receivables and other receivables, including loans to other investments in
equity, which are held for the collection of contractual cash flows which represent solely
payments of principal and interest);
— contract assets as defined in IFRS 15 (see Note 2(k)); and
— lease receivables.
Other financial assets measured at fair value, including equity securities designated at FVOCI
(non-recycling), are not subject to the ECL assessment.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the
present value of all expected cash shortfalls between the contractual and expected amounts.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 472 ---
The expected cash shortfalls are discounted using the following discount rates where the
effect of discounting is material:
— fixed-rate financial assets, trade and other receivables and contract assets: effective
interest rate determined at initial recognition or an approximation thereof;
— variable-rate financial assets: current effective interest rate;
— lease receivables: discount rate used in the measurement of the lease receivable.
The maximum period considered when estimating ECLs is the maximum contractual period
over which the Group is exposed to credit risk.
In measuring ECLs, the Group takes into account reasonable and supportable information
that is available without undue cost or effort. This includes information about past events, current
conditions and forecasts of future economic conditions.
ECLs are measured on either of the following bases:
— 12-month ECLs: these are losses that are expected to result from possible default events
within the 12 months after the reporting date; and
— lifetime ECLs: these are losses that are expected to result from all possible default
events over the expected lives of the items to which the ECL model applies.
Loss allowances for trade receivables and contract assets are always measured at an amount
equal to lifetime ECLs. ECLs on these financial assets are estimated using a provision matrix based
on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors
and an assessment of both the current and forecast general economic conditions at the reporting
date.
For all other financial instruments, the Group recognises a loss allowance equal to 12-month
ECLs unless there has been a significant increase in credit risk of the financial instrument since
initial recognition, in which case the loss allowance is measured at an amount equal to lifetime
ECLs.
Significant increases in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly since
initial recognition, the Group compares the risk of default occurring on the financial instrument
assessed at the reporting date with that assessed at the date of initial recognition. In making this
reassessment, the Group considers that a default event occurs when the borrower is unlikely to pay
its credit obligations to the Group in full, without recourse by the Group to actions such as realising
security (if any is held). The Group considers both quantitative and qualitative information that is
reasonable and supportable, including historical experience and forward-looking information that
is available without undue cost or effort.
In particular, the following information is taken into account when assessing whether credit
risk has increased significantly since initial recognition:
— failure to make payments of principal or interest on their contractually due dates;
— an actual or expected significant deteriora tion in a financial instrument’s external or
internal credit rating (if available);
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 473 ---
— an actual or expected significant deterioration in the operating results of the debtor;
and
— existing or forecast changes in the technological, market, economic or legal
environment that have a significant adverse effect on the debtor’s ability to meet its
obligation to the Group.
Depending on the nature of the financial instruments, the assessment of a significant increase
in credit risk is performed on either an individual basis or a collective basis. When the assessment is
performed on a collective basis, the financial instruments are grouped based on shared credit risk
characteristics, such as past due status and credit risk ratings.
ECLs are remeasured at each reporting date to reflect changes in the financial instrument’s
credit risk since initial recognition. Any change in the ECL amount is recognised as an impairment
gain or loss in profit or loss. The Group recognises an impairment gain or loss for all financial
instruments with a corresponding adjustment to their carrying amount through a loss allowance
account, except for investments in debt securities that are measured at FVOCI (recycling), for which
the loss allowance is recognised in other comprehensive income and accumulated in the fair value
reserve (recycling).
Credit-impaired financial assets
At each reporting date, the Group assesses whether a financial asset is credit-impaired. A
financial asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable events:
— Significant financial difficulties of the debtor;
— A breach of contract, such as a default or past due event;
— It is probable that the borrower will enter into bankruptcy or other financial
reorganisation;
— Significant changes in the technological, market, economic or legal environment that
have an adverse effect on the debtor; or
— The disappearance of an active market for a security because of financial difficulties of
the issuer.
Write-off policy
The gross carrying amount of a financial asset, contract asset or lease receivable is written off
(either partially or in full) to the extent that there is no realistic prospect of recovery. This is
generally the case when the Group determines that the debtor does not have assets or sources of
income that could generate sufficient cash flows to repay the amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal
of impairment in profit or loss in the period in which the recovery occurs.
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(ii) Credit losses from financial guarantees issued
Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified
payments to reimburse the beneficiary of the guarantee (the ‘‘holder’’) for a loss the holder incurs because
a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.
Financial guarantees issued are initially recogn ised. The amount initially recognised as deferred
income is subsequently amortised in profit or loss over the term of the guarantee as income.
The Group monitors the risk that the specified debtor will default on the contract and remeasures
the above liability at a higher amount when ECLs on the financial guarantees are determined to be higher
than the carrying amount in respect of the guarantees.
A 12-month ECL is measured unless the risk that the specified debtor will default has increased
significantly since the guarantee is issued, in which case a lifetime ECL is measured. The same definition
of default and the same assessment of significant increase in credit risk as described in Note 2(i)(i) apply.
As the Group is required to make payments only in the event of a default by the specified debtor in
accordance with the terms of the instrument that is guaranteed, an ECL is estimated based on the expected
payments to reimburse the holder for a credit loss that it incurs less any amount that the Group expects to
receive from the holder of the guarantee, the specified debtor or any other party. The amount is then
discounted using the current risk-free rate adjusted for risks specific to the cash flows.
(iii) Impairment of other non-current assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other
than property carried at revalued amounts, investment property, inventories and other contract costs,
contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any
such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for
impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or
cash-generating units (‘‘CGU’’s). Goodwill arising from a business combination is allocated to CGUs or
groups of CGUs that are expected to benefit from the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less
costs of disposal. Value in use based on the estimated future cash flows, 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 or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable
amount.
Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying
amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets
in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is
reversed only to the extent that the resulting carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised.
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(j) Inventories and other contract assets
(i) Inventories
Inventories are assets which are held for sale in the ordinary course of business, in the process of
production for such sale or in the form of materials or supplies to be consumed in the production process
or in the rendering of services.
Inventories are carried at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost formula and comprises all costs of purchase, costs
of conversion and other costs incurred in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale.
When inventories are sold, the carrying amount of those inventories is recognised as an expense in
the period in which the related revenue is recognised. The amount of any write-down of inventories to net
realisable value and all losses of inventories are recognised as an expense in the period the write-down or
loss occurs. The amount of any reversal of any write-down of inventories is recognised as a reduction in
the amount of inventories recognised as an expense in the period in which the reversal occurs.
A right to recover returned goods is recognised for the right to recover products from customers
sold with a right of return. It is measured in accordance with the policy set out in Note 2(u)(i).
(ii) Other contract costs
Other contract costs are either the incremental costs of obtaining a contract with a customer or the
costs to fulfill a contract with a customer which are not capitalized as inventories (see Note 2(u)(i)).
Incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract
with a customer that it would not have incurred if the contract had not been obtained e.g. an incremental
sales commission. Incremental costs of obtaining a contract are capitalized when incurred if the costs
relate to revenue which will be recognized in a future reporting period and the costs are expected to be
recovered. Other costs of obtaining a contract are expensed when incurred.
Costs to fulfil a contract are capitalized if the costs relate directly to an existing contract or to a
specially identifiable anticipated contract; generate or enhance resources that will be used to provide
goods or services in the future; and are expected to be recovered. Costs that relate directly to an existing
contract or to a specifically identifiable anticipated contract may include direct labour, direct materials,
allocation of costs, costs that are explicitly chargeable to the customer and other costs that are incurred
only because the Group entered into the contract (for example, payments to sub-contractors). Other costs
of fulfilling a contract, which are not capitalized as inventory, property, plant and equipment or
intangible assets, are expensed as incurred.
Capitalised contract costs are stated at cost less accumulated amortization and impairment losses.
Implementation losses are recognized to the extent that the carrying amount of the contract cost asset
exceeds the net of (i) remaining amount of consideration that the Group expects to receive in exchange for
the goods or services to which the asset relates, less (ii) any costs that relate directly to providing those
goods or services that have not yet been recognized as expenses.
Amortisation of capitalized contract costs is cha rged to profit or loss when the revenue to which the
asset relates is recognized. The accounting policy for revenue recognition is set out in Note 2(u).
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(k) Contract assets and contract liabilities
A contract asset is recognised when the Group recognises revenue (see Note 2(u)) before being
unconditionally entitled to the consideration under the payment terms set out in the contract. Contract assets
are assessed for expected credit losses (ECL) in accordance with the policy set out in Note 2(i)(i) and are
reclassified to receivables when the right to the consideration has become unconditional (see Note 2(l)).
A contract liability is recognised when the customer pays non-refundable consideration before the Group
recognises the related revenue (see Note 2(u)). A contract liability is also recognised if the Group has an
unconditional right to receive non-refundable consideration before the Group recognises the related revenue. In
such cases, a corresponding receivable would also be recognised (see Note 2(l)).
When the contract includes a significant financing component, the contract balance includes interest
accrued under the effective interest method (see Note 2(u)(iv)).
(l) Trade and other receivables
A receivable is recognised when the Group has an unconditional right to receive consideration, and only
the passage of time is required before payment of that consideration is due.
Trade receivables that do not contain a significant financing component are initially measured at their
transaction price. Trade receivables that contain a significant financing component and other receivables are
initially measured at fair value plus transaction costs.
All receivables are subsequently stated at amortised cost, using the effective interest method and including
an allowance for credit losses (see Note 2(i)(i)).
(m) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other
financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts
of cash and which are subject to an insignificant risk of changes in value, having been within three months of
maturity at acquisition. Bank overdrafts that are repayable on demand and form an integral part of the Group’s
cash management are also included as a component of cash and cash equivalents for the purpose of the
consolidated cash flow statement. Cash and cash equivalents are assessed for expected credit losses (ECL) in
accordance with the policy set out in Note 2(i)(i).
(n) Trade and other payables (other than refund liabilities)
Refund liabilities arising from rights of returns and volume rebates are recognised in accordance with the
policy set out in Note 2(u)(i).
(o) Interest-bearing borrowings
Interest-bearing borrowings are measured initially at fair value less transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amo rtised cost using the effective interest method. Interest
expense is recognised in accordance with the Group’s accounting policy for borrowing costs (see Note 2(w)).
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(p) Employee benefits
(i) Short-term employee benefits and contribu tions to defined contribution retirement plans
Short-term employee benefits are expensed as the related service is provided. A liability is
recognised for the amount expected to be paid if the Group has a present legal or constructive obligation
to pay this amount as a result of past service provided by the employee and the obligation can be
estimated reliably. Obligations for contributions to defined contribution retirement plans are expensed as
the related service is provided.
(ii) Share-based payments
The fair value of equity-settled share-based payment awards granted to employees is recognised as
an employee cost with a corresponding increase in a capital reserve within equity. The fair value is
measured at grant date using the valuation techniques, taking into account the terms and conditions upon
which the equity-settled share-based payment awards were granted. Where the employees have to meet
vesting conditions before becoming unconditionally entitled to the equity-settled share-based payment
awards, the total estimated fair value of the equity-settled share-based payment awards is spread over the
vesting period, taking into account the probability that the equity-settled share-based payment awards
will vest.
During the vesting period, the number of equity-settled share-based payment award that is expected
to vest is reviewed. Any resulting adjustment to the cumulative fair value recognised in prior years is
charged/credited to the profit or loss for the year/period of the review, unless the original employee
expenses qualify for recognition as an asset, with a corresponding adjustment to the capital reserve. On
vesting date, the amount recognised as an expense is adjusted to reflect the actual number of options that
vest (with a corresponding adjustment to the capital reserve) except where forfeiture is only due to not
achieving vesting conditions that relate to the market price of the Company’s shares. The equity amount is
recognised in the capital reserve until either the equity-settled share-based payment award is exercised
(when it is included in the amount recognised in share capital for the shares issued) or the equity-settled
share-based payment award expires (when it is released directly to retained profits).
(iii) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the
offer of those benefits and when the Group recognises costs for a restructuring.
(q) Income tax
Income tax expense comprises current tax and deferred tax. It is recognised in profit or loss except to the
extent that it relates to a business combination, or items recognised directly in equity or in OCI.
Current tax comprises the estimated tax payable or receivable on the taxable income or loss for the year
and any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax
payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects any
uncertainty related to income taxes. It is measured using tax rates enacted or substantively enacted at the
reporting date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
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Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for:
— temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss and does not
give rise to equal taxable and deductible temporary differences;
— temporary differences related to investment in subsidiaries, associates and joint venture to the
extent that the Group is able to control the timing of the reversal of the temporary differences and it
is probable that they will not reverse in the foreseeable future;
— taxable temporary differences arising on the initial recognition of goodwill; and
— those related to the income taxes arising from tax laws enacted or substantively enacted to
implement the Pillar Two model rules published by the Organisation for Economic Co-operation
and Development.
The Group recognised deferred tax assets and deferred tax liabilities separately in relation to its lease
liabilities and right-of-use assets.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they can be
used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If
the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future
taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business
plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are
reversed when the probability of future taxable profits improves.
Deferred tax assets and liabilities are offset only if certain criteria are met.
(r) Provision and contingent liabilities
Generally provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessment of the time value of money and the risks specific to the liability.
A provision for warranties is recognised when the underlying products or services are sold, based on
historical warranty data and a weighting of possible outcomes against their associated probabilities.
A provision for onerous contracts is measured at the present value of the lower of the expected cost of
terminating the contract and the expected net cost of continuing with the contract, which is determined based on
the incremental costs of fulfilling the obligation under that contract and an allocation of other costs directly
related to fulfilling that contract. Before a provision is e stablished, the Group recognises any impairment loss on
the assets associated with that contract (see Note 2(i)(iii)).
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of
economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or
non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of
outflow of economic benefits is remote.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another
party, a separate asset is recognised for any expected reimbursement that would be virtually certain. The amount
recognised for the reimbursement is limited to the carrying amount of the provision.
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(s) Derivative financial instruments
Derivative financial instruments are recognised at fair value. Subsequently, they are measured at fair value
with changes therein recognised in profit or loss.
(t) Financial instruments issued to investors with preferred rights
A contract that contains an obligation to purchase the Company’s equity instruments for cash or another
financial asset gives rise to a financial liability for the present value of the redemption amount. Even if the
Company’s obligations to purchase is conditional on the counterparty exercising a right to redeem, the financial
instruments issued to investors with preferred rights are recognised as financial liability initially at the present
value of the redemption amount and subsequently measured at amortised cost with interest included in finance
costs.
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged,
cancelled or have expired. The carrying amount of the financial instruments derecognised was credited into the
equity.
(u) Revenue and other income
Income is classified by the Group as revenue when it arises from the sale of goods, the provision of
services or the use by others of the Group’s assets under lease in the ordinary course of the Group’s business.
The Group is the principal for its revenue transactions and recognises revenue on a gross basis. In
determining whether the Group acts as a principal or as an agent, it considers whether it obtains control of the
products before they are transferred to the customers. Control refers to the Group’s ability to direct the use of
and obtain substantially all of the remaining benefits from the products.
Revenue is recognised when control over a product or service is transferred to the customer, or the lessee
has the right to use the asset, at the amount of promised consideration to which the Group is expected to be
entitled, excluding those amounts collected on behalf of third parties such as value added tax or other sales
taxes.
Further details of the Group’s revenue and other income recognition policies are as follows:
(i) Sale of goods
The Group typically offers customers of new energy engineering equipment, encompassing new
energy tractor trucks, new energy loaders and new energy wide-body dump trucks. Revenue is recognised
when products are delivered at the customers’ premises which is taken to be the point in time when the
customer has accepted and taken possession of the goods at the amount of promised consideration to
which the Group is expected to be entitled. Revenue excludes value added tax and is after deduction of any
trade rebates.
Where the contract contains a financing component which provides a significant financing benefit
to the customer for more than 12 months, 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
with the customer, and interest income is accrued se parately under the effective interest method. Where
the contract contains a financing component which provides a significant financing benefit to the Group,
revenue recognised under that contract includes the interest expense accreted on the contract liability
under the effective interest method. The Group takes advantage of the practical expedient in paragraph 63
of IFRS 15 and does not adjust the consideration for any effects of a significant financing component if
the period of financing is 12 months or less.
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The Group typically offers customers of new energy engineering equipment that are not
made-to-order rights of return for those products with significant quality issues. Such rights of return
give rise to variable consideration. The Group uses an expected value approach to estimate variable
consideration based on the Group’s current and future performance expectations and all information that
is reasonably available. This estimated amount is included in the transaction price to the extent it is highly
probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty
associated with the variable consideration is resolved. At the time of sale of new energy engineering
equipment, the Group recognises revenue after taking into account adjustment to transaction price arising
from returns as mentioned above. A refund liability is recognised for the expected returns and rebates, and
is included in trade and other payables (see Note 23). A right to recover returned goods (included in
inventories, see Note 18) and corresponding adjustment to cost of sales are also recognised for the right to
recover products from customers. This right to recover returned goods is measured at the former carrying
amount of the inventory less any expected costs to recover goods (including potential decreases in the
value of the returned goods).
(ii) Rental income from operating lease
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the
term of the lease. Lease incentives granted are recognised as an integral part of the total rental income,
over the term of the lease. Variable lease payments that do not depend on an index or a rate are recognised
as income in the accounting period in which they are earned.
(iii) Rendering of services
The Group recognises revenue from rendering of services including maintenance service, trial-drive
services etc. over the period of the service.
(iv) Interest income
Interest income is recognised as it accrues using the effective interest method using the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross
carrying amount of the financial asset. For financial assets measured at amortised cost or FVOCI
(recycling) that are not credit-impaired, the effective interest rate is applied to the gross carrying amount
of the asset. For credit-impaired financial assets, the effective interest rate is applied to the amortised cost
(i.e. gross carrying amount net of loss allowance) of the asset (see Note 2(i)(i)).
(v) Dividends
Dividend income is recognised in profit or loss on the date on which the Group’s right to receive
payment is established.
(vi) Government grants
Government grants are recognised in the statement of financial position initially when there is
reasonable assurance that they will be received and that the Group will comply with the conditions
attaching to them. Grants that compensate the Group for expenses incurred are recognised as income in
profit or loss on a systematic basis in the same periods in which the expenses are incurred. Grants that
compensate the Group for the cost of an asset are recognised initially as deferred revenue and amortised
as income in the profit or loss on a straight-lin e basis over the useful life of the related asset.
(v) Translation of foreign currencies
Transactions in foreign currencies are translated into the respective functional currencies of group
companies at the exchange rates at the dates of the transactions.
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Monetary assets and liabilities denominated in fore ign currencies are translated into the functional
currency at the exchange rate at the reporting date. Non-mo netary assets and liabilities that are measured at fair
value in a foreign currency are translated into the functional currency at the exchange rate when the fair value
was determined. Non-monetary assets and liabilities t hat are measured based on historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are
generally recognised in profit or loss.
(w) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset
which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part
of the cost of that asset. Other borrowing costs are expensed in the period in which they are incurred.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when
expenditures for the asset is being incurred, borrowing costs are being incurred and activities that are necessary
to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or
ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale
are interrupted or complete.
(x) Related parties
(a) A person, or a close member of that person’s family, is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture
of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third
party.
(v) The entity is a post-employment benefit 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 significan t influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management
personnel services to the Group or to the Group’s parent.
Close members of the family of a person are those family members who may be expected to influence, or
be influenced by, that person in their dealings with the entity.
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(y) Research and development costs
Research and development costs comprise all costs that are directly attributable to research and
development activities or that can be allocated on a reas onable basis to such activities. Because of the nature of
the Group’s research and development activities, the criteria for the recognition of such costs as an asset are
generally not met until late in the development stage of the project when the remaining development costs are
immaterial. Hence both research costs and development cos ts are generally recognised as expenses in the period
in which they are incurred.
(z) Segment reporting
Operating segments, and the amounts of each segment item reported in the financial statements, are
identified from the financial information provided regularly to the Group’s most senior executive management
for the purposes of allocating resources to, and assessing the performance of, the Group’s various lines of
business and geographical locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the
segments have similar economic characteristics and are similar in respect of the nature of products and services,
the nature of production processes, the type or class of customers, the methods used to distribute the products or
provide the services, and the nature of the regulatory environment. Operating segments which are not
individually material may be aggregated if they share a majority of these criteria.
3 ACCOUNTING JUDGEMENTS AND ESTIMATES
Note 29 contains information about the assumptions and their risk factors relating to fair value of financial
investments. Other significant sources of estimation uncertainty in the process of applying the Group’s accounting
policies are as follows:
(i) Depreciation and amortisation
Right-of-use assets, property, plant and equipment and intangible assets, are depreciated or amortised on
a straight-line basis over the estimated useful lives of the assets. The Group reviews the estimated useful lives of
the assets regularly in order to determine the amount of depreciation and amortisation expenses to be recorded
during any reporting period. The useful lives are based on the Group’s historical experience with similar assets.
The depreciation and amortisation expenses for future periods are adjusted if there are material changes from
previous estimates.
(ii) Impairment of contract assets, trade and other receivables
The Group’s management determines the loss allowance for expected credit losses on trade and other
receivables based on an assessment of the present value of all expected cash shortfalls. These estimates are based
on the information about past events, current conditions and forecasts of future economic conditions. The
Group’s management reassesses the loss allowance at each reporting period end.
(iii) Net realizable value of inventories
Net realisable value of inventories is the estimated selling price in the ordinary course of business, less
estimated distribution expenses and related taxes. These estimates are based on the current market condition and
historical experience of selling products of similar nature. It could change significantly as a result of competitor
actions in response to changes in market conditions. Any change in the assumptions would increase or decrease
the amount of inventories write-down or the related reversals of write-downs and affect the Group’s profit or
loss and net asset value.
APPENDIX I ACCOUNTANTS’ REPORT
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(iv) Warranty provisions
As explained in Note 26, the Group makes provisions under the warranties it gives on sale of its vehicles
taking into account the Group’s recent claim experience. As the Group is continually upgrading its product
designs and launching new models, it is possible that the recent claim experience is not indicative of future claims
that it will receive in respect of past sales. Any increase or decrease in the provision would affect profit or loss in
future years.
4 REVENUE AND SEGMENT REPORTING
(a) Revenue
The Group is principally engaged in design, development, and commercialization of engineering
machinery powered by new energy.
(i) Disaggregation of revenue
Disaggregation of revenue from contracts with customers by major products or service lines is as
follows:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Revenue from contracts with customers within
the scope of IFRS 15
Disaggregated by major products or service
lines
Battery-electric vehicles
— Battery-electric tractor trucks 77,940,488 28,550,964 7,034,780
— Battery-electric loaders 183,729,521 281,153,550 224,196,688
— Battery-electric wide-body dump trucks 76,290,027 126,456,394 364,588,475
Spare parts and accessories 15,311,027 19,372,425 25,687,545
Sales of products 353,271,063 455,533,333 621,507,488
Rendering of services 485,486 2,793,670 3,186,676
Subtotal 353,756,549 458,327,003 624,694,164
Revenue from other sources
Rental income 6,349,775 5,411,028 10,762,511
Total 360,106,324 463,738,031 635,456,675
Disaggregation of revenue from contracts with customers by the timing of revenue recognition is as
follows:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Disaggregation by timing of revenue recognition
— Point in time 353,271,063 455,533,333 621,507,488
— Over time 6,835,261 8,204,698 13,949,187
Total 360,106,324 463,738,031 635,456,675
APPENDIX I ACCOUNTANTS’ REPORT
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The Group has applied the practical expedient in paragraph 121 of IFRS 15 such that the above
information does not include information about revenue that the Group will be entitled to when it satisfies
the remaining performance obligations for those the Group has a right to consideration from customers in
an amount that corresponds directly with the value to the customer of the Group’s performance completed
to date, and the Group may recognise revenue in the amount to which the Group has a right to invoice.
The Group’s customer base is diversified and includes Nil, 1 and 2 customers with whom
transactions have exceeded 10% of the Group’s revenues for the years ended 31 December 2022, 2023 and
2024, respectively. During the years ended 31 December 2023 and 2024, revenue from sales of new energy
engineering machinery and rendering of services to the customer, including sales to entities which are
known to the Group to be under common control with the customer, amounted to approximately
RMB47,445,208 and RMB157,834,911. Details of concentrations of credit risk arising from this customer
are set out in Note 29(a).
Disaggregation of revenue from contracts with customers by geographic markets is disclosed in
Note 4(b)(i).
(b) Segment reporting
(i) Segment information
IFRS 8, Operating Segments, requires identification and disclosure of operating segment
information based on internal financial reports that are regularly reviewed by the Company’s chief
operating decision maker for the purpose of resources allocation and performance assessment. The Group
manages its businesses as a whole by the most senior executive management for the purposes of resource
allocation and performance assessment. The Group’s chief operating decision maker is the chief executive
officer of the Group who reviews the Group’s consolidated results of operations in assessing performance
of and making decisions about allocations to this segment. On this basis, the Company has determined
that it only has one operating segment.
Geographic information
For the years ended 31 December 2022, 2023 and 2024, the geographical information on the
total revenue based on the location at which new energy engineering machinery are delivered is as
follows:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Chinese Mainland 360,106,324 454,866,463 635,456,675
United States — 8,871,568 —
Total 360,106,324 463,738,031 635,456,675
(ii) Non-current asset
The Group’s operating assets are substantially situated in the PRC. Accordingly, no segment
analysis based on geographical locations of the assets is provided.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 4–


--- page 485 ---
5 OTHER NET GAIN
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Government grants (Note) 2,058,866 5,320,423 8,251,861
Net gain on modification and termination of lease 175,729 — 866,500
Net foreign exchange gain 56,482 — —
Net (loss)/gain on disposal of property, plant and
equipment (198,812) 61,052 (1,130,216)
Dividends received from other investments — — 333,000
(Loss)/gain on disposal or loss of significant influence
of associates (Note 16) (1,397,542) — 16,276,819
Loss on disposal of subsidiaries (46,906) — —
Compensation (537,760) (1,208,333) —
Others 10,520 327,150 19,331
120,577 4,500,292 24,617,295
Note: Government grants are not assets related and primarily represent reward and subsidies provided to the
Group for its contribution to the local economic growth.
6 LOSS BEFORE TAXATION
Loss before taxation is arrived at after charging/ (crediting):
(a) Finance (income)/costs:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Finance income
Interest income on financial assets measured at
amortised cost (140,808) (8,205,429) (3,011,483)
Interest income on loans to third parties (150,238) (8,109) —
Interest income on sales under instalment
payment (6,155,896) (8,121,642) (7,535,835)
(6,446,942) (16,335,180) (10,547,318)
Finance costs
Interest expenses on loans and borrowings 5,818,540 5,312,225 9,336,428
Interest expenses on other borrowings
(Note 21(c)) 983,750 — —
Interest expenses on financial instruments issued
to investors (Note 25) 6,463,781 272,183 —
Interest expenses on obligations arising from
leaseback transactions 28,158 452,384 94,798
Interest expenses on lease liabilities (Note 21(c)) 438,409 882,489 673,582
Less: interest expense capitalised into property,
plant and equipment — — (918,125)
13,732,638 6,919,281 9,186,683
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 5–


--- page 486 ---
(b) Staff costs:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Salaries, wages and other benefits 68,377,750 90,873,434 98,753,711
Discretionary bonuses 6,358,457 10,627,987 7,815,986
Contributions to retirement schemes (Note) 6,320,766 10,281,132 11,175,293
Equity-settled share-based payment expenses
(Note 27) 29,053,824 29,658,835 33,477,637
110,110,797 141,441,388 151,222,627
Note: Employees of the Group are required to participate in a defined contribution retirement scheme
administered and operated by the local municipal government. The Group contributes funds
which are calculated on certain percentages of the average employee salary as agreed by the local
municipal government to the scheme to fund the retirement benefits of the employees.
The Group has no other material obligation for the payment of pension benefits beyond the
annual contributions described above.
(c) Other items:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Depreciation and amortisation
— Owned property,
plant and equipment (Note 11) 3,936,900 6,008,465 11,941,462
— Right-of-use assets (Note 13) 3,380,674 5,401,941 6,197,288
— Intangible assets (Note 14) 242,228 383,250 800,103
Impairment losses recognized
— Trade and other receivables (Note 29(a)) 26,793,194 37,775,596 80,495,981
— Contract assets (Note 29(a)) — — 36,471
— Inventories (Note 18) 25,650,260 20,879,290 17,432,258
— Financial guarantee issued (Note 26) 69,498 400,090 2,565,400
Product warranty costs (Note 26) 10,304,310 13,448,739 18,608,549
Research and development expenses (i) 44,855,133 68,561,547 81,706,535
Auditors’ remuneration (ii) 630,000 2,542,522 3,477,261
Listing expense — 9,686,061 23,463,429
Cost of sales (Note 18(b))(iii) 351,933,806 454,459,056 598,617,808
(i) During the years ended 31 December 2022, 2023 a nd 2024, research and development costs included
staff costs of RMB29,423,417, RMB38,899,940 and RMB45,759,588 and depreciation and
amortisation expenses of RMB2,175,170, RMB406,347 and RMB566,933, which are also included
in the respective total amounts disclosed separately above or in Note 6(b) for each of these types of
expenses.
(ii) During the year ended 31 December 2023 and 2024, the Group recognised auditors’ remuneration in
respect of initial public offering of RMB1,442,522 and RMB3,477,261, which are also included in
the listing expenses disclosed separately above.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 6–


--- page 487 ---
(iii) During the years ended 31 December 2022, 2023 and 2024, cost of sales included staff costs of
RMB3,093,410, RMB6,643,649 and RMB9,086,600, depreciation and amortisation expenses of
RMB3,150,993, RMB6,666,514 and RMB11,367,315 and write-down of inventories, which are also
included in the respective total amounts disclosed separately above or in Note 6(b) for each of these
types of expenses.
7I N C O M E T A X
(a) Taxation in the consolidated statements of profit and loss represents:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Provision for income tax for the year 630,315 1,381 90,315
(b) Reconciliation between income tax expense and accounting loss at applicable tax rates:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Loss before taxation (177,470,438) (229,412,150) (274,457,165)
Notional tax on loss before taxation, calculated at the
rates applicable to profit in the tax jurisdictions
concerned (Note (i)) (44,062,286) (57,067,993) (68,170,859)
Tax effect of non-deductible e xpenses 283,191 447,242 429,654
Tax effect of non-taxable income — — (83,250)
Tax losses and temporary differences not recognised 44,328,988 56,759,936 67,006,790
Tax effect in respect of share of resul ts of associates 80,422 (137,804) 907,980
Actual income tax expense 630,315 1,381 90,315
Notes:
(i) Pursuant to the Enterprise Income Tax (the ‘‘EIT’’), the Company and its subsidiaries are liable to
EIT at a rate of 25%, unless otherwise specified.
(ii) Certain subsidiaries in the PRC were entitled to a preferential PRC Enterprise Income Tax (the
‘‘EIT’’) rate of 5% as it was accredited as small and micro business.
(iii) According to the EIT Law and its relevant regulations, entities that qualified as a High and New
Technology Enterprises are entitled to a preferential income tax rate of 15%. The Company
obtained the High and New Technology Enterprises status in 2019 and had this status renewed in
2022.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 488 ---
(c) Deferred tax assets not recognised
In accordance with the accounting policy set out in Note 2(q), the Group has not recognised deferred tax
assets in respect of cumulative tax losses of RMB245,843,701, RMB395,366,093 and RMB522,477,814 and
other deductible temporary differences of RMB94,174,337, RMB171,458,660 and RMB257,986,617 as at
31 December 2022, 2023 and 2024 respectively, as it is not probable that future taxable profits against
which the losses and the deductible temporary difference can be utilised will be available in the relevant
tax jurisdiction and entity. Tax losses of RMB28,739,624, RMB57,268,151, RMB103,804,948,
RMB149,562,690 and RMB183,102,401, if unused, will expire in 2025, 2026, 2027, 2028 and 2029,
respectively.
8 DIRECTORS’ EMOLUMENTS
Directors’ emoluments disclosed pursuant to section in 383(1) of the Hong Kong Companies Ordinance and Part
2 of the Companies (Disclosure of Information about Benefits of Directors) Regulations are as follows:
Year ended 31 December 2022
Directors’ fees
Salaries
allowance and
benefits in
kind
Discretionary
bonuses
Contributions
to retirement
scheme
Equity-settled
share-based
payment
(Note) Total
RMB RMB RMB RMB RMB RMB
Directors:
Mr. Chen Fangming ( 陳方明) (a) — 532,666 39,375 62,594 — 634,635
Mr. Zhou Daowu ( 周道武) (b) — 242,434 36,250 9,924 — 288,608
Mr. Qiu Debo ( 邱德波) (f) — 357,893 29,589 10,940 2,693,918 3,092,340
Mr. Liu Xingyu ( 劉星宇) (f) — 175,557 33,750 10,195 214,480 433,982
Mr. Sun Kanghua ( 孫康華) (g) — 86,676 37,500 10,940 39,892 175,008
Mr. Yin Junping ( 尹軍平) (d) ——————
Mr. Zhang Shaobo ( 張紹波) (c) ——————
M r .L iL i w e i( 李立偉) (c) ——————
Independent Non-executive
Directors:
Mr. Jiang Bailing ( 江百靈) (h) 1 6 , 6 6 6———— 1 6 , 6 6 6
M r .Z h o uY u a n(周元) (h) 1 6 , 6 6 6———— 1 6 , 6 6 6
M r .L iX i a o f u(李曉郛) (h) 1 6 , 6 6 6———— 1 6 , 6 6 6
Supervisors:
Mr. Liu Yudong ( 劉昱東) (e) ——————
Ms. Wang Yanzhen ( 王艷湞) (i) — 79,771 7,582 10,746 33,674 131,773
Ms. Sun Wenxu ( 孫文旭) (i) — 23,589 17,500 5,123 11,139 57,351
49,998 1,498,586 201,546 120,462 2,993,103 4,863,695
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 8–


--- page 489 ---
Year ended 31 December 2023
Directors’ fees
Salaries
allowance and
benefits in
kind
Discretionary
bonuses
Contributions
to retirement
scheme
Equity-settled
share-based
payment
(Note) Total
RMB RMB RMB RMB RMB RMB
Directors:
Mr. Chen Fangming ( 陳方明) (a) — 687,079 39,375 67,908 — 794,362
Mr. Qiu Debo ( 邱德波) (f) — 926,918 75,000 67,908 9,640,000 10,709,826
Mr. Liu Xingyu ( 劉星宇) (f) — 669,904 35,500 53,977 866,886 1,626,267
Mr. Sun Kanghua ( 孫康華) (g) — 496,864 37,500 67,908 278,307 880,579
Ms. Yang Hui ( 楊慧) (j) — 158,890 35,500 17,544 1,807,500 2,019,434
Mr. Yin Junping ( 尹軍平) (d) ——————
Mr. Cao Haiyi ( 曹海毅) (k) ——————
Mr. Wang Zhenkun ( 王振坤) (l) ——————
Independent Non-executive
Directors:
Mr. Jiang Bailing ( 江百靈) (h) 100,000 ———— 100,000
M r .Z h o uY u a n(周元) (h) 100,000 ———— 100,000
M r .L iX i a o f u(李曉郛) (h) 100,000 ———— 100,000
Supervisors:
Mr. Liu Yudong ( 劉昱東) (e) ——————
Ms. Wang Yanzhen ( 王艷湞) (i) — 512,481 33,750 66,778 241,000 854,009
Ms. Sun Wenxu ( 孫文旭) (i) — 276,330 9,800 33,878 78,518 398,526
300,000 3,728,466 266,425 375,901 12,912,211 17,583,003
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 9–


--- page 490 ---
Year ended 31 December 2024
Directors’ fees
Salaries
allowance and
benefits in
kind
Discretionary
bonuses
Contributions
to retirement
scheme
Equity-settled
share-based
payment
(Note) Total
RMB RMB RMB RMB RMB RMB
Executive Directors:
Mr. Chen Fangming ( 陳方明) (a) — 926,666 187,500 70,531 — 1,184,697
Mr. Qiu Debo ( 邱德波) (f) — 852,500 187,500 — 9,640,000 10,680,000
Mr. Sun Kanghua ( 孫康華) (g) — 546,683 156,750 70,531 265,837 1,039,801
Ms. Yang Hui ( 楊慧) (j) — 922,740 93,750 70,531 7,230,000 8,317,021
Non-Executive Directors:
Mr. Yin Junping ( 尹軍平) (d) ——————
Mr. Cao Haiyi ( 曹海毅) (k) ——————
Mr. Wang Zhenkun ( 王振坤) (l) ——————
Independent Non-executive
Directors:
Mr. Jiang Bailing ( 江百靈) (h) 100,000 ———— 100,000
M r .Z h o uY u a n(周元) (h) 100,000 ———— 100,000
M r .L iX i a o f u(李曉郛) (h) 100,000 ———— 100,000
Mr. YIM Chi Hung Henry
(嚴志雄) (m) 206,554 ———— 206,554
Supervisors:
Mr. Liu Yudong ( 劉昱東) (e) ——————
Ms. Wang Yanzhen ( 王艷湞) (i) — 469,656 84,375 69,985 241,000 865,016
Ms. Sun Wenxu ( 孫文旭) (i) — 339,186 35,000 38,410 76,440 489,036
506,554 4,057,431 744,875 319,988 17,453,277 23,082,125
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 0–


--- page 491 ---
(a) Mr. Chen Fangming ( 陳方明) was appointed as a Director since November 2016. He was later
re-designated as an executive Director in April 2024.
(b) Mr. Zhou Daowu ( 周道武) was appointed as a Director of the Company on 31 October 2018. He ceased to
act as a Director of the Company because of his resignation on 28 February 2022.
(c) Mr. Zhang Shaobo ( 張紹波)a n dM r .L iL i w e i( 李立偉) were former Directors of the Company during the
period from 3 August 2021 to 30 August 2022, nominated by Zibo Naying Equity Investment Partnership
(Limited Partnership)* ( 淄博納贏股權投資合夥企業（有限合夥）) (‘‘Zibo Naying’’, a shareholder of the
Company).
(d) Mr. Yin Junping ( 尹軍平) was appointed as a Director of the Company on 16 August 2021, nominated by
Zhongding No.5 and Zhongding Qinglan. He ceased to act as a Director in April 2024.
(e) Mr. Liu Yudong ( 劉昱東) was appointed as a Supervisor of the Company on August 2021, nominated by
Guangzhou Naibixin Phase I Venture Capital Fund Partnership (Limited Partnership)* ( 廣州耐必信一期
創業投資基金合夥企業（有限合夥）).
(f) Mr. Qiu Debo ( 邱德波) and Mr. Liu Xingyu ( 劉星宇) were appointed as Directors of the Company on 30
August 2022. Mr. Qiu was later re-designated as an executive Director in April 2024. Mr. Liu ceased to act
as a Director of the Company on 19 October 2023 because of the decision of the Company.
(g) Mr. Sun Kanghua ( 孫康華) was appointed as a Director of the Company on 5 November 2022. He was
later re-designated as an executive Director in April 2024.
(h) Dr. Jiang Bailing ( 江百靈), Mr. Zhou Yuan ( 周
元)a n dD r .L iX i a o f u( 李曉郛) were appointed as
independent Directors in November 2022 and were redesignated as independent non-executive Directors
in April 2024.
(i) Ms. Wang Yanzhen ( 王艷湞) and Ms. Sun Wenxu ( 孫文旭) were appointed as Supervisors of the Company
on 5 November 2022.
(j) Ms. Yang Hui ( 楊慧) was appointed as a Director of the Company on 19 October 2023. She was later
re-designated as an executive Director in April 2024.
(k) Mr. Cao Haiyi ( 曹海毅) was appointed as a Director of the Company on 4 February 2023, nominated by
Hunan Xiangtan Caixin Chanxing Equity Investment Partnership (Limited Partnership)* 湖南湘潭財信產
興股權投資合夥企業（有限合夥）. He was later re-designated as a non-executive Director in April 2024.
(l) Mr. Wang Zhenkun ( 王振坤) was appointed as a Director of the Company on 19 October 2023, nominated
by Hubei Changjiang Automobile Vally Industry Inv estment Fund Partnership (Limited Partnership)* 湖
北長江車谷產業投資基金合夥企業（有限合夥）. He was later re-designated as a non-executive Director in
April 2024.
(m) Mr. YIM Chi Hung Henry ( 嚴志雄) was appointed as independent non-executive Directors in April 2024.
* The English translation of these entities is for reference only. The official names of the entities established in
the PRC are in Chinese.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 1–


--- page 492 ---
Note:
These represent the estimated value of a share award (or share capital before the Company’s conversion into a
joint stock company (see Note 28(c)(i)) granted to the Directors and the chief executives under the Company’s
the Restricted Share Scheme. The value of these restricted shares is measured according to the Group’s
accounting policies for share-based payment transactions as set out in Note 27 and, in accordance with that
policy, includes adjustments to reverse amounts accrued i n previous years where grants of equity instruments are
forfeited prior to vesting. The details of share based payment, including the principal terms and number of
restricted shares granted, are disclosed in Note 27.
During the Relevant Periods, there were no amounts paid or payable by the Group to the Directors or any of the
highest paid individuals set out in Note 9 below as an inducement to join or upon joining the Group or as a
compensation for loss of office. There was no arrangement under which a Director waived or agreed to waive
any remuneration during the Relevant Periods.
9 INDIVIDUALS WITH HIGHEST EMOLUMENTS
Of the five individuals with the highest emoluments for the years ended 31 December 2022, 2023 and 2024, only
one, two and two are directors and supervisors whose emoluments are disclosed in Note 8. The aggregate of the
emoluments in respect of the remaining four, three, and three individuals during the Relevant Periods are as follows:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Salaries, allowances and benefits in kind 2,030,897 2,866,730 2,214,903
Discretionary bonuses 52,003 101,200 319,969
Contributions to retirement benefit schemes 144,232 389,319 149,168
Equity-settled share-based payment (Note 27) 13,278,673 5,636,118 5,786,371
15,505,805 8,993,367 8,470,411
The emoluments of the individuals who are not directors or supervisors and who are amongst the five highest
paid individuals of the Group are within the following bands:
Year ended 31 December
2022 2023 2024
HKD
1,000,001–1,500,000 1 — —
2,500,001–3,000,000 — — 1
3,000,001–3,500,000 1 2 2
3,500,001–4,000,000 — 1 —
5,000,001–5,500,000 1 — —
7,000,001–7,500,000 1 — —
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 2–


--- page 493 ---
10 LOSS PER SHARE
Basic loss per share is calculated by dividing the loss attributable to ordinary equity shareholders of the
Company by the weighted average number of ordinary shares in issue or deemed to be issued during the Relevant
Periods.
As described in Note 28(c)(i), the Company was converted into a joint stock Company with limited liability. The
Company’s paid-in capital of RMB145,558,000 was convert ed into 300,000,000 shares of RMB1.00 each accordingly.
For the purpose of computing basic and diluted loss per share, the weighted average number of ordinary shares
deemed to be in issue before the Company’s conversion into a joint stock Company was determined assuming the
conversion into joint stock Company had occurred since 1 January 2022, at the exchange ratio established in the
conversion in November 2022.
Year ended 31 December
2022 2023 2024
Loss for the year attributable to ordinary equity
shareholders of the Company (148,323,255) (229,413,531) (274,547,480)
Weighted average number of ordinary shares deemed
to be in issue 231,756,462 347,072,296 351,709,265
Basic and diluted loss per share (0.64) (0.66) (0.78)
(a) Loss of the year attributable to equity shareholders of the Company
Year ended 31 December
2022 2023 2024
Loss of the year attributable to all equity shareholders
of the Company (178,100,753) (229,413,531) (274,547,480)
Allocation of loss for the year attributable to ordinary
shares with redemption rights issued to investors 29,777,498 — —
Loss of the year attributable to ordinary equity
shareholders of the Company (148,323,255) (229,413,531) (274,547,480)
(b) Weighted average number of ordinary shares deemed to be in issue
Year ended 31 December
2022 2023 2024
Ordinary shares at 1 January deemed
to be in issue 261,057,997 311,536,557 351,709,265
Effect of ordinary shares deemed to be in issue 14,832,086 — —
Effect of ordinary shares with redemption rights
issued to investors (46,527,618) — —
Effect of ordinary shares in issue 2,393,997 35,535,739 —
Weighted average number of ordinary shares at
the end of the year deemed to be in issue 231,756,462 347,072,296 351,709,265
(c) Ordinary shares with redemption rights issued to investors (Note 25) and restricted shares granted under
the Group’s employee restricted share plans (Note 27) were not included in the calculation of diluted loss
per share because their effect would have been anti-dilutive. Accordingly, diluted loss per share were the
same as basic loss per share during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 3–


--- page 494 ---
11 PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings
Machinery
and
equipment
Office and
other
equipment
Lease
Vehicles
Leasehold
improvement
Construction
in progress Total
RMB RMB RMB RMB RMB RMB RMB
Cost:
At 1 January 2022 — 3,825,588 1,319 ,358 2,479,503 4,354,379 — 11,978,828
Additions — 2,592,723 900,661 5, 210,062 1,522,279 2,796,102 13,021,827
Transfer in/(out) from
construction in progress — 1, 100,707 — — 1,695,395 (2,796,102) —
Disposals — (330,973) (39,455) — — — (370,428)
At 31 December 2022 and
1 January 2023 — 7,188,045 2,180 ,564 7,689,565 7,572,053 — 24,630,227
Additions — 1,771,204 519,769 18,276,517 697,244 65,450,900 86,715,634
Transfer in/(out) from
construction in progress — 1,783,876 — — — (1,783,876) —
D i s p o s a l s — ( 1 , 1 0 0 , 7 0 7 ) ———— ( 1 , 100,707)
At 31 December 2023 and
1 January 2024 — 9,642,418 2,700,3 33 25,966,082 8,269, 297 63,667,024 110,245,154
Additions 149,454 178,633 850,130 12,587,484 1,338,374 68,305,830 83,409,905
Transfer in/(out) from
construction in progress 64,614,82 8 12,017,564 — — 1,592,266 (78,224,658) —
Disposals — (371,496) (239,992) ( 3,198,749) (1,695,395) — (5,505,632)
At 31 December 2024 64,764,282 21,467,119 3, 310,471 35,354,817 9, 504,542 53,748,196 188,149,427
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 4–


--- page 495 ---
The Group
Buildings
Machinery
and
equipment
Office and
other
equipment
Lease
Vehicles
Leasehold
improvement
Construction
in progress Total
RMB RMB RMB RMB RMB RMB RMB
Accumulated depreciation:
At 1 January 2022 — (493,859) (687,780 ) (138,963) (1,900,506) — (3,221,108)
Charge for the year — (524,389) (283,826 ) (1,052,381) (2,076,304) — (3,936,900)
Written back on disposals — 68,034 21,865 — — — 89,899
At 31 December 2022 and
1 January 2023 — (950,214) (949,741) ( 1,191,344) (3,976,810) — (7,068,109)
Charge for the year — (1,135,531) (465,2 69) (2,527,728) (1,879,937) — (6,008,465)
W r i t t e n b a c k o n d i s p o s a l s — 1 3 2 , 0 8 5———— 132,085
At 31 December 2023 and
1 January 2024 — (1,953,660) (1,415,010 ) (3,719,072) (5,856,747) — (12,944,489)
Charge for the year (1,585,175) (2,412,596) ( 723,459) (5,956,743) (1 ,263,489) — (11,941,462)
Written back on disposals — 123,9 96 108,073 1,059,530 747,516 — 2,039,115
At 31 December 2024 (1,585,175) (4,242,260) (2, 030,396) (8,616,285) (6 ,372,720) — (22,846,836)
Net book value:
At 31 December 2022 — 6,237,831 1,230 ,823 6,498,221 3,595,243 — 17,562,118
At 31 December 2023 — 7,688,758 1,285,3 23 22,247,010 2,412, 550 63,667,024 97,300,665
At 31 December 2024 63,179,107 17,224,859 1, 280,075 26,738,532 3, 131,822 53,748,196 165,302,591
The Group’s property, plant and equipment are located in the PRC.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 5–


--- page 496 ---
The Company
Machinery
and
equipment
Office and
other
equipment
Lease
Vehicles
Leasehold
improvement Total
RMB RMB RMB RMB RMB
Cost:
At 1 January 2022 104,633 1,253,209 — 1,024,397 2,382,239
Additions 314,513 828,633 — 696,375 1,839,521
At 31 December 2022 and
1 January 2023 419,146 2,081,842 — 1,720,772 4,221,760
Additions — 486,817 — 80,429 567,246
At 31 December 2023 and
1 January 2024 419,146 2,568,659 — 1,801,201 4,789,006
Additions — 80,564 614,644 — 695,208
Disposal (171,850) (239,992) — — (411,842)
At 31 December 2024 247,296 2,409,231 614,644 1,801,201 5,072,372
Accumulated depreciation:
At 1 January 2022 (20,865) (668,357) — (507,357) (1,196,579)
Charge for the year (56,349) (253,051) — (583,416) (892,816)
At 31 December 2022 and
1 January 2023 (77,214) (921,408) — (1,090,773) (2,089,395)
Charge for the year (138,470) (367,041) — (232,520) (738,031)
At 31 December 2023 and
1 January 2024 (215,684) (1,288,449) — (1,323,293) (2,827,426)
Charge for the year (70,511) (492,458) (82,977) (247,872) (893,818)
Written back on disposals 95,897 108,073 — — 203,970
At 31 December 2024 (190,298) (1,672,834) (82,977) (1,571,165) (3,517,274)
Net book value:
At 31 December 2022 341,932 1,160,434 — 629,999 2,132,365
At 31 December 2023 203,462 1,280,210 — 477,908 1,961,580
At 31 December 2024 56,998 736,397 531,667 230,036 1,555,098
APPENDIX I ACCOUNTANTS’ REPORT
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12 OTHER INVESTMENTS
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Financial assets measured at FVOCI
Unlisted equity investment
(Note 29(d)) 18,938,509 19,093,387 41,734,716
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Financial assets measured at FVOCI
Unlisted equity investment (Note 29(d)) 16,212,736 15,876,268 40,147,141
As at 31 December 2022, 2023 and 2024, other equity in vestments mainly represented the Group’s equity
investment in unlisted Companies and are initially recognized as financial assets at FVOCI.
In December 2021 and 2022, the Group invested 10.0% of the equity interest in the private company A, which is
incorporated in the PRC and principally engaged in sales of new energy vehicles, for a consideration of RMB300,000
and RMB700,000 in cash, respectively.
In January 2022, the Group invested 4.5% of the equity interest in the private company C, which is incorporated
in the PRC and principally engaged in the research and sales of new energy controllers, for a consideration of
RMB2,563,200 in cash.
In March 2022, the Group invested 1.7% of the equity interest in the private company B, which is incorporated
in the PRC and principally engaged in automatic driving and intelligent operation, for a consideration of
RMB2,400,000 in cash.
In July 2022, the Group invested 15.0% of the equity interest in the private company D, which is incorporated in
the PRC and principally engaged in sales of new energy vehicles, for a consideration of RMB1,500,000 in cash. In June
2024, these equity interest has been fully withdrawn and the Group has recognised a loss of RMB215,619 in ‘‘Other
comprehensive income’’ for the year ended 31 December 2024.
In December 2022, the Group invested 4.2% of the e quity interest in the private company E, which is
incorporated in the PRC and principally engaged in the sales of new energy vehicles and provision of unmanned
driving solutions, for a consideration of RMB500,000 in cash. In December 2023, the Group further acquired 23.2% of
the equity interest in the private company E for a consideration of RMB1,876,340 in cash and it was transferred to
associates since then.
Till September 2024, the Group invested 11.4% of the equity interest in a private company F, which is
incorporated in the PRC and principally engaged in operation and sales of new energy vehicles and provision of
unmanned driving solutions. In September 2024, this investment was transferred from interest in associates to other
investments at its fair value of RMB22,739,600 when the Group ceased to have its significant influence over this
company (Note 16).
The Group designated the above investments in unlisted equity securities at FVOCI (non-recycling), as the
investments are held for strategic purposes. No dividends were declared from these investments during the Relevant
Periods, except for a dividend received from the private company C with an amount of RMB333,000 in July 2024.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 7–


--- page 498 ---
For the years ended 31 December 2022, 2023 and 2024, the Group recognised RMB10,975,309, RMB631,532
and RMB1,401,729 in the changes in fair value of financial assets measured at FVOCI.
The analysis on the fair value measurement of the above financial assets was disclosed in Note 29(d).
13 RIGHT-OF-USE ASSETS
The Group
Properties
leased for own
use carried at
cost Land use-rights Total
RMB RMB RMB
Cost:
At 1 January 2022 12,920,263 — 12,920,263
Additions 7,885,555 — 7,885,555
Lease termination (4,888,746) — (4,888,746)
At 31 December 2022 and 1 January 2023 15,917,072 — 15,917,072
Additions 14,580,225 65,439,025 80,019,250
At 31 December 2023 and 1 January 2024 30,497,297 65,439,025 95,936,322
Additions — 37,385,770 37,385,770
Lease termination (15,393,485) — (15,393,485)
At 31 December 2024 15,103,812 102,824,795 117,928,607
Accumulated depreciation:
At 1 January 2022 (3,473,285) — (3,473,285)
Charge for the year (3,380,674) — (3,380,674)
Lease termination 2,415,406 — 2,415,406
At 31 December 2022 and 1 January 2023 (4,438,553) — (4,438,553)
Charge for the year (4,800,876) (601,065) (5,401,941)
At 31 December 2023 and 1 January 2024 (9,239,429) (601,065) (9,840,494)
Charge for the year (4,514,650) (1,682,638) (6,197,288)
Lease termination 4,668,333 — 4,668,333
At 31 December 2024 (9,085,746) (2,283,703) (11,369,449)
Net book value:
At 31 December 2022 11,478,519 — 11,478,519
At 31 December 2023 21,257,868 64,837,960 86,095,828
At 31 December 2024 6,018,066 100,541,092 106,559,158
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 8–


--- page 499 ---
The Company
Properties leased for
own use carried at cost
RMB
Cost:
At 1 January 2022 6,017,173
Additions 7,885,555
Lease termination (3,182,478)
At 31 December 2022, 1 January 2023, 31 December 2023 and 1 January 2024 10,720,250
Additions 2,477,876
Lease termination (813,260)
At 31 December 2024 12,384,866
Accumulated depreciation:
At 1 January 2022 (2,308,608)
Charge for the year (1,963,145)
Lease termination 1,305,632
At 31 December 2022 and 1 January 2023 (2,966,121)
Charge for the year (1,577,111)
At 31 December 2023 and 1 January 2024 (4,543,232)
Charge for the year (1,405,805)
Lease termination 414,451
At 31 December 2024 (5,534,586)
Net book value:
At 31 December 2022 7,754,129
At 31 December 2023 6,177,018
At 31 December 2024 6,850,280
Notes:
(i) Land-use-right premiums was paid by the Group for land situated in the PRC. Lump sum payments were
made upfront to acquire these land-use-rights, and there are no ongoing payments to be made under the
terms of the land lease.
(ii) The Group has obtained the right to use the properties as its warehouse and offices through tenancy
agreements. The leases typically run for an initial period of 2–5 years. None of the leases includes an
option to purchase the leased assets at the end of the lease term.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 9–


--- page 500 ---
The analysis of expense items in relation to lease recognised in the Group’s profit or loss is as follows:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Depreciation charge of right-of-use assets by
class of underlying asset:
Leasehold buildings, carried at depreciated cost 3,380,674 4,800,876 4,514,650
Interest on lease liabilities (Note 6(a)) 438,409 882,489 673,582
Expenses relating to short-term leases 33,153 115,158 1,350,934
14 INTANGIBLE ASSETS
Software
RMB
Cost:
At 1 January 2022 1,144,826
Additions 276,148
At 31 December 2022 and 1 January 2023 1,420,974
Additions 1,395,492
At 31 December 2023 and 1 January 2024 2,816,466
Additions 1,717,093
At 31 December 2024 4,533,559
Accumulated amortisation:
At 1 January 2022 (147,041)
Charge for the year (242,228)
At 31 December 2022 and 1 January 2023 (389,269)
Charge for the year (383,250)
At 31 December 2023 and 1 January 2024 (772,519)
Charge for the year (800,103)
At 31 December 2024 (1,572,622)
Net book value:
At 31 December 2022 1,031,705
At 31 December 2023 2,043,947
At 31 December 2024 2,960,937
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 0–


--- page 501 ---
15 INTEREST IN SUBSIDIARIES
The carrying amounts of investments in subsidiaries of the Company are listed as below:
As at 31 December
2022 2023 2024
RMB RMB RMB
Interest in subsidiaries 107, 511,063 632,801,063 1,017,716,063
Further details of the principal subsidiaries of the Group are set out in Note 1.
16 INTEREST IN ASSOCIATES
(a) The balances recognized in the consolidated balance sheets are as follows:
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Aggregate carrying amount of individually
immaterial associates in the consolidated
financial statements 3,716,353 23,259,475 28,482,306
Aggregate amounts of the Group’s share of those
associates’ profit or loss from continuing
operations and impairment loss (388,109) 590,290 (3,485,038)
Other comprehensive income — — —
Total comprehensive income (388,109) 590,290 (3,485,038)
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Aggregate carrying amount of individually
immaterial associates in the consolidated
financial statements 2,212,746 21,231,584 26,393,716
Aggregate amounts of the Group’s share of those
associates’ profit or loss from continuing
operations and impairment loss (351,716) 578,980 (2,368,008)
Other comprehensive income — — —
Total comprehensive income (351,716) 578,980 (2,368,008)
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 1–


--- page 502 ---
(b) As at 31 December 2022, 2023 and 2024, the Group had interests in the following associates:
Name of associates
Place of
incorporation
and operation
Particulars of
registered and paid-up
share capital
Effective interest held by the Group
As at 31 December
Principal activities2022 2023 2024
Jiangxi Breton New Energy
Technology Co., Ltd. (till 9
December 2022) (Note i) (Note ii)
PRC RMB5 million/
RMB2 million
/ / / sales of new energy
tractor trucks and
new energy loaders
Shanxi Huanghe Green Energy
Technology Co., Ltd. (Note ii)
PRC RMB10 million/
RMB7.5 million
13% 13% 13% sales of new energy
tractor trucks and
new energy loaders
Lituo (Shandong) New Energy
Technology Co., Ltd. (Note ii)
PRC RMB11 million/
RMB11 million
14% 14% 14% operation of new
energy tractor
trucks and new
energy loaders
Shaanxi Lingbo Operation
Technology Co., Ltd. (Note ii)
PRC RMB10 million/
RMB10 million
10% 10% 10% sales of new energy
tractor trucks and
new energy loaders
Shanghai Huansheng New Energy
Technology Co., Ltd.
(till 26 August 2022)
(Note i) (Note ii)
PRC RMB32.865 million/
RMB30.568 million
/ / / sales of new energy
tractor trucks and
new energy loaders
Breton (Jinhua) New Energy Co.,
Ltd. (Note ii)
PRC RMB9.9 million/
RMB9.9 million
/ 28% 28% sales of new energy
wide-body dump
trucks and new
energy loaders
Breton Tianyue (Ningxia) New
Energy Co., Ltd. (Note ii)
PRC RMB10 million/
RMB10 million
/ 49% 49% sales of new energy
tractor trucks and
new energy loaders
Sichuan Breton Tianyi New Energy
Technology Co., Ltd. (Note ii)
PRC RMB5 million/
RMB3.4 million
/ 49% 49% sales of new energy
tractor trucks and
new energy loaders
Moudi Smart Technology Co., Ltd.
(till 5 September 2024) (Note ii)
(Note iv)
PRC RMB50 million/
RMB44.57 million
/ 28% / operation and sales of
new energy tractor
trucks and new
energy loaders
Chongqing Changling Technology
Co., Ltd. (Note ii)
PRC RMB10 million/
RMB2.5 million
/ 40% 40% sales of new energy
tractor trucks and
new energy loaders
Xinjiang Breton New Energy
Technology Co., Ltd. (till 20
October 2023)
(Note i) (Note ii)
PRC RMB5 million/
RMB1.48 million
15% / / sales of new energy
tractor trucks and
new energy loaders
Breton Tianrun (Jiangsu) New
Energy Co., Ltd. (Note ii)
PRC RMB100 million/
RMB33 million
/ 49% 49% sales of new energy
tractor trucks and
new energy loaders
Henan Breton Construction
Machinery Co., Ltd. (Note ii)
PRC RMB5 million/
RMB5 million
10% 5% 10% sales of new energy
tractor trucks and
new energy loaders
Hebei Lvyuan Tiancheng New Energy
Technology Co., Ltd. (Note ii)
PRC RMB10 million/
RMB10 million
/ / 15% sales of new energy
tractor trucks and
new energy loaders
H u n a nL v d i a nB r e t o nN e wE n e r g y
Co., Ltd. (Note ii)
PRC RMB10 million/
RMB10 million
/ / 15% sales of new energy
tractor trucks and
new energy loaders
Breton Jungang (Shandong) Energy
Technology Co., Ltd. (Note ii)
PRC RMB5 million/
RMB5 million
/ / 19% sales of new energy
tractor trucks and
new energy loaders
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 2–


--- page 503 ---
Note i: In 2022 and 2023, the Group disposed of all equity interests in Shanghai Huansheng New Energy
Technology Co, Ltd., Jiangxi Breton New Energy Technology Co., Ltd., and Xinjiang Breton New
Energy Technology Co., Ltd., to third parties, respectively.
Note ii: According to the Articles of Association of these entities, the Company is empowered to appoint
one director with no restriction on the voting right compared with other directors. Therefore, the
Company has significant influence but not control or joint control on the associates mentioned
above, which are accounted for as investment in associate.
Note iii: The English names of certain associates referred to above represent the best effort made by
management of the Group in translating the Chinese names as they do not register any official
English names.
Note iv: In September 2024, the Group ceased to have significant influence over Moudi Smart Technology
Co., Ltd. as a result of capital injection from third parties into this company and resignation of the
representative of the Group on the board of directors of this company, and a gain of
RMB16,276,819 was recognised as a result of the remeasurement of the investment transferred
from interest in associates to other investments (Note 12) during the year ended 31 December 2024.
Note v: The directors consider none of the associates were significant to the Group during the Relevant
Periods.
Note vi: Except for financial guarantee issued as disclosed in Note 30, there are no other contingent
liabilities or commitments relating to the Group’s investments in associates.
17 OTHER NON-CURRENT ASSETS
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Financial assets measured at amortised cost
— Trade receivables due from third parties 52,294,667 33,262,685 53,847,362
— Trade receivables due from related parties 89,263 22,023,698 6,382,311
Less: loss allowance on trade and receivables (8,147,685) (7,027,077) (4,194,203)
Trade receivables, net (Note 20) 44,236,245 48,259,306 56,035,470
Prepayment for property, plant and equipment and land
use right — 12,058,783 1,465,966
Contract assets (Note 19) — — 7,094,279
Deposits 2,671,801 2,246,801 9,064,101
46,908,046 62,564,890 73,659,816
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 3–


--- page 504 ---
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Financial assets measured at amortised cost
— Trade receivables due from third parties 4,805,097 6,982,784 16,408,709
Less: loss allowance on trade and receivables (2,789,003) (39,381) (66,163)
Trade receivables, net 2,016,094 6,943,403 16,342,546
Deposits 457,801 457,801 7,719,927
2,473,895 7,401,204 24,062,473
18 INVENTORIES
(a) Inventories in the consolidated statements of financial position comprise:
As at 31 December
2022 2023 2024
RMB RMB RMB
Raw materials 70,098,954 101,890,536 97,001,382
Finished goods 223,861,252 166,281,419 161,582,935
Right to recover returned goods 584,004 502,606 438,757
294,544,210 268,674,561 259,023,074
Inventories in the statements of financial position of the Company comprise:
As at 31 December
2022 2023 2024
RMB RMB RMB
Raw materials 10,077,613 14,925,344 31,875,072
Finished goods 7,076,913 3,730,973 4,985,246
Right to recover returned goods 48,285 27,690 30,968
17,202,811 18,684,007 36,891,286
(b) The analysis of the amount of inventories recognised as an expense and included in profit or loss is as follows:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Carrying amount of inventories used 326,283,546 433,579,766 581,185,550
Write-down of inventories 25,650,260 20,879,290 17,432,258
351,933,806 454,459,056 598,617,808
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 4–


--- page 505 ---
19 CONTRACT ASSETS AND CONTRACT LIABILITIES
(a) Contract assets
As at 31 December
2022 2023 2024
RMB RMB RMB
Contract assets
Arising from performance under contracts with
customers 860,350 342,400 8,452,950
Less: loss allowance on contract assets
(Note 29(a)) — — (36,471)
860,350 342,400 8,416,479
Less: Contract assets due more than one year
(Note 17) — — (7,094,279)
860,350 342,400 1,322,200
Receivables from contracts with customers within
the scope of IFRS 15, which are included in
‘‘Trade and other receivables’’
(Note 20) 233,417,839 374,089,804 446,327,343
Contract assets represent the Group’s rights to consideration from customers for the sales of new energy
engineering machinery, which arise when the customers withhold certain amounts payable to the Group as
retention money to secure the due performance of the contracts for a period of generally 6–60 months (defect
liability period) after delivery of new energy engineering machinery. Any amount previously recognized as a
contract asset is reclassified to trade receivables at the point at which it becomes unconditional.
(b) Contract liabilities
As at 31 December
2022 2023 2024
RMB RMB RMB
Contract liabilities
Receipts in advance from customers 15,196,543 13,740,178 3,655,027
Movements in contract liabilities
Balance at 1 January 9,029,990 15,196,543 13,740,178
Decrease in contract liabilities as a result of
recognising revenue during the year that was
included in the contract liabilities at the
beginning of the year (4,485,600) (9,261,751) (13,064,716)
Increase in contract liabilities as a result of billing
in advance 10,652,153 7,805,386 2,979,565
15,196,543 13,740,178 3,655,027
The Group receives advance payment from certain customers for sales of new energy engineering
machinery and sales of spare parts and accessories. Contract liabilities will be recognised as revenue when
control of equipment is transferred to the customer.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 5–


--- page 506 ---
20 TRADE AND OTHER RECEIVABLES
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Trade receivables due from
— third parties 262,552,586 321,762,384 382,988,500
— related parties (Note 32(c)) 15,069,073 129,306,836 220,164,240
Less: loss allowance on trade receivables (Note 29(a)) (44,203,820) (76,979,416) (156,825,397)
233,417,839 374,089,804 446,327,343
Less: Trade receivables due more than one year (44,236,245) (48,259,306) (56,035,470)
189,181,594 325,830,498 390,291,873
Bills receivable 9,616,548 47,042,622 56,572,251
Other receivables due from
— third parties 6,625,341 6,844,359 7,465,528
— related parties (Note 32(c)) ———
Less: loss allowance on other receivables (Note 29(a)) (74,716) (4,774,716) (5,424,716)
Other receivables, net 6,550,625 2,069,643 2,040,812
Deposits 75,734 10,590,000 5,414,264
Prepayments for purchase of
raw materials 43,823,225 26,811,087 69,909,123
Prepaid expenses 246,964 2,105,289 2,206,831
Prepayments for listing expenses — 1,728,881 1,823,009
Taxation recoverable 6,863,454 18,911,440 27,574,468
Loans to third parties 900,000 — —
Interest receivables 559,081 — —
257,817,225 435,089,460 555,832,631
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 6–


--- page 507 ---
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Trade receivables due from
— third parties 34,493,558 35,520,709 50,502,842
— related parties — — 24,582,788
— subsidiaries 244,221,685 422,488,510 294,300,805
Less: allowance for trade receivables (18,758,001) (10,964,148) (11,081,734)
259,957,242 447,045,071 358,304,701
Less: Trade receivables due more than one year (2,016,094) (6,943,403) (16,342,546)
257,941,148 440,101,668 341,962,155
Bills receivable 100,000 2,857,915 6,896,770
Other receivables due from
— third parties 5,882,341 4,863,663 4,830,911
— related parties — — —
— subsidiaries 203,725,009 143,479,056 126,159,402
Less: allowance for other receivables (74,716) (4,774,716) (4,774,716)
Other receivables, net 209,532,634 143,568,003 126,215,597
Deposits — 50,000 737,285
Prepayments for purchase of raw mate rials 15,476,023 19,135,087 34,117,555
Prepaid expenses 205,933 1,951,281 1,857,437
Prepayments for listing expenses — 1,728,881 1,823,009
Taxation recoverable 411,045 285,138 2,985,170
Loans to third parties 900,000 — —
Interest receivable 559,081 — —
485,125,864 609,677,973 516,594,978
All of the trade and other receivables are expected to be recovered or recognised as expense within one year.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 7–


--- page 508 ---
(a) Ageing analysis
As of the end of the Relevant Periods, the ageing analysis of trade receivables (which are included in trade
and other receivables), based on the invoice date and net of loss allowance, is as follows:
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Within 1 year 208,628,522 263,741,046 303,449,728
1–2 years 20,576,380 93,067,727 118,231,393
2–3 years 4,212,937 13,954,731 22,070,084
More than 3 years — 3,326,300 2,576,138
233,417,839 374,089,804 446,327,343
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Within 1 year 252,705,511 438,513,826 229,816,488
1–2 years 6,746,305 2,197,624 121,703,891
2–3 years 505,426 6,333,621 1,548,052
More than 3 years — — 5,236,270
259,957,242 447,045,071 358,304,701
Details of the Group’s credit policy and credit risk arising from trade receivable and bills receivables are
set out in Note 29(a).
(b) Endorsed bank acceptance bills
(i) Endorsed bank acceptance bills that ar e not derecognised in their entirety
As at 31 December 2022, 2023 and 2024, the Group endorsed certain bank acceptance bills with a
carrying amount of RMB8,796,490, RMB12,775,500 and RMB28,248,276 respectively to suppliers for
settling trade and other payables of the same amount on a full recourse basis.
In the opinion of the directors, the Group has not transferred the substantial risks and rewards
relating to these bank acceptance bills and commercial bills, and accordingly, these bills receivable and the
associated trade and other payables were not de-recognized in the consolidated statements of financial
position.
(ii) Endorsed bank acceptance bills that are derecognised in their entirety
As at 31 December 2022, 2023 and 2024, the Group endorsed certain bank acceptance bills with a
carrying amount of RMB8,463,166, RMB12,762,115 and RMB16,630,257 respectively to suppliers for
settling trade and other payables of the same amount on a full recourse basis. The Group derecognised
these bills receivable and the payables to suppliers in their entirety in the consolidated statements of
financial position.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 8–


--- page 509 ---
In the opinion of the directors, the Group has transferred substantially all the risks and rewards of
ownership of these bills and has discharged its obligation of the payables to its suppliers. The Group
considered the issuing banks of the bills are of good credit quality and the non-settlement of these bills by
the issuing banks on maturity is not probable.
As at 31 December 2022, 2023 and 2024, the Group’s maximum exposure to loss and undiscounted
cash outflow, which is the same as the amounts payable by the Group to suppliers in respect of the
endorsed bills, should the issuing banks fail to settle the bills on maturity date, amounted to
RMB8,463,166, RMB12,762,115 and RMB16,630,257 respectively.
21 CASH AND CASH EQUIVALENTS, PLEDGED BANK DEPOSITS AND OTHER CASH FLOW
INFORMATION
(a) Cash and cash equivalents and pledged bank deposits
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Cash and cash equivalents 270,260,321 422,072,291 199,254,000
Pledged bank deposits 4,700,000 5,278,000 4,208,000
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Cash and cash equivalents 268,612,984 164,643,976 35,799,184
Pledged bank deposits 4,700,000 5,100,000 4,030,000
As at 31 December 2022, RMB4,700,000 was deposited at banks as guarantee in relation to supplier
guarantee.
As at 31 December 2023, RMB4,000,000 was deposited at banks as guarantee in relation to supplier
guarantee, RMB1,100,000 was deposited at banks in relation to bill deposit, and RMB178,000 was deposited at
banks in relation to quality insurance deposit.
As at 31 December 2024, RMB4,000,000 was deposited at bank as guarantee in relation to supplier
guarantee and RMB208,000 was deposited at bank in relation to quality insurance deposit.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 9–


--- page 510 ---
(b) Reconciliation of loss before taxation to cash generated from operations:
Year ended 31 December
Note 2022 2023 2024
RMB RMB RMB
Loss before taxation (177,470,438) (229,412,150) (274,457,165)
Adjustments for:
Depreciation and amortisation 6(c)
— owned property, plant and equipment 3,936,900 6,008,465 11,941,462
— right-of-use assets 3,380,674 5,401,941 6,197,288
— intangible assets 242,228 383,250 800,103
Finance costs 6(a) 13,732,638 6,919,281 9,186,683
Finance income 6(a) (6,446,942) (16,335,180) (10,547,318)
Net loss/(gain) on disposal of property,
plant and equipment 5 198,812 (61,052) 1,130,216
Net gain on modification and termination
of lease 5 (175,729) — (866,500)
Shares of results of associates, net of
downstream transaction 376,666 (888,369) 6,469,763
Equity-settled share-based payment
expenses 27 29,053,824 29,658,835 33,477,637
Credit loss on financial guarantee issued 6(c) 69,498 400,090 2,565,400
Dividends from other investments 5 — — (333,000)
Loss/(gain) on disposal or loss of
significant influence of associates 5 1,397,542 — (16,276,819)
Loss on disposal of subsidiaries 5 46,906 — —
Changes in working capital
(Increase)/decrease in inventories (76,035,444) 25,869,649 (796,778)
Increase in trade and other receivables (124,004,841) (161,564,440) (131,703,679)
(Increase)/decrease in contract assets (13,790) 517,950 (979,800)
Increase in trade and other payables 28,793,752 121,165,707 91,173,020
Increase/(decrease) in contract liabilities 6,166,553 (1,456,365) (10,085,151)
(Increase)/decrease in pledged bank
deposits (2,632,000) (578,000) 1,070,000
Increase in provisions 2,760,683 4,308,177 1,649,172
Cash used in operations (296,622,508) (209,662,211) (280,385,466)
Interest received 6,344,314 16,894,261 10,547,318
Income tax paid (142,440) (917,707) (112,644)
Net cash used in operating activities (290,420,634) (193,685,657) (269,950,792)
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 0–


--- page 511 ---
(c) Reconciliation of liabilities arising from financing activities:
Loans and
borrowings
Interest
payables
Lease
liabilities
Financial
instruments
issued to
investors Total
RMB RMB RMB RMB RMB
(Note 22) (Note 23) (Note 24) (Note 25)
At 1 January 2022 151,548,945 9,336,701 9, 523,275 569,120,154 739,529,075
Changes from financing cash flows:
Proceeds from loans and borro wings 210,300,000 — — — 210,300,000
Repayments of loans and borrowings (210,648,945) — — — (210,648,945)
Repayment of financial instruments to
investor of subsidiaries — — — (47,124,008) (47,124,008)
Capital element of lease rentals paid — — (4,076,625) — (4,076,625)
Interest element of lease rentals paid — — (438,409) — (438,409)
Proceeds from the issuance of financial
instruments to investors with preferred
rights — — — 197,484,000 197,484,000
Interest paid (5,671,099) (10,320,451) — — (15,991,550)
Total changes from financing cash flows (6, 020,044) (10,320,451) (4, 515,034) 150,359,992 129,504,463
Other changes:
Interest expenses 5,846,698 983,750 438,409 6,463,781 13,732,638
Fair value adjustments on initial carrying
amount of financial instruments issued
to investors recognised as non-current
liabilities — — — 197,484,000 197,484,000
Termination of redemption rights financial
instruments issued to investors of the
Company with preferred rights — — — (894,558,000) (894,558,000)
Increase in lease liabilities from entering
into new leases during the year — — 7,885,555 — 7,885,555
Termination of lease during the year — — (2,649,069) — (2,649,069)
Total other changes 5,846,698 983, 750 5,674,895 (690,610,219) (678,104,876)
At 31 December 2022 151,375,599 — 10,683,136 28,869,927 190,928,662
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 1–


--- page 512 ---
Loans and
borrowings
Interest
payables
Lease
liabilities
Financial
instruments
issued to
investors Total
RMB RMB RMB RMB RMB
(Note 22) (Note 23) (Note 24) (Note 25)
At 1 January 2023 151,375,599 — 10,683,136 28,869,927 190,928,662
Changes from financing cash flows:
Proceeds from loans and borro wings 144,043,800 — — — 144,043,800
Repayments of loans and borrowings (142,335,600) — — — (142,335,600)
Repayment of financial instruments to
investor of subsidiaries — — — (29,142,110) (29,142,110)
Capital element of lease rentals paid — — (2,782,258) — (2,782,258)
Interest element of lease rentals paid — — (882,489) — (882,489)
Interest paid (5,620,883) — — — (5,620,883)
Total changes from financing cash flows (3 ,912,683) — (3,664,747) ( 29,142,110) (36,719,540)
Other changes:
Interest expenses 5,764,609 — 882,489 272,183 6,919,281
Increase in lease liabilities from entering
into new leases during the year — — 14,580,225 — 14,580,225
Total other changes 5,764, 609 — 15,462,714 272,183 21,499,506
At 31 December 2023 and 1 January 2024 153,227,525 — 22,481,103 — 175,708,628
Changes from financing cash flows:
Proceeds from loans and borro wings 275,913,369 — — — 275,913,369
Repayments of loans and borrowings (77,033,310) — — — (77,033,310)
Capital element of lease rentals paid — — (5,061,759) — (5,061,759)
Interest element of lease rentals paid — — (673,582) — (673,582)
Interest paid (9,225,996) — — — (9,225,996)
Total changes from financing cash f lows 189,654,063 — (5,735,341) — 183,918,722
Other changes:
Decrease in lease liabilities from
termination of leases during the year — — (11,591,652) — (11,591,652)
Interest expenses 9,431,226 — 673,582 — 10,104,808
Total other changes 9,431,22 6 — (10,918,070) — (1,486,844)
At 31 December 2024 352,312,814 — 5,827,692 — 358,140,506
Note (i): Interest payable is included in trade and other payables as disclosed in Note 23.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 2–


--- page 513 ---
(d) Total cash outflow for leases
Amounts included in the cash flow statement for leases comprise the following:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Within operating cash flows 33,153 115,158 1,350,934
Within investing cash flows — 75,439,025 37,385,770
Within financing cash flows 4,515,034 3,664,747 5,735,341
4,548,187 79,218,930 44,472,045
22 LOANS AND BORROWINGS
(a) The analysis of the carrying amount of borrowings in the consolidated statements of financial position is as
follows:
As at 31 December
2022 2023 2024
RMB RMB RMB
Current
Short-term bank loans 89,507,758 — 50,024,167
Current portion of long-term bank loans 2,400,000 99,233,327 215,844,788
Obligations arising from sale and leaseback
transactions 2,819,420 — 1,328,096
94,727,178 99,233,327 267,197,051
Non-current
Obligations arising from sale and leaseback
transactions 6,180,580 — 5,891,778
Long-term bank loans 50,467,841 53,994,198 79,223,985
56,648,421 53,994,198 85,115,763
151,375,599 153,227,525 352,312,814
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 3–


--- page 514 ---
The analysis of the carrying amount of borrowings in the statements of financial position of the Company is
as follows:
As at 31 December
2022 2023 2024
RMB RMB RMB
Current
Short-term bank loans 89,507,758 — 40,014,389
Current portion of long-term bank loans 2,400,000 99,233,327 203,786,802
91,907,758 99,233,327 243,801,191
Non-current
Long-term bank loans 50,467,842 23,150,398 44,200,000
142,375,600 122,383,725 288,001,191
The interest rates per annum of borrowings were:
As at 31 December
2022 2023 2024
Current loans
one-year
LPR–0.65%
– +1.00%
or
3.00%–4.70%/
6.20%
one-year
LPR–0.65%
– +0.75%
or
3.00%–4.45%
one-year
LPR–0.65%
–+ 0 . 5 %
or
2.8%–5.98%
Non-current loans 4.00%–6.20% 3.00%–4.35% 2.9%–5.98%
Interest rates comprise fixed rates and floating rates based on Loan Prime Rate (‘‘LPR’’).
(b) The borrowings were repayable as follows:
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Within 1 year 94,727,178 99,233,327 267,197,051
After 1 year but within 2 years 56,648,421 23,150,398 44,609,667
After 2 years but within
5 years — 30,843,800 40,506,096
151,375,599 153,227,525 352,312,814
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 4–


--- page 515 ---
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Within 1 year 91,907,758 99,233,327 243,801,191
After 1 year but within 2 years 50,467,842 23,150,398 27,200,000
After 2 years but within 5 years — — 17,000,000
142,375,600 122,383,725 288,001,191
(c) The borrowings of the Group were secured as follows:
As at 31 December
2022 2023 2024
RMB RMB RMB
Bank loans
— Secured (i) 119,575,599 96,683,800 47,081,971
— Unsecured 22,800,000 56,543,725 298,010,969
142,375,599 153,227,525 345,092,940
Obligations arising from sale and leaseback
transactions
— Secured (ii) 9,000,000 — —
— Unsecured — — 7,219,874
9,000,000 — 7,219,874
Total 151,375,599 153,227,525 352,312,814
(i) Mr. Chen Fangming provided guarantees to the Company in respect of certain bank loans totalling
RMB119,575,599, RMB65,840,000 and nil as at 31 December 2022, 2023 and 2024, respectively.
As at 31 December 2023 and 2024, certain of the Group’s borrowing was secured by the Group’s land use
rights with the amount of RMB24,790,772.
(ii) In December 2022, the Company’s subsidiary, Breton (Shandong) New Energy Vehicle Co., Ltd., entered
into an agreement of sale and leaseback of property, plant and equipment with Zhongguancun
Science-Tech Leasing Co., Ltd. (‘‘ZGC TEC’’) ( 中關村科技租賃股份有限公司), pursuant to which the
lease principals are amounted to RMB9,000,000, with in terest accruing at 6.1% per annum. The principals
and interests should be repaid monthly within 3 years.
Based on the management assessment of the Group, ZGC TEC Leasing did not obtain control of the
assets and the transfer of assets did not satisfy the requirements of IFRS 15 to be accounted for as a sale of
the assets. Therefore, the Group continued to recognize the assets and recognized borrowings equal to the
transfer proceeds according to IFRS 9.
(iii) For the years ended 31 December 2023 and 2024, the Group did not fulfil certain non-financial covenants
as set out in the bank loan facility agreements with total amount of RMB32,200,000 and RMB149,000,000
as at 31 December 2023 and 2024, respectively, which were classified as current liabilities of the Group.
The Group did not receive any demand notice for repayment of any bank loans as a result of the
aforementioned breach of certain non-financial covenants during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 5–


--- page 516 ---
23 TRADE AND OTHER PAYABLES
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Trade payables due to third-party suppliers 94,377,450 185,980,217 270,526,165
Bills payable — 11,000,000 10,000,000
Financial liabilities measured at amortised cost 94,377,450 196,980,217 280,526,165
Other payables
— Deposits 14,434,630 11,888,950 8,571,705
— Government grants payable 4,784,000 4,784,000 1,984,000
— Payables for purchase of property, plant and
equipment 378,000 17,566,588 7,011,873
— Commission expenses payable 1,718,928 2,406,339 2,884,699
— Deposit for restricted shares (Note 28(f)(iv)) 11,600,000 11,600,000 11,600,000
— Others 5,053,402 12,867,952 32,430,085
Accrued payroll and other benefits 17,111,778 22,252,903 19,881,447
VAT and sundry taxes payable 2,713,493 8,765,278 4,938,755
Interest payable — — —
Refund liabilities
— accrual of sales return 574,744 491,138 428,888
— arising from sales rebate 4,228,888 5,304,355 4,281,443
156,975,313 294,907,720 374,539,060
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 6–


--- page 517 ---
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Trade payables due to
— third parties 26,217,795 117,876,762 105,552,181
— subsidiaries 9,247,156 35,201,493 197,395,734
Bills payable — 11,000,000 10,000,000
Financial liabilities measured at amortised cost 35,464,951 164,078,255 312,947,915
Other payables
— Deposits 558,475 530,000 400,000
— Government grants payable 4,284,000 4,284,000 1,484,000
— Payables for purchase of property, plant and
equipment — — 2,028,802
— Commission expenses payable 188,679 420,000 —
— Others 5,494,329 9,698,484 15,759,766
Accrued payroll and other benefits 15,906,766 20,443,803 15,210,347
VAT and sundry taxes payable 1,519,510 7,764,963 2,281,375
Interest payable — — —
Refund liabilities
— accrual of sales return 49,843 28,689 31,885
63,466,553 207,248,194 350,144,090
As of the end of the Relevant Periods, the ageing analysis of trade payables (which are included in trade and
other payables), based on the invoice date, is as follows:
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Within 1 year 93,402,935 179,561,922 265,049,045
1 year to 2 years 974,515 5,773,415 1,489,846
Over 2 years — 644,880 3,987,274
94,377,450 185,980,217 270,526,165
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Within 1 year 34,818,366 148,774,144 295,746,558
1 year to 2 years 646,585 3,659,231 3,228,379
Over 2 years — 644,880 3,972,978
35,464,951 153,078,255 302,947,915
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 7–


--- page 518 ---
24 LEASE LIABILITIES
As of the end of the Relevant Periods, the lease liabilities were repayable as follows:
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Within 1 year 2,383,426 7,037,225 3,222,155
After 1 year but within 2 years 2,506,679 5,674,245 1,465,333
After 2 years but within 5 years 5,793,031 9,769,633 1,140,204
8,299,710 15,443,878 2,605,537
10,683,136 22,481,103 5,827,692
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Within 1 year 1,384,710 1,444,253 2,726,437
After 1 year but within 2 years 1,444,252 1,550,055 2,868,015
After 2 years but within 5 years 4,662,830 3,112,775 5,635,881
6,107,082 4,662,830 8,503,896
7,491,792 6,107,083 11,230,333
25 FINANCIAL INSTRUMENTS ISSUED TO INVESTORS
The Group
As at 31 December
2022 2023 2024
RMB RMB RMB
Current
Financial instruments issued to investors of subsidiaries
of the Company (Note 25(b)) 28,869,927 — —
Non-current
Financial instruments issued to investors of the
Company (Note 25(a)) ———
Financial instruments issued to investors of subsidiaries
of the Company (Note 25(b)) ———
28,869,927 — —
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 8–


--- page 519 ---
The Company
As at 31 December
2022 2023 2024
RMB RMB RMB
Current
Financial instruments issued to investors the
Company (Note 25(b)) 28,869,927 — —
Non-current
Financial instruments issued to investors of the
Company (Note 25(a)) ———
Financial instruments issued to investors of subsidiaries
of the Company (Note 25(b)) ———
28,869,927 — —
(a) Financial instruments issued to investors of the Company:
Pursuant to the agreements between the Company and its investors, the Company agreed to issue its
registered capital to certain investors who were granted the right to require the Company to redeem their paid-in
capital for cash upon specified events (the ‘‘Preferred Rights’’).
The Company recognised its obligation to pay cash to those investors with Preferred Rights as financial
liabilities, because not all triggering events are within the control of the Company. The financial liabilities are
measured at the present value of the redemption amount.
The movements of the redemption liabilities during the Relevant Periods are as follows:
As at 31 December
2022 2023 2024
At the beginning of the year 499,590,000 — —
Recognition of financial instruments issued to
investors 394,968,000 — —
Termination of financial instruments issued to
investors (Note) (894,558,000) — —
At the end of the year — — —
Note: In August 2022, pursuant to the supplementary agreement signed by the Company and the
investors with Preferred Rights, the investors’ Preferred Rights were terminated. Hence, the
financial liabilities were derecognised and the carrying amount of the financial liabilities were
reclassified to equity thereafter.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 9–


--- page 520 ---
(b) Financial instruments issued to investors of subsidiaries of the Company:
As at 31 December
2022 2023 2024
RMB RMB RMB
Investor A (Note i) ———
Investor B (Note ii) 28,869,927 — —
28,869,927 — —
The movements of financial instruments issued to investors of subsidiaries during the Relevant Periods
were as follows:
As at 31 December
2022 2023 2024
At the beginning of the year 69,530,154 28,869,927 —
Interest charges 6,463,781 272,183 —
Interest paid — — —
Termination of financial instruments issued to
investors (47,124,008) (29,142,110) —
At the end of the year 28,869,927 — —
Note i: In March 2020, the Group and Investor A entered into an agreement of capital injection into a
subsidiary of the Company, which the Company held 70% and Investor A held 30% of the
subsidiary’s equity interest.
Pursuant to the agreement, the Group also granted the Investor A with a put option that
Investor A could sell the 30% equity it held at an annual simple interest rate of 8% plus the
original amounts paid when repurchase condition reached. Investor A made capital injection of
RMB30,000,000 as at 31 December 2021.
In August 2022, Investor A exercised the put option and entered into an equity transfer
agreement with the Group. Pursuant to the agreement, the Group shall repurchase all equity
interest in the subsidiary held by Investor A at a consideration of RMB36,349,433. The
consideration was repaid in December 2022.
Note ii: In March 2020, the Group and Investor B entered into an agreement to establish a Company
located in Shandong (‘‘Shandong Company’’) with the Group held 70% and Investor B held
30% of the Shandong Company’s equity interest, respectively.
Pursuant to the agreement, the Group shall repurchase all equity interest held by Investor B at
an annual simple interest rate of 6.2% plus the original amounts paid. Investor B made capital
injection of RMB35,000,000 as at 31 December 2021.
In March 2022, the Group entered into an equity transfer agreement with Investor B to acquire
10% equity interest in Shandong Company held by Investor B at a consideration of
RMB10,774,575, which has been repaid in 2022.
In August 2022, the Group entered into an equity transfer agreement with Investor B to acquire
the remaining 20% equity interest in Shandong Company held by Investor B. The consideration
of RMB25,000,000 plus interest of RMB4,142,110 was paid in early 2023.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 0–


--- page 521 ---
26 PROVISIONS
As at 31 December
2022 2023 2024
RMB RMB RMB
Product warranty provision 7,456,812 11,764,990 12,538,572
Financial guarantee issued
(Note 30) 92,048 492,138 3,057,538
Onerous contracts — — 875,590
7,548,860 12,257,128 16,471,700
Product warranty provision:
RMB
At 1 January 2022 4,696,130
Provision for the year 10,304,310
Utilisation during the year (7,543,628)
At 31 December 2022 7,456,812
Provision for the year 13,448,739
Utilisation during the year (9,140,561)
At 31 December 2023 11,764,990
Provision for the year 18,608,549
Utilisation during the year (17,834,967)
At 31 December 2024 12,538,572
A provision for warranties is recognised when the underlying products are sold. Under the terms of the Group’s
sales agreements, the Group will rectify any product defects arising within predominantly 6 to 60 months from the date
of sale. Provision is therefore made for the best estimate of the expected settlement under these agreements in respect
of products sold which are still within the warranty period. The amount of provision takes into account the Group’s
recent claim experience, historical warranty data and a wei ghting of all possible outcomes against their associated
probabilities.
Onerous contracts
The Group was in contracts with certain customers to whom the Group provides repairment services that were
operating at a loss. The obligation for the future payments of these customers, net of expected service income, has been
provided for.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 1–


--- page 522 ---
27 EQUITY-SETTLED SHARE-BASED PAYMENT
The Company has adopted a Restricted Share Scheme, whereby the directors of the Company may, at their
discretion, offer to grant a share award to subscribe shares (or share capital before the Company’s conversion into a
joint stock Company (see Note 28(c)(i))), to attract and retain the talents and to provide incentives that align the
interests of Shareholders, the Company and employees (the ‘‘Grantees’’), for long-term development of the Company.
Pursuant to the Restricted Share Scheme, the Company has granted certain restricted shares to the Grantees at a fixed
subscription price. All the restricted shares granted shall be vested at the date of 36 months from the date of grant or
the date of completion of a qualified listing, whichever is lat er. The restricted shares are subject to certain transfer and
disposal restrictions until the completion of the vesting. Upon the occurrence of certain events within the vesting
period, including an employee ceased employment with the Group, the restricted shares would be forfeited and
redeemed at the price of subscription price plus simple interest.
(a) The details of the grants are as follows:
Number of
restricted shares
# Subscription price #
RMB
Restricted shares granted to directors:
— on 1 February 2020* — NA
— on 1 March 2022 3,091,551 0.78
— on 3 March 2023 — NA
— on 22 September 2023 — NA
— on 20 December 2023 — NA
Restricted shares granted to employees:
— on 1 February 2020* 9,923,879 0.49
— on 1 March 2022 17,518,790 0.78
— on 3 March 2023 393,500 0.78
— on 22 September 2023 487,500 0.97
— on 20 December 2023 380,000 0.97
* The restricted shares granted on 1 February 2020 are settled by Shanghai Fangao Business
Consulting partnership (Limited Partnership)* 上海方翱商務諮詢合夥企業（有限合夥）(‘‘Shanghai
Fangao’’), a limited partnership controlled by Mr. Chen Fangming, as its general partner.
# The number of restricted shares and subscription price before the Company’s conversion into a joint
stock Company were adjusted for the exchange ratio established in the conversion in November
2022.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 2–


--- page 523 ---
(b) Set out below is the movement in number of the underlying shares of the Company under the Restricted
Shares Scheme (after taking into account of the Company’s conversion into a joint stock company as
disclosed in Note 28(c)(i), assuming the conversion had been effective on 1 January 2021):
As at 31 December
2022 2023 2024
Weighted
average fair
value
Number of
restricted
shares
Weighted
average fair
value
Number of
restricted
shares
Weighted
average fair
value
Number of
restricted
shares
RMB RMB RMB
Outstanding at the
beginning of the year 0.76 9,521,977 4.08 29,143,022 4.96 25,977,951
Granted during the year 5.45 20,610,341 15.48 1,261,000 — —
Forfeited during the year 0.76 (989,296) 2.18 (4,426,071) 12.10 (191,526)
Outstanding at the end of
the year 4.08 29,143,022 4.96 25,977,951 4.90 25,786,425
(c) Expenses for the share-based compensation have been charged to the consolidated statements of profit or
loss and other comprehensive income as follow:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Cost of sales 48,491 57,840 57,840
Selling expenses 6,129,972 5,376,844 6,472,116
Administrative expenses 20,907,534 22,876,160 24,168,278
Research and development costs 1,967,827 1,347,991 2,779,403
29,053,824 29,658,835 33,477,637
(d) Valuation
(i) The restricted shares granted in 2020 and 2022
The fair value of share-based compensation in respect of restricted shares granted to the Grantees
on 1 February 2020 and the Grantees on 3 March 2022 was estimated to be RMB1.57 and RMB11.24,
respectively. The fair value of services received in return for restricted shares granted is measured by
reference to the fair value of restricted shares granted. Equity allocation model method was used to
determine the underlying equity fair value of the Company, based on which, the fair value of per
underlying share was calculated considering total number of shares.
Key assumptions adopted in determining the fair value are as follows:
1 February
2020
1M a r c h
2022
Risk-free interest rate 3.20% 2.90%
Volatility 37.00% 37.30%
APPENDIX I ACCOUNTANTS’ REPORT
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(ii) The restricted shares granted in 2023
The fair value of share-based compensation in respect of restricted shares granted to the Grantees
on 3 March 2023 was estimated to be RMB14.31. The fair value is estimated based on the difference
between the recent financing price and the proceeds received from the Grantees.
The fair value of share-based compensation in respect restricted shares granted to the Grantees on
22 September 2023 and 20 December 2023 was estimated to be RMB16.01. The fair value is estimated
based on the difference between the adjusted recent financing price and the proceeds received from the
Grantees.
28 CAPITAL, RESERVES AND DIVIDENDS
(a) Movements in components of equity
The reconciliation between the opening and closing balances of each component of the Group’s
consolidated equity is set out in the consolidated statem ent of changes in equity. Details of the changes in the
Company’s individual components of equity between the beginning and the end of the Relevant Periods are set
out below:
Note
Paid-in
capital
Share
capital
Share
premium
Capital
Reserve Other reserve
Fair value
reserve
Accumulated
losses
Total (deficit)/
equity
R M BR M BR M BR M BR M BR M BR M B R M B
Balance at 1 January 2022 126,663,600 — — 226,655,617 (499,590,000) — (198,689,004) (344,959,787)
Loss for the year — — — — — — (116,019,870) (116,019,870)
Other comprehensive income — — — — — 8,062,152 — 8,062,152
Total comprehensive income — — — — — 8,062,152 (116,019,870) (107,957,718)
Capital contribution by investors 28(b) 10,000,000 — — 6,000,000 — — — 16,000,000
Issuance of financial instruments to
investors, with preferred rights
net of transaction cost 28(b) 8,894,400 — — 187,047,336 — — — 195,941,736
Recognition of financial
instruments with preferred
rights 25(a) — — — — (394,968,000) — — (394,968,000)
Termination of financial
instruments with preferred
rights 25(a) — — — — 894,558,000 — — 894,558,000
Conversion into a joint stock
company 28(c) (145,558,000) 300,000,000 13,283,150 (436,047,344) — — 268,322,194 —
Issuance of ordinary shares, net of
transaction cost 28(c) — 26,479,054 351,569,490 — — — — 378,048,544
Equity settled share-based payment 27 — — — 29,053,824 — — — 29,053,824
Balance at 31 December 2022 — 326,479,054 364,852,640 12,709,433 — 8,062,152 (46,386,680) 665,716,599
Loss for the year — — — — — — (117,289,872) (117,289,872)
Other comprehensive income — — — — — 105,139 — 105,139
Total comprehensive income — — — — — 105,139 (117,289,872) (117,184,733)
Issuance of ordinary shares, net of
transaction cost 28(c) — 40,172,708 527,471,603 — — — — 567,644,311
Equity settled share-based payment 27 — — — 29,658,835 — — — 29,658,835
Balance at 31 December 2023 — 366,651,762 892,324,243 42,368,268 — 8,167,291 (163,676,552) 1,145,835,012
Loss for the year — — — — — — (125,591,744) (125,591,744)
Other comprehensive income — — — — — 1,148,455 — 1,148,455
Total comprehensive income — — — — — 1,148,455 (125,591,744) (124,443,289)
Equity settled share-based payment 27 — — — 33,477,637 — — — 33,477,637
Balance at 31 December 2024 — 366,651,762 892,324,243 75,845,905 — 9,315,746 (289,268,296) 1,054,869,360
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Paid-in capital
Paid-in capital
RMB
Balance at 1 January 2022 126,663,600
Capital contribution by investors (i) 10,000,000
Issuance of financial instruments to investors (ii) 8,894,400
Conversion into a joint stock limited company (Note 28(c)) (145,558,000)
Balance at 31 December 2022, 2023 and 2024 —
Notes:
(i) Shanghai Jifang Business Consulting Partnership (Limited Partnership) ( 上海驥方商務諮詢合夥企
業（有限合夥）) (‘‘Shanghai Jifang’’), an employee shareholding platform, as well as Mr. Qiu Debo
and Ms. Yanghui, the senior management of the Company completed the injections totaling
RMB16,000,000 in the Company for the subscription of the Company’s newly issued paid-in capital
of RMB10,000,000.
(ii) For the year ended 31 December 2022, the Series B and Series C Investors completed the injections
totaling RMB197,484,000 in the Company for the subscription of the Company’s newly issued
paid-in capital of RMB8,894,400. The excess of the aggregate consideration of RMB197,484,000
over the increase in the paid-in capital of RMB8,894,400, net of transaction cost of RMB1,542,264,
amounting to RMB187,047,336 was credited to the capital reserve.
(c) Share capital
Details of the movement of the issued and fully paid share capital of the Company are as follows:
Ordinary share
Number of
shares Amount
RMB
Ordinary shares, issued and fully paid:
Balance at 1 January 2022 — —
Share issued upon conversion into a joint stock company (i) 300,000,000 300,000,000
Capital contributions by investors (ii) 26,479,054 26,479,054
Balance at 31 December 2022 326,479,054 326,479,054
Capital contributions by investors (iii) 40,172,708 40,172,708
Balance at 31 December 2023 and 2024 366,651,762 366,651,762
APPENDIX I ACCOUNTANTS’ REPORT
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(i) Pursuant to the shareholders’ resolutions and the promoters’ agreement dated 5 November 2022,
the shareholders of the Company agreed to convert the Company into a joint stock limited liability
company. The net assets of the Company as of the conversion base date, which is 31 August 2022,
including paid-in capital, capital reserve and accumulated loss were converted into 300,000,000
ordinary shares at RMB1.00 each. The excess of the net assets converted over the nominal value of
the ordinary shares was credited to the Company’s share premium. Upon the completion of
registration with the Shanghai Administration for Industry and Commerce on 23 November 2022,
the Company was converted into a joint stock limited liability company under PRC Company Law,
and renamed to Breton Technology Co., Ltd.* ( 博雷頓科技股份公司).
(ii) In December 2022, the Company entered into a n investment agreement with Hunan Xiangtan
Caixin Chanxing Equity Investment Partnership Enterprise (Limited Partnership)* ( 湖南湘潭財信
產興股權投資合夥企業（有限合夥）) (‘‘Xiangtan Caixin’’), Tianjin Xingyue Puyu Technology Co.,
Ltd.* ( 天津星月璞瑜科技有限責任公司) (‘‘Tianjin Puyu’’) and Jiaxing Xuying Equity Investment
Partnership (Limited Partnership)* ( 嘉興序盈股權投資合夥企業（有限合夥）) (‘‘Jiaxing Xuying’’),
pursuant to which, the investors subscribed for 26,479,054 ordinary shares of the Company at a
consideration of RMB379,000,000. The excess of the consideration of RMB379,000,000, over the
increase in the share capital of RMB26,479,054, net of transaction cost of RMB951,456, amounting
to RMB351,569,490 was credited to share premium.
(iii) In December 2022, the Company entered into an i nvestment agreement with Jinhua Boleidun Talent
Equity Investment Partnership (Limited Partnership)* ( 金華市博雷頓人才股權投資合夥企業（有限
合夥）) (‘‘Jinhua Boleidun’’), pursuant to which, the investor subscribed for 13,973,116 ordinary
shares at a consideration or RMB200,000,000. The excess of the consideration of RMB200,000,000,
over the increase in the share capital of RMB13,973,116, net of transaction cost of RMB1,415,094,
amounting to RMB184,611,790, was credited to the Company’s share premium. The consideration
has been fully paid in January 2023.
In February 2023, the Company entered into an investment agreement with Hubei Changjiang
Automobile Valley Industry Investment Fund Partnership (Limited Partnership)* ( 湖北長江車谷產
業投資基金合夥企業（有限合夥）) (‘‘Changjiang Automobile Valley’’) and Shandong Province New
and Old Kinetic Energy Conversion Cross-Border Venture Capital FOF Fund Partnership (Limited
Partnership)* ( 山東新舊動能轉換跨境創投母基金合夥企業（有限合夥）) (‘‘Shandong Kinetic
Energy’’), pursuant to which, the investors subscribed for 26,199,592 ordinary shares of the
Company at a consideration of RMB375,000,000. The excess of the consideration
RMB375,000,000, over the increase in the share capital of RMB26,199,592, net of transaction
cost of RMB5,940,595, amounting to RMB342,859,813, was credited to the Company’s share
premium. The consideration was fully paid from February to March 2023.
* The English translation of these entities is for refere nce only. The official names of the entities established
in the PRC are in Chinese.
APPENDIX I ACCOUNTANTS’ REPORT
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(d) Other comprehensive income
Tax effects relating to each component of other comprehensive income:
2022
Before-tax
amount
Tax (expense)/
benefit
Net-of-tax
amount
RMB RMB RMB
Equity investments at fair value through other
comprehensive income — net movement in fair
value reserves (not recycling) 10,975,309 (2,743,827) 8,231,482
2023
Before-tax
amount
Tax (expense)/
benefit
Net-of-tax
amount
RMB RMB RMB
Equity investments at fair value through other
comprehensive income — net movement in fair
value reserves (not recycling) 631,532 (157,883) 473,649
2024
Before-tax
amount
Tax (expense)/
benefit
Net-of-tax
amount
RMB RMB RMB
Equity investments at fair value through other
comprehensive income — net movement in fair
value reserves (not recycling) 1,401,729 (350,432) 1,051,297
(e) Dividends
No dividends were paid or declared by the Company during the Relevant Periods.
(f) Nature and purpose of reserves
(i) Share premium
Under PRC rules and regulations, share premium is non-distributable other than in liquidation and
may be utilised for business expansion or converted into ordinary shares by the issuance of new shares to
shareholders in proportion to their existing shareholdings or by increasing the par value of the shares
currently held by the shareholders.
(ii) Capital reserve
The capital reserve primarily represents the excess of the net contributions from the shareholders of
the Company over the total paid-in capital, and equity-settled share based payment (see Note 27).
(iii) Other reserve
The other reserve primarily comprises the recognition of financial instruments issued to investors as
stipulated in Note 25.
APPENDIX I ACCOUNTANTS’ REPORT
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(iv) Shares held for Restricted Shares Scheme
In March 2022, the Company issued 7,250,000 registered capital (14,942,497 shares after the
conversion into a joint stock company. See Note 28(c)) to Shanghai Jifang, which held the shares under
the Restricted Shares Scheme (See Note 27), at RMB1.6 per registered capital. The total consideration the
Company received is RMB11,600,000, which were credited to other reserve.
As the Company has the power to govern the relevant activities of Shanghai Jifang and can derive
benefits from the contributions of the employees who were awarded with the shares under Restricted
Shares Scheme, Shanghai Jifang was consolidated.
(v) Fair value reserve
The fair value reserve (non-recycling) comprises the cumulative net change in the fair value of other
investments designated at FVOCI under IFRS 9 that are held at the end of the reporting date.
(g) Capital risk management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability to continue as
a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders,
by pricing products and services commensurately with the level of risk and by securing access to finance at a
reasonable cost.
The Group actively and regularly reviews and manage s its capital structure to maintain a balance between
the higher shareholder returns that might be possible with higher levels of borrowings and the advantages and
security afforded by a sound capital position, and makes adjustments to the capital structure in light of changes
in economic conditions.
29 FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL INSTRUMENTS
Exposure to credit, liquidity and interest rate arises in the normal course of the Group’s business. The Group’s
exposure to these risks and the financial risk management policies and practices used by the Group to manage these
risks are described below:
(a) Credit risk
Credit risk refers to the risk that a counterparty will de fault on its contractual obligations resulting in a
financial loss to the Group. The Group’s credit risk is primarily attributable to trade and other receivables,
contract assets and financial guarantees. The Group’s exposure to credit risk arising from cash and cash
equivalents and bills receivable is limited because the counterparties are banks and financial institutions with
low credit risk confirmed by the Group.
Except for the financial guarantee provided by the Group as set out in Note 30, the Group does not
provide any other guarantees which would expose the Group to credit risk. The maximum exposure to credit risk
in respect of this financial guarantee at the end of the reporting period is disclosed in Note 30.
Impairment losses on trade and other receivables and contract assets recognised in profit or loss are
RMB26,793,194, RMB37,775,596 and RMB80,532,452 during the years ended 31 December 2022, 2023 and 2024
respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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Trade receivables
In respect of trade receivables, individual credit evaluations are performed on all customers
requiring credit over a certain amount. These evaluations focus on the customer’s background and
financial strengths, past history of making payments when due and current ability to pay, and take into
account information specific to the customer as well as the economic environment in which the customer
operates. Trade receivables under credit sales arrangement are normally due within 1 to 6 months from the
date of billing. Sales under instalment payment met hod that has instalment payment periods is generally
ranging from 6 to 60 months.
The Group measures loss allowances for trade receivables and lease receivables at an amount equal
to lifetime ECLs, which is calculated using a provision matrix. According to the past experience of the
Group, the loss patterns of different customer groups are significantly different. The Group classifies
customers into customer groups based on a number of factors including their ownership background and
financial strength, and the industries in which they operate, etc. The Group estimates loss allowance for
trade receivables for each of the customer groups with similar loss patterns.
Significant concentrations of credit risk primarily arise when the Group has significant exposure to
individual customers. As of 31 December 2022, 2023 and 2024, 11%, 9% and 11% of the total trade
receivables was due from the Group’s largest customer, respectively, and 33%, 32% and 34% of the total
trade receivables, respectively, were due from the Group’s five largest customers.
The following table provides information about the Group’s exposure to credit risk and ECLs for
trade receivables:
As at 31 December 2022
Expected loss
rate
Gross carrying
amount
Loss
allowance
%R M BR M B
Current (not past due) 14.71% 172,914,426 (25,440,293)
Overdue less than 1 year 15.52% 97,645,594 (15,153,860)
Overdue 1–2 years 43.16% 6,007,864 (2,592,890)
Overdue 2–3 years 96.49% 1,053,775 (1,016,777)
277,621,659 (44,203,820)
As at 31 December 2023
Expected loss
rate
Gross carrying
amount
Loss
allowance
%R M BR M B
Current (not past due) 8.94% 261,888,588 (23,401,968)
Overdue less than 1 year 20.88% 153,163,554 (31,979,864)
Overdue 1–2 years 53.51% 30,629,428 (16,389,096)
Overdue 2–3 years 96.67% 5,387,650 (5,208,488)
451,069,220 (76,979,416)
APPENDIX I ACCOUNTANTS’ REPORT
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As at 31 December 2024
Expected loss
rate
Gross carrying
amount
Loss
allowance
%R M BR M B
Current (not past due) 9.69% 251,597,872 (24,372,816)
Overdue less than 1 year 24.77% 230,885,137 (57,179,521)
Overdue 1–2 years 52.99% 96,215,846 (50,985,241)
Overdue 2–3 years 99.32% 24,453,885 (24,287,819)
603,152,740 (156,825,397)
Expected loss rates are based on actual loss experience over the past years. These rates are adjusted
based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors
and an assessment of both the current and forecast general economic conditions at the reporting date.
Movement in the loss allowance account in respect of trade receivables during the year is as follows:
As at 31 December
2022 2023 2024
RMB RMB RMB
At the beginning of the year 17,485,342 44,203,820 76,979,416
Impairment losses recognised 26,718,478 33,075,596 79,845,981
Uncollectable amounts written off — (300,000) —
At the end of the year 44,203,820 76,979,416 156,825,397
Movement in the loss allowance account in respect of other receivables during the year is as follows:
As at 31 December
2022 2023 2024
RMB RMB RMB
At the beginning of the year — 74,716 4,774,716
Impairment losses recognised 74,716 4,700,000 650,000
At the end of the year 74,716 4,774,716 5,424,716
Movement in the loss allowance account in respect of contract assets during the year is as follows:
As at 31 December
2022 2023 2024
RMB RMB RMB
At the beginning of the year — — —
Impairment losses recognised — — 36,471
At the end of the year — — 36,471
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Liquidity risk
The Group’s policy is to regularly monitor liquidity requirements, and to ensure that it maintains
sufficient reserves of cash and adequate committed lines of funding from major financial institutions to meet its
liquidity requirements in the short and longer term.
The following tables show the remaining contractual maturities at the end of the reporting period of the
Group’s non-derivative financial liabilities, which are based on contractual undiscounted cash flows (including
interest payments computed using contractual rates or, if floating, based on rates current at the end of the
reporting period) and the earliest date the Group and can be required to pay:
As at 31 December 2022
Contractual undiscounted cash outflow
Within
1y e a ro r
on demand
More than
1 year but
less than
2y e a r s
More than
2 years but
less than
5y e a r s T o t a l
Carrying
amount
RMB RMB RMB RMB RMB
Loans and borrowings 96,398,528 59,693,830 — 156,092,358 151,375,599
Trade and other payables 156,975,313 — — 156,975,313 156,975,313
Lease liabilities 2,857,774 2,857,774 6,147,379 11,862,927 10,683,136
Financial instrument issued
to investors 28,869,927 — — 28,869,927 28,869,927
285,101,542 62,551,604 6,147,379 353,800,525 347,903,975
Financial guarantees issued
and payment
commitments maximum
exposure (Note 30) 8,630,320 5,818,017 2,930,233 17,384,570 92,048
As at 31 December 2023
Contractual undiscounted cash outflow
Within
1y e a ro r
on demand
More than
1 year but
less than
2y e a r s
More than
2 years but
less than
5y e a r s T o t a l
Carrying
amount
RMB RMB RMB RMB RMB
Loans and borrowings 100,869,223 27,1 25,812 35,354,706 163,349,741 153,227,525
Trade and other payables 294,907,720 — — 294,907,720 294,907,720
Lease liabilities 7,433,739 6,239,457 9,921,874 23,595,070 22,481,103
403,210,682 33,365,269 45,276,580 481,852,531 470,616,348
Financial guarantees issued
and payment
commitments maximum
exposure (Note 30) 56,801,758 48,301,766 16,009,219 121,112,743 492,138
APPENDIX I ACCOUNTANTS’ REPORT
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As at 31 December 2024
Contractual undiscounted cash outflow
Within
1y e a ro r
on demand
More than
1 year but
less than
2y e a r s
More than
2 years but
less than
5y e a r s T o t a l
Carrying
amount
RMB RMB RMB RMB RMB
Loans and borrowings 275,710,225 45,8 50,731 42,717,227 364,278,183 352,312,814
Trade and other payables 374,539,060 — — 374,539,060 374,539,060
Lease liabilities 3,417,358 1,552,556 1,164,417 6,134,331 5,827,692
653,666,643 47,403,287 43,881,644 744,951,574 732,679,566
Financial guarantees issued
and payment
commitments maximum
exposure (Note 30) 162,477,907 120,793,908 60,808,033 344,079,848 3,057,538
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
The Group’s interest rate risk arises primarily from cash at bank, pledged bank deposits and
interest-bearing borrowings. The Group’s interest-bearing financial instruments at variable rates as at 31
December 2022, 2023 and 2024 are primarily the cash at bank and borrowings, and the cash flow interest rate
risk arising from the change of market interest rate on these balances is not considered significant.
(i) The Group’s interest rate profile as monitored by management is set out below.
As at 31 December
2022 2023 2024
Interest rate Interest rate Interest rate
%R M B %R M B %R M B
Fixed rate:
Lease liabilities 4.18% 10,683,136 3.39% 22,481,103 4.3%–6.2% 5,827,692
Short-term loans and borrowings 3.00%–4.70% 91,907,758 3.00%–4.35% 99,233,327 3.2%–3.7% 265,868,955
Long-term loans and borrowings 4.00%–4.35% 50,467,841 3.85%–4.90% 53,994,198 2.8%–3.9% 79,223,985
Other borrowings 9.52% 9,000,000 / — 5.98% 7,219,874
Financial instruments issued to
investors 6.20%–8.00% 28,869,927 / — / —
190,928,662 175,708,628 358,140,506
Variable rate:
Cash and cash equivalents 0.25% 270,260,321 0.25% 422,072,291 0.25% 199,254,000
Pledged bank deposits 0.25% 4,700,000 0.25% 5,278,000 0.25% 4,208,000
274,960,321 427,350,291 203,462,000
APPENDIX I ACCOUNTANTS’ REPORT
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(ii) Sensitivity analysis
At 31 December 2022, 2023 and 2024, it is estimated that a general increase/decrease of 100 basis
points in interest rates, with all other variables held constant, would have increased/decreased the Group’s
loss after tax by approximately RMB1,909,287, RMB1,757,086 and RMB3,581,405 respectively.
The sensitivity analysis above indicates the instantaneous change in the Group’s loss after tax (and
accumulated losses) and other components of consolidated equity that would arise assuming that the
change in interest rates had occurred at the end of the reporting period and had been applied to
re-measure those financial instruments held by the Group which expose the Group to fair value interest
rate risk at the end of the reporting period. In respect of the exposure to cash flow interest rate risk arising
from floating rate non-derivative instruments held by the Group at the end of the reporting period, the
impact on the Group’s loss after tax (and accumulated losses) and other components of consolidated
equity is estimated as an annualised impact on interest expenses or income of such changes in interest
rates.
(d) Fair value measurement
(i) Financial assets and liabilities measured at fair value
Fair value hierarchy
The following table presents the fair value of the Group’s financial instruments measured at
the end of the reporting period on a recurring basis, categorised into the three-level fair value
hierarchy as defined in IFRS 13, Fair value measurement . The level into which a fair value
measurement is classified is determined with reference to the observability and significance of the
inputs used in the valuation technique as follows:
. Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted
quoted prices in active markets for identical assets or
liabilities at the measurement date.
. Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable
inputs which fail to meet Level 1, and not using significant
unobservable inputs. Unobservable inputs are inputs for
which market data are not available.
. Level 3 valuations: Fair value measured using significant unobservable inputs.
Fair value at
31 December
2022
Fair value measurements as at
31 December 2022 categorised into
Level 1 Level 2 Level 3
RMB RMB RMB RMB
Recurring fair value
measurement
Financial assets measured
at FVOCI
— Unlisted equity
securities 18,938,509 — — 18,938,509
APPENDIX I ACCOUNTANTS’ REPORT
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Fair value at
31 December
2023
Fair value measurements as at
31 December 2023 categorised into
Level 1 Level 2 Level 3
RMB RMB RMB RMB
Recurring fair value
measurement
Financial assets measured
at FVOCI
— Unlisted equity
securities 19,093,387 — — 19,093,387
Fair value at
31 December
2024
Fair value measurements as at
31 December 2024 categorised into
Level 1 Level 2 Level 3
RMB RMB RMB RMB
Recurring fair value
measurement
Financial assets measured
at FVOCI
— Unlisted equity
securities 41,734,716 — — 41,734,716
During the years ended 31 December 2022, 2023 and 2024, there were no transfers between
Level 1 and Level 2, or transfers into or out of Level 3. The Group’s policy is to recognise transfers
between levels of fair value hierarchy as at the end of the Relevant Periods in which they occur.
Information about Level 3 fair value measurements
The fair value of unlisted equity securities is determined based on medium market multiples
(e.g. price-to-earnings ratio, price-to-sale s ratio) of comparable companies or comparable
transactions with a discount for lack of marketability as appropriate.
As at 31 December 2022, 2023 and 2024, it is estimated that with all other variables held
constant, a decrease/increase in discount for lack marketability by 1% would have decrease/increase
the Group’s loss by RMB25,091, RMB24,839 and RMB239,891 respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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The movement during the year in balance of Level 3 fair value measurement is as follows:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Unlisted equity securities:
At 1 January 300,000 18,938,509 19,093,387
Additional securities acquired 7,663,200 — —
Transferred from an associate
(Note 12) — — 22,739,600
Transferred to associates — (476,654) —
Disposals — — (1,500,000)
Changes in fair value 10,975,309 631,532 1,401,729
At 31 December 18,938,509 19,093,387 41,734,716
The net gains arising from remeasurement of unlisted equity securities are presented in the
‘‘Other comprehensive income’’ line item in the co nsolidated statements of profit or loss and other
comprehensive income.
(ii) Fair values of financial assets and liabilities carried at other than fair value
The carrying amounts of the Group’s financial instruments carried at cost or amortised cost are not
materially different from their fair values as at 31 December 2022, 2023 and 2024.
30 FINANCIAL GUARANTEE ISSUED
Certain customers of the Group finance their purchase of the Group’s products through finance leases provided
by third-party leasing companies. The Group undertakes the joint liability guarantee for these customers. In the event
of customer default, the Group is required to make payments to the third-party leasing companies for the outstanding
amounts due from the customers. At the same time, the Group is entitled to repossess and purchase the leased
products, and retain any net proceeds in excess of the guarantee payments made to the leasing companies. The terms of
these guarantees coincide with the tenure of the lease contracts which generally range from 1 to 4 years.
The initial fair value of the financial guarantees upon the initial recognition was immaterial, which was
measured based on the future net cash outflow. Subsequently, the financial guarantee contract was measured at the
higher of the initial recognised amount and the expected credit loss allowance. As at 31 December 2022, 2023 and 2024,
the Group’s maximum exposure to such guarantees was RMB17,384,570, RMB121,112,743 and RMB344,079,848,
respectively. During the Relevant Periods, no customer default incurred.
31 COMMITMENTS
Purchase and capital commitments
Capital commitments outstanding as at 31 December 2022, 2023 and 2024 not provided for in the
consolidated financial statements were as follows:
As at 31 December
2022 2023 2024
RMB RMB RMB
Contracted for — 101,313,086 36,017,574
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 536 ---
32 MATERIAL RELATED PARTY TRANSACTIONS
(a) Names and relationship of the related parties that had material transactions with the Group during the
Relevant Periods
Name of related parties Relationship
Mr. Chen Fangming One of the Controlling
Shareholders*
Shanghai Huansheng New Energy Technology Co., Ltd. Associate (till August 2022)
Jiangxi Breton New Energy Technology Co., Ltd. Associate (till December 2022)
Breton (Jinhua) New Energy Co., Ltd. Associate
Breton Tianrun (Jiangsu) New Energy Co., Ltd. Associate
Breton Tianyue (Ningxia) New Energy Co., Ltd. Associate
Sichuan Breton Tianyi New Energy Technology Co., Ltd. Associate
Moudi Smart Technology Co., Ltd. Associate (till September 2024)
Shanxi Huanghe Green Energy Technology Co., Ltd. Associate
Shaanxi Lingbo Operation Technology Co., Ltd. Associate
Lituo (Shandong) New Energy Technology Co., Ltd. Associate
Chongqing Changling Technology Co., Ltd. Associate
Henan Breton Construction Machinery Co., Ltd. Associate
Breton Jungang (Shandong) Energy Technology Co., Ltd. Associate
Hebei Lvyuan Tiancheng New Energy Technology Co., Ltd. Associate
H u n a nL v d i a nB r e t o nN e wE n e r g yC o . ,L t d . A s s o c i a t e
Xinjiang Breton New Energy Technology Co., Ltd. Associate (till October 2023)
Shanghai Yijin Investment Co., Ltd. (‘‘Shanghai Yijin’’) One of the Controlling
Shareholders*
Suzhou Zhongding No. 5 Equity Investment Fund Partnership (Limited
Partnership)
Shareholder
Suzhou Zhongding No.5 Qinglan Equity Investment Fund Partnership
(Limited Partnership)
Shareholder
* The controlling shareholders comprise Mr. Chen Fangming, Shanghai Fangao, Shanghai Cloud Tribe
Yijin Venture Capital Center (limited Partnership) ( 上海雲部落易津創業投資中心（有限合夥）),
Shanghai Cloud Tribe Yijin Venture Capital Management Co., Ltd. ( 上海雲部落易津創業投資管理
有限公司), Shanghai Yijin, Shanghai Yijin Ventur e Capital Management Co., Ltd. ( 上海易津創業投資
管理有限公司), and Shanghai Yijin Investment Management Firm (Limited Partnership) ( 上海易津投
資管理事務所（有限合夥）) (‘‘the Controlling Shareholders’’).
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 6–


--- page 537 ---
(b) Transactions with related parties
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Sales of products and rental income
Breton (Jinhua) New Energy Co., Ltd. — 7,058,337 4,068,510
Breton Tianrun (Jiangsu) New Energy Co., Ltd. — 31,679,227 38,275,794
Breton Tianyue (Ningxia) New Energy Co., Ltd. — 5,948,496 3,287,018
Breton Jungang (Shandong) Energy Technology
Co., Ltd. — — 4,177,893
Moudi Smart Technology Co., Ltd. — 3,851,097 294,478
Shanxi Huanghe Green Energy Technology
Co., Ltd. 17,727,487 36,637,359 42,707,258
Shaanxi Lingbo Operation Technology Co., Ltd. 5,814,159 36,071,593 2,718,179
Sichuan Breton Tianyi New Energy Technology
Co., Ltd. — — 7,259,987
Chongqing Changling Technology Co., Ltd. — 2,745,133 1,045,712
Henan Breton Construction Machinery Co., Ltd. 901,988 22,036,966 6,928,543
Hebei Lvyuan Tiancheng New Energy
Technology Co., Ltd. — — 70,899,022
Hunan Lvdian Breton New Energy Co., Ltd. — — 86,935,889
Xinjiang Breton New Energy Technology
Co., Ltd. 4,781,915 28,231,946 —
29,225,549 174,260,154 268,598,283
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Interest expense
Suzhou Zhongding No. 5 Equity Investment
Fund Partnership (Limited Partnership) 530,882 — —
Suzhou Zhongding No.5 Qinglan Equity
Investment Fund Partnership
(Limited Partnership) 45,940 — —
Shanghai Yijin Investment Co., Ltd. 333,073 — —
909,895 — —
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Repayment of loans and borrowings
Suzhou Zhongding No. 5 Equity Investment
Fund Partnership (Limited Partnership) 7,362,857 — —
Suzhou Zhongding No.5 Qinglan Equity
Investment Fund Partnership
(Limited Partnership) 637,143 — —
Shanghai Yijin Investment Co., Ltd. 19,000,000 — —
27,000,000 — —
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 7–


--- page 538 ---
(c) Balance with related parties
Trade and other receivables
Trade in nature:
As at 31 December
2022 2023 2024
RMB RMB RMB
Breton (Jinhua) New Energy Co., Ltd. — 6,744,500 3,312,000
Breton Jungang (Shandong) Energy Technology
Co., Ltd. — — 1,975,275
Breton Tianrun (Jiangsu) New Energy Co., Ltd. — 19,861,295 33,273,188
Breton Tianyue (Ningxia) New Energy Co., Ltd. — 5,850,000 1,015,598
Moudi Smart Technology Co., Ltd. — 4,209,099 —
Shanxi Huanghe Green Energy Technology
Co., Ltd. 7,439,000 31,694,812 36,464,590
Shaanxi Lingbo Operation Technology Co., Ltd. 3,120,000 39,079,565 37,087,136
Sichuan Breton Tianyi New Energy Technology
Co., Ltd. — — 5,358,757
Chongqing Changling Technology Co., Ltd. — 4,136,000 1,376,000
Henan Breton Construction Machinery C o., Ltd. 1,019,246 17,731,565 10,259,109
Hebei Lvyuan Tiancheng New Energy
Technology Co., Ltd. — — 25,953,141
Hunan Lvdian Breton New Energy Co., Ltd. — — 64,089,446
Xinjiang Breton New Energy Technology
Co., Ltd. 3,490,827 — —
15,069,073 129,306,836 220,164,240
Trade and other payables
Trade in nature:
As at 31 December
2022 2023 2024
RMB RMB RMB
Breton (Jinhua) New Energy Co., Ltd. — — 50,000
Breton Tianrun (Jiangsu) New Energy Co., Ltd. — 20,000 70,619
Shaanxi Lingbo Operation Technology Co., Ltd. 442,478 707,965 707,965
Henan Breton Construction Machinery Co., Ltd. 340,910 1,175,912 454,737
Shanxi Huanghe Green Energy Technology
Co., Ltd. 1,265,310 1,726,089 456,827
Xinjiang Breton New Energy Technology
Co., Ltd. 542,705 — —
Hunan Lvdian Breton New Energy Co., Ltd. — — 1,336,585
Hebei Lvyuan Tiancheng New Energy
Technology Co., Ltd. — — 10,197,171
Breton Jungang (Shandong) Energy Technology
Co., Ltd. — — 290,000
2,591,403 3,629,966 13,563,904
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 8–


--- page 539 ---
Non-trade in nature:
As at 31 December
2022 2023 2024
RMB RMB RMB
Xinjiang Breton New Energy Technology
Co., Ltd. 227,650 — —
Contract liabilities
Trade in nature:
As at 31 December
2022 2023 2024
RMB RMB RMB
Sichuan Breton Tianyi New Energy Technology
Co., Ltd. — 1,139,823 13,274
Breton (Jinhua) New Energy Co., Ltd. — — 75,221
Breton Tianyue (Ningxia) New Energy Co., Ltd. — — 2,075
Henan Breton Construction Machinery Co., Ltd. — 752,212 —
Shanxi Huanghe Green Energy Technology
Co., Ltd. 2,402,302 77,892 48,693
Breton Tianrun (Jiangsu) New Energy Co., Ltd. — 1,915 115,990
Shaanxi Lingbo Operation Technology Co., Ltd. — 7,522 —
Xinjiang Breton New Energy Technology
Co., Ltd. 382,567 — —
2,784,869 1,979,364 255,253
(d) Key management personnel remuneration
Remuneration for key management personnel of the Group, including amounts paid to the Company’s
directors as disclosed in Note 8, is as follows:
Year ended 31 December
2022 2023 2024
RMB RMB RMB
Salaries, allowances and benefits in kind 2,193,793 4,028,466 4,563,985
Discretionary bonuses 201,546 266,425 744,875
Contributions to retirement benefit schemes 172,116 375,901 319,988
Equity-settled share-based payment 8,380,938 12,912,211 17,453,277
10,948,393 17,583,003 23,082,125
(e) Guarantee provided by related parties
As disclosed in Note 22, the bank loans and oth er borrowings of RMB119,575,599, RMB65,840,000 and
nil as at 31 December 2022, 2023 and 2024, respectively, were guaranteed by one of the Controlling
Shareholders.
APPENDIX I ACCOUNTANTS’ REPORT
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33 POSSIBLE IMPACT OF AMENDMENTS, NEW ST ANDARDS AND INTERPRETATIONS ISSUED BUT
NOT YET EFFECTIVE FOR THE RELEVANT PERIODS
Up to the date of this report, the IASB has issued a number of new or amended standards, which are not yet
effective for the Relevant Periods, and which have not been adopted in preparing the Historical Financial Information.
These developments include the following which may be relevant to the Group.
Effective for accounting periods
beginning on or after
Amendments to IAS 21, The effects of changes in foreign exchange rates: Lack
of exchangeability
1 January 2025
Amendments to IFRS 9 and IFRS 7, Contracts Referencing Nature-dependent
Electricity
1 January 2026
Amendments to IFRS 9 and IFRS 7, Amendments to the Classification and
Measurement of Financial Instruments
1 January 2026
Annual Improvements to IFRS Accounting Standards — Volume 11 1 January 2026
IFRS 18, Presentation and Disclosure in Financial Statements Basis for
conclusions on IFRS 18 Illustrative examples on IFRS 18
1 January 2027
IFRS 19, Subsidiaries without Public Ac countability: Disclosures 1 January 2027
Amendments to IFRS 10 and IAS 28, Sale or contribution of assets between an
investor and its associate or joint venture
To be determined
The Group is in the process of making an assessment of what the impact of these developments is expected to be
in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a significant
impact on the consolidated financial statements.
34 SUBSEQUENT EVENTS
There was no material non-adjusting event after reporting period up to the date of this report.
Subsequent financial statements
No audited financial statements have been prepared by the Company and its subsidiaries that comprise
the Group in respect of any period subsequent to 31 December 2024.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 541 ---
The information set forth in this appendix does not form part of the accountants’ report
prepared by KPMG, Certified Public Accountants, Hong Kong, the reporting accountants of the
Company, as set forth in Appendix I to this prosp ectus, and is included herein for illustrative
purposes only.
The unaudited pro forma financial information s hould be read in conjunction with the section
headed ‘‘Financial Information’’ in this prospectus and the accountants’ report set forth in
Appendix I to this prospectus.
A. UNAUDITED PRO FORMA ADJU STED NET TANGIBLE ASSETS
The following unaudited pro forma statemen t of adjusted net tangible assets of our Group
is prepared in accordance with Rule 4.29 of the Listing Rules and is set out below for the
purpose to illustrate the effect of the Global Offering on the consolidated net tangible assets
attributable to equity shareholders of the Company as of December 31, 2024 as if it had taken
place on December 31, 2024.
The statement of unaudited pro forma adjuste d net tangible assets has been prepared for
illustrative purpose 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 December 31,
2024 or at any future date.
Consolidated net
tangible assets
attributable to
the equity
shareholders of
the Company
as of
December 31,
2024 (1)
Estimated net
proceeds from
this Global
Offering (2)
Unaudited pro
forma adjusted
net tangible
assets
attributable to
the equity
shareholders of
the Company
Unaudited pro forma adjusted net
tangible assets attributable to the
equity shareholders of the Company
Per H Share (3)
RMB RMB (4) RMB RMB (4) HK$ (4)
B a s e do na nO f f e rP r i c eo f
HK$18.00 per H Share 679,320,057 170 ,449,982 849,770,039 2.33 2.51
Notes:
(1) The consolidated net tangible assets of the Group attributable to equity shareholders of the Company as
at December 31, 2024 is arrived at after deducting intangible assets of RMB2,960,937 from the total equity
attributable to equity shareholders of the Company of RMB682,280,994 as at December 31, 2024, as
shown in the Accountants’ Report as set out in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offerings are based on the indicative Offering Price of
HK$18.00 per H Share and 13,000,000 H Shares expect ed to be issued under the Global Offering, after
deduction of the underwriting commissions and other listing related expenses paid or payable by the
Company (excluding the listing expense of RMB33,149,491 charged to profit or loss prior to December 31,
2024), and takes no account of any shares that may be issued upon issued upon exercise of the
Over-Allotment Option or pursuan t to the Restricted Shares Scheme.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 1–


--- page 542 ---
(3) The unaudited pro forma adjusted consolidated net t angible assets of the Group attributable to equity
shareholders of the Company per share is arrived at by dividing the unaudited pro forma adjusted net
tangible assets attributable to equity shareholders of the Company by 364,709,265 Shares, being the
number of shares expected following the completion of the Global Offering (excluding 14,942,497 shares
held for Restricted Shares Scheme as shown in Note 28(f)(iv) to the Accountants’ Report set out in
Appendix I to this prospectus), and does not take into any shares which may be issued upon the exercise of
the Over-allotment Option or pursuant to the Restricted Shares Scheme.
(4) For illustrative purpose, the estimated net proceeds from the Global Offering is converted from Hong
Kong dollar into Renminbi and the unaudited pro forma adjusted net tangible assets attributable to
equity Shareholders of the Company per Share is converted from Renminbi into Hong Kong dollar at the
exchange rate of HK$1.00 to RMB0.9289, the exc hange rate set by PBOC prevailing on the Latest
Practicable Date. No representation is made that Renminbi amount have been, could have been or may be
converted to Hong Kong dollars, or vice versa, at the rate or at any other date.
(5) No adjustment has been made to the unaudited pro forma adjusted net tangible assets attributable to
equity shareholder of the Company to reflect any trading results or other transactions entered into
subsequent to December 31, 2024.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 2–


--- page 543 ---
B. REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from the reporting accountants, KPMG,
Certified Public Accountants, Hong Kong, in respect of the Group’s pro forma financial
information for the purpose in this prospectus.
INDEPENDENT REPORTING ACCOUNT ANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
TO THE DIRECTORS OF BRETON TECHNOLOGY CO., LTD.
We have completed our assurance engagement to report on the compilation of pro forma
financial information of Breton Technology Co ., Ltd. (the ‘‘Company’’) and its subsidiaries
(collectively the ‘‘Group’’) by the directors of t he Company (the ‘‘Directors’’) for illustrative
purposes only. The unaudited pro forma financial information consists of the unaudited pro
forma statement of adjusted net tangible assets as at December 31, 2024 and related notes as set
out in Part A of Appendix II to the prospectus dated 25 April 2025 (the ‘‘Prospectus’’) issued by
the Company. The applicable criteria on the basis of which the Directors have compiled the pro
forma financial information are described in Part A of Appendix II to the Prospectus.
The pro forma financial information has been compiled by the Directors to illustrate the
impact of the proposed offering of the ordinary shares of the Company (the ‘‘Global Offering’’)
on the Group’s financial position as at December 31, 2024 as if the Global Offering had taken
place at December 31, 2024. As part of this proc ess, information about the Group’s financial
position as at December 31, 2024 has been ex tracted by the Directors from the Group’s
historical financial information included in the Accountants’ Report as set out in Appendix I to
the Prospectus.
Directors’ Responsibilities for th e Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information in
accordance with paragraph 4.29 of the Rules Gov erning the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and with reference to Accounting
Guideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment
Circulars’’ (‘‘AG 7’’) issued by the Hong Kong Institute of Certified Public Accountants
(‘‘HKICPA’’).
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professi onal competence and due care, confidentiality and
professional behaviour.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 3–


--- page 544 ---
Our firm applies Hong Kong Standard on Qu ality Management 1 ‘‘Quality Management
for Firms that Perform Audits or Reviews of Fi nancial 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 an d applicable legal and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing
Rules, on the pro forma financial information and to report our opinion to you. We do not
accept any responsibility for any reports previ ously given by us on any financial information
used in the compilation of the pro forma financial information beyond that owed to those to
whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements (‘‘HKSAE’’) 3420 ‘‘Assurance Engagements to Report on the Compilation of Pro
Forma Financial Information Included in a Prospectus’’ issued by the HKICPA. This standard
requires that the reporting accountants plan and perform procedures to obtain reasonable
assurance about whether the Directors have compiled the pro forma financial information in
accordance with paragraph 4.29 of the Listing R ules, and with reference to AG 7 issued by the
HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the pro forma
financial information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in com piling the pro forma fin ancial information.
The purpose of pro forma financial information i ncluded in an investment circular is solely
to illustrate the impact of a significant event or tr ansaction on unadjusted financial information
of the Group as if the event had occurred or the transaction had been undertaken at an earlier
date selected for purposes of the illustration. Accordingly, we do not provide any assurance that
the actual outcome of events or transactio ns as at December 31, 2024 would have been as
presented.
A reasonable assurance engagement to rep ort on whether the pro forma financial
information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the pro forma financial information provide a reasonable basis for presenting the
significant effects directly attr ibutable to the event or transaction, and to obtain sufficient
appropriate evidence about whether:
. the related pro forma adjustments give app ropriate effect to th ose criteria; and
. the pro forma financial information ref lects the proper application of those
adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 4–


--- page 545 ---
The procedures selected depend on the reporting accountants’ judgement, having regard to
the reporting accountants’ understanding of the n ature of the Group, the event or transaction in
respect of which the pro forma financial information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating th e overall presentation of the pro forma
financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other st andards and practices generally accepted in the
United States of America, auditing standards of the Public Company Accounting Oversight
Board (United States) or any overseas standards and accordingly should not be relied upon as if
they had been carried out in accordance with those standards and practices.
We make no comments regarding the reasona bleness of the amount of net proceeds from
the issuance of the Company’s shares, the appli cation of those net proceeds, or whether such use
will actually take place as described in the secti on headed ‘‘Future Plans and Use of Proceeds’’ in
the Prospectus.
Opinion
In our opinion:
a) the pro forma financial information has be en properly compiled on the basis stated;
b) such basis is consistent with the accounting policies of the Group, and
c) the adjustments are appropriate for the purposes of the pro forma financial
information as disclosed pursuant to pa ragraph 4.29(1) of the Listing Rules.
KPMG
Certified Public Accountants
Hong Kong
25 April 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 5–


--- page 546 ---
1. TAXATION OF SECURITY HOLDERS
The taxation of income and capital gains of holders of H Shares is subject to the laws and
practices of the PRC and of jurisdictions in which holders of H Shares are residents or otherwise
subject to tax. The following summary of certa in relevant taxation provisions is based on
current effective laws and practices, and no predictions are made about changes or adjustments
to relevant laws or policies, and no legal or tax comments or suggestions will be made
accordingly. The discussion has no intention to de al with all possible tax consequences resulting
from the investment in H Shares, nor does it take into account the specific circumstances of any
particular investor, some of which may be subject to special regulations. Accordingly, you
should consult your own tax advisor regarding the tax consequences of an investment in H
Shares. The discussion is based upon laws and relevant interpretations in effect as of the date of
this prospectus, which is fully subject to change or adjustment and may have retrospective
effect.
No issues on PRC or Hong Kong taxation other than income tax, capital appreciation and
profit tax, business tax/appreciation tax, stamp duty and estate duty were referred in the
discussion. Prospective investors are urged to consult their financial advisors regarding the
PRC, Hong Kong and other tax consequences of owning and disposing of H Shares.
A. The PRC Taxation
Taxation on Dividends
Individual Investor
Pursuant to the Individual Income Tax Law of the PRC ( 《中華人民共和國個人所
得稅法》), which was promulgated on September 10, 1980 and most recently amended
on August 31, 2018 by the Standing Committee of the National People’s Congress (the
‘‘NPC’’), and came into effect on January 1, 2019, and the Implementation Provisions
of the Individual Income Tax Law of the PRC ( 《中華人民共和國個人所得稅法實施條
例》), which was most recently amended by the State Council on December 18, 2018
and came into effect on January 1, 2019 (collectively the ‘‘IIT Law’’), dividends
distributed by PRC enterprises are generally subject to a withholding individual
income tax levied at a flat rate of 20%. M oreover, pursuant to the Notice of the
Ministry of Finance, the State Administration of Taxation and the China Securities
Regulatory Commission on Issues Concerning Differentiated Individual Income Tax
Policies for Dividends and Bonuses of Listed Companies ( 《財政部、國家稅務總局、
證監會關於上市公司股息紅利差別化個人所得稅政策有關問題的通
知》)i s s u e db yt h e
Ministry of Finance (the ‘‘MOF’’), the Sta te Taxation Administration (the ‘‘STA’’)
and CSRC on September 7, 2015, where an individual acquires stocks of a listed
enterprise from public offering of the enterprise or from the stock transfer market and
holds the stocks for more than one year, the income from dividends distributed by the
enterprise shall be exempt from individual income tax for the time being; if the
individual holds the stocks for one month or less, the income from dividends
distributed by the enterprise shall be fully t axable; if the individual holds the stocks
for one month to one year (one year inclusive), 50% of the income from dividends
distributed by the enterprise shall be taxable; the aforesaid income is subject to an
individual income tax at a flat rate of 20%.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 1–


--- page 547 ---
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
individual income tax of 20% unless specifi cally exempted by the tax authority of the
State Council or reduced by relevant tax treaty. Indeed, the withholding tax rate for
dividends of non-resident individuals may be lower than 20% under certain
circumstances. However, pursuant to the Circular of the MOF and the STA on
Issues Concerning Individual Income Tax Policies ( 《財政部、國家稅務總局關於個人
所得稅若干政策問題的通知》), the income received by individual foreigners from
dividends and bonuses of a foreign-invested enterprise is exempt from individual
income tax for the time being. On Februar y 3, 2013, the State Council approved and
promulgated the Notice of the State Council on Approving and Relaying the Several
Opinions of the National Development and Reform Commission and Other
Departments on Deepening Reform of t he Income Distribution System ( 《國務院批
轉發展改革委等部門關於深化收入分配制度改革若干意見的通知》). On February 8,
2013, the General Office of the State Council promulgated the Notice of the
General Office of the State Council on Deepening the Division of Key Work for
Income Distribution System Reform ( 《國務院辦公廳關於深化收入分配制度改革重點
工作分
工的通知》). Pursuant to these two documents, the PRC government is planning
to cancel foreign individuals’ tax exemption for dividends obtained from
foreign-invested enterprises, and the MOF and the STA should be responsible for
making and implementing details of such pl an. However, relevant implementation
rules or regulations have not been promulgated by the MOF and the STA.
Pursuant to the Notice of the STA on Issues Concerning Taxation and
Administration of Individual Income Tax After the Repeal of the Document (Guo
Shui Fa [1993] No. 045) ( 《國家稅務總局關於國稅發[1993]045 號文件廢止後有關個人所
得稅徵管問題的通知》) issued by the STA on June 28, 2011, domestic
non-foreign-invested enterprises issuing shares in Hong Kong may, when
distributing dividends to overseas resident individuals in the jurisdiction of the tax
treaty, normally 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 excessive withholding amount will be refunded.
For the individual holders of H Shares re ceiving dividends who are citizens of
countries that have entered into a tax treat y 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 S hares receiving dividends who are citizens
of countries without taxation treaties with the PRC or are under other situations, the
non-foreign-invested enterprise is requ ired to withhold the tax at a rate of 20%.
Pursuant to the Arrangement between the Mainland of China and the Hong
Kong Special Administrative Region for t he Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income ( 《內地和香港特別行政
區關於對所得避免雙重徵稅和防止偷漏稅的安排》) signed by the Central People’s
Government of Mainland of China and the Government of the Hong Kong Special
Administrative Region on August 21, 2006, the PRC government may impose tax on
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 548 ---
dividends paid by a PRC company to a Hong Kong resident (including natural person
and legal entity), but such tax shall not e xceed 10% of the total amount of dividends
payable. If a Hong Kong resident directly holds 25% or more of the equity interests in
a PRC company and the Hong Kong resident is the beneficial owner of the dividends
and meets other conditions, such tax shall not exceed 5% of the total amount of
dividends payable by the PRC company. The Fifth Protocol to the Arrangement
between the Mainland of China and the Hong Kong Special Administrative Region
for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Income ( 《〈內地和香港特別行政區關於對所得避免雙重徵稅和防
止偷漏稅的安排〉第五議定書》) issued by the STA and effective on December 6, 2019
provides that such provisions shall not apply to arrangements or transactions made
for one of the primary purposes of obtaining such tax benefits.
Enterprise Investors
In accordance with the Enterprise Income Tax Law of the PRC ( 《中華人民共
和國企業所得稅法》) issued by NPC on March 16, 2007 and latest amended on
December 29, 2018 and the Implementation Provisions of the Enterprise Income
Tax Law of the PRC ( 《中華人民共和國企業所得稅法實施條例》)i s s u e db yt h e
State Council on December 6, 2007, came into effect on January 1, 2008 and
amended on January 20, 2025 (collectively the ‘‘EIT Law’’), a non-resident
enterprise is generally subject to a 10% enterprise income tax (the ‘‘EIT’’) on
PRC-sourced income (including dividends received from a PRC resident
enterprise), if it does not have an establishment or premise in the PRC or has
an establishment or premise in the PRC but its PRC-sourced income has no real
connection with such establishment or premise. The aforesaid income tax payable
for non-resident enterprises are 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. The withholdi ng tax may be reduced or eliminated under
an applicable treaty for the avoidance of double taxation. Notice of the STA on
the Issues concerning Withholding the E nterprise Income Tax on the Dividends
Paid by Chinese Resident Enterprises to H-share Holders Which Are Overseas
Non-resident Enterprises ( 《國
家稅務總局關於中國居民企業向境外H股非居民企業
股東派發股息代扣代繳企業所得稅有關問題的通知》), which was promulgated by
the STA and came into effect on November 6, 2008, further clarified that a
PRC-resident enterprise must withhold corporate income tax at a rate of 10% on
the dividends of 2008 and onwards that it distributes to overseas non-resident
enterprise shareholders of H Shares. Th e Reply of the Imposition of Enterprise
Income Tax on B-share and Other Dividends of Non-resident Enterprises ( 《關於
非居民企業取得B股等股票股息徵收企業所得稅問題的批覆》) that was promulgated
by the STA on July 24, 2009, further provide s that any Chinese resident enterprise
listed on any overseas stock exchange must withhold EIT at a rate of 10% on
dividends distributed to non-PRC resident enterprise shareholders. Such tax rates
may be further changed pursuant to the tax treaty or agreement that China has
concluded with a relevant jurisdiction, where applicable.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 3–


--- page 549 ---
Pursuant to the Arrangement between the Mainland of China and the Hong
Kong Special Administrative Region for t he Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income ( 《內地和香港特別行政
區關於對所得避免雙重徵稅和防止偷漏稅的安排》) signed by the Central People’s
Government of Mainland of China and the Government of the Hong Kong Special
Administrative Region on August 21, 2006, the PRC government may impose tax on
dividends paid by a PRC company to a Hong Kong resident (including natural person
and legal entity), but such tax shall not e xceed 10% of the total amount of dividends
payable. If a Hong Kong resident directly holds 25% or more of the equity interests in
a PRC company and the Hong Kong resident is the beneficial owner of the dividends
and meets other conditions, such tax shall not exceed 5% of the total amount of
dividends payable by the PRC company. The Fifth Protocol to the Arrangement
between the Mainland of China and the Hong Kong Special Administrative Region
for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Income ( 《〈內地和香港特別行政區關於對所得避免雙重徵稅和防
止偷漏稅的安排〉第五議定書》) issued by the STA and effective on December 6, 2019
provides that such provisions shall not apply to arrangements or transactions made
for one of the primary purposes of obtaining such tax benefits.
Tax Treaties
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 corporate income tax imposed on the dividends received
from PRC companies. The PRC currently has entered into Avoidance of Double
Taxation Treaties or Arrangements with a number of countries and regions including
Hong Kong Special Administrative Region, Macau Special Administrative Region,
Australia, Canada, France, Germany, Japa n, Malaysia, the Netherlands, Singapore,
the United Kingdom and the United States. Non-PRC resident enterprises entitled to
preferential tax rates in accordance wi th the relevant taxation treaties or
arrangements are required to apply to the Chinese tax authorities for a refund of
the corporate income tax in excess of the agr eed tax rate, and the refund application is
subject to approval by the Chinese tax authorities.
Pursuant to the Administrative Measur es on Entitlement of Non-resident
Taxpayers to Preferential Treatment under Tax Treaties ( 《非居民納稅人享受協定待
遇管理辦法》), which was promulgated by the STA on October 14, 2019 and became
effective on January 1, 2020, non-resident taxpayers are entitled to preferential
treatment under the tax trea ties through self-determina tion, self-declaration and
keeping and documenting relevant information for inspection. Where a non-resident
taxpayer self-assesses and concludes that it s atisfies the criteria for claiming treaty
benefits, it may enjoy treaty benefits at t he time of tax declaration or at the time of
withholding declaration through a withholding agent, simultaneously gather and
retain the relevant materials pursuant to th e regulations for future inspection, and be
subject to subsequent administration by tax authorities.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 550 ---
Taxation on Share Transfer
Value-added Tax and Local Additional Tax
Pursuant to the Notice on Fully Imple menting the Pilot Reform for the
Transition from Business Tax to Value-added Tax ( 《關於全面推開營業稅改徵增值稅
試點的通知》) (the ‘‘Circular 36’’), which was implemented on May 1, 2016, entities
and individuals engaged in the services sa le in the PRC are subject to value-added Tax
(‘‘VAT’’) 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 VAT at 6% on the taxable revenue (which is the balance of sales price
upon deduction of purchase price), for a general or a foreign VAT taxpayer, while the
transfer of financial products by individuals is exempt from VAT.
At the same time, VAT payers are also required to pay urban maintenance and
construction tax, education surtax and local education surcharge.
Income Tax
Individual Investors
According to the IIT Law, gains on the transfer of equity interests in the PRC
resident enterprises are subject to indivi dual income tax at a rate of 20%. Pursuant to
the Circular on Declaring that Individual Income Tax Continues to be Exempted over
Income of Individuals from the Transfer of Shares ( 《關於個人轉讓股票所得繼續暫免
徵收個人所得稅的通知》) issued by the STA 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 STA 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 Individual Income Tax Law.
However, on December 31, 2009, the MO F, STA and CSRC jointly issued the
Circular on Related Issues on Levying Individual Income Tax over the Income
Received by Individuals from the Transfer of Listed Shares Subject to Sales
Limitation ( 《關於個人轉讓上市公司限售股所得徵收個人所得稅有關問
題的通知》),
which came into effect on January 1, 2010, which states that individuals’ income
from the transfer of listed shares obtained from the public offering of listed companies
and transfer market on the Shanghai Stock Exchange and the Shenzhen Stock
Exchange shall continue to be exempted from individual income tax, except for the
relevant shares which are subject to sales res triction (as defined in the Supplementary
Notice on Issues Concerning the Levy of Individual Income Tax on Individuals’
Income from the Transfer of Restric ted Stocks of Listed Companies ( 《關於個人轉讓
上市公司限售股所得徵收個人所得稅有關問題的補充通知》)j o i n t l yi s s u e da n d
implemented by such departments on November 10, 2010). As of the Latest
Practicable Date, no aforesaid provisions have expressly provided that individual
income tax shall be levied from non-PRC resident individuals on the transfer of shares
in PRC resident enterpr ises listed on overseas stock exchanges.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 5–


--- page 551 ---
Enterprise Investors
In accordance with the EIT Law, a non-resi dent enterprise is generally subject to
corporate income tax at the rate of a 10% 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 premise in the PRC or has an establishment or premise
in the PRC but its PRC-sourced income has no real connection with such
establishment or premise. Such income tax payable for non-resident enterprises are
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. Such tax may be
reduced or exempted pursuant to relevant tax treaties or agreements on avoidance of
double taxation.
Tax policies for Shanghai-Hong Kong Stock Connect
On October 31, 2014, the MOF, the STA and the CSRC jointly promulgated the
Circular on the Relevant Taxation Po licy for the Pilot Programme of an
Interconnection Mechanism for Transactions in the Shanghai and Hong Kong
Stock Markets ( 《關於滬港股票市場交易互聯互通機制試點有關稅收政策的通知》) (the
‘‘Shanghai-Hong Kong Stock Connect T axation Policy’’). Pursuant to the
Shanghai-Hong Kong Stock Connect Taxation Policy, the income from the transfer
price difference obtained by corporate investors of the mainland of China investing in
stocks listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock
Connect is included in their total income and EIT is levied on such income in
accordance with the law. The income from dividends and bonus obtained by
corporate investors of the mainland of China investing in stocks listed on the Hong
Kong Stock Exchange through Shanghai-Hong Kong Stock Connect is included in
their total income. The EIT is levied on such income in accordance with the law.
Among them, EIT will be exempt according to law for income from dividends and
bonus obtained by resident enterprises of the Mainland of China that hold H-shares
for at least 12 consecutive months. The H-share companies do not need to withhold
tax on the income from dividends and bonus obtained by corporate investors of the
Mainland of China. The tax payable shall be declared and paid by the enterprises
themselves.
Pursuant to the Announcement on Continued Implementation of Individual
Income Tax Policies Relating to Interconnection Mechanism for Transactions in
Shanghai-Hong Kong Stock Markets and Shenzhen-Hong Kong Stock Markets and
Mutual Recognition of Funds Between the Mainland of China and the Hong Kong
Special Administrative Region ( 《關於繼續執行滬港、深港股票市場交易互聯互通機制
和內地與香港基金互認有關個人所得稅政策的公告》) that came into effect on
December 5, 2019, from December 5, 2019 to December 31, 2022, the income from
the transfer price difference obtained by individual investors of the mainland of China
investing in stocks listed on the Hong Kong Stock Exchange through Shanghai-Hong
Kong Stock Connect is exempt from individual income tax. For dividends and bonus
obtained by individual investors of the Mainland of China investing in H-shares listed
on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect, the
H-share companies shall apply to China Securities Depository and Clearing
Corporation Limited (the ‘‘CSDCC’’) fo r provision by the CSDCC to the H-share
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 6–


--- page 552 ---
companies the register of individual investors of the Mainland of China. The H-share
companies shall withhold individual income tax at a rate of 20%. According to the
Announcement on the Extension of Relevant Preferential Policies for Individual
Income Tax (《關於延續實施有關個人所得稅優惠政策的公告》)i s s u e db yM O Fa n dt h e
STA on January 16, 2023 and the Announcement on Extending the Implementation of
the Individual Income Tax Policies Concerning the Shanghai-Hong Kong Stock
Connect and the Shenzhen-Hong Kong Stock Connect and the Mainland-Hong Kong
Mutual Recognition of Funds ( 《關於延續實施滬港、深港股票市場交易互聯互通機制
和內地與香港基金互認有關個人所得稅政策的公告》) which promulgated on 21 August
2023 and implemented on the same date, the above-mentioned individual income tax
policy shall continue to apply during the period from January 1, 2023 to December 31,
2027.
Tax policies for Shenzhen-Hong Kong Stock Connect
On November 5, 2016, the MOF, the STA and the CSRC jointly issued the
Circular on the Relevant Taxation Po licy for the Pilot Programme of an
Interconnection Mechanism for Transactions in the Shenzhen and Hong Kong
Stock Markets ( 《關於深港股票市場交易互聯互通
機制試點有關稅收政策的通知》) (the
‘‘Shenzhen-Hong Kong Stock Connect Ta xation Policy’’). Pursuant to the
Shenzhen-Hong Kong Stock Connect Taxation Policy, the income from the transfer
price difference obtained by corporate investors of the mainland of China investing in
stocks listed on the Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock
Connect is included in their total income. The EIT is levied on such income in
accordance with the law. The income from dividends and bonus obtained by
corporate investors of the Mainland of China investing in stocks listed on the Hong
Kong Stock Exchange through Shenzhen-Hong Kong Stock Connect is included in
their total income. The EIT is levied on such income in accordance with the law. EIT
is exempt according to law for income from dividends and bonus obtained by resident
enterprises of the Mainland of China that hold H-shares for at least 12 consecutive
months. The H-share companies do not need to withhold tax on the income from
dividends and bonus obtained by corporate investors of the Mainland of China. The
tax payable shall be declared and paid by the enterprises themselves.
Pursuant to the Announcement on Continued Implementation of Individual
Income Tax Policies Relating to Interconnection Mechanism for Transactions in
Shanghai-Hong Kong Stock Markets and Shenzhen-Hong Kong Stock Markets and
Mutual Recognition of Funds Between the Mainland of China and the Hong Kong
Special Administrative Region ( 《關於繼續執行滬港、深港股票市場交易互聯互通機制
和內地與香港基金互認有關個人所得稅政策的公告》) that came into effect on December
5, 2019, from December 5, 2019 to Decemb er 31, 2022, the income from the transfer
price difference obtained by individual investors of the mainland of China investing in
stocks listed on the Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock
Connect are exempt from individual income tax. For dividends and bonus obtained by
individual investors of the Mainland of China investing in the H Shares listed on the
Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock Connect, the
H-share companies shall apply to the C SDCC for provision by the CSDCC to the
H-share companies the register of individual investors of the Mainland of China, and
the H-share companies shall withhold indi vidual income tax at a rate of 20%. Pursuant
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 7–


--- page 553 ---
to the Announcement on the Extension of Relevant Preferential Individual Income Tax
Policies ( 《關於延續實施有關個人所得稅優惠政策的公告》)t h a tc a m ei n t oe f f e c to n
January 16, 2023 and the Announcement on Extending the Imple mentation of the
Individual Income Tax Policies Concerning the Shanghai-Hong Kong Stock Connect
and the Shenzhen-Hong Kong Stock Connect and the Mainland-Hong Kong Mutual
Recognition of Funds ( 《關於延續實施滬港、深港股票市場交易互聯互通機制和內地與
香港基金互認有關個人所得稅政策的公告》) which promulgated on 21 August 2023 and
implemented on the same date, the preferen tial IIT policies stated in the Announcement
on Continued Implementation of Individual Income Tax Policies Relating to
Interconnection Mechanism for Transactions in Shanghai-Hong Kong Stock Markets
and Shenzhen-Hong Kong Stock Markets and Mutual Recognition of Funds Between
the Mainland of China and the Hong Kong Special Administrative Region shall
continue to be in effect from January 1, 2023 to December 31, 2027.
Stamp Duty
Pursuant to the Stamp Duty Law of the PRC ( 《中華人民共和國印花稅法》)
promulgated on June 10, 2021 which took effect on July 1, 2022, the entities and
individuals that conclude taxable certifi cates, or conduct secu rities transactions
within the territory of the PRC shall be taxpayers of stamp tax, and shall pay stamp
tax in accordance with the provisions of this law; where entities or individuals, outside
the territory of the PRC, conclude taxable certificates that are used within the
territory of the PRC, they shall pay stamp tax in accordance with the provisions of
this law. 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.
Estate Duty
As of the date of this prospectus, no estate duty has been levied in the PRC under
the PRC laws.
2. FOREIGN EXCHANGE
The lawful currency of the PRC is Renminbi, which is currently subject to foreign exchange
control and cannot be freely converted into foreign currency. The State Administration of
Foreign Exchange (the ‘‘SAFE’’), with the authorization of the People’s Bank of China (the
‘‘PBOC’’), is empowered with the functions of administering all matters relating to foreign
exchange, including the enforcement of foreign ex change control regulations. The Regulations
on Foreign Exchange Control of the PRC ( 《中華人民共和國外匯管理條例》)w h i c hw a s
promulgated by the State Council on January 29, 1996, implemented on April 1, 1996 and
was subsequently amended on January 14, 1997 and A ugust 5, 2008, classifies all international
payments and transfers into current items and c apital items. Current items are subject to the
reasonable examination of the veracity of tran saction documents and the consistency of the
transaction documents and the foreign exchange receipts and payments by financial institutions
engaging in conversion and sale of foreign curr encies and supervision and inspection by the
foreign exchange control authorities. For capit al items, overseas organizations and overseas
individuals making direct investments in China shall, upon approval by the relevant authorities
in charge, process registration formalities with t he foreign exchange control authorities. Foreign
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 8–


--- page 554 ---
exchange income received overseas can be repa triated or deposited ov erseas, and foreign
exchange and foreign exchange settlement fund s under the capital account are required to be
used only for purposes as approved by the competent authorities and foreign exchange
administrative authorities. In the event that international revenues and expenditure occur or
may occur a material misbalance, or the national economy encounters or may encounter a
severe crisis, the State may adopt necessary safeguard and control measures on international
revenues and expenditure.
The Regulations for the Administration of Settlement, Sale and Payment of Foreign
Exchange (《結匯、售匯及付匯管理規定》), which was promulgated by the PBOC on June 20,
1996 and implemented on July 1, 1996, removes oth er restrictions on convertibility of foreign
exchange under current items, while imposing existing restrictions on foreign exchange
transactions under capital account items. Co nsequently, Renminbi is generally freely
convertible for payments of current account item s, such as trade and service-related foreign
exchange transactions and dividend payments, but remains to be not freely convertible for
capital account items, such as direct investment, loan or investment in securities outside China
unless prior approval of the SAFE or its local counterparts is obtained.
According to the Announcement on Improving the Reform of the Renminbi Exchange
Rate Formation Mechanism ( 《關於完善人民幣匯率形成機制改革的公告》), which was issued by
the PBOC and implemented on July 21, 2005, th e PRC has started to implement a managed
floating exchange rate system in which the exch ange rate would be determined based on market
supply and demand and adjusted with reference to a basket of currencies since July 21, 2005.
Therefore, the Renminbi exchange rate was no longer pegged to the U.S. dollar. PBOC would
publish the closing price of the exchange rate of the Renminbi against trading currencies such as
the U.S. dollar in the interbank foreign exchan ge market after the closing of the market on each
working day, as the central parity of the currency against Renminbi transactions on the
following working day.
According to the relevant laws and regulatio ns in the PRC, PRC ente rprises (including
foreign investment enterprises) which need fore ign exchange for current item transactions may,
without the approval of the foreign exchange administrative authorities, effect payment through
foreign exchange accounts opened at the designat ed foreign exchange bank, on the strength of
valid transaction receipts and proof. Foreign investment 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 our Company) may, on the stren gth of resolutions of the board of directors or
the shareholders’ meeting on the distribution of profits, effect payment from foreign exchange
accounts at the designated foreign exchange bank, or effect exchange and payment at the
designated foreign exchange bank.
According to the Decision of the State Council on Cancelling and Adjusting a Group of
Administrative Approval Items and Other Matters ( 《國務院關於取消和調整一批行政審批項
目
等事項的決定》) which was promulgated by the State Council on October 23, 2014, it decided to
cancel the approval requirement of the SAFE and its branches for the remittance and settlement
of the proceeds raised from the overseas listi ng of the foreign shares into RMB domestic
accounts.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 9–


--- page 555 ---
According to the Notice of the State Administration of Foreign Exchange on Issues
Concerning the Foreign Exchange Ad ministration of Overseas Listing ( 《國家外匯管理局關於境
外上市外匯管理有關問題的通知》) issued by the SAFE and implemented on December 26, 2014,
a domestic company shall, within 15 business days from the date of the end of its overseas listing
issuance, register the overseas listing with the l ocal branch office of the SAFE at the place of its
establishment; the proceeds from an overseas lis ting of a domestic company may be remitted to
the domestic account or deposited in an overs eas account, but the use of the proceeds shall be
consistent with the content of the prospectus and other disclosure documents.
According to the Notice of the State Administration of Foreign Exchange of the PRC on
Revolutionizing and Regulating Capital Account Settlement Management Policies ( 《國家外匯管
理局關於改革和規範資本項目結匯管理政策的通知》) which was promulgated by the SAFE,
implemented on June 9, 2016 and was amended on December 4, 2023, foreign currency
earnings in capital account that relevant polic ies of willingness exchange settlement have been
clearly implemented on (including the recallin g 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 s ettlement 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 exp enditure situations. The Circular on Issues
Concerning the Administration of Foreign Ex change in Offshore Investments and Financing
and Return Investments by Domestic Residents through Special Purpose Vehicles ( 《關於境內居
民通過特殊目的公司境外投融資及
返程投資外匯管理有關問題的通知》) (the ‘‘Circular 37’’) was
promulgated and implemented by the SAFE on Jul y 4, 2014. According to Circular 37, domestic
residents, individuals and entities shall apply to the SAFE for registration of foreign exchange
for offshore investment before making contributions to special purpose vehicles with domestic
and overseas legal assets or equities. In additio n, any domestic resident who is a shareholder of
an overseas special purpose vehicle shall complet e the registration formality of foreign exchange
alteration for offshore investment with the S AFE in a timely manner in the event of any change
of significant matters of such overseas special purp ose vehicle such as capital increase/decrease,
equity transfer or swap, merge and spin-off.
The subsequent foreign exchange business (including remittance of profits and dividend) of
a domestic resident who fails to comply with the registration requirements as set out in Circular
37 may be restricted. Domestic residents that have made contributions to special purpose
vehicles with domestic and overseas legal assets or equities without the required registration of
foreign exchange for offshore investment prior to the implementation of Circular 37 shall issue a
letter of explanation to the SAFE containing specific reasons. The SAFE shall make a
post-registration following the principles of leg ality and rationality and impose administrative
penalties in case of suspected violation of the Regulations on Foreign Exchange Control of the
PRC.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 1 0–


--- page 556 ---
According to the Circular on Further Simplif ying and Improving Poli cies for the Foreign
Exchange Administration Applicable to Direct Investment ( 《關於進一步簡化和改進直接投資外
匯管理政策的通知》), which was issued by the SAFE on February 13, 2015, came into effect on
June 1, 2015 and partially repealed on December 30, 2019, the confirmation of foreign exchange
registration under domestic direct investment and the confirmation of foreign exchange
registration under overseas direct investment shall be directly examined and handled by banks
and the foreign exchange authorities shall indir ectly regulate the foreign exchange registration
of direct investment through banks. The banks that have obtained financial institution
identification codes from foreign exchange authorities and have connected to the Capital
Account Information System with the local foreign exchange authorities may directly handle the
registration under Circular 37.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 1 1–


--- page 557 ---
PRC LEGAL SYSTEM
The PRC legal system is based on the Constitution of the PRC ( 《中華人民共和國憲法》)
(the ‘‘Constitution’’) and is made up of written l aws, administrative regulations, local
regulations, separate regulations, autono mous regulations, rules and regulations of
departments, rules and regulations of local governments, international treaties of which the
PRC government is a signatory, and other re gulatory 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 revision) ( 《中華
人民共和國立法法（2023 年修正）》) (the ‘‘Legislation Law’’), the NPC and the Standing
Committee of the NPC are empowered to exercise the legislative power of the State according
to the Constitution. The NPC has the power to formulate and amend basic laws governing civil
and criminal matters, state organs and other matters. The NPC may authorize the SCNPC to
formulate relevant laws, and the SCNPC is emp owered 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 th e 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 formula te local regulations based on the specific
circumstances and actual requirements of their o wn 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 Co uncil, PBOC, the Audit Administration and
institutions required by law as well as 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, ecological civilization construction, 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, administrati ve regulations, and the relevant local regulations of the relevant
provinces or autonomous regions. People’s cong resses 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 la ws, administrative regulations and the local
regulations of their respective provinces, autonomous regions or municipalities.
The Constitution has supreme legal authority a nd 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 administ rative 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 p rovinces 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 a ny 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 app roved 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 ( 《全國人民代表
大會常務委員會關於加強法律解釋工作的決議》) 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 al so 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) (《中華人民共和國人民法院組織法（2018 年修訂）》), the PRC judicial system is made up
of the Supreme People’s Court, the local people’s courts and special people’s courts.
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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.
The PRC Civil Procedure Law (2023 revision) ( 《中華人民共和國民事訴訟法（2023 年修
訂）》) (the ‘‘Civil Procedure Law’’), which was adopted in 1991 and amended in 2007, 2012, 2017,
2021 and 2023, sets forth the criteria for instituti ng 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. Gener ally, 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 cour t 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 c ountry’s judicial system limits the litigation
rights of PRC citizens and enterprises, the P RC courts may apply the sa me limitations 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 accord ance 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. A foreign
judgment or ruling may also be recognized and e nforced by the people’s court according to PRC
enforcement procedures if the PRC has entered in to or acceded to an international treaty with
the relevant foreign country, which provides f or such recognition and enforcement, or if the
judgment or ruling satisfies the court’s examination according to the principle of reciprocity,
unless the people’s court finds that the recognition or enforcement of such judgment or ruling
will result in a violation of the basic legal principles of the PRC, its sovereignty or security or
against social and public interest.
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THE COMPANY LAW, OVERSEAS LISTING TRIAL MEASURES AND GUIDANCE FOR
ARTICLES OF ASSOCIATION
A joint stock limited company which was incorporated in the PRC and seeking a listing on
the Hong Kong Stock Exchange is mainly subject to the following laws and regulations in the
PRC:
. The PRC Company Law ( 《中華人民共和國公司法》) which was promulgated by the
Standing Committee of the NPC on December 29, 1993, came into effect on July 1,
1994, revised on December 25, 1999, August 28, 2004, October 27, 2005 and
December 28, 2013, October 26, 2018 respectiv ely and the latest revision of which was
issued on December 29, 2023 and took effective on July 1, 2024;
. The Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies ( 《境內企業境外發行證券和上市管理試行辦法》) (the ‘‘Overseas
Listing Trial Measures’’) and five relevant guidelines which were promulgated by the
CSRC on February 17, 2023 pursuant to Se curities Law of the PRC, and were
applicable to the direct and indirect over seas share subscription and listing of
domestic companies; and
. The Guidelines for Articles of Association of Listed Companies ( 《上市公司章程指
引》) (the ‘‘Guidance for Articles of Association’’) which was latest amended on
December 15, 2023 by the CSRC. The related Gu idance for Articles of Association are
set out in the Articles of Association of the Company, the summary of which is set out
in the section entitled ‘‘Appendix V — Summa ry of 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. Unless otherwise provided by law, the joint stock limited company may not be
a contributor that undertakes joint and several liabilities for the debts of the invested
companies.
Incorporation
A joint stock limited company may be incorporated by promotion or public subscription.
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A joint stock limited company may be incorporated by a minimum of two 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 issued shares have been
fully paid up, 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 promoters or subscribers representing at least half of the shares in the
company. At the inaugural meeting, matters including the adoption of articles of association
and 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
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 r egistration authority. Joint stock limited
companies established by the subscription method with offering and issuing shares to the public
shall file the approval issued by the securities administration department of the State Council
with the company registration authority for record.
A joint stock limited company’s promoters shall be liable for: (i) the payment of all
expenses and debts incurred in the incorporati on process jointly and severally if the company
cannot be incorporated; (ii) the refund of subscription monies to the subscribers, together with
interest, at bank rates for a deposit of the same term jointly and severally if the company cannot
be incorporated; and (iii) damages suffered b y the company as a result of the default of the
promoters in the course of incorporation of the company. According to the Interim Provisional
Regulations on the Administration of Share Issuance and Trading ( 《股票發行與交易管理暫行條
例》) promulgated by the State Council on Apr il 22, 1993 (which is only applicable to the
issuance and trading of shares in the PRC and their related activities), if a company is
established by means of public subscription, the promoters of such company are required to sign
on the prospectus to ensure that the prospectus doe s not contain any misrepresentation, serious
misleading statements or material omissions, and assume joint and several responsibility for it.
Share Capital
The promoters of a company can make capital contributions in cash or in kind, which can
be valued in currency and transfe rable according to law such as intellectual property rights or
land use rights based on their appraised value.
If capital contribution is made other than in cash, valuation and verification of the
property contributed must be carried out and converted into shares.
A company may issue registered or bearer shar e. However, shares issued to promoter(s) or
legal person(s) shall be in the form of registered share and shall be registered under the name(s)
of such promoter(s) or legal person(s) and shall not be registered under a different name or the
name of a representative.
The Overseas Listing Trial Measures provide s that domestic enterprises that are listed
overseas may raise funds and distribute dividends in foreign currencies or Renminbi.
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Under the Overseas Listing Trial Measures, for a domestic company directly offering and
listing overseas, shareholders of its domestic unl isted shares applying to convert such shares into
shares listed and traded on an overseas tradin g 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 mentione d 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 sh all be centrally registered and deposited with
domestic securities registrati on and settlement institutions. The registration and settlement
arrangements of overseas listed shares shal l 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
registered shares by a shareholder must be ma de by means of an endorsement or by other means
stipulated by laws or administrative regulations. Bearer shares are transferred by delivery of the
share certificates to the transferee.
Shares held by a promoter of a company shall not be transferred within one year after the
date of the company’s incorporation. Shares is sued 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, supe rvisors and senior management of a company
shall not transfer over 25% of the shares held b ye a c ho ft h e mi nt h ec o m p a n ye a c hy e a rd u r i n g
their term of office and shall not transfer any sh are of the company held by each of them within
one year after the listing date. There is no r estriction under the Company Law as to the
percentage of shareholding a single shareholder may hold in a company.
Transfers of shares may not be entered in the reg ister of shareholders within 20 days before
the date of a shareholders’ 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 mu st 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 overse as shall file with the CSRC in accordance with
Overseas Listing Trial Measures, submit filing reports, legal opinions and other relevant
materials, and truthfully, accurately and compl etely 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 i ndirectly listed overseas, the issuer shall
designate a major domestic operating entity as th e domestic responsible person and file with the
CSRC.
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Registered Shares
Under the Company Law, the shareholders may make capital contributions in cash, or
alternatively may make capital contributions with such valuated non-monetary property as
physical items, intellectual property rights, and land-use rights that may be valued in monetary
t e r ma n dm a yb et r a n s f e r r e di na c c o r d a n c ew i t hthe law. Pursuant to the Overseas Listing Trial
Measures, domestic enterprises that are listed o verseas may raise funds and distribute dividends
in foreign currencies or Renminbi.
Under the Company Law, when the company issues shares in registered form, it shall
maintain a register of shareholders, stating the following matters:
. the name and domicile of each shareholder;
. the number of shares held by each shareholder;
. the serial numbers of shares he ld by each shareholder; and
. the date on which each shareh older 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 sh ares, the commencement and end of the new share
issuance and the class and amount of new shares to be issued to existing shareholders. When the
company launches a public issuance of new shares with the approval of the securities regulatory
authorities of the State Council, it shall publi sh the prospectus and fin ancial and accounting
reports, and prepare the share subscription form. After the new share issuance has been paid up,
the change shall be registered with the company registration authorities and an announcement
shall be made.
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 within 30 days from the date of the
resolution on the reduction;
. creditors may within 30 days after receivin g 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;
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. it shall apply to the relevant administratio n of registration for the registration of the
r e d u c t i o ni nr e g i s t e r e dc a p i t a l .
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 a listed 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’ 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 Sec urities Law. If the share buyback is made under
any of the circumstances stipulated in (iii), (v ) or (vi) hereof, centralized trading shall be
adopted publicly.
Transfer of Shares
Shares held by shareholders may be transferred in accordance with the relevant laws and
regulations. Pursuant to the Com pany 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 provi sions shall prevail.
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Under the Company law, shares issued prior to the public issuance of shares shall not be
transferred within one year from the date of the jo int stock limited company’s listing on a stock
exchange. Directors, supervisors and the senior management shall declare to the company their
shareholdings in the company and any changes of such shareholdings. They shall not transfer
more than 25% of all the shares they hold in the c ompany annually during their tenure. They
shall not transfer the shares they hold within one year from the date on which the company’s
shares are listed and commenced trading on a stock exchange, nor within six months after their
resignation from their positions with the company.
Shareholders
Under the Company Law and the Guidance for Articles of Association, the rights of
holders of ordinary shares of a joint stock limited company include:
. the right to attend or appoint a proxy to attend shareholders’ general meetings and to
vote thereat;
. the right to transfer shares in accordance wi th laws, administrative regulations and
provisions of the articles of association;
. the right to inspect the company’s articles of association, share register, counterfoil of
company debentures, minutes of shareholder’s general meetings, resolutions of
meetings of the board of directors, resolutions of meetings of the board of supervisors
and financial and accounting reports and to make proposals or enquires on the
company’s operations;
. the right to bring an action in the people’s court to rescind resolutions passed by
shareholder’s general meetings and board of directors where the articles of association
is violated by the above resolutions;
. the right to receive dividends and other types of interest distributed in proportion to
the number of shares held;
. in the event of the termination or liquidation of the company, the right to participate
in the distribution of residual properties of the company in proportion to the number
of shares held; and
. other rights granted by laws, administrative regulations, other regulatory documents
and the company’s articles of association.
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 cont ributions, 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.
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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 powers:
. to decide on the company’s operational policies and investment plans;
. to elect or remove the directors and supervis ors (other than the representative of the
employees of the company) 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 proposed annual financial budget and final
accounts;
. to examine and approve the company’s proposals for profit distribution plans and
loss recovery plans;
. 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 the structure;
. 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 paid-in share capital;
. 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;
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. when the board of supervisors proposes; or
. other circumstances as provided fo r in the articles of associations.
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 n ot 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, th e 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 alon e 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 Guidance for Articles of Association,
after the notice of the general meeting of shareholders is issued, the general meeting of
shareholders shall not be postponed or cancelled without justifiable reasons, and the proposals
listed in the notice of general meeting of shareholders shall not be cancelled. In the event of
postponement or cancellation, 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 shar eholders’ meeting. Pursuant to the Guidance for Articles of
Association, the board of directors and the Secretary of the board of directors will cooperate
with the general meeting of shareholders conven ed 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 Guidance for Articles of Association, shareholders who individually or
jointly hold more than 3% 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, 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 syst em may be adopted for the election of directors
and supervisors at the shareholders’ general m eeting. 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 Guidance for Articles of Association, 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 th e meeting: (i) amendments to the articles of
association; (ii) the increase or decrease of regist ered capital; (iii) equity incentive plan; (iv) the
company purchases or sells major assets within one year or the amount of guarantee exceeds
30% of the company’s total audited assets in t he 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 meetin g, 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 sh all 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 e ndorse such minutes. The minutes shall be kept
together with the shareholders’ atte ndance register and the proxy forms.
Board
Under the Company Law, a joint stock limited company shall have a board of directors,
which shall consist of 5 to 19 members. Me mbers 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 as sembly, 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 con secutive terms if re-elected. A director shall
continue to perform his duties in accordance wi th the laws, administrative regulations and
articles of association until a duly re-elected dir ector takes office, if re-election is not conducted
in a timely manner upon the expiry of his term of o ffice, 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 shareholde rs’ 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;
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. to formulate the company’s proposed annual financial budget and final accounts;
. 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;
. to prepare plans for the merger, division, dissolution and change in the form of the
company;
. to formulate the company’s basic management system; and
. to exercise any other power und er 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. No tice of meeting shall be given to all directors
and supervisors 10 days before the meeting. In terim board meetings may be proposed to be
convened by shareholders representing more th an 10% of voting rights, more than one-third of
the directors or the board of supervisors. The c hairman shall convene and preside over such
meeting within 10 days after receiving such propo sal. 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. Director s 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 violate s 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 cha irman are elected with approval of more than
half of all the directors. The c hairman 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 c hairman. 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.
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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 offens e of bribery, corrupt ion, 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 than five years have elapsed sin ce the date of completion of the 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 persona lly responsible, where less than three
years have elapsed since the date of such revocation; or
. a person who is liable for a relatively large amount of debts that are overdue.
Other circumstances under which a person is disqualified from acting as a director are set
out in the Guidance for Articles of Association.
Board of Supervisors
A joint stock limited company shall have a b oard of supervisors composed of not less than
three members. The board of supervisors is made up of representatives of the shareholders and
an appropriate proportion of representative s of the employees of the company. The actual
proportion shall be stipulated in the articles of association, provided that the proportion of
representatives of the employees shall not be less than one third of the supervisors.
Representatives of the employees of the company in the board of supervisors shall be
democratically elected by the employees at the em ployees’ representativ e assembly, employees’
general meeting or otherwise. The directors an d senior management may not act concurrently as
supervisors.
The board of supervisors shall appoint a ch airman and may appoint a vice chairman. The
chairman and the vice chairman of the board of supervisors are elected with approval of more
than half of all the supervisors. The chairma n of the board of supervisors shall convene and
preside over the meetings of the board of supe rvisors. In the event that the chairman of the
board of supervisors is incapable of performing or not performing his duties, the vice chairman
of the board of supervisors shall convene a nd preside over the meetings of the board of
supervisors. In the event that the vice chairma n of the board of supervisors is incapable of
performing or not performing his duties, a supervisor nominated by more than half of the
supervisors shall convene and preside ove r the meetings of the board of supervisors.
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Each term of office of a supervisor is three years and he or she may serve consecutive terms
if re-elected. A supervisor shall continue to perform his duties in accordance with the laws,
administrative regulations and articles of association until a duly re-elected supervisor 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 supervisors results in the n umber of supervisors being less than the quorum.
The board of supervisors of a company shall hold at least one meeting every six months.
According to the PRC Company Law, a resolutio n of the board of supervisors shall be passed
by more than half of all the supervisors.
The board of supervisors exercises the following powers:
. to review the company’s financial position;
. to supervise the directors and senior management in their performance of their duties
and to propose the removal of directors and senior management who have violated
laws, regulations, the articles of association or the resolutions of shareholders’
meeting;
. when the acts of directors and senior ma nagement are harmful to the company’s
interests, to require correction of those acts;
. to propose the convening of extraordinary shareholders’ general meetings and to
convene and preside over shareholders’ general meetings when the board of directors
fails to perform the duty of convening and presiding over shareholders’ general
meeting under this law;
. to initiate proposals for resolution s to shareholders’ general meeting;
. to initiate proceedings against d irectors and senior management;
. other powers specified in the articles of association; and
. Supervisors may attend board meetings and make enquiries or proposals in respect of
board resolutions. The board of supervisors may initiate investigations into any
irregularities identified in the operati on of the company and, where necessary, may
engage an accounting firm to assist their work at the company’s expense.
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 report to the board of directors and may
exercise the following powers:
. to supervise the business and administra tion of the company and arrange for the
implementation of resolutions of the board of directors;
. to arrange for the implementation of the company’s annual business plans and
investment proposals;
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. to formulate the general administration system of the company;
. to formulate the compan y’s detailed rules;
. to recommend the appointment and dismissal of deputy managers and person in
charge of finance;
. to appoint or dismiss other administratio n officers (other than those required to be
appointed or dismissed by the board of directors); and
. to other powers conferred by the board of directors or the articles of association.
The manager shall comply with other provision s of the articles of association concerning
his/her powers. The manager shall attend board meetings.
According to the Company Law, senior management shall mean the manager, deputy
manager(s), person-in-charge of finance, bo ard 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, re gulations and the articles of association, and
have fiduciary and diligent duties to the company. Directors, supervisors and senior
management are prohibited from abusing their powers to accept bribes or other unlawful
income and from misappropriating of the com pany’s properties. Directors and senior
management are prohibited from:
. misappropriation of the company’s capital;
. depositing the company’s capital into accounts under his own name or the name of
other individuals;
. loaning company funds to others or providing guarantees in favor of others supported
by the company’s assets in violation of the articles of association or without prior
approval of the shareholders’ general meeting or board of directors;
. entering into contracts or deals with the company in violation of the articles of
association or without prior approval o f the shareholders’ general meeting;
. using their position and powers to procure business opportunities for themselves or
others that should have otherwise been available to the company or operating for
their own benefits or managing on behalf of others businesses similar to that of the
company without prior approval of t he shareholders’ general meeting;
. accept and possess commissions paid by a third party for transactions conducted with
the company;
. unauthorized divulgence of confidential business information of the company; or
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. other acts in violation of their fiduciary duty to the company.
A director, supervisor or senior management who contravenes any law, regulation or the
c o m p a n y ’ sa r t i c l e so fa s s o c i a t i o ni nt h ep e r f o r m a n c eo fh i sd u t i e sr e s u l t i n gi na n yl o s st ot h e
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, the company shall deliver its financial and accounting
reports to all shareholders within the time limit stipulated in the articles of association 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 re serve fund (except where the fund has reached 50%
of its registered capital).
If its statutory common reserve fund is not s ufficient to make up losses of the previous
year, profits of the current year shall be appli ed to make up losses befo re allocation is made to
the statutory common reserve fund pursuant to the above provisions.
After allocation of the statutory common res erve 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.
The remaining after-tax profits after makin g 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. However,
the capital reserve fund may not be applied to make up the company’s losses. Upon the
conversion of statutory common reserve fund in to 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.
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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 Retirement 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 or board of directors in accordance with provisions of articles of association. The
accounting firm should be allowed to make repr esentations when the shareholders’ general
meeting or board of directors 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 Guidance for Articles of Association provide that the company guarantees to provide
true and complete accounting vouchers, accounting books, financial accounting reports and
other accounting materials to the employed acco unting 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 relati on to matters involving
the company’s registration, its registrati on 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 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.
In the event of (i) above, it may carry on its existence by amending its articles of
association. The amendment of the articles of association in accordance with provisions set out
above shall require approval of more than two th irds of voting rights of shareholders attending
a shareholders’ general meeting.
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Where the company is dissolved in the circumstances described in subparagraphs (i), (ii),
(iv), or (v) above, a liquidation group shall be established and the liquidation process shall
commence within 15 days after the occu rrence of an event of dissolution.
The members of the company’s liquidation group shall be composed of its directors or the
personnel appointed by the shareholders’ general meeting. If a liquidation group is not
established within the stipulated period, creditors 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 for m a liquidation group to conduct l iquidation 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 handle the company’s remaining asset s after its debts have been paid off; and
. to represent the compan y in civil lawsuits.
The liquidation group shall notify the company’s creditors within 10 days after its
establishment and issue public notices in newspapers 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 liquidatio n group shall not make any debt settlement to
creditors during the period of claim.
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 p eople’s court for confirmation.
The company’s remaining assets after paymen t 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 to the foregoing provisions.
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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 mus t 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 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, and a public notice of its termination shall be issued. Members of the liquidation
group are required to discharge their duties honestly and in compliance with the relevant laws.
Members of the liquidation group s hall be prohibited from abusin g their powers to accept bribes
or other unlawful income and from misappropriating the company’s properties.
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 overs eas issuance and listing. If an issuer issues
securities in the same overseas market after overs eas 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 a nd listing, it shall also file with the CSRC within
3 working days after submitting the application documents for overseas issuance and listing.
Moreover, if the filing materials are comple te and meet the requirements, the CSRC shall
complete the filing within 20 working days from the date of receiving the f iling 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 filin g materials. The issuer shall supplement the
materials within 30 working days.
Loss of Share Certificates
If a registered share certificate is lost, stole n 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 a pply 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) ( 《中華人民共和國證券法（2019 年修訂）》)h a sa l s o
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 absor ption 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 corpo ration, 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 Oct ober 1992, the State Council established the
Securities Committee and the CSRC. The Securities Committee is responsible for coordinating
the drafting of securities regula tions, formulating securities-related policies, planning the
development of securities markets, directing, coo rdinating 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 Provisional Regulations on the A dministration of Share Issuance and Trading
(《股票發行與交易管理暫行條例》) deals 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 s ecurities, 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 comp anies and the duties and responsibilities of the
State Council’s securities regulatory authorit ies. 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 re levant 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 ( 《中華人民共和國仲裁法》) (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 committe e may, before the promulgation by the PRC
Arbitration Association of arbitration regulat ions, formulate interim arbitration rules in
accordance with the Arbitration Law and the C ivil 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 ar bitration 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 comp ly 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 commissio n 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 o f PRC arbitration panel against a party who,
or whose property, is not within the PRC, may app ly to a foreign court with jurisdiction over
the case for enforcement. Simila rly, 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 o r acceded to by the PRC. The PRC acceded to the
Convention on the Recognition and Enforcemen t of Foreign Arbitral Awards (the ‘‘New York
Convention’’) adopted on June 10, 1958 pursuant to a resolution of the Standing Committee of
the NPC passed on December 2, 1986. The New Yo rk Convention provides that all arbitral
awards made in a state which is a party to the New York Convention shall be recognized and
enforced by all other parties to the New York Convention, subject to their right to refuse
enforcement under certain circum stances, including where the enfo rcement 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 t he New York 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 Ju ne 18, 1999, the Supreme People’s Court adopted
the Arrangement on Mutual Enforcement of Arbitral Awards between Mainland China and
Hong Kong (《關於內地與香港特別行政區相互執行仲裁裁決的安排》), which became effective on
February 1, 2000. In accordance with this ar rangement, 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.
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Judicial judgment and its enforcement
According to the Arrangement on Mutual Recognition and Enforcement of Judgments in
Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region ( 《最高人民法院關於內地與香港特別行政區法院相互認可和執行民商事案
件判決的安排》) (the ‘‘Arrangement’’) promulgated by the Supreme People’s Court on January
25, 2024 and implemented on January 29, 2024, the Arrangement applies to the reciprocal
recognition and enforcement of legally effect ive judgments in civil and commercial matters
between the courts of Hong Kong and the PRC. In respect of judgments for the award of
property, reciprocal recognition and enforcement of judgments includes both monetary and
non-monetary rulings. the scope of recognition and enforcement by the courts of the Mainland
and of the HKSAR shall include the property awarded, the corresponding interest, costs,
payment for late compliance, or interest for late compliance awarded in the judgment, but shall
not include taxes and penalties.
Shanghai-Hong Kong Stock Connect
On April 10, 2014, CSRC and SFC issued the Joint Announcement of China Securities
Regulatory Commission and Hong Kong Securities and Futures Commission — Principles that
Should be Followed when the Pilot Program that Links the Stock Markets in Shanghai and
Hong Kong is expected to be implemented and approved in principle the launch of the pilot
program that links the stock markets in Shang hai and Hong Kong (hereinafter referred to as
‘‘Shanghai-Hong Kong Stock Connect’’) by the Shanghai Stock Exchange (hereinafter referred
to as ‘‘SSE’’), the Stock Exchange, China Securities Depository and Clearing Corporation
Limited (hereinafter referred to as ‘‘CSDCC’’) and HKSCC. Shanghai-Hong Kong Stock
Connect comprises the two portions of Northbound Trading Link and Southbound Trading
Link. Southbound Trading Link refers to the entrustment of China securities houses by China
investors to trade stocks listed on the Stock Exchange within a stipulated range via filing by the
securities trading service company establish ed by the SSE with the Stock Exchange. During the
initial period of the pilot program, the stocks of Southbound Trading Link consist of
constituent stocks of the Stock Exchange Hang Seng Composite Large Cap Index and the Hang
Seng Composite MidCap Index as well as stocks of A+H stock companies concurrently listed
on the Stock Exchange and the SSE. The total limit of Southbound Trading Link is RMB250
billion and the daily limit is RMB10.5 billion. During the initial period of the pilot program, it is
required by SFC that China investors participating in Southbound Trading Link are only
limited to institutional invest ors and individual investors with a securities account and capital
account balance of not less than RMB500,000.
On November 10, 2014, CSRC and SFC issued a Joint Announcement, approving the
official launch of Shanghai-Hong Kong Stock Connect by SSE, the Stock Exchange, CSDCC
and HKSCC. Pursuant to the Joint Announcement, trading of stocks under Shanghai-Hong
Kong Stock Connect will commence on November 17, 2014.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
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On September 30, 2016, CSRC amended the Fil ing Provision on the Placement of Shares
by Hong Kong Listed Companies with Domestic Original Shareholders under Southbound
Trading Link ( 《關於港股通下香港上市公司向境內原股東配售股份的備案規定》) which came
into effect on the same day. The act of the placement of shares by Hong Kong listed
companies with domestic original shareholders under Southbound Trading Link shall be filed
with CSRC. Hong Kong listed companies shall file the application materials and approved
documents with CSRC after obtaining approval from the Stock Exchange for their share
placement applications. CSRC will carry out supervision based on the approved opinion and
conclusion of the Hong Kong side.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
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This Appendix contains a summary of the principal provisions of the Articles of
Association adopted by the Company, which will become effective on the date on which the
H Shares are listed on the Hong Kong Stock Exchange. The main purpose of this Appendix is to
provide potential investors with an overview of t he Articles of Association of the Company, and
therefore it may not contain all the informatio n that is important for potential investors.
SHARES AND REGISTERED CAPITAL
Shares of the Company shall take the form of share certificates. The shares issued by the
Company shall be denominated in RMB. The par value per share is RMB1.00.
The Company shall issue shares in an open, fair and just manner, and each share of the
same class shall have the same rights.
Shares of the same class issued at the same time shall be issued on the same conditions and
at the same price. Any entity or individual shal l pay the same price for each of the shares for
w h i c hi to rh eo rs h es u b s c r i b e sf o r .
INCREASE, DECREASE AND REPURCHASE OF SHARES
Capital Increase
The Company may, based on its business and development needs and in accordance with
the laws and regulations, increase its capit al in the following ways, subject to separate
resolutions of the shareholders’ general meeting:
1. Public offering of shares;
2. Non-public issuance of shares;
3. Shares placing to its existing shareholders;
4. distributing bonus shares to its existing shareholders;
5. Conversion of capital reserve into share capital;
6. other means as is stipulated by laws, administrative regulations, or as approved by
relevant regulatory authorities.
Capital reduction
The Company may reduce its registered capital. When the company needs to reduce its
registered capital, it must prepare a ba lance sheet and an inventory of assets.
The Company shall reduce its registered capital in accordance with the procedures
stipulated in the Company Law and other relevant regulations and the Articles of Association.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 582 ---
Shares repurchase
The Company shall not buy back its shares, except in one of the following circumstances:
1. reducing the registered capital of the Company;
2. merging with another company that holds shares in the Company;
3. using shares for employee stock ownership plan or equity incentives;
4. shareholders who object to resolutions of the general meeting on merger or division of
the Company requesting the Company to buy back their shares;
5. to use the shares for conversion of corporate bonds issued by the Company which are
convertible into shares;
6. where it is necessary for the Company to prese rve its value and shareholders’ interest;
7. other circumstances recognized by laws, administrative regulations and other relevant
regulations.
The Company may repurchase its shares throug h offer, public centralized trading or other
methods recognized by laws, administrative regul ations, securities regulatory rules of the place
where the Company’s shares are listed and relevant regulatory authorities.
Where the Company repurchases its shares und er the circumstances set out in items 1 and 2
above, a resolution shall be passed at the gener al meeting of the Company. Where the Company
repurchases its shares under the circumstances set out in items 3, 5 and 6 above, a resolution
may be passed at a Board meeting attended by more than two-thirds of the directors.
Where the Company repurchases its shares und er the circumstances set out in item 1 above,
such shares shall be cancelled within 10 days fr o mt h ed a t eo fr e p u r c h a s e ;w h e r et h eC o m p a n y
repurchases its shares under the circumstan ces set out in items 2 and 4, such shares shall be
transferred or cancelled within 6 months; where the Company repurchases its shares under the
circumstances set out in items 3, 5 and 6, the total number of shares held by the Company shall
not exceed 10% of the total issued shares of the Company, and such shares shall be transferred
o rc a n c e l l e dw i t h i n3y e a r s .
Where relevant laws, regulations, normative doc uments and the securities regulatory rules
of the place where the shares of the Company are lis ted provide otherwise, such provisions shall
prevail.
Transfer of Shares
Shares issued by the Company prior to the public offering of shares shall not be transferred
within one year from the date on which the Company’s shares are listed and traded on the Hong
Kong Stock Exchange.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 583 ---
Directors, supervisors and senior mana gement of the Company shall declare to the
Company their shareholdings in the Company a nd any changes thereof, and shall not transfer
more than 25% of the total number of shares of the same class of the Company held by them
each year during their terms of office; the shares of the Company held by them shall not be
transferred within one year from the date on w hich the shares of the Company are listed and
traded. The above personnel shall not transfer the shares of the Company held by them within
half a year after they leave the Company.
DIVIDENDS AND OTHER METHODS OF DISTRIBUTION
There are no provisions in the Articles of Association relating to dividends and other
methods of distribution of the Company.
REGISTER OF MEMBERS
The Company shall establish a register of shareholders in accordance with the evidence
provided by the securities registration authority.
When the Company convenes a general meeting, distributes dividends, conducts
liquidation or engages in other activities that require the confirmation of the identity of
shareholders, the Board or the co nvener of the general meeting shall determine the record date.
Shareholders whose names appear on the register of shareholders after the close of trading on
the record date shall be the shareholde rs entitled to relevant interests.
VARIATION OF RIGHTS OF EXISTING SHARES OR CLASSES OF SHARES
There are no provisions in the Articles of Association relating to variation of rights of
existing Shares or classes of Shares of the Company.
RIGHTS AND OBLIGATIONS OF SHAREHOLDERS
Shareholders of the ordinary shares of the Company shall enjoy the following rights:
1. to receive dividends and other distributions in proportion to the number of shares
held;
2. to request, summon, preside over, attend or appoint a proxy to attend shareholders’
general meetings in accordance with the laws, and to exercise the corresponding
voting rights;
3. to supervise the operation of the Compa ny, making suggestions or enquiries;
4. to transfer, give or pledge the shares held by them in accordance with the laws,
administrative regulations and the Articles of Association;
5. to review the Articles of Association, the register of members, counterfoils of
corporate bonds, minutes of general meetin gs, resolutions of the Board meetings,
resolutions of the Supervisory Board meetings and financial and accounting reports;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 584 ---
6. 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;
7. to request the Company to buy back the shares of shareholders objecting to
resolutions of the general meeting concerning merger or division of the Company;
8. other rights stipulated by laws, administra tive regulations, departmental rules or the
Articles of Association.
Shareholders of the Company shall assume the following obligations:
1. to abide by laws, administrative regu lations and the Articles of Association;
2. to pay subscription monies according t o the number of shares subscribed and the
method of subscription;
3. not to make divestment unless in the circumstances stipulated by laws and
regulations;
4. not to abuse the rights of shareholders to damage the interests of the Company or that
of other shareholders; not to abuse the independent status of the Company as a legal
person and the limited liability of shareholders to damage the interests of the creditors
of the Company;
5. other obligations imposed by laws, administrative regulations, securities regulatory
rules of the place where the Company’s shares are listed and the Articles of
Association.
Shareholders of the Company who abuse their shareholders’ rights and cause losses to the
Company or other shareholders shall be liable f or compensation in accordance with the law.
Shareholders of the Company who abuse the independent status of the Company as a legal
person and the limited liability of shareholders to evade debts and seriously damage the interests
of the creditors of the Company shall bear joint and several liabilities for the debts of the
Company.
RESTRICTIONS ON RIGHTS OF TH E CONTROLLING SHAREHOLDERS
The controlling shareholders and de facto controllers of the Company shall not use their
connected relations to damage the interests of the Company. If the violation causes losses to the
Company, it shall be liable for compensation.
The controlling shareholders and de facto controllers of the Company shall have fiduciary
duties towards the Company and its public shareholders. The controlling shareholder shall
exercise its rights as a capital contributor in strict compliance with the laws. The controlling
shareholder shall not damage the legitimate rights and interests of the Company and public
shareholders by means of profit distribution, asset restructuring, external investment, fund
appropriation, loan guarantee, etc., and shall not use its controlling status to damage the
interests of the Company and public shareholders.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 585 ---
GENERAL MEETING
General Provisions of General Meetings
The shareholders’ general meeting is the organ of authority of the Company and shall
exercise the following functions and powers:
1. to decide on the Company’s business policies and investment plans;
2. to elect and replace director s and supervisors who are not employee representatives
and to decide on matters relating to the remuneration of directors and supervisors;
3. to consider and approve the reports of the Board;
4. to consider and approve the report of the Supervisory Board;
5. to consider and approve the annual financial budgets and final accounts of the
Company;
6. to consider and approve the Company’s profit distribution plans and loss recovery
plans;
7. to resolve on the increase or reduction o f the registered capital of the Company;
8. to resolve on the issue of corporate bonds;
9. to resolve on the merger, division, dissol ution, liquidation or change of corporate
form of the Company;
10. amendments to the Art icles of Association;
11. to resolve on the appointment and dismissal of the accounting firm of the Company;
12. to consider and approve the proposal raise d by shareholders who, individually or in
the aggregate, hold 3% of more of the total number of voting shares of the Company;
13. to consider other matters required by laws, a dministrative regulations, departmental
rules, the securities regulatory rules of the place where the Company’s shares are listed
or the Articles of Association to be decided by the general meeting.
General meetings are divided into annual ge neral meetings and extraordinary general
meetings. The annual general meeting shall be convened once a year within six months after the
end of the previous accounting year.
The Company shall convene an extraordinary general meeting within two months from the
date of occurrence of any of the following circumstances:
(1) the number of directors is less than the number stipulated in the Company Law or less
than two-thirds of the number specifi ed in the Articles of Association;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 586 ---
(2) when the unrecovered losses of the Company amount to one-third of the total amount
of its paid-up share capital;
(3) when shareholders individually or jointly holding 10% or more of the Company’s
shares so request in writing;
(4) when deemed necessary by the Board;
(5) when proposed by the Supervisory Board;
(6) other circumstances stipulated by laws, a dministrative regulations, departmental
rules, securities regulatory rules of the place where the Company’s shares are listed or
the Articles of Association.
Summoning of General Meetings
General meetings shall be summoned by the Board.
The independent non-executive Directors are entitled to propose to the Board to convene
an extraordinary general meeting. The Board shal l, in accordance with th e laws, administrative
regulations and the Articles of Association, give a written reply on whether or not to convene
the extraordinary general meeting within 1 0 days after receiving the proposal from the
independent non-executive Directors.
If the Board agrees to convene the extraordinary general meeting, a notice of such meeting
shall be issued within five days after the resolution of the Board is passed. If the Board does not
agree to convene the extraordin ary general meeting, it shall explain the reasons and make an
announcement.
The Supervisory Board shall have the right to propose to the Board to convene an
extraordinary general meetin gi nw r i t i n g .T h eB o a r ds h a l l ,i na c c o r d a n c ew i t ht h el a w s ,
administrative regulations and the Articles o f Association, give a written reply on whether to
convene the extraordinary general meeting or not within 10 days after receipt of the proposal.
If the Board agrees to convene the extraordinary general meeting, a notice of such meeting
shall be issued within five days after the resolution of the Board is passed. Any changes to the
original proposal made in the notice sha ll be approved by the Supervisory Board.
If the Board does not agree to convene the extr aordinary general meeting or fails to give a
reply within 10 days after receiving the proposal, the Board shall be deemed to be unable or fail
to perform the duty of convening the general meeting, and the Supervisory Board may summon
and preside over the meeting on its own.
Shareholders individually or jointly holding 10% or more of the Company’s voting shares
shall have the right to request the Board of Directors in writing to convene an extraordinary
general meeting. The Board shall, in accordance with the laws, administrative regulations and
the Articles of Association, give a written reply on whether to convene the extraordinary general
meeting or not within 10 days after receipt of the proposal.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 587 ---
If the Board agrees to convene the extraordinary general meeting, a notice of such meeting
shall be issued within five days after the resolution of the Board is passed. Any change to the
original request made in the notice shall be subject to the consent of the relevant shareholders.
If the Board does not agree to convene an extraordinary general meeting or does not reply
within 10 days upon receipt of the proposal, the shareholders individually or jointly holding
more than 10% of the Company’s voting shares shall have the right to propose to the
Supervisory Board to convene an extraordinary general meeting, and such proposal shall be
made in writing.
If the Supervisory Board agrees to convene the ex traordinary general me eting, it shall issue
a notice of general meeting within five days upon receipt of the request. Any changes to the
original request in the notice shall be approved by the relevant shareholders.
If the Supervisory Board fails to issue the notice of the general meeting within the
prescribed period, it shall be deemed that the Supervisory Board will not convene and preside
over the general meeting, and shareholders individually or jointly holding 10% or more of the
Company’s voting shares for more than 90 consecutive days may summon and preside over the
meeting by themselves.
Proposals at General Meetings
When the Company convenes a general meeting, the Board, the Supervisory Board and
shareholders individually or jointly holding more than 3% of the Company’s shares shall have
the right to submit proposals to the Company.
Shareholders individually or jointly holding 3% or more of the Company’s shares may
submit ad hoc proposals in writing to the convener 10 working days before a general meeting is
convened. The convener shall issue a supplementary notice of the general meeting within two
days upon receipt of the proposal to announce the contents of the provisional proposal.
Except as provided in the preceding paragraph , the convener shall not amend the proposals
set out in the notice of the general meeting or add any new proposals after issuing the notice of
the general meeting.
Notice of General Meetings
The convener shall notify all shareholders by way of written notice at least 21 days before
the annual general meeting and shall notify all shareholders by way of written notice 15 days
(but not less than 10 business days) before the extraordinary general meeting.
Provided that the relevant laws, regulations, securities regulatory rules of the place where
the Company’s shares are listed are met, and the relevant procedures are followed, the company
may issue notices for general meetings of shareholders through the company website and/or
designated websites specified by Hong Kong Stock Exchange, or in any other manner permitted
by the Listing Rules and the Articles of Association.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 588 ---
Convening of General Meetings
All shareholders registered on the record da te or their proxies are entitled to attend the
general meeting. They shall speak and exercise their voting rights in accordance with the
relevant laws, regulations, the Listing Rules and the Articles of Association.
Individual shareholders who attend the meeting in person shall produce their identity cards
or other effective document or proof of identity and stock account cards. Proxies of individual
shareholders shall produce their valid identity cards and the power of attorney of the
shareholder.
Shareholder that is a legal person shall be represented at the meeting by its legal
representative or a proxy appointed by it. If a leg al representative attends the meeting, he/she
should produce his/her identity card and valid p roof that he/she is a legal representative; if a
proxy attends the meeting, the proxy should produce his/her identity card and a written power
of attorney issued by the legal representative of the legal person shareholder in accordance with
the law (unless a shareholder is a recognized clearing house as defined in the relevant ordinances
in force from time to time under the laws of Hong Kong or its nominee (hereinafter referred to
as a ‘‘Recognized Clearing House’’)).
If the shareholder is a Recognized Clearing House (or its nominee), the shareholder may
authorize one or more persons as it thinks fit to act as its representative (s) at any shareholders’
general meeting or any class shareholders’ meeting; however, if more than one person are so
authorized, the power of attorney shall specify the number and class of shares in respect of
which each such person is authorized, and the power of attorney shall be signed by the
authorized personnel of the Recognized Clearing House. The person so authorized may attend
the meeting on behalf of the Recognized Clearing House (or its nominee) to exercise the rights
(without being required to present share certificate, notarized authorization and/or further
evidence to prove that he/she is duly authorized) as if he/she was an individual shareholder of
the Company.
The proxy form shall contain a statement that in the absence of instructions from the
shareholder the proxy may vote as he/she thinks fit.
If the proxy form is signed by a person authorized by the principal, the power of attorney
or other authorization documents shall be notarized. The instrument appointing a proxy, the
notarized power of attorney or other authorization documents shall be placed at the domicile of
the Company or at such other place as specified in the notice convening the meeting.
If the principal is a legal person, its legal representative or such person as is authorized by
resolution of its board of directors or other governing body to act as its representative may
attend the general meeting of the Company.
Resolutions of General Meetings
Resolutions of the general meeting are divided into ordinary resolutions and special
resolutions.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 589 ---
Ordinary resolutions shall be passed by votes representing more than half of the voting
rights represented by the shareholders (including proxies) present at the meeting.
A special resolution shall be passed by votes representing two-thirds or more of the voting
rights represented by the shareholders (including proxies) present at the meeting.
The following matters shall be approved by ordinary resolutions at a general meeting:
1. work reports of the Board and the Supervisory Board;
2. profit distribution plans and loss recovery plans formulated by the Board;
3. appointment and removal of members of the Board and the non-employee
representative members of the Superviso ry Board, their remuneration and method
of payment;
4. annual budget, final accounts, balance sheets and profit and loss accounts and other
financial statements of the Company;
5. annual reports of the Company;
6. external guarantee as stipulate d in the Articles of Association;
7. to consider and approve the change in use of proceeds;
8. to make a resolution on the appointment, dismissal or non-renewal of the accounting
firm by the Company;
9. matters other than those required by the laws, administrative regulations or the
Articles of Association to be adopted by special resolution.
The following matters shall be approved by s pecial resolutions at a general meeting:
1. increase or reduction of the registered capital of the Company and issuance of any
class of shares, warrants and other similar securities;
2. issuance of corporate bonds;
3. division, merger, dissolution and liquidation of the Company;
4. amendments to the Art icles of Association;
5. other matters stipulated by laws, administr ative regulations, the securities regulatory
rules of the place where the Company’s shares are listed or the Articles of Association,
the Rules of Procedure of the General Meet ing, and other matters considered by the
general meeting, by way of ordinary resolution, to have a material impact on the
Company and need to be approved by special resolution.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 590 ---
DIRECTORS AND BOARD OF DIRECTORS
Directors
Directors shall be elected or replaced by the shareholders’ general meeting, and may be
removed by the shareholders’ general meeting b efore the expiry of their terms of office. The
term of office of the Directors shall be 3 years, and they may be re-elected and re-appointed.
The term of office of the Directors shall commence from the date of their appointment
until the expiry of the term of the current session of the Board. If the term of office of a director
expires but re-election is not made responsively, the said director shall continue fulfilling the
duties as director pursuant to laws, administrative regulations, departmental rules and the
Articles of Association until a new director is elected.
Power to allocate and issue Shares
The Articles of Association does not contain clauses that authorize the Board of Directors
to allocate or issue shares. The Board of Directors shall prepare suggestions for share allotment
or issue, which are subject to approval by the Shareholders at the Shareholders’ General
Meeting (‘‘General Meeting’’ or ‘‘Shareholders’ Meeting’’) in the form of a special resolution.
Any such allotment or issue shall be in accordance with the procedures stipulated in appropriate
laws, administrative regulations and sup ervision rules of shares listed region.
Power to dispose assets of our Company or any subsidiary
The Board of Directors shall determine the aut hority of external investment, acquisition
and sale of assets, asset mortgage, external guar antee matters, entrusted financial management,
connected transactions, externa l donations, and establish strict review and decision-making
procedures; major investment projects shall be reviewed by relevant experts and professionals
and reported to the General Meeting for approval.
Compensation or payments for loss of office
There are no provisions in the Articles of Association relating to compensation or
payments for loss of office.
Loans to Directors
There are no provisions in the Articles of Association relating to loans to directors.
The Board
The Company shall have a board of directors which shall be accountable to the general
meeting. The Board shall consist of 11 Directors. Independent non-executive directors shall not
be less than one-third of all board members.
The Board shall exercise the following powers:
1. to summon general meetings and report its work to the general meetings;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 591 ---
2. to implement the resolutions of the general meeting;
3. to decide on the Company’s business plans and investment plans;
4. to formulate the Company’s annual financial budgets and final accounts;
5. to formulate the Company’s profit distribution plans and loss recovery plans;
6. to formulate proposals for the increase o r reduction of the Company’s registered
capital, the issue of bonds or other securities and listing plans;
7. to formulate plans for material acquisi tions, purchase of shares of the Company or
merger, division, dissolution and change of corporate form of the Company;
8. to decide on the Company’s external investment, acquisition and disposal of assets,
pledge of assets, entrusted wealth management and other matters in accordance with
the laws, regulations, the securities regula tory rules of the place where the shares of
the Company are listed and within the scope authorized by the general meeting;
9. to decide on the establishment of the Company’s internal management structure;
10. to decide on the appointment or dismissal of the Company’s manager, secretary to the
Board, chief financial officer and othe r senior management, and decide on their
remuneration, rewards and punishments;
11. to formulate the basic management system of the Company;
12. to formulate proposals for any amendment to the Articles of Association;
13. to manage the information disclosure of the Company;
14. to propose to the general meeting the appointment or replacement of the accounting
firm that audits the Company;
15. to listen to the work report of the general manager of the Company and inspect the
work of the general manager;
16. other functions and powers conferred by laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the Company’s
shares are listed or the Articles of Association.
SENIOR MANAGEMENT
Manager
The manager shall be accountable to the Board and exercise the following powers:
1. to be in charge of the production, operation and management of the Company,
organize the implementation of the resolutions of the Board and report to the Board;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 592 ---
2. to organize the implementation of the Company’s annual business plan and
investment plan;
3. to draft plans for the establishment of the Company’s internal management structure;
4. to draft the basic management system of the Company;
5. to formulate the specific rules and regulations of the Company;
6. to propose to the Board to appoint or dismi ss other senior management personnel of
the Company;
7. to draft the salaries, benefits, rewards and punishments for the employees of the
Company, and decide on the employment of the employees;
8. to exercise other powers conferred by t he Articles of Association or the Board.
The manager is to attend board meetings.
SUPERVISORY BOARD
The Company shall have a Supervisory Board. The Supervisory Board shall consist of three
Supervisors including one employee representative Supervisor and shall have one chairman. The
chairman of the Supervisory Board shall be elected by more than two-thirds of the Supervisors.
The supervisory board shall comprise shareho lder representatives and an appropriate
proportion of the company’s staff representatives, of which the proportion of staff
representatives shall not be less than one-third. The employee representatives of the
Supervisory Board shall be democraticall y elected by the Company’s employees at the
employee representative assembly, employee meeting or otherwise.
The Supervisory Board exercises the following powers:
1. it shall review the regular reports of the Company prepared by the Board and to
provide written review opinions;
2. to examine the financial affairs of the Company;
3. to supervise the directors and senior management in their performance of their duties
and to propose the removal of directors and senior management who have violated
laws, administrative regulations, the Arti cles of Association or the resolutions of the
shareholders’ general meetings;
4. to demand rectification from a Director or senior management when the acts of such
persons are detrimental to the interests of the Company;
5. to propose the convening of extraordi nary general meetings and to summon and
preside over general meetings when the Board fails to perform the duty of summoning
and presiding over general meetings under the Company Law;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 593 ---
6. to submit proposals to the general meeting;
7. to initiate proceedings against director s and senior management in accordance with
the Company Law;
8. to verify the financial information such as the financial report, business report and
plans for distribution of profits to be submitted by the Board to the general meetings
and, should any queries arise, to appoint, in the name of the Company, a
re-examination by the certified public accountants and practicing auditors at the
expenses of the Company;
9. to investigate any irregularities iden tified in the operation of the Company; if
necessary, to engage professional institu tions such as accounting firms and law firms
to assist its work at the expense of the Company;
10. to make recommendation on the preparatio n and amendment of profit distribution
policy of the Company;
11. other functions and powers conferred by laws, administrative regulations,
departmental rules, the listing rules of the stock exchange where the shares of the
Company are listed or the Articles.
FINANCIAL AND ACCOUNTING SYSTEM
The Company shall establish its financial and accounting system in accordance with the
laws, administrative regulations and the re quirements of the relevant state authorities.
The Company shall submit, disclose, and/or present annual reports, interim reports,
preliminary performance announcements, and other regulatory documents in accordance with
the laws, regulations, securities regulatory ru les of the place where the Company’s shares are
listed and other normative documents.
NOTICES
Subject to the laws, administrative regulati ons and the securities regulatory rules of the
place where the Company’s shares are listed, a notice of the Company shall be given in the
following manner:
1. by hand;
2. by mail;
3. by way of announcement;
4. by fax or email;
5. by publication on the website of the Company and the websites designated by the
stock exchange under the precondition of conforming to laws, administrative
regulations, departmental rul es, normative documents, the listing rules of the stock
exchange where the shares of the Company are listed and the Articles;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 594 ---
6. by other means specified in the Articles;
7. by other means agreed by the Company or the notified party in advance or accepted
by the notified party after receipt of the notice;
8. other means stipulated by securities regulatory rules of the place where the
Company’s shares are listed or the Articles of Association.
As required by the Listing Rules, the company may provide or send company
communications to H shares shareholders through the means designated the company and/or
the Hong Kong Stock Exchange website, or by electronic means, provided that it complies with
laws, administrative regulations, departmental r ules, securities regulatory of the stock exchange
on which the company’s shares are listed, and the Article of Association.
Where a notice of the Company is published by way of announcement, the said notice shall
be deemed as received by all relevant persons once it is published.
DISSOLUTION AND LIQUIDATION OF THE COMPANY
The Company shall be dissolved for the following reasons:
1. the shareholders’ general meeting resolves to dissolve the Company;
2. dissolution is necessary due to merger or division of the Company;
3. the Company is legally declared bankrupt because it is unable to repay its debts upon
maturity;
4. the Company’s business license is revoked, the Company is ordered to close down or
be revoked in accordance with the law;
5. Where the Company encounters serious difficulties in its operation and management
and its continuous existence will cause significant losses to the interests of
shareholders, and such difficulties cannot be resolved through other means,
shareholders holding more than 10% of the voting rights of all shareholders of the
Company may request the People’s Court to dissolve the Company.
Where the Company is dissolved pursuant to items 1, 4 and 5 above, a liquidation
committee shall be established within 15 days after the occurrence of the cause of dissolution.
The liquidation committee shall be composed of persons determined by the shareholders’
general meeting through ordinary resolutions. If a liquidation committee is not established
within the time limit, the creditors may apply to the people’s court to designate relevant
personnel to form a liquidation committee to carry out liquidation.
Where the Company is dissolved pursuant to item 3 above, the people’s court shall,
according to the relevant laws and regulations, org anize shareholders, relevant institutions and
professionals to establish liquidation committee and carry out liquidation.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 4–


--- page 595 ---
The liquidation committee shall notify creditors within 10 days from the date of its
establishment, and publish an announcement in a newspaper recognized by the CSRC or
announce on the National Enterprise Credit Information Publicity System and the Company’s
website and stock exchange’s website within 60 days.
If the liquidation committee dis covers that the Company’s asse ts are insufficient to repay
its debts after cleaning up the Company’s assets and preparing a balance sheet and an inventory
of assets, it shall apply to the People’s Court for a declaration of insolvency in accordance with
the law.
Upon completion of the liquidation, the liquidation committee shall prepare a liquidation
report, income and expenditure statements and account books and, after verification of the
Chinese certified public accountants, shall su bmit to the shareholders’ general meeting or the
relevant Authority for confirmation, and shall submit the same to the company registration
authority, apply for cancellation of the company’s registration, and publish an announcement
on the termination of the company.
AMENDMENTS TO THE ARTICLES
The Company shall amend the Articles of Association in any of the following
circumstances:
(1) After the amendments are made to the Company Law or relevant laws, administrative
regulations, departmental rul es 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, departmental rules and
securities regulatory rules of the place where the shares of the Company are listed;
(2) there is a change in the Company’s situation, which is inconsistent with the matters
recorded in the Articles of Association;
(3) the shareholders’ general meeting decides to amend the Articles of Association.
The amendments to the Articles of Association adopted by the shareholders’ general
meeting shall be submitted to the competent authorities for approval if they are subject to
approval by the competent authorities. If th ere is any change relati ng 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 ARTICLES OF ASSOCIATION
–V - 1 5–


--- page 596 ---
A. FURTHER INFORMATION ABOUT OUR GROUP
1. Establishment of Our Company
Our Company was established as a limited liability company in the PRC on November
28, 2016, and was converted into a joint stock limited company on November 23, 2022
under the laws of the PRC. Our registered office is located at Room 208, 2/F, Block 3, No.
168 Shennan Road, Minhang District, Shanghai, PRC.
Our Company has established a place of business in Hong Kong at Room 1912, 19/F,
Lee Garden One, 33 Hysan Avenue, Causeway Bay, and has been registered as a non-Hong
Kong company in Hong Kong under Part 16 of the Companies Ordinance. Mr. Sun
Kanghua and Ms. Shum Kit Han have been appoi nted as our Authorized Representatives
for acceptance of service of process and no tices in Hong Kong whose correspondence
address is the same as our place of business in Hong Kong.
2. Changes in the Share Capital of Our Company
Save as disclosed in ‘‘History, Development and Corporate Structure,’’ there has been
no alteration in the share capital of the Company within two years immediately preceding
the date of this prospectus.
3. Changes in the Share Capital of Our Subsidiaries
Details of our subsidiaries are set out in ‘‘History, Development and Corporate
Structure — Our Major Subsidiaries’’ and Note 1 to the Accountants’ Report as set out in
Appendix I to this prospectus.
Save as disclosed below, there has been no change in the share capital of any of our
subsidiaries within the two years immediately preceding the date of this prospectus.
Breton (Hunan) Technology Co., Ltd. (
博雷頓（湖南）科技有限公司)
On October 12, 2022, Breton (Hunan) Technology Co., Ltd. was established
under the laws of the PRC with a registered capital of RMB300,000,000.
Breton (Lanxi) New Energy Engineering Machinery Co., Ltd. ( 博雷頓（蘭溪）新能源工
程機械有限公司)
On January 28, 2023, Breton (Lanxi) New Energy Engineering Machinery Co.,
Ltd. was established under the laws of the PRC with a registered capital of
RMB200,000,000.
Breton (Wuhan) Technology Co., Ltd. (
博雷頓（武漢）科技有限公司)
On March 1, 2023, Breton (Wuhan) Technology Co., Ltd. was established under
the laws of the PRC with a registered capital of RMB300,000,000.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1–


--- page 597 ---
Breton (Wuhan) New Energy Equipment Co., Ltd. ( 博雷頓（武漢）新能源裝備有限公
司)
On March 1, 2023, Breton (Wuhan) New Energy Equipment Co., Ltd. was
established under the laws of the PRC with a registered capital of RMB100,000,000.
Breton ESG Pte. Ltd.
On November 29, 2023, Breton ESG Pte. L td. was incorporated under the laws
of Singapore with an issued share capital of 10,000 Singapore dollars.
Breton (Hong Kong) Technology Limited
On November 4, 2024, Breton (Hong Kong) Technology Limited was
incorporated under the laws of Hong Kong with an issued share capital of
HK$100,000.
Breton (Beijing) Technology Co., Ltd. ( 博雷頓（北京）科技有限公司)
On November 25, 2024, Breton (Beijing) Technology Co., Ltd. was established
under the laws of the PRC with a registered capital of RMB20,000,000.
Breton HK Holding Limited
On January 2, 2025, Breton HK Holding Limited was incorporated under the
laws of Hong Kong with an issued share capital of HK$100,000.
Breton Corporation
On January 9, 2025, Breton Corporation was incorporated under the laws of
Cayman with an authorized share capital of US$50,000 divided into 500,000,000
Shares of US$0.0001 each.
Breton Energy Technology Zambia Limited
On January 28, 2025, Breton Energy Technology Zambia Limited was
incorporated in Republic of Zambia under the laws of Republic of Zambia with an
issued share capital of 20,000 Kwacha.
VOIE LACTEE ENERGIE S.A.S
On February 6, 2025, VOIE LACTEE ENERGIE S.A.S was incorporated in
Democratic Republic of the Congo under the laws of Democratic Republic of the
Congo with an issued share capital of US$5,000.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2–


--- page 598 ---
4. Resolutions of Our Shareholders
Pursuant to a general meeting held on April 2, 2024, our Shareholders resolved that,
among others:
(a) the issuance by our Company of H Shares with a nominal value of RMB1.00
each and such H Shares being listed on the Stock Exchange;
(b) the number of H Shares to be issued shall not be more than 25% of the total
issued share capital of our Company as enlarged by the Global Offering (without
taking into account of any H Shares which may be issued upon the exercise of the
Over-Allotment Option), and the grant of the Over-allotment Option in respect
of not more than 15% of the number of H Shares initially available under the
Global Offering;
(c) subject to the completion of the Global Offering, the adoption of the Articles of
Association which shall become effectiv e on the Listing Date, and authorization
to our Board to amend the Articles of Association to the extent necessary in
accordance with laws, regulations and regulatory rules and requirements from
relevant government bodies or regulatory authorities and for the purpose of the
Listing; and
(d) authorization of our Board or its authorized individual(s) to handle all matters
relating, among other things, to the Global Offering, the issue and the listing of
H Shares on the Stock Exchange.
5. Restriction on Share Repurchase
For details of the restrictions on share repurchase by our Company, see ‘‘Appendix V
— Summary of Articles of Association.’’
B. FURTHER INFORMATION ABOUT OUR BUSINESS
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 agreemen t dated April 21, 2025 entered into among
the Company, HongKong Xinwei Electronic Co., Limited, China International
Capital Corporation Hong Kong Securities Limited and CMB International
Capital Limited, pursuant to which HongKong Xinwei Electronic Co., Limited
agreed to subscribe for such number of H Shares at the Offer Price in an
aggregate investment amount of HK$38,500,000 (including the brokerage, SFC
transaction levy, AFRC transaction l evy and Stock Exchange trading fee in
respect of such number of H Shares);
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 3–


--- page 599 ---
(b) the cornerstone investment agreemen t dated April 21, 2025 entered into among
the Company, Changfeng Growth Equity Fund OFC, China International
Capital Corporation Hong Kong Securities Limited and CMB International
Capital Limited, pursuant to which Changfeng Growth Equity Fund OFC
agreed to subscribe for such number of H Shares at the Offer Price in an
aggregate investment amount of HK$25,000,000 (excluding the brokerage, SFC
transaction levy, AFRC transaction l evy and Stock Exchange trading fee in
respect of such number of H Shares); and
(c) the Hong Kong Underwriting Agreement.
2. Intellectual Property Rights
Trademarks
As of the Latest Practicable Date, we had registered the fol lowing trademarks
w h i c hw ec o n s i d e r e dt ob em a t e r i a lt oo u rb u s i n e s s :
No. Trademark
Registration
number Registered owner
Place of
registration Class Validity period
1
 59072442 Company PRC 1 February 27, 2032
2
 66249381 Company PRC 4 June 13, 2033
3
 39742126 Company PRC 7 March 6, 2030
4
 33541605 Company PRC 7 May 13, 2029
5
 33537928 Company PRC 9 May 13, 2029
6
 34933162 Company PRC 9 August 13, 2029
7
 35162352 Company PRC 12 August 13, 2029
8
 67542021 Company PRC 37 April 6, 2033
9
 33525446 Company PRC 42 May 13, 2029
10
 69177910 Company PRC 1 February 6, 2034
11
 65939842 Company PRC 4 March 6, 2033
12
 35177577 Company PRC 7 June 27, 2030
13
 32812709 Company PRC 9 February 6, 2030
14
 34933171 Company PRC 9 January 13, 2030
15
 35167377 Company PRC 39 August 20, 2029
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 4–


--- page 600 ---
No. Trademark
Registration
number Registered owner
Place of
registration Class Validity period
16
 33509467 Company PRC 7 May 13, 2029
17
 39749756 Company PRC 7 March 6, 2030
18
 33509742 Company PRC 9 May 13, 2029
19
 34934690 Company PRC 9 August 6, 2029
20
 33513587 Company PRC 12 May 13, 2029
21
 67539912 Company PRC 37 April 13, 2033
22
 33492119 Company PRC 39 May 13, 2029
23
 54317285 Company PRC 39 January 27, 2032
24
 33500454 Company PRC 42 May 13, 2029
25
 59081007 Company PRC 1 March 13, 2032
26
 49800153 Company PRC 7 May 27, 2031
27
 49808392 Company PRC 9 May 27, 2031
28
 73467389 Company PRC 9 February 13, 2034
29
 49801743 Company PRC 12 September 6, 2031
30
 67529937 Company PRC 37 April 13, 2033
31
 49783504 Company PRC 39 August 27, 2031
32
 49799742 Company PRC 42 June 27, 2031
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 5–


--- page 601 ---
No. Trademark
Registration
number Registered owner
Place of
registration Class Validity period
33 306423606 Company Hong Kong 7, 12 December 11, 2033
Patents
As of the Latest Practicable Date, we had registered the following patents which
we considered to be material to our business:
No. Patent name Patent number Patent holder
Place of
registration Patent type
Patent application
date
1 A battery electric vehicle drive
motor torque control method
(一種純電動車驅動電機扭矩控制方
法)
201910591182.7 Company PRC Invention July 2, 2019
2 A battery electric vehicle battery
charging temperature control
method
(一種純電動汽車電池充電控溫方法)
202010450616.4 Company PRC Invention May 25, 2020
3 Ap l u g - i nh y b r i dv e h i c l ep o w e r
control method, device and
equipment
(一種插電式混動力汽車動力控制方
法、裝置及設備)
202010440261.0 Company PRC Invention May 22, 2020
4 A high voltage insulation fault
detection method, device,
electronic equipment and system
(一種高壓絕緣故障檢測方法、裝
置、電子設備及系統)
202010446018.X Company PRC Invention May 22, 2020
5 A stiffness calibration method for
the charging seat bracket of new
energy electric heavy trucks
(一種用於新能源電動重卡充電座支
架的剛度校核方法)
202010452540.9 Company PRC Invention May 26, 2020
6 A battery electric vehicle battery
charging and temperature control
system
(一種純電動汽車電池充電控溫系統)
202010449421.8 Company PRC Invention May 25, 2020
7 A battery electric vehicle battery
remote preheating system,
operation method and vehicle
(一種純電動車電池遠程預熱系統、
操作方法及車輛)
202010453943.5 Company PRC Invention May 26, 2020
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 6–


--- page 602 ---
No. Patent name Patent number Patent holder
Place of
registration Patent type
Patent application
date
8 A battery electric vehicle battery
remote preheating method
(一種純電動車電池遠程預熱方法)
202010453944.X Company PRC Invention May 26, 2020
9 Ap l u g - i nh y b r i dv e h i c l ep o w e r
control device
(一種插電式混動力汽車動力控制設
備)
202011494486.0 Company PRC Invention May 22, 2020
10 A device and method for vehicle
battery pack replacement
(一種車輛電池包更換的裝置及方法)
202110706569.X Company PRC Invention June 24, 2021
11 A plug-in hybrid vehicle power
control device
(一種插電式混動力汽車動力控制裝
置)
202011494470.X Company PRC Invention May 22, 2020
12 An electric vehicle driving road
condition real-time slope
measurement method and
measurement system
(一種電動車輛行駛路況實時坡度的
測量方法及測量系統)
202110699752.1 Company PRC Invention June 23, 2021
13 A dual-source battery electric
loader high-voltage system and
control method
(一種雙源純電動裝載機高壓系統及
控制方法)
202111514420.8 Company PRC Invention December 13, 2021
14 A control method for gear shifting
cylinder of gearbox
(一種變速箱換擋氣缸控制方法)
202110152566.6 Company PRC Invention February 4, 2021
15 A method of battery swapping for
railed mobile trolleys
(一種有軌移動小車換電方法)
202110707950.8 Company PRC Invention June 24, 2021
16 An electric accessory control
method under low power and
battery electric vehicles
(一種低電量下電動附件控制方法及
純電汽車)
202111226715.5 Company PRC Invention October 21, 2021
17 A dual-source overhead line circuit
control system and electric
tractor trucks
(一種
雙源架線電路控制系統及電動
牽引車)
202111319057.4 Company PRC Invention November 9, 2021
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 7–


--- page 603 ---
No. Patent name Patent number Patent holder
Place of
registration Patent type
Patent application
date
18 A fuel cell power output control
method for hydrogen-electric
hybrid vehicles
(一種氫電混動汽車用的燃料電池功
率輸出控制方法)
202111465924.5 Company PRC Invention December 3, 2021
19 Loader anti-skid strategy method,
computer storage medium and
electric loaders
(裝載機防打滑策略方法、計算機存
儲介質及電動裝載機)
202111321287.4 Company PRC Invention November 9, 2021
20 A battery electric vehicle cooling
and heating system with phase
change energy storage device
(一種帶有相變儲能裝置的純電動整
車製冷製熱系統)
201910705237.2 Company PRC Invention August 1, 2019
21 A battery electric vehicle cooling
and heating system with phase
change energy storage device
(一種帶有相變儲能
裝置的純電動車
整車製冷製熱系統)
201921229898.4 Company PRC Utility
model
August 1, 2019
22 An electric vehicle mechanical
braking and energy recovery
brake distribution system
(一種電動汽車機械制動與能量回收
制動分 配系統)
202020140228.1 Company PRC Utility
model
January 22, 2020
23 A control system for gear shifting
cylinder of gearbox
(一種變速箱換擋氣缸控制系統)
202120324684.6 Company PRC Utility
model
February 4, 2021
24 Load-sensing loader control
system and electric loaders
(可感知載荷的裝載機控制系統及
電動裝載機)
202122664358.2 Company PRC Utility
model
November 2, 2021
25 An integrated drive control system
for electric loaders
(一種電動裝載機集
成式驅動控制
系統)
202220221733.8 Company PRC Utility
model
January 26, 2022
26 A loader control system that saves
energy and reduces consumption
by reducing overflow pressure
(一種通過降低溢流壓力來節能降耗
的裝載機控制系統)
202320283312.2 Company PRC Utility
model
February 22, 2023
27 A laminated battery box structure
for engineering machinery
(一種工程機械用的疊片電池箱體
結構)
202320360740.0 Company PRC Utility
model
March 2, 2023
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 8–


--- page 604 ---
No. Patent name Patent number Patent holder
Place of
registration Patent type
Patent application
date
28 A power electronic system
integrating multi-module power
distribution
(一種集合多模塊配電的電力電子
系統)
202321297082.1 Company PRC Utility
model
May 26, 2023
29 A thermal management system for
power and laminated batteries
(一種動力域疊層電池的熱管理系統)
202321617416.9 Company PRC Utility
model
June 25, 2023
30 Collaborative decision analysis
neural network algorithm system
design methods, systems and
vehicles
(協同決策分析神經網絡 算法系統設
計方法、系統及車輛)
202210198939.8 Company PRC Invention
patent
March 2, 2022
31 A dual-motor driven pure electric
loader four-wheel drive structure
and control system
(一種雙電機驅動純電動裝載機四驅
結構及
控制系統)
202111514237.8 Company PRC Invention
patent
December 13, 2021
32 A water connection plug-in and a
battery module with three-sided
liquid-cooled liquid-heated liquid
(一種水連接插件及三面液冷液熱的
電池模組)
202322937471.2 Company PRC Utility
model
October 31, 2023
33 A pure electric loader wire control
system
(一種純電動裝載機線控制動系統)
202323337265.4 Company PRC Utility
model
December 8, 2023
34 A new energy batteries with BMS
battery balance system
(一種新能源電池用BMS 電池均衡系
統)
202421062024.5 Company PRC Utility
model
May 16, 2024
35 Design methods, algorithm systems
and vehicles for unmanned
driving in multiple vehicles
(多工種車輛無人駕駛協同作業設計
方法、算法系統及車
輛)
202210218210.2 Breton
(Hunan)
Technology
Co., Ltd.
PRC Invention
patent
March 2, 2022
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 9–


--- page 605 ---
As of the Latest Practicable Date, we had applied for the following patents which
we considered to be material to our business:
No. Patent name
Application
number Applicant
Place of
application Patent type
Patent application
date
1 An unmanned environment sensing
and navigation method based on
digital twin technology
(一種基於數字孿生技術的無人駕駛
環境感知與導航方法)
202310319686.X Company PRC Invention
patent
March 29, 2023
2 An unmanned environment sensing
and navigation system based on
digital twin technology
(一種基於數字孿生技術的無人駕駛
環境感知與導航系統)
202310319683.6 Company PRC Invention
patent
March 29, 2023
Copyrights
As of the Latest Practicable Date, we had registered the following copyrights
w h i c hw ec o n s i d e r e dt ob em a t e r i a lt oo u rb u s i n e s s :
No. Copyright
Place of
registration Owner Registration date Registered number
1 vehicle tracking and scheduling
system
(車輛跟蹤調度系統)
PRC Company April 12, 2019 2019SR0330331
2 vehicle operation monitoring and
management system
(車輛運營監控與管理系統)
PRC Company April 12, 2019 2019SR0330353
3 vehicle operation data monitoring
platform
(車輛運行數據監控平台)
PRC Company April 12, 2019 2019SR0330354
4 vehicle operation monitoring and
safety management system
(車輛運行監控與安全管理系統)
PRC Company April 12, 2019 2019SR0330330
5 Breton vehicle fleet management
system
(博雷頓車隊管理系統)
PRC Company July 31, 2019 2019SR0795466
6 Breton intelligent vehicle networking
platform system
(博雷頓智能車聯網平台系統)
PRC Company September 11,
2019
2019SR0944970
7 Breton dual motor e-powertrain
control system for pure electric
heavy truck
(
博雷頓純電重卡用雙電機動力總成控
制系統)
PRC Company September 10,
2019
2019SR0942350
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 0–


--- page 606 ---
No. Copyright
Place of
registration Owner Registration date Registered number
8 A vehicle monitoring system based
on dump truck
(一種基於礦卡的車輛監控系統)
PRC Company March 23, 2023 2023SR0386831
9 A vehicle statistics and analysis
system based on dump truck
(一種基於礦卡的車輛統計與分析系統)
PRC Company March 23, 2023 2023SR0386830
10 Breton Data Visualisation
Large-screen Platform
(博雷頓數據可視化大屏平台)
PRC Company March 23, 2023 2023SR0386829
11 Breton Telematics Data Management
Central Platform
(博雷頓車聯網數據管理中台平台)
PRC Company March 23, 2023 2023SR0386832
12 Vehicle multi-s ource integrated
system software
(整車多源整合系統軟件)
PRC Company February 20, 2019 2019SR0159103
13 Breton Smart IoT APP Software
(博雷頓智慧物聯 APP 軟件)
PRC Company July 1, 2024 2024SA0053444
14 Breton Smart IoT APP Software
(博雷頓智慧物聯 APP 軟件)
PRC Company August 8, 2024 2024SR1150622
15 Road condition data cleaning system
for pure electric dump truck
(純電動礦卡路況數據清洗系統)
PRC Breton (Hunan)
Technology
Co., Ltd.
October 28, 2024 2024SR1625295
16 A configuration knowledge base
system for pure electric dump truck
based on large model
(基於大模型的純電動礦卡車輛配置知
識庫系統)
PRC Breton (Hunan)
Technology
Co., Ltd.
October 28, 2024 2024SR1624542
17 Energy consumption status analysis
system of pure electric dump truck
(純電動礦卡整車能耗狀態分析系統)
PRC Breton (Hunan)
Technology
Co., Ltd.
November 7, 2024 2024SR1726314
Domain Names
As of the Latest Practicable Date, we h ad registered the following internet
domain name which we considered to be material to our business:
No. Domain name Registered owner Approval date
1 breton.top Company December 8, 2022
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 1–


--- page 607 ---
C. FURTHER INFORMATION ABOUT OU R DIRECTORS, SUPERVISORS AND
SUBSTANTIAL SHAREHOLDERS
1. Particulars of Directors’ and Supervisors’ Service Contracts
W eh a v ee n t e r e di n t oas e r v i c ec o n t r a c tw i th each of our Directors and Supervisors in
respect of, among others, (i) term of service, ( ii) termination, and (iii) dispute resolution
mechanism. The service contracts may be re newed in accordance with our Articles of
Association and the applicable laws, ru les and regulations from time to time.
Save as disclosed above, none of our Directors or Supervisors has or is proposed to
have a service contract with any member of our Group.
2. Remuneration of Directors and Supervisors
Save as disclosed in ‘‘Directors, Supervisors and Senior Management’’ and ‘‘Appendix
I — Notes to the Historical Financial Information — 8. Directors’ Emoluments,’’ none of
our Directors or Supervisors received other remuneration or benefits in kind from our
Company in respect of the years en ded December 31, 2022, 2023 and 2024.
3. Disclosure of Interests
Interests of our Directors, Supervis ors and Chief Executive of the Company
Save as disclosed below, immediately following the completion of the Global
Offering (assuming no exercise of the Over-allotment Option) and the conversion of
the Unlisted Shares into H Shares, so fa r as our Directors are aware, none of our
Directors, Supervisors or chief executive wi ll have any interest and/or short position
(as applicable) in the Shares, underlying Shares or debentures of our Company or our
associated corporation (within the mea ning of Part XV of the SFO) which will be
required to be notified to our Company and the Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which
they 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, pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing
Rules to be notified to our Company and the Stock Exchange, once the H Shares are
l i s t e do nt h eS t o c kE x c h a n g e .
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 2–


--- page 608 ---
Name Position Nature of interest
Number and
description of
Shares held
Approximate
percentage of
shareholding in
the relevant type
of Shares (1)
Approximate
percentage of
shareholding in
the total share
capital of our
Company (1)
(%) (%)
Mr. Chen (2) Executive Director,
chairman of the
Board, and general
manager
Beneficial owner 15,550,502
Domestic Shares
11.24 4.10
15,550,502
H Shares
6.45 4.10
Interest in controlled
corporation
42,251,198
Domestic Shares
30.53 11.13
44,621,388
H Shares
18.50 11.75
Dr. Qiu Debo Executive Director,
and president of the
Company
Beneficial owner 3,091,551
H Shares
1.28 0.81
Ms. Yang Hui Executive Director,
and director of
public relations
Beneficial owner 2,576,293
H Shares
1.07 0.68Notes:
(1) The calculation is based on the total number of 138,410,231 Unlisted Shares and 241,241,531
H Shares in issue upon Listing comprising (i) an aggregate of 228,241,531 Shares to be
converted from the Unlisted Shares and (ii) 13,000,000 Shares to be issued pursuant to the
Global Offering (without taking into account the H Shares which may be issued upon the
exercise of the Over-allotment Option) and the conversion of the Unlisted Shares into H
Shares.
(2) Mr. Chen beneficially holds 15,550,502 Domestic Shares and 15,550,502 H Shares.
Mr. Chen is the general partner of Shanghai Fangao. Besides, the general partner of Cloud
Tribe Yijin is Cloud Tribe Management, which is held as to 51% by Shanghai Yijin and 49%
by Yijin Venture Capital Management. Yijin Venture Capital Management is held as to
approximately 51.76% by Shanghai Yijin. Sha nghai Yijin is held as to approximately 19.49%
by Mr. Chen and approximately 80.51% by Shanghai Yijin Management, whose general
partner is Mr. Chen. Therefore, by virtue of SFO, Mr. Chen is deemed to be interested in (i)
the 42,251,198 Domestic Shares and 42,251,199 H Shares held by Shanghai Fangao and (ii)
the 2,370,189 H Shares held by Cloud Tribe Yijin.
Interests of substantial Shareholders
Save as disclosed in ‘‘Substantial Sharehol ders’’ in this prospectus, our Directors
are not aware of any other person (other t han our Directors, Supervisors or chief
executive) who will, immediately following the completion of the Global Offering
(assuming no exercise of the Over-allotment Option) and the conversion of the
Unlisted Shares into H Shares, have an inter est and/or short position in the Shares or
underlying Shares which would fall to be disclosed to our Company and the Stock
Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is,
directly or indirectly, interested in 10% or more of the nominal value of any class of
share capital carrying rights to vote in al l circumstances at general meetings of our
Company or any other member of our Group.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 3–


--- page 609 ---
4. Agency Fees or Commissions Received
The Underwriters will receive an underwri ting commission in connection with the
Underwriting Agreements, see ‘‘Underwriting — Commission and Expenses.’’
Within the two years immediately preced ing the date of this prospectus, no
commission has been paid or is payable for subscription, agreeing to subscribe,
procuring subscription or agreeing to pr ocure subscription for any share in or
debentures of the Company.
5. Employee Incentive Schemes
In recognition of the contributions of the r elevant persons (pri marily comprise our
employees) and to incentivize them to further promote our development, Shanghai Jifang,
Shanghai Fangzhanbo and Shanghai Fangao, were established in the PRC as our incentive
platforms (the ‘‘Incentive Platforms’’). For fu rther details of the Incentive Platforms, see
‘‘History, Development and Corporate Structure — Incentive Platforms.’’
We have adopted our employee incentive schemes in respect of the Incentive
Platforms (the ‘‘Employee Incentive Scheme s’’). The Employee Incentive Schemes are not
subject to the provisions of Chapter 17 of the Listing Rules as they do not involve the grant
of options or share awards by our Company to subscribe for the Shares after the Listing.
Given the underlying Shares under the Emp loyee Incentive Schemes had already been
issued, there will not be any dilution effect to the issued Shares upon the vesting of the
awards under the Employee Incentive Schemes.
Purpose
The purpose of the Employee Incentive Schemes is to fully stimulate the
enthusiasm of the management members and personnel of our Group and to recognize
the contribution to our Group by them.
Eligibility
Pursuant to the Employee Incentive Schemes, eligible participants of the
Employee Incentive Schemes shall include:
. senior and middle level management members of our Group; and
. core technical personnel and key pers onnel of our Group recognized by the
chairman of the Board.
Participation by Selected Participants
The general and executive partner of Shanghai Fangao is Mr. Chen and the
general and executive partner of Shangha i Jifang and Shanghai Fangzhanbo is Mr.
Liu Xingyu, who are responsible for the respective management of the Incentive
Platforms.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 4–


--- page 610 ---
The selected participants under th e Employee Incentive Schemes (the
‘‘Participants’’) are granted awards in the form of economic interests in the
Incentive Platforms and become indirectly interested in our Company through their
respective interests as limited partner s of the relevant Incentive Platforms upon
acquisition of partnership interest s in the relevant Incentive Platforms.
Restrictions on Transfers
Participants shall not tran sfer, pledge or otherwise encumber their respective
interests in the Incentive Platforms unless o therwise permitted under the partnership
agreements of the relevan t Incentive Platforms.
Repurchase Arrangements
A Participant, who:
. is in violation of the laws and regulations, professional ethics and
undertakings under his/her confiden tiality agreement, or causes losses to
our Company by seriously neglecting his/her duties;
. breaches the labor or service agreement entered into with our Group;
. is dismissed as a result of incompetence for the job, failure to pass the
assessment, or violation of labor disciplines of our Group or
non-competition undertakings;
. has not served as an employee in our Group for three continuous years or
resigns before the Listing;
. does not fulfill his/her obligations under the Employee Incentive Schemes;
. is not in compliance with the restricti ons on transfers as stated above; or
. is removed from his/her eligibility as a limited partner of the relevant
Incentive Platforms,
shall transfer his/her interests in the Incen tive Platforms to the general partners or the
person appointed by the general partners, at a price that equals to his/her actual
paid-in contribution plus interests, after deduction of dividends distributed.
As of the Latest Practicable Date, the Company did not have any disputes with
resigned employees who used to be the Participants.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 5–


--- page 611 ---
6. Disclaimers
(a) None of the Directors, Supervisors nor any of the experts referred to in
‘‘Qualifications of Experts’’ below has any direct or indirect interest in the
promotion of, 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,
any member of our Group, or are proposed to be acquired or disposed of by, or
leased to, any member of the Group.
(b) No cash, securities or other benefit ha s been paid, allotted or given within the
two years preceding the date of this prospectus to any promoter of the Company
nor is any such cash, securities or benef it intended to be paid, allotted or given
on the basis of the Global Offering or related transactions as mentioned in this
prospectus.
(c) Save in connection with the Underwriting Agreements, none of the Directors,
Supervisors nor any of the experts referre d to ‘‘Qualifications of Experts’’ below
is materially interested in any contract or arrangement subsisting at the date of
this prospectus which is significant in relation to the business of the Group.
(d) None of our Directors or their respective close associates or our Shareholders
who to the knowledge of our Directors are interested in more than 5% of our
issued share capital has any interest in our top five customers or suppliers during
the Track Record Period.
(e) Save as disclosed 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 would have to be disclosed pursuant to Divisions 2 and 3 of Part XV of the
SFO.
D. OTHER INFORMATION
1. Estate Duty
Our Directors have been advised that no mater ial liability for estate duty is likely to
fall on our Company or any of our subsidiaries.
2. Litigation
As of the Latest Practicable Date, no member of our Group was involved in any
litigation, arbitration, administrative proceedings or claims of material importance, and so
far as we are aware, no litigation, arbitrati on, administrative pr oceedings or claims of
material importance are pending or thre atened against any member of our Group.
3. Joint Sponsors
Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors
set out in Rule 3A.07 of the Listing Rules. The Joint Sponsors will receive an aggregate fee
of US$1,000,000 to act as the sponsors to our Company in connection with the Listing.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 6–


--- page 612 ---
4. Preliminary Expense
Our Company did not incur any material preliminary expense.
5. Promoters
The promoters of our Company are all then 42 shareholders of our Company as of
November 4, 2022 before our conversion into a joint stock company with limited liability.
Within the two years immediate ly preceding the date of this prospectus, no cash, securities
or other benefit has been paid, allotted or given nor are any proposed to be paid, allotted
or given to any promoters in connection with the Global Offering or the related
transactions described in this prospectus.
6. Qualifications of Experts
The qualifications of the experts who have given opinions or advice in this prospectus
are as follows:
Name Qualification
China International
Capital Corporation
Hong Kong Securities
Limited
A licensed corporation under the SFO to conduct Type 1
(dealing in securities), Type 2 (dealing in futures
contracts), Type 4 (advising on securities), Type 5
(advising on futures contracts) and Type 6 (advising on
corporate finance) of the reg ulated activities under the
SFO
CMB International
Capital Limited
A licensed corporation under the SFO to conduct Type 1
(dealing in securities) and Type 6 (advising on corporate
finance) of the regulated activities under the SFO
KPMG Certified Public Accountants and Public Interest Entity
Auditor registered in accordance with the Accounting and
Financial Reporting Council Ordinance
AllBright Law Offices Legal advisor as to PRC law
AllBright Law Offices Legal advisor as to PRC cybersecurity and data privacy
law
China Insights Industry
Consultancy Limited
Independent industry consultant
7. Consents of Experts
Each of the experts referred to in ‘‘Qualific ation of Experts’’ above has given and has
not withdrawn its written consent to the issue of this prospectus with the inclusion of its
reports, letters or opinions (as the case may be) and the references to its name included
herein in the form and context in which they are included.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 7–


--- page 613 ---
As of the Latest Practicable Date, none of the experts named above had any
shareholding interest in our Company or any of our subsidiaries or rights (whether legally
enforceable or not) to subscribe for or to nom inate persons to subscribe for securities in
any member of our Group.
8. Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty.
The current rate charged on each of the seller and purchaser is 0.1% of the consideration
or, if higher, the fair value of the H Shares being sold or transferred. For further
i n f o r m a t i o ni nr e l a t i o nt ot a x a t i o n ,s e e‘ ‘ A p pendix III — Taxation and Foreign Exchange.’’
9. No Material Adverse Change
Our Directors confirm that, as of the date of this prospectus, there has been no
material adverse change in our financial or trading position since December 31, 2024, being
the latest date of our consolidated financial statements as set out in Appendix I to this
prospectus.
10. Binding Effect
This prospectus shall have the effect, if any application is made pursuant hereto, of
rendering all persons concerned bound by all the provisions (other than the penal
provisions) of Sections 44A and 44B of the Co mpanies (Winding Up and Miscellaneous
Provisions) Ordinance as far as applicable.
11. Bilingual Prospectus
The English language and Chinese langua ge versions of this prospectus are being
published separately in reliance upon the exemption provided by Section 4 of the
Companies Ordinance (Exemption of Compan ies and Prospectuses from Compliance with
Provisions) Notice (Chapter 32L of the Laws of Hong Kong).
12. Miscellaneous
Save as disclosed in this prospectus:
(a) within the two years immediately preced ing the date of this prospectus, no share
or loan capital or debenture of our Company or any of our subsidiaries has been
issued or agreed to be issued or is proposed to be issued for cash or as fully or
partially paid other than in cash or otherwise;
(b) within the two years immediately pr eceding the date of this prospectus, no
commissions, discounts, brokerages or other special terms have been granted in
connection with the issue or sale of any share or loan capital of our Company or
our subsidiaries;
(c) no share or loan capital of our Company is under option or is agreed
conditionally or unconditionally to be put under option;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 8–


--- page 614 ---
(d) our Company has not issued nor agreed to issue any founder or management or
deferred shares;
(e) there is no restriction affecting the remi ttance of profits or repatriation of capital
of our Company into Hong Kong from outside Hong Kong;
(f) there are no arrangements under which future dividends are waived or agreed to
be waived;
(g) there are no contracts for hire or hire purchase of plant to or by us for a period
of over one year which are substantial in relation to our business;
(h) there have been no interruptions in our business which may have or have had a
significant effect on our financial position in the last 12 months;
(i) no part of the equity or debt securities of our Company, if any, is currently listed
on or dealt in on any stock exchange or trading system, and no such listing or
permission to deal in on any stock exchange other than the Stock Exchange is
being or is proposed to be sough;
(j) our Company has no outstanding convertible debt securities or debentures;
(k) our Company is a joint stock limited company and is subject to the PRC
Company Law; and
(l) the English text of this prospectus shall p revail over its respective Chinese text.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 9–


--- page 615 ---
DOCUMENTS DELIVERED TO THE REGIS TRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this p rospectus delivered to the Registrar of
Companies in Hong Kong for registration were:
1. the written consents referred to in ‘‘Appendix VI — Statutory and General
Information — D. Other Information — 7. Consents of Experts;’’ and
2. a copy of each of the material contracts referred to in ‘‘Appendix VI — Statutory and
General Information — B. Further Information about our Business — 1. Summary of
Material Contracts.’’
DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the Stock
Exchange at
www.hkexnews.hk and our website at www.breton.top d u r i n gap e r i o do f1 4d a y s
from the date of this prospectus:
1. the Articles of Association;
2. the Accountants’ Report prepared by KPMG, the text of which is set out in Appendix
It ot h i sp r o s p e c t u s ;
3. the audited consolidated financial statements of our Company for the years ended
December 31, 2022, 2023 and 2024;
4. the report prepared by KPMG on the unaudited pro forma financial information of
our Group, the text of which is set out in Appendix II to this prospectus;
5. the material contracts in ‘‘Appendix VI — Statutory and General Information — B.
Further Information about Our Business — 1. Summary of Material Contracts;’’
6. the written consents referred to in ‘‘Appendix VI — Statutory and General
Information — D. Other Information — 7. Consents of Experts;’’
7. the service contracts referred to in ‘‘Appendix VI — Statutory and General
Information — C. Further Information about our Directors, Supervisors and
Substantial Shareholders — 1. Particulars of Directors’ and Supervisors’ Service
Contracts;’’
8. the PRC legal opinion issued by AllBri ght Law Offices, our legal advisor as to PRC
law, in respect of, among other things, the general corporate matters and property
interests of our Group under PRC law;
9. the legal opinion issued by AllBright Law Offices, our legal advisor as to PRC
cybersecurity and data privacy law;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
AND AVAILABLE ON DISPLAY
–V I I - 1–


--- page 616 ---
10. the industry report issued by China Insights Industry Consultancy Limited, the
summary of which is set forth in the section headed ‘‘Industry Overview;’’ and
11. the PRC Company Law and the Trial Measures, together with their unofficial English
translations.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
AND AVAILABLE ON DISPLAY
–V I I - 2–


--- page 617 ---
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and
Joint Lead Manager s
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
(A joint stock company established in the People’s Republic of China with limited liability)
Stock code : 1333
GLOBAL OFFERINGGLOBAL OFFERINGGLOBAL OFFERING
Joint Lead Manager
