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Shenzhen HQVT Technology Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock Code : 1392
Joint Sponsors, Sponsor-Overall Coordinators, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners, and Joint Lead Managers
GLOBAL
OFFERING
Financial Adviser
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Bookrunners and Joint Lead Managers


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If you are in any doubt about this prospectus, you should obtain independent professional advice.
Shenzhen HQVT Technology Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the Global Offering : 85,162,500 H Shares
Number of International Placing Shares : 76,646,000 H Shares (subject to reallocation)
Number of Hong Kong Offer Shares : 8,516,500 H Shares (subject to reallocation)
Offer Price : HK$7.20 per H Share plus brokerage of 1.0%, SFC
transaction levy of 0.0027%, Hong Kong Stock
Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015% (payable in full on
application in Hong Kong dollars and subject to
refund)
Nominal value : RMB0.0125 per H Share
Stock code : 1392
Joint Sponsors, Sponsor-Overall Coordinators, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners, and Joint Lead Managers
Financial Adviser
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Bookrunners and Joint Lead Managers
SOMERLEY CAPITAL LIMITED
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of
this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever ar ising from or in reliance upon the whole
or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in the section headed “Appendix VII — Documents delivered to the Registrar of Companies and available on
display” to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no re sponsibility as to the
contents of this prospectus or any of the other documents referred to above.
The Offer Price will be HK$7.20. Applicants for the Offer Shares may be required to pay, on application (subject to application channels), the Offer Pr ice of HK$7.20 for each Hong Kong
Offer Share together with brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and Stock Exchange trading fee of 0.00 565%.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, with our consent, reduce the number of Offer Shares and/or the Offer P rice below that stated in this
prospectus at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such a case, as soon as practi cable following the decision to
make such reduction, and in any event not later than the morning of the last day for lodging applications under the Hong Kong Public Offering on Tuesday, 16 June 2026, notices of the
reduction in the number of Hong Kong Offer Shares being offered under the Global Offering and/or the Offer Price will be published on our Company’s webs ite at www.hqvt.com and the
website of the Stock Exchange at www.hkexnews.hk . Further details are set out in the sections headed “Structure and Conditions of the Global Offering” and “How to Apply for Hong
Kong Offer Shares” of this prospectus.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includin g the risk factors set out in the section
headed “Risk factors” of this prospectus.
The Offer Shares have not been and will not be registered under the US Securities Act or any state securities law in the United States and may not be offere d, sold, pledged or transferred in
the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in accordance with any applicable US
securities laws. The Offer Shares are being offered and sold outside the United States in offshore transactions in reliance on Regulation S.
The obligations of the Underwriters under the Underwriting Agreements to subscribe for, and to procure applicants for the subscription for, the Offe r Shares, are subject to termination by
the Overall Coordinators (for themselves and on behalf of the Underwriters) if certain grounds arise prior to 8:00 a.m. (Hong Kong time) on the Listing Date. Such grounds are set out in
the section headed “Underwriting — Underwriting Arrangements and Expenses — Grounds for termination” of this prospectus. It is important that you re fer to that section for further
details.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus to the p ublic in relation to the Hong
Kong Public Offering.
This document is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and our website at www.hqvt.com .
If you require a printed copy of this prospectus, you may download and print from the website addresses above.
IMPORTANT
11 June 2026


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IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not
provide 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.hqvt.com .I f
you require a printed copy of this prospectus, you may download and print from the website addresses
above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online via the HK eIPO White Form service at www.hkeipo.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC Nominees to apply on
your behalf by instructing your broker or custodian who is a HKSCC Participant to give
electronic application instructions via HKSCC’s FINI system to apply for the Hong Kong Offer
Shares on your behalf.
We will not provide any physical channels to accept any application for the Hong Kong Offer Shares by
the public. The contents of the electronic version of this prospectus are identical to the printed
prospectus as registered with the Registrar of Companies in Hong Kong pursuant to Section 342C of
the Companies (WUMP) Ordinance.
If you are an intermediary, broker or agent , please remind your customers, clients or principals, as
applicable, that this prospectus is available online at the website addresses stated above.
Please see the section headed “How to Apply for Hong Kong Offer Shares” in this prospectus for
further details of the procedures through which you can apply for the Hong Kong Offer Shares
electronically. Your application through the HK eIPO White Form service or the HKSCC EIPO
service must be for a minimum of 500 Hong Kong Offer Shares and in one of the numbers set out in
the table. You are required to pay the amount next to the number you select.
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
HK$ HK$ HK$ HK$
500 3,636.31 7,000 50,908.29 50,000 363,630.60 700,000 5,090,828.40
1,000 7,272.61 8,000 58,180.90 60,000 436,356.72 800,000 5,818,089.60
1,500 10,908.92 9,000 65,453.51 70,000 509,082.85 900,000 6,545,350.80
2,000 14,545.22 10,000 72,726.12 80,000 581,808.95 1,000,000 7,272,612.00
2,500 18,181.54 15,000 109,089.18 90,000 654,535.08 2,000,000 14,545,224.00
3,000 21,817.83 20,000 145,452.25 100,000 727,261.20 3,000,000 21,817,836.00
3,500 25,454.14 25,000 181,815.30 200,000 1,454,522.40 4,258,000
(1) 30,966,781.90
4,000 29,090.45 30,000 218,178.35 300,000 2,181,783.60
4,500 32,726.75 35,000 254,541.42 400,000 2,909,044.80
5,000 36,363.05 40,000 290,904.48 500,000 3,636,306.00
6,000 43,635.67 45,000 327,267.55 600,000 4,363,567.20
Note:
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is approximately 50% of the Hong Kong Offer
Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction
levy. If your application is successful, brokerage will be paid to the Exchange Participants (as defined in the Listing Rules)
or to the HK eIPO White Form Service Provider (for applications made through the application channel of the HK eIPO
White Form service) while the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will
be paid to the SFC, the Stock Exchange and the AFRC, respectively.
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


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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 Hong Kong to be published on our website at www.hqvt.com and
the website of the Stock Exchange at www.hkexnews.hk .
Date (Note 1)
2026
Hong Kong Public Offering commences ..................................... 9:00 a.m. on
Thursday, 11 June
Latest time to complete electronic applications under
the HK eIPO White Form service through the designated website
www.hkeipo.hk (Note 2) .............................................1 1:30 a.m. on
Tuesday, 16 June
Application lists open (Note 3) ...........................................1 1:45 a.m. on
Tuesday, 16 June
Latest time to give electronic application instructions
to HKSCC (Note 4) ................................................. 12:00 noon on
Tuesday, 16 June
Latest time to complete payment of the HK eIPO White Form
applications by effecting internet banking transfer(s) or
PPS payment transfer(s) ............................................. 12:00 noon on
Tuesday, 16 June
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 through the HKSCC EIPO channel, you are advised to contact your broker or custodian for the
latest time for giving such instructions which may be different from the latest time as stated above.
Application lists close ................................................ 12:00 noon on
Tuesday, 16 June
Announcement of:
 the level of applications in the Hong Kong Public Offering;
 the level of indications of interest in the International Placing;
 the basis of allocation of the Hong Kong Offer Shares; and
 the number of Offer Shares reallocated, if any, between
the Hong Kong Public Offering and the International Placing,
will be published on our website at www.hqvt.com
(Note 5)
and the website of the Stock Exchange at www.hkexnews.hk
(Note 6) on or before .............................................1 1:00 p.m. on
Thursday, 18 June
EXPECTED TIMETABLE
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Results of allocations in the Hong Kong Public Offering
(with successful applicants’ identification document numbers,
where appropriate) will be available through a variety
of channels as described in the paragraph headed
“How to Apply for Hong Kong Offer Shares — B. Publication
of Results” in this prospectus from ......................................1 1:00 p.m. on
Thursday, 18 June
Results of allocations in the Hong Kong Public Offering
from the designated results of allocations website
at www.hkeipo.hk/IPOResult
or www.tricor.com.hk/ipo/result
with a “search by ID” function from .....................................1 1:00 p.m. on
Thursday, 18 June
H Share certificates in respect of wholly or partially
successful applications will be despatched or deposited
into CCASS on or before (Note 7) ................................... Thursday, 18 June
HK eIPO White Form e-Auto Refund payment instructions/refund
cheques in respect of wholly or partially unsuccessful applications
will be despatched on or before
(Notes 7, 8 and 9) ................................................ Monday, 22 June
Dealings in H Shares on the Stock Exchange expected to
expected to commence at 9:00 a.m. on ................................. Monday, 22 June
Notes:
1. All dates and times refer to Hong Kong dates and local time unless otherwise stated. Details of the structure of the Global
Offering, including its conditions, are set out in the section headed “Structure and Conditions of the Global Offering” in
this prospectus. If there is any change in the above expected timetable, we will issue a separate announcement in Hong
Kong to be published on our website at www.hqvt.com
and the website of the Stock Exchange at www.hkexnews.hk .
2. You will not be permitted to submit your application through the designated website at www.hkeipo.hk after 11:30 a.m.
on the last day for submitting applications. If you have already submitted your application and obtained a payment
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 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, Extreme Conditions and/or a tropical cyclone warning signal number 8 or above in
force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, 16 June 2026, the application lists will not
open or close on that day. Please see the paragraph headed “How to Apply for Hong Kong Offer Shares — E. Severe
Weather Arrangements” in this prospectus.
4. Applicants who apply for the Hong Kong Offer Shares by giving electronic application instructions to HKSCC should
see the paragraph headed “How to Apply for Hong Kong Offer Shares — A. Application for Hong Kong Offer Shares” in
this prospectus.
5. None of the website or any of the information contained on the website forms part of this prospectus.
6. The announcement will be available for viewing on the Stock Exchange’s website at www.hkexnews.hk
.
7. Applicants who apply for 1,000,000 or more Hong Kong Offer Shares and have provided all required information may
collect H Share certificates (where applicable) in person from our H Share Registrar, Tricor Investor Services Limited at
17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong from 9:00 a.m. to 1:00 p.m. on Monday, 22 June 2026.
Applicants being individuals who are eligible for personal collection must not authorise any other person to make
collection on their behalf. If you are a corporate applicant which is eligible for personal collection, your authorised
representative must bear a letter of authorisation from your corporation stamped with your corporation’s chop. Both
individuals and authorised representatives must produce, at the time of collection, evidence of identity acceptable to the H
Share Registrar. Applicants who have applied for the Hong Kong Offer Shares through the HKSCC EIPO channel should
see the paragraph headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share Certificates
and Refund of Application Monies” in this prospectus for details.
EXPECTED TIMETABLE
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8. Applicants who apply through the HK eIPO White Form service by paying the application monies through a single bank
account, may have HK eIPO White Form e-Auto Refund payment instructions (if any) despatched to their application
payment bank account. Applicants who apply through the HK eIPO White Form service by paying the application
monies through multiple bank accounts, may have refund cheques in favour of the applicant (or, in the case of joint
applications, the first-named applicant) sent to the address specified in their application instructions by ordinary post and
at their own risk.
9. HK eIPO White Form e-Auto Refund payment instructions/refund cheques will be issued in respect of wholly or
partially unsuccessful applications.
The H Share certificates will only become valid evidence of title provided that the Global
Offering has become unconditional in all respects and neither of the Underwriting Agreements is
terminated in accordance with its respective terms prior to 8:00 a.m. on the Listing Date. The
Listing Date is expected to be on or about Monday, 22 June 2026. Investors who trade the H
Shares on the basis of publicly available allocation details prior to the receipt of H Share
certificates or prior to the H Share certificates becoming valid evidence of title do so entirely at
their own risk.
EXPECTED TIMETABLE
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IMPORTANT NOTICE TO INVESTORS
This prospectus is issued by our Company solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitation of
an offer to buy any security other than the Hong Kong Offer Shares offered by this prospectus. This
prospectus may not be used for the purpose of, and does not constitute, an offer to sell or a
solicitation of an offer in any other jurisdiction or in any other circumstances. No action has been
taken to permit a public offering of the Offer Shares or the distribution of this prospectus in any
jurisdiction other than Hong Kong. The distribution of this prospectus for purposes of a public
offering and the offering and sale of the Offer Shares in other jurisdictions are subject to restrictions
and may not be made except as permitted under applicable securities laws of such jurisdictions
pursuant to registration with, or authorisation by, the relevant securities regulatory authorities or an
exemption therefrom.
You should rely only on the information contained in this prospectus to make your investment
decision. Our Company, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers and
the Underwriters, any of their respective directors or affiliates or any other persons or parties
involved in the Global Offering have not authorised anyone to provide you with information that is
different from what is contained in this prospectus. Any information or representation not made or
contained in this prospectus must not be relied on by you as having been authorised by our
Company, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters and the
Capital Market Intermediaries, any of their respective directors or affiliates or any other persons or
parties involved in the Global Offering. The contents of our website at www.hqvt.com
do not form
part of this prospectus.
Page
EXPECTED TIMETABLE ................................................ i
CONTENTS ........................................................... i v
SUMMARY AND HIGHLIGHTS ........................................... 1
DEFINITIONS ......................................................... 1 4
GLOSSARY OF TECHNICAL TERMS ...................................... 2 3
FORW ARD-LOOKING STATEMENTS ...................................... 2 8
RISK FACTORS ........................................................ 3 0
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES .......... 5 1
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING ...... 5 4
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING ........... 5 8
CORPORATE INFORMATION ............................................ 6 3
INDUSTRY OVERVIEW ................................................. 6 5
CONTENTS
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REGULATORY OVERVIEW .............................................. 7 8
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE ................... 9 5
BUSINESS ............................................................ 1 1 7
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS ..................... 1 7 6
SUBSTANTIAL SHAREHOLDERS .......................................... 1 8 1
DIRECTORS AND SENIOR MANAGEMENT ................................. 1 8 2
SHARE CAPITAL ...................................................... 1 9 6
FINANCIAL INFORMATION .............................................. 1 9 9
FUTURE PLANS AND USE OF PROCEEDS .................................. 2 4 0
UNDERWRITING ....................................................... 2 4 5
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING ................ 2 5 5
HOW TO APPLY FOR HONG KONG OFFER SHARES ......................... 2 6 0
APPENDIX I — ACCOUNTANTS’ REPORT .............................. I - 1
APPENDIX II — UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... II-1
APPENDIX III — TAXATION AND FOREIGN EXCHANGE ................... III-1
APPENDIX IV — SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS .......................... I V - 1
APPENDIX V — SUMMARY OF THE ARTICLES OF ASSOCIATION ........... V - 1
APPENDIX VI — STATUTORY AND GENERAL INFORMATION ............... VI-1
APPENDIX VII — DOCUMENTS DELIVERED TO THE REGISTRAR
OF COMPANIES AND A V AILABLE ON DISPLAY ........... VII-1
CONTENTS
–v–


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This summary aims to give you an overview of the information contained in this prospectus. As
this is a summary, it does not contain all the information that may be important to you. You should
read this prospectus in its entirety before you decide to invest in our Offer Shares. In addition, we
have incurred net losses in the Track Record Period, and we may incur net losses for the foreseeable
future. We had net cash used in operating activities during the Track Record Period. We did not
declare or pay any dividends during the Track Record Period and may not pay any dividends in the
foreseeable future. Your investment decision should be made in light of these considerations.
There are risks associated with any investment. Some of the particular risks in investing in the
Offer Shares are set out in the section headed “Risk factors” of this prospectus. You should read that
section carefully before you decide to invest in the Offer Shares. V arious expressions used in this
section are defined or explained in the sections headed “Definitions” and “Glossary of Technical
Terms” of this prospectus.
BUSINESS OVERVIEW
We are a multispectral AI technology enterprise in China, specialising in the acquisition,
processing, and analysis of optical information captured from multiple specific spectrum bands to
provide more detailed information than visible lights imaging. Leveraging our proprietary technology in
multispectral perception and AI algorithms, we offer products and services designed to detect both
visible and invisible spectral information to human eyes, which includes (1) Multispectral AI Modules,
which are embedded hardware components that collect and process multispectral data (including visible
light, infrared, and UV) through AI algorithms for integration into third-party devices; (2) Multispectral
AI Perception Terminals, which are devices that integrate multispectral sensors, enhanced multispectral
AI algorithms, and standard hardware components, to provide real-time perception insights; and (3)
Multispectral AI Large Model Services, which are large model solutions with our proprietary “Zhiyuan
Origin Large Model”. Our solutions deliver enhanced perception and safety monitoring, providing
additional information decisions for multi-scenario safety and intelligent perception purposes for
diverse customers who are mainly engaged in business related to software and information technology
services, electronic products, information data centres (IDCs), intelligent driving systems,
telecommunication operators, internet-of-things (IoT) system integration, and construction. Our
technologies have been widely applied across numerous application scenarios beyond traditional safety
solutions, including smart cities, intelligent campus management, IDC safety optimisation, industrial
and commercial safety and IoT-enabled facility management, showcasing the applicability of our
multispectral AI solutions.
According to Frost & Sullivan, multispectral AI modules and multispectral AI large model
services are subsets of the multispectral AI market, which forms a segment of the broader perceptual
intelligence market. In 2025, the multispectral AI modules and multispectral AI large model services
industries in China accounted for approximately 27.5% and 7.5% of China’s total multispectral AI
industry, respectively. Meanwhile, the multispectral AI industry in China accounted for approximately
5.9% of China’s total perceptual intelligence industry.
We were certified by the Ministry of Industry and Information Technology (ʷ௅ )a sa
National-Level Specialised and Sophisticated “Little Giant” Enterprise (ॴਖ਼ၚतอʃ̶ɛΆ
ุ) in 2022, and as a National-level Specialised and Sophisticated “Little Giant” Enterprise (ॴਖ਼
ၚतอʃ̶ɛΆุ ) and National-level Specialised and Sophisticated Key “Little Giant” Enterprise
(ᓃʃ̶ɛΆุ ) in 2025. In recent years, we have received multiple awards,
including recognitions for outstanding contribution, excellence in innovation, and partnership
excellence from major telecommunication operators in China. Since our establishment in 2013, we have
built a full-chain products and services offering encompassing Multispectral AI Modules, Multispectral
AI Perception Terminals and Multispectral AI Large Model Services. Our technological expertise spans
SUMMARY AND HIGHLIGHTS
–1–


--- page 10 ---
a wide range of fields, including AI, optical electronics, integrated circuits, embedded systems, safety
engineering and cloud computing. As at the Latest Practicable Date, we have registered 101 invention
patents and 46 software copyrights, and have actively contributed to the drafting and formulation of
around ten national and association standards in the multi-scenario safety industry.
During the Track Record Period, our revenue for FY2023, FY2024 and FY2025 was
approximately RMB117.1 million, RMB522.6 million and RMB668.5 million, respectively, with a
CAGR of approximately 138.9%. Notably, we recorded a net loss of approximately RMB18.4 million
for FY2023, but achieved a turnaround to a net profit of approximately RMB40.4 million and RMB29.4
million in FY2024 and FY2025, respectively.
With over a decade of technical expertise in the multispectral AI industry, we have accumulated
experience in R&D and product designs and have established a comprehensive
“optics-sensor-imaging-computing” technology architecture encompassing our three core technologies:
(1) multispectral perception-computing integration; (2) lightweight on-device AI computing; and (3)
multispectral AI large model platform.
OUR BUSINESS MODEL
We adopt a vertically integrated business model which covers full-chain AI perception solutions,
building on modular design, multi-scenario scalability, and life-cycle value creation. Our core
capabilities cover upstream multispectral optics and embedded AI hardware development to downstream
application software development, which enable us to deliver deployable, adaptable and comprehensive
perception intelligent solutions tailored to various multi-scenario safety sector user cases.
Our product system and service portfolio comprised three core multispectral AI products that
underpins our capabilities, covering the full product stack from hardware to application software. We
may offer these three core multispectral AI products as an integrated unit or separate components,
depending on customer needs. Our customers may directly use our three core products to solve their
own production or multi-scenario safety needs. Alternatively, they may incorporate our products into
their AI solutions.
SUMMARY AND HIGHLIGHTS
–2–


--- page 11 ---
The following diagram illustrates our business model as well as the service flow in relation to our
products and services:
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Specifically, our customers of our products and services during the Track Record Period included:
(i) system integrators that integrated our products and services into their offerings to enterprise-level
users; and (ii) enterprise-level users that used our products and services directly.
OUR COMPETITIVE STRENGTHS
We believe that the following competitive strengths and advantages are key factors to our success
to date:
 Proprietary technology in the multispectral AI industry
 A diversified customer base
 Stable R&D and innovation capabilities
 Established mass production and quality delivery capabilities
 Experienced senior management team and strategic investors
Please refer to the section headed “Business — Our Competitive Strengths” in this prospectus for
further details.
SUMMARY AND HIGHLIGHTS
–3–


--- page 12 ---
OUR BUSINESS STRATEGIES
With the aim of further developing our business and continuing our growth, we will implement
the following strategies:
 Enhancing R&D capabilities and increasing investment in product development
 Expanding production capacity to support business growth and new product development
 Pursuing strategic investments and M&As to enhance our industrial layout and technological
strengths
 Strengthening business expansion and accelerating global market penetration
Please refer to the section headed “Business — Our Business Strategies” in this prospectus for
further details.
OUR PRODUCTS AND SERVICES
Our three core multispectral products and services consist of: (1) Multispectral AI Modules; (2)
Multispectral AI Perception Terminals; and (3) Multispectral AI Large Model Services. Our products
also include Other AI Vision Modules. Our aforementioned product and services categories collectively
constitute a full-chain product and service offering that enables our customers to deploy intelligent
multispectral perception operational systems. Such products could be used individually as well as a
system-level complete integration solutions, enhancing our competitiveness across a wide range of
application scenarios.
OUR CUSTOMERS
During the Track Record Period, our customers primarily comprised the following two types: (i)
system integrators that integrated our products and services into their offerings to enterprise-level users;
and (ii) enterprise-level users that used our products and services directly.
During the Track Record Period, our revenue from the five largest customers in each year
accounted for 38.3%, 59.0% and 46.8% of our total revenue, and the revenue from our largest customer
amounted to approximately RMB23.0 million, RMB185.7 million and RMB94.0 million, respectively,
accounting for 19.6%, 35.5% and 14.1% of our total revenue during the same year, respectively.
OUR SUPPLIERS
We have established stable relationships with a group of selected suppliers to ensure supply chain
stability, including but not limited to domestic semiconductor component manufacturers, optical and
sensor manufacturers, printed circuit board manufacturers, and outsourced assembly and testing service
providers. These relationships ensure product quality, supply chain continuity and delivery efficiency,
covering all types of our hardware product lines. During the Track Record Period, our purchases from
the top five suppliers in each year accounted for 54.2%, 66.4% and 62.2% of our total purchases, and
the purchases from our largest supplier amounted to approximately RMB18.8 million, RMB152.4
million and RMB100.5 million, respectively, accounting for 18.6%, 39.9% and 18.5% of our total
purchases during the same year, respectively.
SUMMARY AND HIGHLIGHTS
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OUR PRODUCTION BASES
As at the Latest Practicable Date, our production facilities are located in two key regions in
China, namely Shenzhen and the Longyou Economic Development Zone in Zhejiang Province. The
Zhejiang production base performs the full range of production processes, including the SMT automated
assembly, sensor optical calibration and firmware programming, product configuration and assembly,
quality sampling and automated testing, product ageing and packaging and warehousing. Meanwhile,
the Shenzhen production base mainly undertakes the subsequent production processes after SMT
automated assembly, including sensor optical calibration and firmware programming, product
configuration and assembly, quality sampling and automated testing, product ageing and packaging and
warehousing. In addition, the Shenzhen production base also undertakes R&D activities as required, as
it is located in close proximity to our Company’s R&D centre. This dual-base structure allows us to
combine efficient mass delivery capabilities with technological flexibility and innovation incubation. As
our business continues to expand, we plan to further expand our production capacity in the future to
accommodate our growing needs. The utilisation rates of our Shenzhen and Zhejiang production bases
are 24.0%, 87.0% and 49.0% in FY2023, FY2024 and FY2025, respectively. For details of our
utilisation rate, please refer the section headed “Business — Production — Our Production Bases” in
this prospectus.
OUR COST STRUCTURE
Raw material and consumables cost is the largest component in our Group’s cost structure. During
the Track Record Period, raw materials and consumables used accounted for 69.9%, 90.1% and 91.9%
of the cost of sales in FY2023, FY2024 and FY2025, respectively.
For a breakdown of our cost of sales, please refer to section headed “Financial Information —
Description of Selected Components of Statements of Profit or Loss and Other Comprehensive Income
— Cost of Sales” in this prospectus.
OUR PRE-IPO INVESTORS
We received certain rounds of Pre-IPO Investments since our establishment. See “History,
Development and Corporate Structure — Pre-IPO Investments” for details.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary financial data from our consolidated financial information
for the Track Record Period, derived from our consolidated financial statements included in “Appendix
I — Accountants’ Report” to this prospectus.
SUMMARY AND HIGHLIGHTS
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Summary of Consolidated Statements of Profit or Loss and Other Comprehensive Income
FY2023 FY2024 FY2025
RMB’000 RMB’000 RMB’000
Revenue ........................... 117,063 522,568 668,519
Cost of sales ........................ (102,756) (424,399) (519,127)
Gross profit ........................ 14,307 98,169 149,392
Other income ....................... 6,863 5,051 7,430
Other (losses)/gains, net ................ (958) 56 (3,897)
General and administrative expenses ....... (11,874) (13,040) (46,802)
Selling and marketing expenses .......... (16,035) (16,470) (17,700)
Research and development expenses ....... (11,084) (25,151) (50,793)
Net impairment losses on financial assets ... (1,631) (5,413) (6,484)
Operating (loss)/profit ................ (20,412) 43,202 31,146
Finance income ...................... 613 273 207
Finance costs ....................... (3,055) (1,016) (3,862)
(Loss)/Profit before income tax ......... (22,854) 42,459 27,491
Income tax credit/(expense) .............. 4,441 (2,047) 1,863
(Loss)/Profit and total comprehensive
(loss)/income for the year ............ (18,413) 40,412 29,354
Non-IFRS Measure
We define adjusted net (loss)/profit (non-IFRS measure) as net (loss)/profit for the years adjusted
by adding back share-based payment expenses, which is a non-cash item, and listing expenses.
To supplement our consolidated financial statements, we also use adjust net (loss)/profit
(non-IFRS measure) as an additional financial measure, which is not required by, or presented in
accordance with IFRS. We believe this non-IFRS measure facilitates comparisons of operating
performance from year to year and company to company by eliminating potential impacts of certain
items. We believe this measure provides useful information to investors and others in understanding and
evaluating our consolidated results of operations in the same manner as they help our management.
However, our presentation of adjusted net (loss)/profit (non-IFRS measure) may not be comparable to
similarly titled measures presented by other companies. The use of this non-IFRS measure as an
analytical tool has limitations, and you should not consider it in isolation from, or as a substitute for an
analysis of, our results of operations or financial condition as reported under IFRS.
SUMMARY AND HIGHLIGHTS
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The following table reconciles our adjusted net (loss)/profit (non-IFRS measure) for the years
presented in accordance with IFRS, which is net (loss)/profit for the years indicated:
FY2023 FY2024 FY2025
RMB’000 RMB’000 RMB’000
Reconciliation of net (loss)/profit to
adjusted net (loss)/profit (non-IFRS
measure)
(Loss)/profit for the year ................ (18,413) 40,412 29,354
Add:
Listing expenses ..................... — — 17,426
Share-based payment expenses
(1) ......... 242 2,532 8,465
Adjusted net (loss)/profit (non-IFRS
measure) ......................... (18,171) 42,944 55,245
Note:
(1) Share-based payment expenses is a non-cash item.
Revenue by products and services
FY2023 FY2024 FY2025
RMB’000 % of Total RMB’000 % of Total RMB’000 % of Total
Multispectral AI
Multispectral AI Modules .......... 99,121 84.6 299,228 57.3 209,044 31.3
Multispectral AI Perception Terminals .. 12,586 10.8 61,229 11.7 92,638 13.9
Multispectral AI Large Model Services .. — — 113,791 21.8 355,364 53.1
111,707 95.4 474,248 90.8 657,046 98.3
Others
Other AI Vision Modules (1) ......... 5,150 4.4 47,080 9.0 10,258 1.5
Others (2) .................... 206 0.2 1,240 0.2 1,215 0.2
5,356 4.6 48,320 9.2 11,473 1.7
Total...................... 117,063 100.0 522,568 100.0 668,519 100.0
Notes:
(1) Our Other AI Vision Modules represent embedded hardware components designed for visible light perception, providing
standardised visual capture and preliminary processing for cost-effective applications.
(2) Others represent primarily fees from subscription service and maintenance services.
Our revenue increased by 27.9% from RMB522.6 million in FY2024 to RMB668.5 million in
FY2025, primarily attributable to (i) significant increase in the sales of our Multispectral AI Large
Model Services as a result of our products gaining market recognition; (ii) the strong sales performance
from Multispectral AI Perception Terminals; (iii) the implementation of supportive industry policy
boosted market demand; and (iv) the expansion of our customer base.
Our revenue significantly increased by 346.4% from RMB117.1 million in FY2023 to RMB522.6
million in FY2024. This growth was primarily attributable to (i) the relatively strong market demand
for our products targeting safety-related applications; (ii) the acquisition of new customers that
contributed significant orders for our Multispectral AI Modules and Multispectral AI Perception
SUMMARY AND HIGHLIGHTS
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--- page 16 ---
Terminals; and (iii) the launch of our Multispectral AI Large Model Services. The relatively significant
revenue growth in FY2024 was primarily attributable to the relatively low revenue level in FY2023, as
a result of the slow down of the economy.
Gross profit and gross profit margin by products and services
FY2023 FY2024 FY2025
Gross profit
Gross profit
margin Gross profit
Gross profit
margin Gross profit
Gross profit
margin
RMB’000 (%) RMB’000 (%) RMB’000 (%)
Multispectral AI Modules ......... 10,832 10.9 22,753 7.6 23,414 11.2
Multispectral AI Perception Terminals .. 2,481 19.7 15,347 25.1 16,408 17.7
Multispectral AI Large Model Services . — — 56,282 49.5 107,901 30.4
Other AI Vision Modules ......... 996 19.3 2,976 6.3 802 7.8
Others ..................... (2) (1.0) 811 65.4 867 71.3
Total...................... 14,307 12.2 98,169 18.8 149,392 22.3
Our gross profit increased by 52.2% from RMB98.2 million in FY2024 to RMB149.4 million in
FY2025. This significant growth was primarily driven by the strong performance of our Multispectral
AI Large Model Services, which accounted for 53.1% of total revenue in FY2025, increased from
21.8% in FY2024. Our gross profit margin rose from 18.8% in FY2024 to 22.3% in FY2025, primarily
attributable to change in our revenue composition, where Multispectral AI Large Model Services with
higher gross profit margin contributed larger portion of our revenue in FY2025.
Our gross profit significantly increased by 586.2% from RMB14.3 million in FY2023 to RMB98.2
million in FY2024, primarily as a result of our revenue growth. Our gross profit margin rose from
12.2% in FY2023 to 18.8% in FY2024, mainly due to launch of our Multispectral AI Large Model
services which enjoyed a higher gross profit margin than those of the other products.
Our income from others in FY2023 primarily comprise our fee income from maintenance services.
Our income, gross profit and gross profit margin from others increased in FY2024 primarily because we
also received income from subscription services. Our income from others was relatively stable in
FY2025.
Profit/Loss for the year
Our profit for the year decreased from RMB40.4 million in FY2024 to RMB29.4 million in
FY2025, mainly due to a significant increase in our general and administrative expenses (in particular,
listing expenses) and our research and development expenses.
We achieved a significant turnaround from a loss of RMB18.4 million for FY2023 to a profit of
RMB40.4 million for FY2024, which was mainly due to (i) a significant increase in gross profit from
RMB14.3 million in FY2023 to RMB98.2 million in FY2024; (ii) general and administrative expenses
and selling and marketing expenses in FY2024 remained relatively stable; and (iii) a RMB14.1 million
increase in R&D expenses.
SUMMARY AND HIGHLIGHTS
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Summary of Consolidated Statements of Financial Position
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Total non-current assets ................ 87,053 103,017 153,166
Total current assets ................... 173,908 302,225 570,726
Total non-current liabilities .............. 14,512 7,907 55,738
Total current liabilities ................. 85,016 162,958 305,958
Net current assets .................... 88,892 139,267 264,768
Net assets .......................... 161,433 234,377 362,196
Changes in net assets and net current assets
Our net assets increased from RMB161.4 million as at 31 December 2023 to RMB234.4 million as
at 31 December 2024, and further increased to RMB362.2 million as at 31 December 2025. The
increase was a result of (i) capital injections by our Company’s shareholders of RMB30.0 million and
RMB90.0 million during FY2024 and FY2025, respectively; (ii) our net profit of RMB40.4 million and
RMB29.4 million during FY2024 and FY2025, respectively; and (iii) the share based compensation
expenses of RMB2.5 million and RMB8.5 million for shares issued to eligible employees and directors
of the Group pursuant to an employee share incentive plan during FY2024 and FY2025, respectively.
Our net current assets increased from RMB88.9 million as at 31 December 2023 to RMB139.3
million as at 31 December 2024, primarily due to the increases of trade and notes receivables and trade
and notes payables. Our net current assets further increased to RMB264.8 million as at 31 December
2025, primarily due to the increase in our prepayments and other receivables. For details of the
fluctuation of our net current assets during the Track Record Period, please refer to section headed
“Financial Information — Liquidity and Capital Resources — Current Assets and Liabilities” in this
prospectus.
Summary of the Consolidated Statements of Cash Flows
FY2023 FY2024 FY2025
RMB’000 RMB’000 RMB’000
Cash generated from/(used in) operations ... 68,958 (6,736) (129,362)
Interest received ...................... 613 273 207
Income tax paid ...................... — (28) (760)
Net cash generated from/(used in) operating
activities .......................... 69,571 (6,491) (129,915)
Net cash generated from/(used in) investing
activities ......................... 34,084 (22,678) (110,478)
Net cash (used in)/generated from financing
activities ......................... (152,758) 48,759 249,244
Net (decrease)/increase in cash and cash
equivalents ....................... (49,103) 19,590 8,851
Cash and cash equivalents at beginning of the
year ............................. 86,218 37,115 56,705
Cash and cash equivalents at the end of
the year ......................... 37,115 56,705 65,556
SUMMARY AND HIGHLIGHTS
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Our net cash generated from operating activities amounted to RMB69.6 million for FY2023,
during which we recorded a loss before income tax of RMB22.9 million, adjusted for items mainly
including non-cash and non-operating items, primarily comprising increase in payables of
approximately RMB54.8 million, decrease in receivables of RMB29.7 million, which was off-set by an
increase of inventories of RMB15.8 million.
Our net cash used in operating activities amounted to RMB6.5 million for FY2024 despite a profit
before income tax of RMB42.5 million, due to changes in working capital, primarily comprising an
increase in receivables of RMB152.3 million, as offset by an increase in payables of RMB53.9 million.
Net cash used in operating activities amounted to RMB129.9 million for FY2025, primarily
consisting of our profit before income tax of RMB27.5 million, adjusted for items mainly including (i)
non-cash and non-operating items, primarily comprising depreciation and amortisation of non-current
assets of RMB21.7 million; and (ii) changes in working capital, primarily comprising (a) an increase in
receivables of RMB172.6 million, which was mainly attributable to the increase in our prepayments of
approximately RMB146.9 million to certain suppliers in order to secure a stable supply of
high-performance computing (HPC) servers, which have recently been in high demand; (b) an increase
in inventories of RMB55.5 million; and (c) an increase in payables of RMB21.3 million.
SUMMARY OF KEY FINANCIAL RATIOS
The table below sets forth our key financial ratios as at the dates indicated:
For the year ended/As at 31 December
2023 2024 2025
Gross profit margin (1) .................. 12.2% 18.8% 22.3%
Net profit margin (2).................... (15.7)% 7.7% 4.4%
Gearing ratio (3) ....................... 0.14 0.20 0.59
Current ratio (4) ....................... 2.0 1.9 1.9
Quick ratio (5) ....................... 1.4 1.7 1.6
Notes:
(1) Gross profit margin equals gross profit divided by total revenue during the period, multiplied by 100%.
(2) Net profit margin equals net profit divided by total revenue during the period, multiplied by 100%.
(3) Gearing ratio equals total borrowings and lease liabilities divided by total equity as at the relevant dates.
(4) Current ratio represents current assets divided by current liabilities as at the relevant dates.
(5) Quick ratio represents current assets minus inventories, divided by current liabilities as of the relevant date.
RECENT DEVELOPMENTS SUBSEQUENT TO THE TRACK RECORD PERIOD AND NO
MATERIAL ADVERSE CHANGE
Subsequent to the Track Record Period and up to the Latest Practicable Date, we continued to
focus on the sales and provision of our Multispectral AI Modules, Multispectral AI Perception
Terminals, Multispectral AI Large Model Services and Other AI Vision Modules.
For the four months ended 30 April 2026 (“ 4M2026 ”), we recorded an increase of our revenue
from that for the four months ended 30 April 2025 (“ 4M2025 ”). This increase was primarily due to an
increase in revenue from our Multispectral AI Large Model Services was recognised during 4M2026, as
there was an increase in demand and acceptance works of such services in 4M2026 as compared to
4M2025.
SUMMARY AND HIGHLIGHTS
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Our Directors confirm that up to the date of this prospectus, there has been no material adverse
change in our sales performance, trading position or prospects since 31 December 2025 being the end
of the year reported on as set out in “Appendix I — Accountants’ Report” to this prospectus.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the granting of the listing of, and permission to deal
in, the H Shares to be issued pursuant to the Global Offering and the H Shares to be converted from the
existing Unlisted Shares.
We applied on the basis that, among other things, we satisfy the market capitalisation/revenue test
under Rule 8.05(3) of the Listing Rules.
GLOBAL OFFERING STATISTICS
All statistics in the following table are based on the assumption that the Global Offering has been
completed and 85,162,500 H Shares are issued pursuant to the Global Offering and 774,208,420 Shares
are issued and outstanding following the completion of the Global Offering.
Based on an Offer Price
of HK$7.20
per H Share
Market Capitalisation of our Shares (1) .............................. HK$5,574.3 million
Unaudited pro forma adjusted net tangible asset per Share (2) ............. HK$1.09
Notes:
(1) The calculation of market capitalisation is based on 774,208,420 Shares, comprising 18,064,480 Unlisted Shares and
756,143,940 H Shares, expected to be in issue and conversion following completion of the Share Subdivision and the
Global Offering.
(2) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after the adjustments referred to
in “Appendix II — Unaudited Pro Forma Financial Information” in this prospectus.
(3) No adjustment has been made to the unaudited pro forma adjusted net tangible assets of our Group to reflect any trading
results or other transactions of our Group entered into subsequent to 31 December 2025.
DIVIDENDS
No dividend has been declared or paid by us during FY2023, FY2024 and FY2025. The earnings
per share for FY2024 and FY2025 are approximately RMB5.09 and RMB3.49, respectively. The loss
per share for FY2023 was approximately RMB2.33.
After the completion of the Global Offering, we may distribute dividends in the form of cash or
by other means permitted by our Articles of Association. As at the Latest Practicable Date, we did not
have any specific dividend policy nor any pre-determined dividend payout ratio. In principle, we
prioritise cash dividends as the profit distribution method if the conditions for cash dividends are met.
When we have major investment plans or significant cash expenditures, we may distribute dividends in
the form of share equity. A decision to declare or to pay dividends in the future and the amount of
dividends will be at the discretion of our Board and will depend on a number of factors, including our
results of operations, cash flows, financial condition, payments by our subsidiaries of cash dividends to
us, business prospects, statutory and regulatory restrictions on our declaration and payment of dividends
and other factors that our Board may consider important. Any declaration and payment as well as the
amount of dividends will be subject to our constitutional documents and the relevant laws. As advised
SUMMARY AND HIGHLIGHTS
–1 1–


--- page 20 ---
by our PRC legal advisers, a PRC company can pay dividends after covering all accumulated losses
from prior years with its current profits after tax and statutory reserve allocations. Our Shareholders
may approve any declaration of dividends.
USE OF PROCEEDS
We estimate the aggregate net proceeds from the Global Offering, after deducting underwriting
fees and other estimated expenses in connection with the Global Offering and an Offer Price of
HK$7.20 per Share, will be approximately HK$536.8 million.
In accordance with our strategy, we intend to use the net proceeds from the Global Offering for
the following purposes in the following amounts:
 approximately 50.0% of the net proceeds (approximately HK$268.4 million) is expected to
be used to enhance our R&D capabilities and increase investment in product development;
 approximately 25.0% of the net proceeds (approximately HK$134.2 million) will be used to
expand our production capacity to support business growth and new product development;
 approximately 15.0% of the net proceeds (approximately HK$80.5 million) will be used for
strengthening our business expansion and accelerating global market penetration; and
 approximately 10.0% of the net proceeds (approximately HK$53.7 million) will be used to
provide funding for our general working capital and for general corporate uses.
Please refer to the section headed “Future Plans and Use of Proceeds” in this prospectus for
further details.
RISK FACTORS
Our business is subject to certain risks and uncertainties and there are risks relating to an
investment in the Offer Shares. A summary of certain of these risk factors is set forth below. This
summary should be read together with the section headed “Risk Factors” in this prospectus in its
entirety. Any of the following developments may have a material adverse effect on our business, results
of operations, financial condition and future prospects: (i) our business development is subject to
uncertainties in end-market demand and competitive pressures from technological iteration, and failure
to maintain technological leadership could materially and adversely affect our operating results and
financial condition; (ii) we have invested, and intend to continue investing, significantly in R&D, which
may adversely affect our profitability and operating cash flow and may not yield the anticipated results;
(iii) failure to develop and launch new products and services could materially and adversely affect our
future business, operating results, financial condition, and competitive position; and (iv) the size of our
addressable markets and the demand for our products and services may not increase as rapidly as we
anticipate due to a variety of factors, which would materially and adversely affect our business, results
of operations, financial condition and prospects.
LISTING EXPENSES
The total listing expenses payable by our Company are estimated to be RMB66.4 million and
based on an Offer Price of HK$7.2, accounting for 12.5% of gross IPO proceeds. Among such
estimated total listing expenses, (i) underwriting-related expenses, including underwriting commission,
are expected to be RMB32.0 million; and (ii) non-underwriting-related expenses of RMB34.4 million,
comprising (a) fees and expenses of the Joint Sponsors, legal advisers and reporting accountants of
RMB20.3 million; and (b) other fees and expenses of RMB14.1 million.
SUMMARY AND HIGHLIGHTS
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Among the total listing expenses payable of RMB66.4 million, (i) approximately RMB17.4
million was charged to the statement of profit or loss during FY2025; (ii) approximately RMB13.6
million is expected to be expensed through the statement of profit or loss after the Track Record Period;
and (iii) the remaining amount of RMB35.4 million is directly attributable to the issue of shares and
would be deducted from equity upon the Listing.
The professional fees and/or other expenses related to the preparation of the Listing are currently
in estimates for reference only and the actual amount to be recognised is subject to adjustment based on
audit and the then changes in variables and assumptions.
CONTROLLING SHAREHOLDERS
As at the date of this prospectus, Mr. Zhou controls 48.87% of the voting power at the general
meetings of our Company, comprising (1) 5.96% beneficially owned by him directly; (2) 38.34%
beneficially owned by Zhongcheng Tianying LP, which is controlled by Mr. Zhou as its general partner;
and (3) 2.79% beneficially owned by Zhongzheng Tianying LP, which is controlled by Mr. Zhou as its
general partner; and (4) 1.79% beneficially owned by Zhongzhi Tianying LP, which is controlled by Mr.
Zhou as its general partner.
Immediately following completion of the Share Subdivision and the Global Offering, the group of
our Controlling Shareholders will be, in aggregate, entitled to control the exercise of approximately
43.50% of the voting rights and thus remain as a group of Controlling Shareholders.
FILING WITH THE CSRC FOR FULL CIRCULATION
According to the Trial Measures promulgated by the CSRC, for a H-share listed company,
shareholders of its Unlisted Shares applying to convert such shares into shares listed and traded on an
overseas trading venue shall conform to relevant regulations promulgated by the CSRC, and authorise
the domestic company to file with the CSRC on their behalf.
In accordance with the Guidance of H-share Companies Applying for “Full Circulation” Business
of Unlisted Shares in China (H΅͡ሗ “ஷ”ˏ) announced by the
CSRC, an unlisted domestic joint stock company may file with the CSRC for “full circulation”
simultaneously when applying for an overseas initial public offering.
We have filed with the CSRC for, and the CSRC has registered, the conversion of 670,981,440
Unlisted Shares into H Shares on a one-for-one basis upon completion of Listing.
SUMMARY AND HIGHLIGHTS
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In this prospectus, unless the context otherwise requires, the following expressions have the
following meanings.
“Accountants’ Report” the Report of the Reporting Accountants set out in Appendix I
to this prospectus
“AFRC” the Accounting and Financial Reporting Council of Hong
Kong
“Articles” or “Articles of
Association”
the articles of association of our Company conditionally
adopted on 31 July 2025 with effect from the Listing Date,
and as amended from time to time, a summary of which is set
out in Appendix V to this prospectus
“Audit Committee” the audit committee of the Board
“BIS” U.S. Department of Commerce, Bureau of Industry and
Security
“Board” or “Board of Directors” the board of directors of our Company
“Business Day” or “business day” any day (other than a Saturday, Sunday or public holiday in
Hong Kong) on which banks in Hong Kong are generally open
for normal banking business to the public
“Capital Market Intermediary(ies)” or
“capital market intermediary(ies)”
or “CMI(s)”
the Sponsor-Overall Coordinators, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Underwriters and other capital market
intermediary(ies) (within the meaning ascribed thereto under
the Listing Rules) participating in the Global Offering
“CCASS” the Central Clearing and Settlement System established and
operated by HKSCC
“Chairman” the chairman of our Board, Mr. Zhou
“China” or “PRC” the People’s Republic of China and, except where the context
otherwise requires and only for the purpose of this prospectus,
and for geographical reference only, references in this
prospectus to China or the PRC exclude Hong Kong, the
Macao Special Administrative Region of the PRC and Taiwan
region
“Companies (WUMP) Ordinance” the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as
amended, modified and supplemented from time to time
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, modified and supplemented from time to
time
DEFINITIONS
–1 4–


--- page 23 ---
“Company Law” or “PRC Company
Law”
Company Law of the People’s Republic of China ( ʕശɛ͏΍
جas amended, supplemented or otherwise modified
from time to time, which was last amended on 29 December
2023 to take effect on 1 July 2024
“Company” or “our Company” Shenzhen HQVT Technology Co., Ltd. (ٰ
ʮ̡ ), a limited liability company established in the
PRC on 3 April 2013 which was converted into a joint stock
company with limited liability on 8 November 2022, formerly
known as Shenzhen Haiqing Video Technology Co., Ltd.* ( ଉ
ʮ̡ )
“Controlling Shareholder(s)” has the meaning ascribed to it under the Listing Rules and
unless the context otherwise requires, means Mr. Zhou,
Zhongcheng Tianying LP, Zhongzheng Tianying LP and
Zhongzhi Tianying LP
“Corporate Governance Code” the Corporate Governance Code as set out in Appendix C1 to
the Listing Rules
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ၍
ึ)
“Deed of Indemnity” the deed of indemnity dated 2 June 2026 given by our
Controlling Shareholders in favour of our Company regarding
certain indemnities, details of which are set out in the
paragraph headed “D. Other information — 1. Tax and other
indemnities” in Appendix VI to this prospectus
“Deed of Non-Competition” the deed of non-competition dated 2 June 2026 given by our
Controlling Shareholders in favour of our Company regarding
certain non-competition undertakings, details of which are set
out in the section headed “Relationship with Controlling
Shareholders — Non-competition undertaking” in this
prospectus
“Designated Bank” HKSCC Participant’s EIPO Designated Bank
“Director(s)” the director(s) of our Company, including all executive,
non-executive and independent non-executive directors
“EAR” United States Export Administration Regulations, 15 C.F.R.
Parts 730−774
“ECCN” Export Control Classification Number
“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
DEFINITIONS
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“F&S Report” or “Frost & Sullivan
Report”
a market research report commissioned by us and prepared by
Frost & Sullivan on the overview of the industry in which our
Group operates
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., an
independent professional market research and consulting
company
“FINI” “Fast Interface for New Issuance”, an online platform operated
by HKSCC that is mandatory for admission to trading and,
where applicable, the collection and processing of specified
information on subscription in and settlement for all new
listings
“FY2023” the financial year ended 31 December 2023
“FY2024” the financial year ended 31 December 2024
“FY2025” the financial year ended 31 December 2025
“General Rules of HKSCC” General Rules of HKSCC published by the Stock Exchange
and as amended from time to time
“Global Offering” the Hong Kong Public Offering and the International Placing
“Group”, “we, “us” or “our Group” our Company and our subsidiaries at the relevant time or,
where the context otherwise requires, in respect of the period
prior to our Company becoming the holding company of our
present subsidiaries, our present subsidiaries and the
businesses operated by such subsidiaries or their predecessors
(as the case may be)
“H Share Registrar” Tricor Investor Services Limited
“H Share(s)” overseas listed ordinary share(s) in the share capital of our
Company with a nominal value of RMB0.0125 each (taking
into account Share Subdivision), which are to be subscribed
for and traded in Hong Kong dollars and to be listed on the
Hong Kong Stock Exchange
“HKD”, “Hong Kong dollars”, “HK$”
or “cents”
Hong Kong dollars and cents respectively, the lawful currency
of Hong Kong
“HK eIPO White Form ” the application for Hong Kong Offer Shares to be issued in the
applicant’s own name, submitted online through the designated
website at www.hkeipo.hk
“HK eIPO White Form Service
Provider ”
the HK eIPO White Form service provider designated by our
Company as specified on the designated website at
www.hkeipo.hk
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
DEFINITIONS
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“HKSCC EIPO” the application for the Hong Kong Offer Shares to be issued in
the name of HKSCC Nominees and deposited directly into
CCASS to be credited to your designated HKSCC Participant’s
stock account through causing HKSCC Nominees to apply on
your behalf, including by instructing your broker or custodian
who is a Clearing Participant or a Custodian Participant in
HKSCC to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer
Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary of
HKSCC
“HKSCC Operational Procedures” the operational procedures of HKSCC, containing the
practices, procedures and administrative or other requirements
relating to HKSCC’s services and the operation and functions
of CCASS, FINI or any other platform, facility or system
established, operated or otherwise provided or through
HKSCC, as from time to time in force
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong”, “HKSAR” or “HK” the Hong Kong Special Administrative Region of the PRC
“Hong Kong Offer Share(s)” the 8,516,500 H Shares initially offered for subscription
pursuant to the Hong Kong Public Offering, subject to
reallocation as described in the section headed “Structure and
Conditions of the Global Offering” in this prospectus
“Hong Kong Public Offering” the offering by our Company of the Hong Kong Offer Shares
for subscription by the public in Hong Kong, as further
described in the section headed “Structure and Conditions of
the Global Offering” in this prospectus
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly-owned
subsidiary of Hong Kong Exchanges and Clearing Limited
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed in
the paragraph headed “Underwriting — Hong Kong
Underwriters” in this prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated 10 June 2026 relating to the
Hong Kong Public Offering and entered into by our executive
Directors, our Controlling Shareholders, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Sponsors, the
Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Hong Kong Underwriters and our
Company, as further described in the paragraph headed
“Underwriting — Underwriting arrangements and expenses —
Hong Kong Public Offering — Hong Kong Underwriting
Agreement” in this prospectus
DEFINITIONS
–1 7–


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“IFRS” International Financial Reporting Standards, which include
standards, amendments and interpretations promulgated by the
International Accounting Standards Board and the
International Accounting Standards and interpretation issued
by the International Accounting Standards Board
“Independent Third Party(ies)” an individual(s) or a company(ies) who or which, to the best
of our Directors’ knowledge, information and belief, having
made all due and careful enquiries, is/are not a connected
person(s) of our Company under the Listing Rules
“International Placing” the conditional placing of the International Placing Shares by
the International Underwriters, as further described in the
section headed “Structure and Conditions of the Global
Offering” in this prospectus
“International Placing Shares” the 76,646,000 H Shares initially offered for subscription
pursuant to the International Placing, subject to reallocation as
described in the section headed “Structure and Conditions of
the Global Offering” in this prospectus
“International Underwriters” the underwriters of the International Placing that are expected
to enter into the International Underwriting Agreement
“International Underwriting
Agreement”
the international underwriting agreement expected to be
entered into on or around 17 June 2026 by our executive
Directors, our Controlling Shareholders, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Sponsors, the
Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the International Underwriters and our
Company in respect of the International Placing, as further
described in the paragraph headed “Underwriting — The
International Placing” in this prospectus
“Joint Bookrunner(s)” the joint bookrunner(s) as named in the section headed
“Directors and Parties Involved in the Global Offering” in this
prospectus
“Joint Global Coordinator(s)” the joint global coordinator(s) as named in the section headed
“Directors and Parties Involved in the Global Offering” in this
prospectus
“Joint Lead Manager(s)” the joint lead manager(s) as named in the section headed
“Directors and Parties Involved in the Global Offering” in this
prospectus
“Joint Sponsor(s)” the joint sponsor(s) as named in the section headed “Directors
and Parties Involved in the Global Offering” in this prospectus
“Latest Practicable Date” 1 June 2026, being the latest practicable date prior to the
printing of this prospectus for the purpose of ascertaining
certain information in this prospectus prior to its publication
“Listing” listing of the H Shares on the Main Board
DEFINITIONS
–1 8–


--- page 27 ---
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Date” the date, expected to be on or about Monday, 22 June 2026, on
which dealings in the H Shares first commence on the Main
Board
“Listing Rules” the Rules Governing the Listing of Securities on the Main
Board of the Stock Exchange, as amended, modified and
supplemented from time to time
“Main Board” the Main Board of the Stock Exchange
“Mr. Zhou” Mr. Zhou Bo (تour executive Director, general manager
of our Group, and chairman of our Board
“NDRC” the National Development and Reform Commission of the
PRC (ึ )
“Nomination Committee” the nomination committee of the Board
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍ձ਷
ɽึ )
“OFAC” Office of Foreign Assets Control
“Offer Price” the price per Offer Share in Hong Kong dollars (exclusive of
brokerage of 1.0%, SFC transaction levy of 0.0027%, the
Stock Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015%) at which the Offer Shares are to
be subscribed for or issued pursuant to the Global Offering,
being HK$7.20
“Offer Share(s)” the Hong Kong Offer Shares and the International Placing
Shares
“Overall Coordinator(s)” the overall coordinator(s) as named in the section headed
“Directors and Parties Involved in the Global Offering” in this
prospectus
“Overseas Listing Trial Measures” The Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies and five
supporting guidelines ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍ଣ༊
ˏ ) promulgated by the CSRC on 17
February 2023 and became effective on 31 March 2023
“Outbound Investment Rule” “Provisions Pertaining to U.S. Investments in Certain National
Security Technologies and Products in Countries of Concern”,
issued by the U.S. Department of the Treasury on 28 October
2024
“PBOC” People’s Bank of China ( ʕ਷ɛ͏ვБ ), the central bank of
the PRC
DEFINITIONS
–1 9–


--- page 28 ---
“PRC Government” the central government of the PRC and all governmental
subdivisions (including provincial, municipal and other
regional or local government entities) and instrumentalities
thereof or, where the context requires, any of them
“PRC Legal Advisers” AllBright Law Offices (Shenzhen)
“Pre-IPO Investments” certain rounds of financing carried out by our Company before
the Global Offering, details of which are set out in the section
headed “History, Development and Corporate Structure —
Pre-IPO Investments” in this prospectus
“Pre-IPO Investor(s)” the investor(s) who participated in the Pre-IPO Investments,
background and information of which are set out in the
paragraph headed “History, Development and Corporate
Structure — Pre-IPO investment” in this prospectus
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of the Board
“Reporting Accountants” Confucius International CPA Limited
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“SAFE” the State Administration of Foreign Exchange of the PRC ( ʕ
ശɛ͏΍ձ਷̮ි၍ଣ҅ )
“SAT” the State Taxation Administration of the PRC ( ʕശɛ͏΍ձ
೼ਕᐼ҅ , formerly known as the State Administration
of Tax)
“Securities Law” the Securities Law of the PRC (جas
amended, supplemented or otherwise modified from time to
time
“SFC” the Securities and Futures Commission of Hong Kong
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Share Subdivision” the share subdivision immediately prior to the Listing,
pursuant to which each of our Share with par value of
RMB1.00 will be subdivided into 80 Shares with par value of
RMB0.0125 each
“Share(s)” Unlisted Share(s) and/or H Share(s)
“Shareholder(s)” holder(s) of the Share(s)
“Sponsor-Overall Coordinator(s)” the sponsor-overall coordinator(s) as named in the section
headed “Directors and Parties Involved in the Global
Offering” in this prospectus
DEFINITIONS
–2 0–


--- page 29 ---
“sq.ft.” square foot
“sq.m.” square metre
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫ )
“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 period comprising FY2023, FY2024 and FY2025
“U.S. Legal Advisers” DeHeng Law Offices, our legal advisers as to United States
export controls and sanctions
“U.S. Securities Act” United States Securities Act of 1933, as amended, modified
and supplemented from time to time
“Underwriters” the Hong Kong Underwriters and the International
Underwriters, details of which are set out in the section
headed “Underwriting” in this prospectus
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
“United States” or “U.S.” the United States of America
“Unlisted Share(s)” existing ordinary shares(s) in the share capital of our
Company with a nominal value of RMB1.00 each, and
ordinary share(s) in the share capital of our Company of par
value of RMB0.0125 per Share (taking into account the Share
Subdivision), which is/are not listed or traded on any stock
exchange
“US$”, “USD” or “U.S. dollars” United States dollars, the lawful currency of the United States
“Zhongcheng Tianying LP” Shenzhen Zhongcheng Tianying Venture Capital Partnership
(Limited Partnership)* (௴ุҳ༟ΥྫΆุ (Ϟ
Υྫ)), a limited partnership established under the laws of
the PRC on 21 August 2017, an employee shareholding
platform and one of our Controlling Shareholders
“Zhongzheng Tianying LP” Shenzhen Zhongzheng Tianying Venture Capital Partnership
(Limited Partnership)* (௴ุҳ༟ΥྫΆุ (Ϟ
Υྫ)), a limited partnership established under the laws of
the PRC on 8 December 2020, an employee shareholding
platform and one of our Controlling Shareholders
“Zhongzhi Tianying LP” Shenzhen Zhongzhi Tianying Venture Capital Partnership
(Limited Partnership)* (௴ุҳ༟ΥྫΆุ (Ϟ
Υྫ)), a limited partnership established under the laws of
the PRC on 25 February 2022, an employee shareholding
platform and one of our Controlling Shareholders
“%” per cent
DEFINITIONS
–2 1–


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Unless expressly stated or the context otherwise requires:
 all times refer to Hong Kong time and references to years in this prospectus are to calendar
years;
 the terms “associate(s)”, “close associate(s)”, “connected person(s)”, “core connected
person(s)”, “connected transaction(s)”, “subsidiary(ies)” and “substantial shareholder(s)”
shall have the meanings ascribed to such terms in the Listing Rules;
 all data in this prospectus are as at the Latest Practicable Date;
 certain amounts and percentage figures included in this prospectus 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. Any discrepancies in any table or
chart between the total shown and the sum of the amounts listed are due to rounding; and
The English names of the PRC laws, rules, regulations, nationals, entities, governmental
authorities, institutions, facilities, certificates and titles etc. mentioned in this prospectus, including
those marked with “*”, are translations from their Chinese names and are for identification purpose
only. If there is any inconsistency between the Chinese names and their English translations, the
Chinese names shall prevail.
DEFINITIONS
–2 2–


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This glossary contains an explanation of certain technical terms used in this prospectus as they
relate to our Company and as they are used in this prospectus in connection with our business or us.
Such terminology and meanings may not correspond to standard industry meanings or usages of
those terms.
“architecture (࿴)” The fundamental structure and organisation of a system,
defining its components, their relationships, and the principles
governing its design and evolution. In AI and computing, it
refers to the framework of hardware and software elements.
“AI” artificial intelligence, simulation of human intelligence by
machines.
“AI chip (AI˪)” a specialised hardware processor designed to accelerate
artificial intelligence workloads, particularly those involving
machine learning (ML) and deep learning (DL) algorithms.
Unlike general-purpose CPUs, AI chips are optimised for
parallel computation, matrix operations, and low-latency
inference, making them ideal for training and deploying AI
models efficiently.
“AI vision modules (AI ൖᙂᅼଡ଼)” compact intelligent chip modules that integrate visible light
image sensors, processors, software algorithms, and interface
components.
“algorithm (جA well-defined, finite sequence of instructions or rules used to
solve a specific problem or perform a computation. In AI,
algorithms process data to learn patterns, make predictions, or
automate decisions.
“artificial intelligence algorithm(s)
(ج”)
set(s) of instructions or rules that enable machines to perform
tasks requiring human-like intelligence, including learning,
reasoning, and decision-making. They serve as the
foundational mechanisms of AI systems across diverse
applications.
“CAGR (ଟ )” compound annual growth rate.
“cloud computing (ၑ)” the delivery of computing services — including servers,
storage, databases, networking, software, and analytics — over
the internet (“the cloud”) on a pay-as-you-go basis. This
model allows users to pay only for the resources they use,
offering scalable access without the need for on-premises
infrastructure.
“CMOS (̒ኬ᜗ )” a complementary metal-oxide-semiconductor (CMOS), which
is a semiconductor technology used to create integrated circus,
such as processors and memory chips.
“CMOS image sensors (CMOS ྡ྅ෂ
ชኜ)”
an image sensor technology based on CMOS fabrication
processes. Its core function is to convert incoming light
(photons) into electrical signals, which are then processed to
form a digital image (i.e. CIS).
GLOSSARY OF TECHNICAL TERMS
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“computing power miniaturisation
(ʷ )”
the process of integrating high-performance computing
capabilities into smaller, more portable hardware devices,
enabling compact and efficient computing resources that meet
the demands of edge and mobile devices for high performance.
“COVID-19” coronavirus disease 2019, a disease caused by a novel virus
designated as severe acute respiratory syndrome coronavirus 2.
“cross band imaging (ϓ྅ )” An imaging technique that captures and combines data from
different parts of the electromagnetic spectrum simultaneously
or in a correlated manner. This provides richer information
beyond what is possible with single spectral imaging.
“deep learning (ኪ୦)” A subset of machine learning that uses artificial neural
networks with multiple layers to learn complex patterns and
representations from large amounts of data. It excels at tasks
like image and speech recognition.
“electromagnetic ( ཥှ)” Electromagnetic is used to describe phenomena and things
related to the interaction between electric fields and magnetic
fields. The interaction between electric and magnetic fields
can generate electromagnetic waves, which, depending on
their wavelength, include various types such as gamma rays,
ultraviolet, visible light, infrared, and radio waves.
“facial recognition ( ɛᑕᗆй)” A biometric technology that identifies or verifies a person’s
identity by analysing and comparing patterns in their facial
features from digital images or video frames.
“lightweight ( Ⴠඎʷ)” The process of designing or optimising models and algorithms
to have reduced computational complexity, and memory
footprint, enabling efficient deployment on
resource-constrained devices.
“ISO” International Organisation for Standardisation.
“large model (ۨA type of artificial intelligence model, typically based on deep
learning neural networks, characterised by having a very large
number of parameters and trained on massive datasets. These
models exhibit broad capabilities, including complex
reasoning and multi-task learning.
“full-chain ( Όᗡ༩)” in the context of AI technology enterprise, means that the
company possesses the business capabilities to encompass
module R&D, software algorithm development, terminal
equipment integration, and tailored scenario-based solutions.
“HtFS” a filing system developed by our Company, which is designed
for vision scenario applications to extend the service life of
terminals storage.
“HtOS” an operating system developed by our Company, which is
designed for edge AI computing to fundamentally overcome
key technical bottlenecks in computational miniaturisation.
GLOSSARY OF TECHNICAL TERMS
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“image sensor(s) ( ྡ྅ෂชኜ )” a device that converts optical images (light) into electronic
signals. It is the core component of cameras and imaging
systems, enabling the capture of visual information by
detecting the intensity and sometimes the wavelength of
incoming light. Image sensors are essential in both consumer
electronics and industrial/computational vision applications.
“infrared thermal imaging
(̮ᆠϓ྅ )”
a non-contact imaging technology that detects infrared
radiation (heat) emitted by objects and converts it into a
visible image. The resulting thermographic image represents
temperature distribution across the surface of an object or
scene, enabling temperature-based analysis, diagnostics, or
monitoring.
“IDCs ( ʝᑌၣᅰኽʕː )” information data centres, refers to centralised physical
facilities or spaces designed for the centralised processing,
storage, transmission, exchange, and management of
information and data.
“IoT (ᑌၣ)” internet-of-things, refers to a network of physical objects or
“things” embedded with sensors, software, and other
technologies that enable them to connect and exchange data
with other devices and systems over the internet.
“infrared (̮ᇞ)” Electromagnetic radiation with wavelengths longer than visible
light but shorter than microwaves, typically ranging from ~700
nanometres to 1 millimetres.
“machine learning ( ዚኜኪ୦)” A field of artificial intelligence focused on developing systems
that can learn from data and improve their performance on a
specific task without being explicitly programmed for every
scenario.
“MEMS” Micro-Electro-Mechanical Systems.
“model (ۨIn the context of AI, a mathematical representation trained on
data to recognise patterns, make predictions, or perform
specific tasks. Models are the core output of machine learning
and deep learning processes.
“multimodal model (ۨan artificial intelligence model designed to process and
integrate multiple data modalities — such as text, images,
audio, video, and structured data — within a unified
framework. It enables understanding of complex relationships
across diverse inputs, facilitating richer and more
context-aware predictions or outputs.
“multispectral ( εΈᗅ)” Relating to the acquisition, processing, and analysis of optical
information captured from multiple specific spectral bands to
provide more detailed information than standard RGB (visible
lights) imaging.
GLOSSARY OF TECHNICAL TERMS
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“Multispectral AI Large Model
Services ( εΈᗅAIਕ )”
model services that integrate multispectral data with
domain-specific AI to support training, compression, and
secure on-device deployment. Built on a unified architecture,
it enables cross-band imaging, analysis, and efficient local
inference adapted to the complex needs of the multi-scenario
safety sector. It delivers robust algorithmic performance,
supporting real-time, secure, and scalable inference across
diverse application environments.
“Multispectral AI Modules
(εΈᗅAIᅼଡ଼)”
embedded AI vision modules designed to capture information
across multiple spectral bands, including infrared, ultraviolet,
and visible light, enabling simultaneous multispectral data
acquisition and overcoming the perceptual limits of traditional
visible-light imaging.
“Multispectral AI Perception
Terminals ( εΈᗅAI୞၌)”
an intelligent terminal device integrating spectral imaging and
AI algorithms, capable of capturing data across multiple
spectral bands including near-infrared, short-wave infrared and
visible for enhanced perception and understanding of object
characteristics. It combines optical components, sensors, local
storage, and AI processing to enable on-device imaging,
analysis, recognition, and inference, overcoming traditional
vision system limitations in complex, high-precision scenarios.
”multispectral AI technology
(εΈᗅAIҦஔ)”
the integration of multispectral signal acquisition including
ultraviolet, infrared, and visible light with perception, spectral
modelling, and intelligent computing into a unified system. It
enables on-device closed-loop processing from data capture to
preliminary inference, offering ultra-wide spectral sensing and
high sensitivity, while also supporting cloud-based services for
centralised model training, data aggregation, and remote
optimisation.
“multi-scenario safety
(τΌჯਹ )”
a demand-driven market encompassing diverse application
areas such as fire safety, food safety, urban surveillance and
industrial hazard prevention. It integrates advanced perception,
intelligent decision-making, and cost-effective deployment to
enable real-time risk detection and rapid response across
complex environments.
“nm” nanometre.
“on-device ( ၌ਉ)” Refers to the execution of computation directly on an end-user
device rather than relying on remote cloud servers. Offers
benefits like reduced latency, enhanced privacy, and offline
operation.
“on-device AI ( ၌ਉAI)” on-device AI enables artificial intelligence to run directly on
terminal devices — such as sensors and IoT endpoints —
providing localised data processing and real-time
decision-making without relying on cloud-based systems.
GLOSSARY OF TECHNICAL TERMS
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“optical communication module(s)
(ᅼ෯ )”
an integrated device that enables data transmission via optical
fibre by converting electrical signals into optical signals (for
transmission) and vice versa (for reception). It typically
includes components such as lasers or LEDs, photodetectors,
optical fibres, and electronic interface circuits, facilitating
high-speed, long-distance, and low-loss communication.
“Other AI Vision Modules
(Չ˼AIൖᙂᅼଡ଼)”
designed for visible-light perception, these compact intelligent
chip modules integrate image acquisition, on-device
computing, and AI analysis within constrained spaces.
“PCB(s)” printed circuit board(s), refers to a thin board made of
insulating material, typically fibreglass or composite epoxy,
that contains conductive pathways (traces) etched or printed
onto its surface.
“PCBA(s)” printed circuit board assembly(ies), refers to the process of
mounting and soldering electronic components onto a bare
printed circuit board to create a functional electronic circuit.
“perceptual intelligence
(౽ঐ)”
AI technologies — primarily machine learning and computer
vision — that emulate human sensory capabilities, enabling
machines to perceive, interpret, and respond to their
environment through sensors and devices. It is typically
classified into visual, auditory, tactile, and other forms of
perception based on the type of human sense being simulated.
“private protocol ( ӷϞ՘ᙄ)” a proprietary communication protocol designed and controlled
by a specific company or organisation for communication
between designated devices or systems within its network
environment. Such protocols are not publicly standardised and
are typically used to enable secure and efficient data
transmission between internal devices and platforms.
“public protocol ( ʮϞ՘ᙄ)” refers to a communication protocol that is publicly available
and widely adopted across public networks or the internet,
enabling interoperability and data exchange between different
systems and devices.
“RGB” red, green and blue. In visual imaging technology, it is an
additive colour model in which these three primary colours of
light are combined in varying intensities to reproduce a broad
array of colours perceived by the human eye.
“R&D” research and development.
“SMT” surface mount technology, refers to a method for assembling
electronic components directly onto the surface of a PCB.
“ultraviolet” or “UV” ultraviolet, a type of electromagnetic radiation with
wavelengths shorter than visible light but longer than X-rays,
typically ranging from 10 to 400 nanometres.
GLOSSARY OF TECHNICAL TERMS
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We have included in this prospectus forward-looking statements. Statements that are not
historical facts, including statements about our intentions, beliefs, expectations or predictions for the
future, are forward-looking statements.
This prospectus contains forward-looking statements, including, without limitation, words and
expressions such as “aim”, “expect”, “believe”, “consider”, “continue”, “intend”, “plan”, “project”,
“anticipate”, “seek”, “may”, “might”, “will”, “would”, “should”, “ought to”, “could”, “estimate”,
“potential”, “predict” or similar words or statements, in particular, in the sections headed “Industry
Overview”, “Business” and “Financial Information” in this prospectus in relation to future events, our
future financial, business or other performance and development, the future development of our
industry and the future development of the general economy of our key markets.
These statements are based on numerous assumptions regarding our present and future business
strategy and the environment in which we will operate in the future. These forward-looking statements
reflecting our current views with respect to future events are not a guarantee of future performance and
are subject to certain risks, uncertainties and assumptions, including the risk factors described in this
prospectus, and the following:
 general political and economic conditions, including those related to PRC;
 our ability to successfully implement our business plans and strategies;
 future developments, trends and conditions in the industry and markets in which we operate
or into which we intend to expand;
 our business operations and prospects;
 our capital expenditure plans;
 the actions and developments of our competitors;
 our financial condition and performance;
 capital market developments;
 our dividend policy;
 any changes in the laws, rules and regulations of the PRC and other relevant jurisdictions
and the rules, regulations and policies of the relevant governmental authorities relating to all
aspects of our business and our business plans;
 various business opportunities that we may pursue; and
 certain factors set out in the sections headed “Industry Overview”, “Business” and
“Financial Information” in this prospectus.
FORW ARD-LOOKING STATEMENTS
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We caution you that, subject to the requirements of applicable laws, rules and regulations, we do
not have any obligation to update or otherwise revise the forward-looking statements in this prospectus,
whether as a result of new information, future events or otherwise. As a result of these and other risks,
uncertainties and assumptions, the forward-looking events and circumstances discussed in this
prospectus might not occur in the way we expect, or at all. Accordingly, you should not place undue
reliance on any forward-looking information. All forward-looking statements contained in this
prospectus are qualified by reference to the cautionary statements set out in this section.
In this prospectus, statements of or references to the intentions of our Company or any of our
Directors are made as at the date of this prospectus. Any such intentions may potentially change in light
of future developments.
FORW ARD-LOOKING STATEMENTS
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An investment in our H Shares may involve significant risks. Potential investors should
carefully consider all of the information set out in this prospectus and, in particular , should consider
the following risks and special consideration associated with an investment in our Company before
making any investment decision in relation of the Offer Shares. You should pay particular attention
to the fact that we primarily conduct our operations in China, the legal and regulatory environment
of which in some respects may differ from that in Hong Kong. If any of the possible events as
described below materialises, our Group’ s business, financial position and prospects could be
materially and adversely affected and the trading prices of H Shares could decline due to any of
these risks, and you may lose all or part of your investments. The risks and uncertainties identified
below are not the only ones we face. Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also affect our business and results of operations.
You should carefully consider all of the information in this prospectus, including the following
risk factors before making any investment decision in relation to the H Shares. Our business,
financial condition or results of operations could be materially and adversely affected by any of
these risks. The market price of the H Shares could fall significantly due to any of these risks, and
you may lose all or part of your investment. The information given is subject to the cautionary
statements in the section headed “Forward-Looking Statements” in this prospectus.
RISKS RELATING TO OUR INDUSTRY AND BUSINESS
Our business development is subject to uncertainties in end-market demand and competitive
pressures from technological iteration, and failure to maintain technological leadership could
materially and adversely affect our operating results and financial condition.
We have continuously invested in R&D to develop core advantages in multispectral AI
technology, resulting in product and service offerings, including Multispectral AI Modules,
Multispectral AI Perception Terminals, and Multispectral AI Large Model Services. However, given the
multispectral AI technology sector’s fast pace of innovation, we may not be able to timely adapt our
R&D focus, successfully launch new products, or achieve our R&D objectives as planned. If our
competitors achieve technological breakthroughs that offer cost or performance advantages and we fail
to respond effectively, our competitive position and operating results could be materially and adversely
affected.
We have invested, and intend to continue investing, significantly in R&D, which may adversely
affect our profitability and operating cash flow and may not yield the anticipated results.
We are directing our R&D efforts toward several key products and solutions, including the
development of large models and AI chips. In line with this focus, we have committed substantial
resources to R&D. For FY2023, FY2024 and FY2025, our R&D expenses amounted to RMB11.1
million, RMB25.2 million and RMB50.8 million, respectively, representing 9.5%, 4.8% and 7.6% of our
total revenue for the respective years.
The industries in which we operate are characterised by rapid technological changes. To maintain
competitiveness, we must invest significant resources in R&D to enhance our technological capabilities
and maintain the market relevance of our products and solutions.
However, there can be no assurance that our R&D initiatives will deliver the expected benefits or
achieve market recognition. R&D activities are inherently uncertain, and we may encounter challenges
in securing and retaining adequate resources, such as qualified personnel. Emerging technologies could
render our existing or developing products obsolete, limiting our ability to recover associated
development costs and potentially leading to declines in revenue, profitability, and market share.
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Our R&D investments may not contribute meaningfully to our future results of operations or
offset the incurred costs. This could materially and adversely affect our business, results of operations,
operating cash flow, financial condition, and competitive position.
Failure to develop and launch new products and services could materially and adversely affect our
future business, operating results, financial condition, and competitive position.
The sustainability of our operations and R&D capabilities hinges on our ability to develop and
commercialise new products or services that align with customer needs, regulatory requirements, and
safety specifications in accordance with the latest advancements in multispectral AI technologies.
In pursuing such development, we may encounter significant technical and production challenges,
R&D delays, or cost overruns, requiring us to design innovative and differentiated products, maintain
collaboration with key partners, and respond promptly to technological market, and regulatory changes.
We face risks in the development, commercialisation, and expansion of new products and services,
including potential lack of market acceptance, limited professional expertise, difficulties in talent
acquisition, and possible imitation by competitors. Any delays in new product development or
impediments to market expansion could significantly and adversely impact our overall operations. As
the multispectral AI sector continues to evolve, technological or regulatory changes may require
strategic adjustments, and failure to respond effectively could harm our business, financial condition,
and results of operations.
The size of our addressable markets and the demand for our products and services may not
increase as rapidly as we anticipate due to a variety of factors, which would materially and
adversely affect our business, results of operations, financial condition and prospects.
We are pursuing opportunities in markets that are undergoing rapid changes, including
technological and regulatory changes, and it is difficult to predict or anticipate the timing and size of
the market opportunities for each of our products and services.
Similarly, our internal estimates and forecasts are based on a variety of assumptions, including
assumptions regarding market acceptance of multispectral AI products and services and the manner in
which those new and rapidly evolving markets will develop. While we believe our assumptions and the
data underlying our estimates and forecasts are reasonable, these assumptions and estimates may not be
correct and the conditions supporting our assumptions or estimates may change at any time, thereby
reducing the predictive accuracy of these underlying factors. As a result, our estimates and forecasts
may prove to be incorrect. If third-party or internally generated data were proved to be inaccurate or we
make errors in our assumptions based on that data, the addressable markets for our products and
services may be smaller than we have estimated, our future growth opportunities and sales growth may
be smaller than we have estimated, our future business, results of operations and financial condition
may be materially and adversely affected.
There is no guarantee that demand for our products and solutions will correlate with that growth if
we fail to effectively pursue such opportunities. There is also no guarantee that our business will
continue to be successful simply because of the future addressable markets and the trend thereof we
have currently identified. If demand does not develop or if we cannot accurately forecast customer
demand, then the size of our markets, inventory requirements or our future business, results of
operations and financial condition would be adversely affected.
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The market in which we operate is highly competitive, which may have a material adverse effect
on our business, financial condition and results of operations.
We operate in the highly competitive Multispectral AI technology market in China where existing
and potential competitors are competing for market share through diversified and multi-faceted
strategies. On the one hand, some competitors continue to increase R&D investment to accelerate
technology iteration and product innovation, and expand production capacity to improve market supply
capacity and enhance brand equity through extensive marketing strategies. On the other hand, some
competitors may adopt competitive pricing strategies to attract customers and stimulate sales growth by
lowering the prices of products or services. Perceptual intelligence, which emulates human perceptual
faculties through the application of artificial intelligence, is an upstream industry to the Multispectral
AI technology market, and consists of the Multispectral AI and other technologies. The other
technologies utilised in perceptual intelligence may be in competitions with us. Please see the section
headed “Industry Overview” in this prospectus.
The above competitive pressures may directly impact the market demand and pricing strategies
and tactics of our products. Maintaining or improving our market position depends on our ability to
effectively respond to multiple competitive factors, including competitors’ pricing strategies,
technological advantages, changes in customer preferences, available resources, and the launch of new
or improved products or services. If we were to fail in establishing favourable pricing, obtaining the
resources needed to compete or developing new products or services, or market preferences shift to a
reliance on other technologies, our competitiveness in acquiring new businesses may decline, thereby
materially and adversely affecting our business, financial condition and results of operations.
We may face risks if there are quality issues with our products or services.
Product quality is of significant importance. We are always highly committed to product quality
and safety, considering them vital to our operations. Our quality management and risk control systems
span across the entire product life cycle, including product design, procurement, production, sales,
usage and maintenance. We did not experience any material product quality or safety issues during the
Track Record Period. However, given that product quality control involves complex processes and may
be difficult to manage, we cannot guarantee that there will not be any quality issues with our products
or services.
Any quality issues with our products and services could compromise our product performance,
lose customers and/or orders, and reduce our profitability. In severe cases, we may need to recall our
products or take other measures. Third parties who have suffered losses may bring claims or legal
proceedings against us. Certain product liability claims may arise from low quality raw materials or
defective parts and components that we have procured from suppliers. While we may seek remedies
from suppliers of these low quality raw materials or defective parts and components, such efforts may
be costly, time-consuming and ultimately futile. These suppliers may not be able to fully compensate
us, or at all, for the losses we suffer.
If we were unable to retain our existing customers or attract new customers in the future, our
business, financial condition and results of operations could be materially and adversely affected.
Our customer base comprises a diverse range of customers, including system integrators, and
enterprise-level users. Our product quality and manufacturing capability are widely recognised by
domestic and international customers. However, our future success depends significantly on our ability
to maintain and enhance such customer relationship, and if we were unable to retain existing customers
or attract new customers in the future due to our products failing to meet customer requirements or
market demand, or various other factors, our business, financial condition and results of operations will
be materially and adversely affected.
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We may fail to effectively implement our future investment and acquisition plans, or such plans
may not proceed as expected. These initiatives may involve valuation risks, and we may fail to
realise the anticipated benefits, synergies, cost savings or efficiencies. Any such failure could have
a material adverse effect on our business, reputation, financial condition and results of operations.
We may in the future evaluate and consider a wide array of investments and acquisitions that we
believe are complementary to our growth strategies, particularly those that can help us enrich our
products and services offerings, enhance our technologies, and expand our customer base. Investment
and acquisition processes involve certain known and unknown risks that could impose significant
challenges, including but not limited to that:
 we may not be able to identify suitable acquisition candidates or to consummate acquisitions
on acceptable terms in a timely and cost-effective manner, or at all;
 we may compete with others to acquire complementary businesses and technologies, which
could result in decreased availability of, or increased price for, suitable acquisition
candidates;
 we may not be able to obtain the necessary financing on favourable terms, or at all, to
finance any or all of our potential acquisitions;
 our results of operations may be harmed due to dilutive issuances of equity securities, the
use of our available cash or incurrence of debts; and
 our acquisition activities may be subject to various laws, rules and regulations, including
that on antitrust and competition, of the countries in connection with any proposed
acquisitions.
Even if a planned acquisition were consummated, we might not be able to realise the anticipated
benefits, including expected synergies, cost savings, efficiencies or other strategic objectives. Such
benefits may also take longer than expected to materialise or may be offset by operational disruptions,
increased organisational complexity, competitive responses, customer attrition or changes in market
conditions, due to a number of factors, including but not limited to:
 difficulties in integrating the acquired personnel, products and/or solutions, operations and
technologies, or effectively managing the combined business following the acquisition;
 unanticipated costs or liabilities associated with the acquisition that may adversely affect us
following the acquisition;
 lack of management control or influence over the controlling partners or shareholders, which
may prevent us from achieving our strategic goals;
 new regulatory and compliance risks arising from acquisitions in new industries;
 actual or alleged pre-acquisition misconduct or non-compliance by the acquired company
leading to potential investigations or reputational damage;
 potential issues with the acquired company’s technologies or internal controls;
 disruptions of our ongoing business and diversion of management’s attention;
 harm to our existing relationships with our business partners as a result of the acquisition;
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 the loss of our or the acquired business’s key employees and established customer
relationships; and
 diversion of resources that could have been more effectively deployed in other parts of our
business.
If we are unable to realise anticipated benefits, synergies, cost savings or efficiencies, our overall
profitability and results of operations may be materially and adversely affected.
We are subject to valuation risks associated with potential investments and acquisitions. Although
such transactions may support our growth strategy and enhance our competitive position, the valuation
of the targets can be highly uncertain and subject to significant fluctuations due to factors such as
market sentiment, technological developments and regulatory changes. In assessing the value, prospects
and risks of a target, we may need to rely on assumptions, estimates and limited information which may
prove to be inaccurate. If we overestimate a target’s value or fail to identify material risks during due
diligence, we may overpay for the investment or acquisition or fail to achieve an adequate return on the
capital deployed. Any such misjudgement could adversely affect our financial performance and
prospects, and may result in goodwill impairment charges, amortisation of intangible assets, other
write-downs, the need for significant cash outlays or potentially dilutive issuances of equity securities.
Any negative developments described above could disrupt our existing business and have a
material adverse effect on our business, reputation, financial condition and results of operations.
Price fluctuation and inadequate supply of materials and equipment for our production could
adversely affect our business, financial condition and results of operations.
As a provider of multispectral AI products and services, we procure key components from
domestic suppliers, including image sensors, microprocessor (MPUs) and other components. Price
fluctuations and inadequate supply of these key components may have a material adverse impact on our
business, financial condition and results of operations. The increase in price of materials and equipment
(including key components of our products) could potentially damage our business, results of operations
and relationship with customers. In any case, we may not be able to successfully counteract this impact
through price increases for our products to transfer the increased costs to our customers at all, or find
alternative sources of supply in a timely manner. All the aforementioned factors may adversely impact
our business, results of operations and relationship with customers.
Specifically, the supply stability and procurement prices of key components may be affected by
uncontrollable factors such as geopolitical disruptions to trade and logistics, heightened demand from
other industries, and natural disasters or public health events impacting the supply chain.
The procurement prices of key components fluctuated during the Track Record Period. According
to the F&S Report, the average price of microprocessors used in the multispectral field in China
increased from RMB28.9 per piece in 2023 to RMB30.2 per piece in 2024, and further to RMB40.1 per
piece in 2025. The price is projected to increase continually. The impact of the increase in the average
price of microprocessors during the Track Record Period over our procurement costs of microprocessors
and gross profit margin was not significant. During FY2023, FY2024 and FY2025, our procurement
costs for microprocessors were approximately RMB3.2 million, RMB7.1 million and RMB3.4 million,
respectively, while our gross profit margin was 12.2%, 18.8% and 22.3%. The rise in procurement costs
in FY2024 was primarily attributable to higher procurement volumes, which were intended to meet
increased production needs driver by higher customer orders. Fluctuations in our gross profit margin
during the Track Record Period were mainly influenced by a combination of factors, including changes
in product mix, customer profile, production scale, and pricing strategy. For details, please see the
section headed “Financial Information — Description of Selected Components of Statements of Profit
RISK FACTORS
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or Loss and Other Comprehensive Income — Gross Profit and Gross Profit Margin” in this prospectus.
The average price of CMOS image sensors in China decreased from RMB12.4 per piece in 2023 to
RMB12.2 per piece in 2024, and further to RMB12.1 per piece in 2025. It is projected to continue the
mild downward trend. Please see the section headed “Industry Overview — Overview of China’s
Multispectral AI Industry - Analysis of Component Prices” in this prospectus for more details.
Abnormal price fluctuations in key components would directly impact gross profit margins, while
supply disruptions could halt production, leading to delayed order fulfilment and reduced or loss of
customer satisfaction. Additionally, we also procure various equipment required for production from
other sources. Failure by equipment suppliers to meet our quality, cost or delivery requirements would
further adversely affect our business and production operations.
Our operations may be affected by concentrating on a few key suppliers. Should there be any loss
of key suppliers or disruption in their supply, our business and results of operations could be
materially and adversely affected.
We rely on a limited number of suppliers for supply of raw materials, components, software
services, and others. 54.2%, 66.4% and 62.2% of our total purchase for FY2023, FY2024 and FY2025,
respectively, were from our five largest suppliers in each year during the Track Record Period. It
generally involves several risks when there is a concentration on a few key suppliers, including the
possibility of defective products from a supplier, loss of market share of supplier’s products, failure of
supplier’s products to maintain their competitiveness because of changing industry standards or
customers’ preference, a shortage of product supply and loss of such suppliers.
We may face project delays if our key suppliers fail to provide materials on time or on acceptable
terms. If there is any disruption in their supply of materials to us and we are unable to identify an
alternative source of supply with competitive prices and terms and satisfactory quality in a timely
manner, our business and results of operations may be adversely affected.
Failure to maintain optimal inventory levels could increase our inventory holding costs or
negatively impact our operation results.
Our inventories primarily include (i) raw materials; (ii) work in progress; (iii) finished goods; (iv)
outsourced processing materials; and (v) goods in transit. As at 31 December 2023, 2024 and 2025, our
inventories amounted to RMB56.0 million, RMB31.6 million and RMB80.2 million, respectively. Our
inventory turnover days were 201 days, 44 days and 45 days in FY2023, FY2024 and FY2025,
respectively.
We may not be able to effectively manage our inventory level or to identify any excessive
build-up or insufficient stock of inventory in our operations. We may also misjudge market demand.
Inventory levels in excess of customer demand may result in inventory write-downs or write-offs, and
the sale of excess inventory at discounted prices could impair our brand image and harm our gross
profit margin. On the other hand, if we underestimate the demand for our products, insufficient stock
could result in delays in the shipment of our products, thereby impacting our ability to generate sales
and cause damages to our reputation and relationships with our customers. Therefore, failure to
maintain optimal inventory levels could increase our inventory holding costs or cause us to lose sales,
either of which could adversely impact our business, financial condition and results of operations.
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Our success depends on our ability to protect our intellectual property rights. Intellectual
property infringement by, or disputes with, third parties may adversely affect our business,
financial condition and results of operations.
We regard our patents, know-how, proprietary technologies, trademarks, copyrights, domain names
and other intellectual properties as critical to our business and operations. We seek to protect these
rights through intellectual property laws, contractual arrangements, and internal management measures,
but they may still be challenged, invalidated, circumvented or misappropriated, or otherwise fail to
provide the competitive advantages we expected. There can be no assurance that our patent applications
will be approved, that any issued patents will adequately protect our intellectual property rights, or that
such patents will not be challenged or found by a judicial authority to be invalid and unenforceable. We
may not have sufficient intellectual property rights in all countries and regions due to lack of
comprehensive intellectual property laws in certain regions, and our ability to protect our intellectual
property rights differs by jurisdiction.
The China National Intellectual Property Administration and various governmental patent agencies
require compliance with a number of procedural, documentary, fee payment, and other similar
provisions during the patent application process and over the lifetime of the patent. Non-compliance
events, including failure to respond to official actions within prescribed time limits, non-payment of
periodic maintenance fees, and failure to properly legalise and submit formal documents, can result in
abandonment or lapse of the patent or patent application, leading to partial or complete loss of patent
rights in the relevant jurisdiction. In any such event, our competitors might be able to enter the market,
which would materially and adversely affect our business.
We may be a party to claims and litigation as a result of infringement by third parties of our
intellectual property rights. Even when we sue the parties for such infringement, such lawsuits may
have adverse consequences for our business. Any of such lawsuits may be time-consuming and costly to
resolve and may divert our management’s time and attention from our business. It could also result in a
court or governmental agency invalidating, narrowing the scope of, or rendering our patents or other
intellectual property rights involved in such lawsuits unenforceable which may significantly harm our
business. Our products may infringe issued patents of third parties. If any of our products infringes a
valid and enforceable patent, we may be prevented from selling, or choose to cease the sales of related
products. Additionally, we may face liabilities to our customers, business partners or third parties for
indemnification or other remedies in the event that they are sued for infringement in connection with
their use of our products.
We carefully select suppliers and adopt relevant management policies. However, there can be no
assurance that such measures will be sufficient to prevent suppliers from providing products with
potential intellectual property issues, nor can we guarantee that we will be able to recover all damages
or compensation from suppliers in respect of claims by third parties against us for such products or
intellectual property infringements. If any of these events occur, our reputation could be damaged, and
our business, financial condition and results of operations may be adversely affected.
Our brand may be counterfeited and imitated. We cannot assure that brand counterfeiting or
imitation will not occur in the future or, if it does occur, that we will be able to identify or address the
problem effectively or in a timely manner. Any occurrence of counterfeiting or imitation of our
products or other infringement of our brand could adversely affect our reputation and brand.
Although we enter into employment agreements with confidentiality, non-compete covenants and
intellectual property ownership clauses with our employees, we cannot assure that these agreements will
not be breached, that we will have adequate remedies for any breach in time, or that our proprietary
technology, know-how or other intellectual properties will not otherwise become known to third parties.
Similarly, if we recruit employees who breached confidentiality and/or non-compete covenants with
RISK FACTORS
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their prior employers, we may become subject to claims that such employees have improperly used or
disclosed trade secrets or other proprietary information in violation of their confidentiality and/or
non-compete covenants in a way that unduly benefits us.
Changes in patent law could diminish the value of patents in general, thereby impairing our
ability to protect our products and services.
There is uncertainty in the legal application of patent protection scope across jurisdictions. Patent
laws in China and other countries or their interpretations may change, which may weaken our ability to
protect inventions and affect the acquisition, maintenance, enforcement and overall value of intellectual
property rights, or even lead to narrowing of patent scope.
We cannot guarantee that current or future patent applications will be granted in specific
jurisdictions, nor can we ensure that the claims of granted patents are sufficient to prevent competitors
from copying. In addition, claims in patent applications may be significantly reduced before grant, or
their protection scope may change after grant due to adjustments in legal interpretation. Even if our
current or future patent applications are granted as patents, the granted form may not provide us with
any meaningful protection or prevent competition from competitors.
Our insurance coverage may not be sufficient to cover all losses, which may increase our costs of
operation.
Our Group has purchased group medical insurance and accident insurance for our employees. We
do not, however, carry insurance in respect of certain situations that we believe are not insurable under
industry norm, or which are not on commercially acceptable terms. Such uninsured risks include,
among others, force majeure events such as natural disasters. Accordingly, there can be no assurance
that our insurance coverage is sufficient to prevent us from any loss or that we will be able to
successfully claim our losses under our current insurance policies on a timely basis, or at all. Any
damages to our properties, such as fixed assets and inventories, that are not covered by insurance may
result in substantial losses for us. Nevertheless, we would remain liable for any bank borrowings or
other financial obligations related to these damaged properties. If we incur any loss that is not covered
by our insurance policies, or the compensated amount is significantly less than our actual loss, our
business, financial condition and results of operations could be adversely affected.
We incurred net loss in FY2023 during the Track Record Period.
In FY2023, we had net loss of RMB18.4 million. Our net loss in FY2023 was primarily
attributable to the softened demand of some of our products and the prevailing macroeconomic
headwind during the year.
We may incur net loss in the short term, as we are in the stage of expanding our business and
operations in the highly competitive market and are continuously investing heavily in R&D. We may
not be able to achieve or subsequently maintain profitability in the near future. We believe that our
future revenue growth will depend on, among other factors, our ability to develop new technologies,
enhance customer experience, establish effective commercialisation strategies, compete effectively and
successfully and develop new products and solutions. Accordingly, you should not rely on the revenues
of any prior period as an indication of our future performance. We expect our costs and expenses to
increase in future periods as we continue to expand our business and operations, and invest in R&D.
We also expect to incur substantial costs and expenses as a result of becoming a listed company. If we
are unable to generate adequate revenue and manage our expenses, we may continue to incur significant
losses and may not be able to achieve or subsequently maintain profitability.
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We have recorded operating cash outflows in FY2024 and FY2025, and may not be able to achieve
or subsequently maintain profitability in the near future.
We recorded net cash used in operating activities of RMB6.5 million and RMB129.9 million in
FY2024 and FY2025, respectively. For details, see “Financial Information — Liquidity and Capital
Resources — Cash Flows”. We cannot assure you that we will be able to generate positive cash flows
from operating activities in the future. If we continue to record net operating cash outflows in the
future, our working capital may be constrained, which may adversely affect our financial condition. Our
future liquidity primarily depends on our ability to maintain adequate cash inflows from our operating
activities and adequate external financing such as offering and issuing securities, and/or other sources
such as external debt, which may not be available on terms favourable or commercially reasonable to us
or at all. If we fail to obtain sufficient funding in a timely manner and on reasonable terms, or at all,
we will be in default of our payment obligations and may not be able to expand our business. As a
result, our business, results of operations and financial condition may be adversely affected.
We had long inventory turnover days, long trade receivables turnover days and long cash
conversion cycle during the Track Record Period, which may adversely affect our liquidity.
We had long inventory turnover days during a particular year in the Track Record Period, being
201 days in FY2023, which was primarily attributable to the high goods in transit as at 31 December
2023 because of our Multispectral AI Modules and Multispectral AI Perception Terminals products
being delivered to our customers pending inspection and acceptance. Please see the section headed
“Financial Information — Discussion of Certain Selected Items from the Consolidated Statements of
Financial Position — Inventory” in this prospectus.
We had long trade receivables turnover days during a particular year in the Track Record Period,
being 95 days in FY2025, which were mainly due to some customers with an aggregate amount of
approximately RMB67.9 million, which accounted for 34.7% of our trade and notes receivables as at 31
December 2025, were late settling our invoices. Please see the section headed “Financial Information
— Discussion of Certain Selected Items from the Consolidated Statements of Financial Position —
Trade and Notes Receivables” in this prospectus.
The lengths of our cash conversion cycle were 171 days, 53 days and 98 days in FY2023, FY2024
and FY2025 respectively
(Note) .
We cannot guarantee that we will not continue to incur long inventory days, long trade receivables
turnover days or long cash conversion cycle in the future. If we are to record long inventory days, long
trade receivables turnover days or long cash conversion cycle again, it may affect our liquidity, as well
as our ability to raise funds to meet our cash flow needs. Any difficulty or failure to meet our liquidity
needs as and when needed may have a material adverse effect on our results of operations and financial
position.
We are subject to credit risk in collecting trade receivables due from customers.
We generally grant a credit period to our major customers. As at 31 December 2023, 2024 and
2025, the balances of our trade receivables amounted to RMB19.0 million, RMB144.8 million and
RMB183.4 million, respectively. Our trade receivables turnover days were 68 days, 60 days and 95
days in FY2023, FY2024 and FY2025, respectively. There is no assurance that all such amounts will be
settled on time or at all, and we are subject to credit risk in relation to the trade and bills receivables.
Note: For illustrative purposes only, cash conversion cycle is calculated based on the sum of the inventory turnover days in each
year/period and the trade receivables turnover days in the respective year/period, less the trade and notes payables
turnover days in the respective year/period.
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Our performance, liquidity and profitability may be adversely affected if amounts due to us are not
settled on time or at all. The bankruptcy or deterioration of the credit condition of any of our major
customers could also materially and adversely affect our business.
Failure to fulfil our obligations in respect of contract liabilities could materially and adversely
affect our results of operation, liquidity and financial position.
Our contract liabilities are recognised when payment from a customer is received or is due
(whichever is earlier) before we transfer the related goods or services. As at 31 December 2023, 2024
and 2025, we had contract liabilities of RMB21.3 million, RMB20.3 million and RMB75.9 million,
respectively. If we are not able to fulfil our obligations with respect to our contract liabilities, the
amount of such contract liabilities will not be recognised as revenue. As a result, our results of
operations, liquidity and financial position may be materially and adversely affected.
We have granted and may continue to grant share awards, which may adversely affect our results
of operations and financial condition.
We have established the ESOP Platforms to offer persons selected by our Company an opportunity
to acquire a proprietary interest in the success of our Company, or to increase such interest by acquiring
Shares. We recorded share-based payment expenses of RMB0.2 million, RMB2.5 million and RMB8.5
million in FY2023, FY2024 and FY2025, respectively. We believe such share awards are important to
our ability to attract, retain and motivate our key individuals, and we may continue to grant share
awards in the future. As a result, our share-based payment expenses may increase, which may adversely
affect our results of operations and financial condition.
The carrying amount of our intangible assets is subject to potential impairment.
Our intangible assets are approximately RMB37.4 million, RMB62.7 million and RMB111.0
million as at 31 December 2023, 2024 and 2025, respectively, primarily represented our software and
system and development costs for our business operations. Intangible assets are reviewed and tested for
impairment in accordance with the relevant accounting standards. An impairment loss is recognised in
profit or loss if the carrying amount of the intangible asset exceeds its recoverable amount. There is no
assurance that we will not incur impairment losses on our intangible assets. Any significant impairment
losses could materially and adversely affect our profitability and financial position.
Our success depends to a large extent on the continued service of our senior management and key
technical personnel, and the loss of core personnel may adversely affect our business, financial
condition and results of operations.
Management level and R&D capabilities are core elements to drive business development and
maintain industry leadership. The ability to maintain high-quality senior management team and
technology R&D team will directly affect the sustainable development ability of enterprises. The
continued growth of our business depends to a large extent on the stability and continuous contribution
of our talented team. We attach great importance to the cultivation and introduction of management and
technical talents to ensure the effective coordination and successful implementation of various
management and R&D work. In order to maintain the enthusiasm and stability of core management and
technical personnel, we have formulated corresponding incentive mechanisms to encourage
technological innovation, which has better ensured the stability of our R&D system and the continuous
improvement of R&D capabilities. However, due to fierce competition for talent, we may face the risk
of losing core management and technical personnel. Failure to effectively attract, train and retain key
talent could have a material impact on our market competitiveness and future development.
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Disruptions in the financial markets and economic conditions could affect our ability to raise
capital.
Global economies could suffer dramatic downturns as the result of a deterioration in the credit
markets and related financial crisis as well as a variety of other factors, including extreme volatility in
securities prices, severely diminished liquidity and credit availability, ratings downgrades of certain
investments and declining valuations of others. The occurrence of adverse economic conditions may
cause a significant impact on our ability to raise capital, if needed, on a timely basis and on acceptable
terms or at all.
The increasing complexity and volatility of the international situation, such as the Russia-Ukraine
conflict continues to have profound impacts on the regional and global political and economic order.
For instance, the conflict between Russia and Ukraine has resulted in the imposition by the United
States and other nations of sanctions and other restrictive actions against certain banks, companies, and
individuals in Russia. Geopolitical conflicts are escalating continuously, intensifying the tensions
worldwide, seriously disrupting the international political and economic order and posing great
challenges to the recovery and development of the global economy. During the Track Record Period and
up to the Latest Practicable Date, we did not have any business operations in Russia or Ukraine which
would expose us to any sanctions by the United States or other nations. Our operations are primarily
conducted in mainland China, and the majority of our revenues are generated from providing products
and services to customers operating in mainland China. Such, our Group’s exposure to Russia and
Ukraine, through our ordinary course of business or otherwise, is minimal.
In recent years, the United States has expanded export controls restrictions on China through the
EAR, as administered by the BIS. In particular, on 7 October 2022, the BIS issued an interim final rule
amending the EAR to impose new licensing restrictions on exports, re-exports and in-country transfers
of items intended for use in semiconductor fabrication facilities in the PRC and supercomputers located
in or destined for the PRC. On 17 October 2023, the BIS issued two interim final rules further
amending the EAR to impose new restrictions on the export, re-export or in-country transfer of certain
semiconductor and advanced computing items to the PRC, expanding the range of advanced chips and
semiconductor manufacturing equipment subject to special licensing requirements. On 12 January 2026,
the Remote Access Security Act (H.R. 2683) was passed by the U.S. House of Representatives, and as
of the Latest Practicable Date is pending approval by the Senate, which would authorise the BIS to
extend export controls to the remote access of U.S. goods, software, or technology, and could
potentially affect our Group’s provision of AI services to customers in China.
According to the Frost & Sullivan Report, the global multispectral perception market, valued at
approximately RMB85.0 billion in 2025, offers significant growth opportunities, particularly in
overseas markets such as North America, which commands 24.5% market share in 2025, respectively.
As such, we intend to use part of the net proceeds (i) to increase the recruitment of additional sales and
marketing personnel with industry insights, expertise in downstream application industries such as
urban safety, beauty sector, and food safety, and deploy them across North America to drive customer
acquisition, manage local partnerships, and support brand-building initiatives; and (ii) for other
marketing and selling expenses responsive to market developments in North America. In the context of
such proposed expansion into the North American market, as advised by our U.S. Legal Advisers, our
potential future employment of personnel to support product sales in the United States would not give
rise to risks under U.S. economic sanctions laws and regulations, provided that no dealings involve
sanctioned persons or prohibited transactions. As further advised by our U.S. Legal Advisers, while our
Group’s proposed marketing activities in the U.S, including (i) the implementation of online and offline
marketing campaigns and brand-building initiatives such as digital advertising, participation in trade
shows, and overseas seminars, and (ii) the obtaining of relevant regulatory certifications, are not
inherently sanctionable, such activities may incrementally increase our potential exposure to U.S.
regulatory scrutiny risks. This is because our proposed marketing activities operate in the field of,
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among others, fire monitoring, which may be viewed as part of the broader “security” or
“surveillance-related” technology domain under U.S. regulatory frameworks, and such increased market
visibility and engagement in the United States may heighten regulatory attention to our products, end
users and application scenarios. There is also a potential commercial risk from U.S. tariff policies.
Certain of the Company’s products, namely Multispectral AI Modules (which may be classified under
PRC Harmonised Tariff Schedule code 8543709990), could fall within the scope of the tariffs under
Section 301 of the Trade Act of 1974 at an additional rate of 25%, depending on the applicable tariff
classifications. In such circumstances, U.S. tariffs may be levied on our downstream customers when
they import our products into the United States, depending on applicable product classifications, pricing
arrangements, and the scale of exports. This may increase the overall cost of the Company’s products in
the U.S. market and could result in reduced order volumes, or pricing pressure from customers seeking
to offset the tariff burden.
Nevertheless, should we operate in markets where the impact of such geopolitical conflicts
become apparent, the aforementioned uncertainties would have a material adverse effect on the stability
of the financial markets and economic conditions in such markets, which in turn could have a material
adverse effect on our results of operations, cash flow position and long-term development prospects.
If our current and future infrastructure, internal systems, operational processes, and control
measures are unable to support our continuous business expansion, our business and prospects
may be materially and adversely affected.
Our business has been growing in recent years, so has the scope of our business and number of
employees. As we expand our product and service portfolio, customer base and geographical coverage,
we will need to work with a larger number of suppliers and partners efficiently. We also need to
continuously enhance and upgrade our infrastructure and technology, optimise our supplier
management, refine our reporting systems and operational procedures, expand our employee base, train
and incentivise our employees, and improve our internal control. All these efforts will require
significant managerial, financial and human resources. We cannot assure you that such efforts will be
successful. We cannot assure you that our current and future infrastructure, internal systems, operational
procedures and internal control measures will be adequate to support our expanding business or that our
strategies and new business initiatives will be executed successfully.
In addition, changes and developments in the industry where we operate may also require us to
re-evaluate our business model and make significant adjustments to our long-term strategies and
business plans. If we fail to adapt to these changes and developments and innovate, this could have a
material adverse effect on our business, financial condition and results of operations. Even if we are
able to adapt to these changes and developments and innovate, we may still fail to realise the expected
benefits of the measures we have taken and our profitability may be adversely affected.
Any litigation, legal and contractual disputes, claims or administrative proceedings against us
could be costly and time-consuming for us to defend or resolve and could result in a negative
impact on our reputation.
Our business is subject to the risk of disputes, claims or legal proceedings brought by customers,
suppliers, employees, government agencies and others in the form of private, administrative, regulatory
or other litigation. The outcome of such litigation may be difficult to assess.
Claimants in such litigation may seek large or uncertain amounts of damages from us, and the
scale of potential losses related to such disputes may be unknown for a considerable period of time.
The costs of defending against future disputes or litigation may be extremely high, and if we are forced
to change our business operations as a result of such disputes and litigation, it could negatively impact
our results of operations.
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We may be the target of unfair competition, harassment or other harmful behaviour by third
parties, including filing complaints with regulatory authorities, posting negative messages on
social media and making malicious comments about us, which may damage our reputation and
result in loss of market share, customers and revenue.
We may be the target of unfair competition, harassment or other harmful behaviour by third
parties. These behaviours include filing complaints with regulatory authorities, posting negative
messages on social media and making malicious comments about us. We may be subject to
investigation by government or regulatory authorities and may require significant time and expense to
respond to these third-party behaviours, and we cannot guarantee that such allegations will be resolved
within a reasonable time. Allegations against us, whether or not related to us, may be disseminated by
anyone. Social media generally does not verify the accuracy of such information, and we may not have
the opportunity to remedy or correct it. The occurrence of any of such event could damage our
reputation and ultimately result in our loss of customers and revenue.
We may not be able to detect and prevent fraud or other misconduct committed by our employees,
customers, suppliers or third parties.
We may be exposed to fraud or other misconduct committed by our employees, customers,
suppliers or third parties that could affect our reputation and subject us to litigation, financial losses
and penalties imposed by governmental authorities. Such misconduct could include concealing
unauthorised or unlawful activities, such as money laundering or bribery, improperly using or disclosing
confidential information, misappropriating funds, conducting unauthorised or excessive transactions,
engaging in misrepresentation or other fraudulent or deceptive acts, engaging in unauthorised
transactions to the detriment of our customers, or otherwise failing to comply with applicable laws or
our internal policies and procedures.
Our internal control procedures are designed to monitor our operations and ensure overall
compliance. However, such internal control procedures may be unable to identify all instances of
non-compliance or suspicious transactions in a timely manner, or at all. Furthermore, the precautions
we take to detect and prevent fraud and other misconduct may not be effective. There is no assurance
that we will not be involved in fraud or other misconduct in the future. If such fraud or other
misconduct does occur, it may adversely affect our reputation.
We face risks in relation to the build-up of our production capacity.
Our future success and growth potential are dependent on our ability to effectively manage our
production capacity and successfully implement our production capacity construction plan. However,
there is no assurance that such construction plan will be successfully implemented as scheduled or will
be commercially successful. Our production capacity construction plan may also be subject to
interruptions caused by risks commonly associated with large construction projects, such as
insufficiency of capital, failure to obtain requisite approvals from regulatory authorities, adverse
weather conditions, natural disasters, accidents, unforeseen circumstances and problems, and other
factors beyond our control. As such, we may not be able to achieve the planned production capacity
construction on time, or at all.
Our operations rely on IT systems and networks, and any IT system failures, network disruptions
or cybersecurity breaches may affect our business.
Our IT systems are critical to our ability to effectively manage our operations. If these systems
were to malfunction, cease or experience interruptions in normal operations, experience security
breaches or do not provide the anticipated benefits, our ability to manage our operations could be
impaired, which could have an adverse impact on our operations and financial condition. If the software
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installed on the computers used by us and our employees is not properly authorised or licenced, we may
be subject to claims or litigations from software vendors. We may be subject to IT system failures or
network disruptions caused by natural disasters, accidents, power disruptions, telecom failures, acts of
terrorism or war, computer viruses, physical or electronic break-ins or other events. We have business
continuity and disaster recovery ability, which may or may not be sufficient for managing operational
disruptions resulting from circumstances beyond our control.
Our IT systems may be subject to computer viruses, malicious codes, unauthorised access,
phishing and other cyberattacks. We continue to assess potential threats and adopt proper measures to
address these threats. However, due to the techniques used in these cyberattacks change frequently and
may be difficult to detect for periods of time, we may face difficulties in implementing adequate
preventative measures. To date, we have seen no material impact on our business or operations from
these attacks. However, we cannot guarantee that our efforts would prevent attacks or breakdowns to
our or our third party providers’ databases or systems. If the IT systems, networks or service providers
we rely upon were to fail to function properly and we do not effectively address these failures on a
timely basis, we may be exposed to business damage as well as litigation and regulatory action,
including administrative fines, which could adversely affect our business and financial condition.
Extreme weather events can damage corporate assets, disrupt supply chains and production
deliveries, and trigger power shortages that make it difficult for suppliers to meet their contracts,
ultimately affecting customer product supply and our business and financial performance.
Extreme weather events, such as floods, typhoons and extreme high temperatures, occurring in
areas where our Group has operations may adversely damage corporate assets, disrupt product supply
assurance and service delivery, and in severe cases, may cause business operation interruption. In
addition, extreme weather may cause power supply shortages that prevent suppliers from meeting their
component delivery obligations on time, quality and quantity, limiting our ability to produce and deliver
products to customers and end users.
The increase in customer environmental standards and ESG assessment requirements may affect
our ability to acquire and retain customers, which in turn may have a material impact on business
operations and financial performance.
Changes in customer preferences will induce potential transition risks, reflected in increased
customer requirements for supplier’s environmental and social risk assessments and higher standards for
environmentally friendly products and solutions. If we fail to attract new customers or retain existing
customer base accordingly, our business operations, financial condition and results of operations may be
materially and adversely affected.
RISKS RELATING TO CONDUCTING BUSINESS IN THE JURISDICTION WE OPERATE
We could be subject to changes in our tax rates, the adoption of new tax legislation or exposure to
additional tax liabilities.
According to the relevant provisions of the Enterprise Income Tax Law of the PRC ( ʕശɛ͏΍
), the statutory tax rate for enterprise income tax is generally 25%. Our Company
and some of our subsidiaries are entitled to preferential tax treatment. For example, our Company and
several of our subsidiaries in China have been qualified as high-tech enterprises or engaged in
policy-encouraged businesses, accordingly, they were entitled to a preferential income tax rate of 15%
during the Track Record Period. The tax effect arising from our Group’s entitlement to preferential
income tax rates approximately amounted to a tax expense of RMB2.1 million in FY2023, a tax credit
of RMB3.8 million in FY2024, and a tax credit of RMB2.4 million in FY2025. For details, see
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“Financial Information — Description of Selected Components of Statements of Profit or Loss and
Other Comprehensive Income — Income Tax Credit/(Expenses).” and Accountants’ Report set out in
Appendix I to this prospectus.
Furthermore, according to the relevant laws and regulations promulgated by the State Taxation
Administration of the PRC, enterprises engaging in research and development activities are entitled to
claim 175% from 2018 onwards (subsequently raised to 200% from 2023 onwards) of their qualifying
research and development expenses incurred as tax deductible expenses when determining their
assessable profits for that year. During the Track Record Period, we were qualified for this preferential
policy and had consistently applied it to reduce its tax liabilities.
To the extent there are any changes in the laws and regulations governing preferential tax
treatment or increases in our effective tax rate due to any other reasons, our tax liability would increase
correspondingly. In addition, the PRC government may amend or restate regulations on income,
withholding, value-added, and other taxes. Non-compliance with the tax laws and regulations in China
may also result in penalties or fines imposed by relevant tax authorities. Adjustments or changes to tax
laws and regulations in China and tax penalties or fines could affect our businesses, financial condition
and results of operations.
We also operate in countries and regions overseas and are subject to various taxes. Due to the fact
that the tax environment can be different in different jurisdictions and that the regulations regarding
various taxes, including but not limited to corporate income tax, are complex, our overseas operations
may expose us to risks associated with the overseas tax policy changes. During the Track Record Period
and up to the Latest Practicable Date, no overseas tax payable was incurred due to our Group’s
overseas operations. Due to economic and political conditions, tax rates in various jurisdictions may be
subject to significant change. Our effective tax rates could be affected by changes in the mix of
earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets
and liabilities, or changes in tax laws or their interpretation. Dealing with such regulatory complexities
and changes may require us to invest more managerial and financial resources, which in turn could
affect our results of operations.
We are also subject to the examination of our tax returns and other tax matters by local and
overseas tax authorities and governmental authorities. We regularly assess the likelihood of an adverse
outcome resulting from these examinations to determine the adequacy of our provision for taxes. There
can be no assurance as to the outcome of these examinations. If our effective tax rates were to increase,
or if the ultimate determination of our taxes payable is for an amount in excess of amounts previously
accrued, our financial condition, operating results and cash flows could be adversely affected.
We are exposed to risks related to the properties we use that may adversely affect our business
operations and financial condition.
We lease certain properties primarily for production facilities, office, R&D centre and
warehousing purposes. Pursuant to the Administrative Measures for Commodity House Leasing (ۜ
), both lessors and lessees are required to file the lease agreements for registration
and obtain property leasing filing certificates for their leases. As at the Latest Practicable Date, a total
of 13 lease agreements of our leased properties in the PRC had not completed the lease registration
procedures. We cannot assure you that the lessors will cooperate and complete the registration in a
timely manner. Our PRC Legal Advisers have advised us that failure to complete the registration and
filing of lease agreements will not affect the validity of the lease agreements or our right to use such
property under PRC laws, but we may be subject to a maximum penalty of RMB10,000 for each
non-registered lease if we fail to register such lease agreements within the time frame prescribed by the
relevant PRC government authorities. As a result, any imposition of fines due to such failure may
adversely affect our business operations and financial condition.
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We are subject to various laws, regulations and regulatory standards and any inability to comply
with such requirements and standards may subject us to liabilities.
We are subject to various laws and regulations in the PRC and other jurisdictions in which we
operate and are required to comply with all relevant requirements and standards. For example, we are
required to contribute to a number of social insurance funds, including funds for pension insurance,
unemployment insurance, basic medical insurance, work-related injury insurance, maternity insurance
and housing provident fund on behalf of our employees in mainland China. According to the Regulation
of the PRC on the Administration of Housing Provident Funds (၍ଣૢ
Է), a mainland China enterprise is required to set up housing provident fund accounts and pay the
housing provident fund in time and in full for its employees. According to the PRC Social Insurance
Law (), a mainland China enterprise is required to complete social
insurance registration for its employees and to pay the social insurance contributions in time and in full.
During the Track Record Period, we failed to make full contributions to social insurance and
housing provident fund for our employees in the PRC as required by relevant laws and regulations in
the PRC. During FY2023, FY2024 and FY2025, our unpaid social insurance was approximately
RMB3.5 million, RMB2.7 million and RMB3.2 million respectively, while the unpaid housing provident
fund during the Track Record Period amounted to approximately RMB1.1 million, RMB1.3 million and
RMB1.8 million respectively. As advised by our PRC Legal Advisers, we may be subject to fines
imposed by relevant authorities. For details of these non-compliance incidents, see “Business —
Employees” in this prospectus.
Under certain circumstances, we may be required to pay outstanding social insurance
contributions and housing provident funds within a specified period. Failure to make timely payments
may result in penalties. In addition to the above, if we fail to comply with any other relevant labour
laws and regulations in mainland China, we may be exposed to penalties or be required to compensate
employees. Given the scope, complexity and constant revision of these laws and regulations, our
compliance efforts may face significant challenges, requiring significant financial and management
resources to build a sound compliance system. The related compliance costs and management
requirements may significantly increase the operational burden, and even affect the normal operation of
business or cause operational disruption. Non-compliance with the laws and regulations applicable to
our operations may even result in, among other things, administrative penalties or fines, rectification
orders, or enforcement measures. Such events could impact our results of operations and financial
condition.
Developments in social and economic policies, as well as the interpretation and enforcement of
laws, rules and regulations, may affect our business, financial condition, results of operations and
prospects.
We operate in the PRC and therefore our business, financial condition, results of operations and
prospects may be affected by local economic, social and legal policies. We cannot guarantee that our
business operations will be able to benefit from such measures.
Our business is subject to a variety of laws, rules, policies and other obligations regarding data
protection. Any loss or unauthorised access to or release of confidential information, personal data
may have significant reputational, financial, legal and operational consequences for us.
Our business involves the utilisation and storage of confidential information, including but not
limited to personal information with respect to our employees. We are subject to laws relating to the
collection, use, retention, protection and transfer of personal information. In many cases, these laws
apply not only to third party transactions, but also may restrict transfers of personal information
between us and our subsidiaries. Several jurisdictions have passed laws in this area, and other
jurisdictions are considering imposing additional restrictions. These laws continue to evolve and may be
inconsistent from jurisdiction to jurisdiction. Compliance with emerging and changing overseas
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requirements may incur us substantial costs or require us to change our business practices.
Non-compliance could result in significant penalties or legal liability. Any failure by us to comply with
other privacy-related or data protection laws and regulations could result in proceedings against us by
governmental entities or others, which may lead to reputational impacts and significant legal liabilities.
We have implemented systems and processes intended to secure our information technology
systems and prevent unauthorised access to or loss of sensitive data, including through the use of
encryption and authentication technologies. As with all companies, these security measures may not be
sufficient for all eventualities and may be vulnerable to hacking, employee error, malfeasance, system
error, faulty password management or other non-compliant incidents.
In accordance with the current algorithm and AI service regulatory requirements in China, a
function of a mobile application of our Multispectral AI Large Model Services, which is yet to be
launched, is subject to the requirement of the Generative AI Service (Large-Model) Filing. The said
mobile application can employ cameras and sensors for real-time monitoring and analysis, deliver
intelligent safety alerts, risk assessments, and decision support. Its users would also be able to monitor
environmental changes across multiple scenarios, including construction sites, homes, campuses, and
healthcare facilities, and receive safety notifications. We intend to integrate “Zhiyuan Origin Large
Model” into the said mobile application in the future, enabling users to independently input plain text
to the said mobile application for intelligent question-and-answer interactions, thereby providing
personalised safety advice and solutions. As at the Latest Practicable Date, “Zhiyuan Origin Large
Model” has yet to be integrated with the said mobile application. In accordance with the Interim
Measures for the Administration of Generative Artificial Intelligence Services* (ਕ
) and the Provisions on the Administration of Algorithm-generated Recommendations
for Internet Information Services* (), generative AI services
possessing public opinion attributes or social mobilisation capabilities may submit filings through the
local cyberspace administration department. Pursuant to the Provisions on the Security Assessment of
Internet Information Services with Public Opinion Attributes or Social Mobilisation Capabilities* ( Ո
 ), internet information services
possessing public opinion attributes or social mobilisation capabilities include but are not limited to
internet information services that provide channels for public opinion expression or possess the
capability to mobilise the public to engage in specific activities. It may not be possible for us to
entirely rule out the potential involvement in public discourse attributes due to the information
exchange characteristics of our “Zhiyuan Origin Large Model”. According to our legal advisers as to
PRC data compliance law, our “Zhiyuan Origin Large Model” has been registered with the Cyberspace
Administration of China (“ CAC”). Since the function of the mobile application subject to the
Generative AI Service (Large-Model) Filing has yet to be launched, according to our legal advisers as
to PRC data compliance law, we comply with the PRC laws and regulations, namely the Internet
Information Service Algorithm Recommendation Management Provisions and the Interim Measures for
Generative AI Services. In respect of the Internet Information Service Algorithm Filing, we have
submitted the filing application for algorithm recommendation and generative AI service involved in
multispectral AI technology respectively to the CAC through the Internet Information Service
Algorithm Filing System, and the local Provincial Cyberspace Administration Office in person. At
present, we have completed the Internet Information Service Algorithm Filing as required and obtained
the Algorithm Filing Certificate. Please see the sections headed “Business — Licences, Approvals and
Permits — Data Compliance” and “Regulatory Overview — PRC Laws and Regulations — Laws and
Regulations in Relation to the Artificial Intelligence Industry” in this prospectus. If the filing is delayed
or fails due to failure to pass the review, we may need to rectify relevant technologies, which may
affect business continuity and incur additional compliance costs, which in turn adversely affect
operating results. At the same time, we must comply with PRC’s evolving regulatory framework for
algorithms, AI services and data compliance. Failure to meet regulatory requirements in areas such as
algorithmic transparency management, personal information processing, automated decision-making
fairness assurance or generated content security controls may expose us to administrative penalties,
litigation and business restrictions, resulting in increased compliance costs, goodwill damage and
significant adverse effects on financial condition and operating results.
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In addition, we assume legal obligations regarding data classification, grading and important data
identification in accordance with PRC laws. In accordance with relevant laws and regulations, the
Ministry of Industry and Information Technology is responsible for organising the formulation of
standards for data classification, grading and identification of important data and core data in the field
of industry and information technology. Although the relevant standard framework has been initially
established, the catalogue of important data in this field has not yet been published, and the absence of
this regulatory detail leads to uncertainty in identifying important data. If processed data is included in
the catalogue in the future, we will have to meet stricter data protection obligations (such as localised
storage, cross-border transfer security assessment, etc.), which may increase compliance costs and
business agreement negotiation costs. If important data were not identified in time due to unclear rules,
or the important data catalogue fails to meet the protection requirements after publication, we may face
penalties, which will have a significant adverse impact on business and reputation.
Our ability to pay dividends and other obligations is subject to the regulations governing foreign
currency exchange.
The conversion of RMB into foreign currencies, including Hong Kong dollars and U.S. dollars, is
based on rates set by the PBOC. The conversion of RMB into Hong Kong dollars and other currencies
is subject to regulatory controls and restrictions. We cannot assure you that RMB will not appreciate or
depreciate significantly in value against Hong Kong dollars in the future. Any significant appreciation
or depreciation of RMB may materially and adversely affect our revenue, earnings and financial
position, and the value of, and any dividends payable on, our Shares. For example, to the extent that we
need to convert Hong Kong dollars we receive into RMB to pay our operating expenses, appreciation of
RMB against the Hong Kong dollars would have an adverse effect on the RMB amount we would
receive from the conversion. Conversely, a significant depreciation of RMB against the Hong Kong
dollars may significantly reduce the Hong Kong dollars equivalent of our earnings, which in turn could
adversely affect the price of our Shares.
During the Track Record Period, a portion of our revenue and expenditures were denominated in
Renminbi, while the net proceeds from the Global Offering will be in Hong Kong dollars. Fluctuations
in the exchange rate between the Renminbi and the Hong Kong dollar will affect the relative purchasing
power in Renminbi terms of the net proceeds from the Global Offering. Fluctuations in the exchange
rate may also cause us to incur foreign exchange losses and affect the relative value of any dividend
issued by our subsidiaries. Where that is the case, such foreign currency exchange losses could have a
material and adverse effect on our business, financial performance and result of operations.
Y ou may encounter difficulty in effecting service of process upon us or our Directors who reside in
mainland China, or enforcing foreign court judgements against us or them in mainland China.
The legal system of the PRC is based on written statutes and differs from the common law
system. Prior court decisions may be cited for reference purposes only and are not legally binding.
Since the late 1970s, the PRC government has promulgated a comprehensive body of laws and
regulations governing general economic activities, including those relating to investment, corporate
organisation and governance, commerce, taxation, and trade. Over the past four decades, such
legislative developments have materially enhanced the overall legal protection available to commercial
and investment activities in the private sector within mainland China. Nevertheless, as many of these
laws and regulations are relatively new and the PRC legal system continues to evolve rapidly, often
with limited prior notice, interpretations of various legal provisions, regulations, and rules may lack
consistency, and their practical enforcement remains subject to significant uncertainty.
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RISKS RELATING TO THE GLOBAL OFFERING
The price and trading volume of our H Shares may be volatile, which could lead to substantial
losses to investors.
The price and trading volume of our H Shares may be subject to significant volatility in response
to various factors beyond our control, including the general market conditions of the securities in Hong
Kong and elsewhere in the world. The Stock Exchange and other securities markets have, from time to
time, experienced significant price and trading volume volatility that are not related to the operating
performance of any particular company. The business, results and stock market prices of other
companies engaged in similar businesses may also affect the price and trading volume of our H Shares.
In addition to market and industry factors, the price and trading volume of our H Shares may be highly
volatile for specific business reasons, such as fluctuations in our revenue, earnings, cash flows,
investments, expenditures, relationships with our business partners, movements or activities of key
personnel, actions taken by competitors or regulatory developments. Moreover, shares of other
companies listed on the Stock Exchange have experienced price volatility in the past, and it is possible
that our H Shares may be subject to changes in price not directly related to our business performance.
We may not be able to pay dividends in the foreseeable future after the Global Offering.
We may not be able to distribute any cash dividends in the foreseeable future. Therefore, investing
in our H Shares should not be relied upon as a source of future dividend income.
Whether we are able to pay dividends depends on various factors, including our ability to generate
sufficient earnings. The decision to declare and pay dividends will be made by our Board at its
discretion and subject to corporate approval processes. In making such decision, the Board will
consider our financial performance, cash flows, operating and capital expenditure requirements,
distributable profits under PRC GAAP or IFRS, our Articles of Association and other constitutional
documents, the PRC Company Law and other relevant PRC laws and regulations, market conditions,
business strategy and projections, contractual obligations, taxation, global regulatory constraints and
other factors deemed relevant by our Board. As a result, there can be no assurance as to when and in
what form we will pay dividends in the future. Due to the above considerations, we may not be able to
pay dividends according to our dividend policy. Please see the section headed “Financial information —
Dividend” in this prospectus.
Future sales or perceived sales or conversion of substantial amounts of our securities in the public
market, such as conversion of our Unlisted Shares into H Shares, could have a material and
adverse effect on the prevailing market price of our H Shares and our ability to raise additional
capital in the future, or may result in dilution of your shareholdings.
Future sales of substantial amounts of our H Shares or other securities relating to our H Shares in
the public market, or the issuance of new H Shares or other securities relating to our H Shares, or the
perception that such sales or issuances may occur could all cause a decline in the market price of our H
Shares and the dilution of shareholdings. At the same time, our Company has implemented and may
continue to implement the equity incentive plans. Should Shares be issued under any existing or future
equity incentive plans in future, this would result in the further dilution of shareholdings in our
Company. Moreover, future sales, or perceived sales, of substantial amounts of our securities or other
securities relating to our H Shares, including part of any future offerings, could also materially and
adversely affect our ability to raise capital in the future at a time and at a price which we deem
rational.
RISK FACTORS
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Although our Controlling Shareholders are subject to restrictions on their sales of H Shares within
12 months from the Listing Date as described in the section headed “Underwriting” in this prospectus,
future sales of a significant number of our H Shares by our Controlling Shareholders or other existing
shareholders in the public market after the Global Offering, or the perception that these sales could
occur, could cause the market price of our H Shares to decline and could materially impair our future
ability to raise capital through offerings of our H Shares. We cannot assure you that our Controlling
Shareholders or other existing shareholders will not dispose of H Shares held by them or that we will
not issue H Shares upon the expiration of restrictions set out above.
Non-PRC resident holders of our H Shares may be subject to PRC income tax obligations.
Under the Enterprise Income Tax Law of the PRC () and its
implementation rules, subject to any applicable tax treaty or similar arrangement between the China and
foreign investors’ jurisdictions of residence that provide for a different income tax arrangement, PRC
withholding tax at the rate of 10% is normally applicable to dividends from PRC sources payable to
investors that are non-PRC resident enterprises, which do not have an establishment or place of
business in China, or which have an establishment or place of business in China if the relevant income
is not effectively connected with such establishment or place of business. Any gains realised on the
transfer of shares by such investors are subject to a 10% PRC income tax rate if such gains are
regarded as income from sources within China unless a treaty or similar arrangement provides
otherwise.
Under the Individual Income Tax Law of the PRC () and its
implementation rules, dividends from sources within China paid to foreign individual investors who are
not PRC resident individuals are generally subject to a withholding tax at a rate of 20% and gains from
PRC sources realised by such investors on the transfer of shares are generally subject to a 20% income
tax rate, in each case, subject to any reduction or exemption set forth in applicable tax treaties and laws
in mainland China.
Pursuant to the Circular on Questions Concerning the Collection of Individual Income Tax
Following the Repeal of Guo Shui Fa [1993] No. 045 (਷೼೯ [1993]045ɛ
) (Guo Shui Han [2011]No. 348) issued by the SAT on 28 June 2011,
dividends paid to non-PRC resident individual holders of H Shares are generally subject to individual
income tax of mainland China at the withholding tax rate of 10%, depending on whether there is any
applicable tax treaty between the PRC and the jurisdiction in which the non-PRC resident individual
holder of H Shares resides as well as the tax arrangement between mainland China and Hong Kong.
Non-PRC resident individual holders who reside in jurisdictions that have not entered into tax treaties
with mainland China are subject to a 20% withholding tax on dividends received from us. However,
pursuant to the Circular Declaring that Individual Income Tax Continues to be Exempted over Income
of Individuals from Transfer of Shares ( )
issued by the Ministry of Finance (“ MOF”) and the SAT on 30 March 1998, gains of individuals
derived from the transfer of listed shares of enterprises may be exempt from individual income tax. In
addition, on 31 December 2009, the MOF, the SAT and the CSRC jointly issued the Circular on
Relevant Issues Concerning the Collection of Individual Income Tax over the Income Received by
Individuals from Transfer of Listed Shares Subject to Sales Limitation (ٰ
) (Cai Shui [2009] No. 167), which states that individuals’
income from the transfer of listed shares on certain domestic exchanges shall continue to be exempted
from individual income tax, except for the relevant shares which are subject to sales restrictions as
defined in the Supplementary Circular on Relevant Issues Concerning the Collection of Individual
Income Tax over the Income Received by Individuals from Transfer of the Listed Shares Subject to
Sales Limitations ( ) (Cai
Shui [2010] No. 70). As of the Latest Practicable Date, the aforesaid provision had not expressly
provided that individual income tax shall be collected from non-PRC resident individuals on the sale of
shares of PRC resident enterprises listed on overseas stock exchanges.
RISK FACTORS
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If mainland China income tax is imposed on gains realised from the transfer of our H Shares or on
dividends paid to our non-PRC resident investors, the value of your investment in our H Shares may be
affected. Furthermore, our Shareholders whose jurisdictions of residence have tax treaties or
arrangements with mainland China may not qualify for benefits under such tax treaties or arrangements.
Y ou should read the entire prospectus carefully and only rely on the information included in this
prospectus to make your investment decision, and we strongly caution you not to rely on any
information contained in press articles or other media coverage relating to us, our Shares or the
Global Offering.
We strongly caution our investors not to rely on any information contained in press articles or
other media coverage relating to us, our Shares and the Global Offering. Prior to the publication of this
prospectus, there may be press and media coverage regarding the Global Offering and us. Such press
and media coverage may include references to certain information that does not appear in this
prospectus, including certain operating and financial information and projections, valuations and other
information. We have not authorised the disclosure of any such information in the press or media and
do not accept any responsibility for any such press or media coverage or the accuracy or completeness
of any such information or publication. We make no representation as to the appropriateness, accuracy,
completeness or reliability of any such information or publication. To the extent that any such
information is inconsistent or conflicts with the information contained in this prospectus, we disclaim
responsibility for it and our investors should not rely on such information.
Certain information and statistics in this prospectus obtained from official government sources
have not been independently verified and may not be reliable.
Certain information and statistics in this prospectus are derived from official government sources.
However, our Directors cannot guarantee the reliability of such source materials. Notwithstanding this,
the information from governmental and official sources has not been independently verified by us, the
Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters and the capital market
intermediaries or their respective affiliates or advisers. Therefore, we make no warranty as to the
accuracy of these facts and statistics. Further, we cannot assure our investors that they are stated or
compiled on the same basis or with the same degree of accuracy as similar statistics presented
elsewhere. In all cases, our investors should consider carefully how much weight or importance should
be attached to or placed on such facts or statistics.
Forward-looking statements contained in this prospectus are subject to risks and uncertainties.
This prospectus contains forward-looking statements with respect to our business strategies,
operating efficiencies, competitive positions, growth opportunities for existing operations, plans and
objectives of management, certain pro forma information and other matters. The words “aim,”
“anticipate,” “believe,” “could,” “predict,” “potential,” “continue,” “expect,” “intend,” “may,” “might,”
“plan,” “seek,” “will,” “would,” “should” and the negative of these terms and other similar expressions
identify a number of these forward-looking statements. These forward-looking statements, including,
amongst others, those relating to our future business prospects, capital expenditure, cash flows, working
capital, liquidity and capital resources are necessarily estimates reflecting the best judgement of our
Directors and management and involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by the forward-looking statements. As a consequence,
these forward-looking statements should be considered in light of various important factors, including
those set out in this section. Accordingly, such statements are not a guarantee of future performance and
investors should not place undue reliance.
RISK FACTORS
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In preparation for the Listing, we have sought the following waivers from strict compliance with
the Listing Rules:
APPOINTMENT OF JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, we must appoint a company secretary, who,
by virtue of academic or professional qualifications or relevant experience, is, in the opinion of the
Stock Exchange, capable of discharging the functions of company secretary.
Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock Exchange considers the following
academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159 of the
Laws of Hong Kong); and
(c) a certified public accountant as defined in the Professional Accountants Ordinance (Chapter
50 of the Laws of Hong Kong).
In addition, pursuant to Note 2 to Rule 3.28 of the Listing Rules, in assessing “relevant
experience,” the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles they played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including the
Securities and Futures Ordinance, the Companies Ordinance, the Companies (Winding Up
and Miscellaneous Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement under
Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
We have appointed Dr. Chai Jian (“ Dr. Chai ”) as our joint company secretary with effect from the
Listing Date. Our Group’s key operations and principal business activities are conducted outside of
Hong Kong. We believe that the company secretary role requires a person to be deeply familiar with
our operations and the specific industry context, and to be able to cultivate strong relationships with
both the Board and the management. It would be in the best interests of our Company and our corporate
governance to have as its board secretary a person such as Dr. Chai who has been with our Company
since November 2024. As the executive Director and Board secretary, Dr. Chai is deeply familiar with
our operations and is able to cultivate strong relationships with both the Board and the management.
Our Directors believe that Dr. Chai’s intimate knowledge of our Company and operations is essential
for the performance of company secretary duties in the most effective and efficient manner. For
biographical details, see “Directors and Senior Management.”
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Since Dr. Chai does not possess the qualifications stipulated in Rule 3.28 of the Listing Rules, he
is not able to fulfil the requirements to act as a company secretary of a listed issuer stipulated under the
Listing Rules. To support Dr. Chai in performing the duties of company secretary, we have appointed
Ms. Lui Mei Ka (ྗ)( “ Ms. Lui ”), who is a member of the Hong Kong Institute of Certified Public
Accountants and meets the requirements under Rule 3.28 of the Listing Rules, as a joint company
secretary to provide assistance for a three-year period from the Listing Date so as to enable Dr. Chai to
acquire the relevant experience as required under Note 2 to Rule 3.28 of the Listing Rules to duly
discharge his duties.
Accordingly, our Company has applied for, and the Stock Exchange has granted us, a waiver from
strict compliance with the requirements under Rules 3.28 and 8.17 of the Listing Rules in relation to
the appointment of Dr. Chai as our joint company secretary for a period of three years from the Listing
Date. Such waiver has been granted on the conditions that: (i) Dr. Chai is assisted by Ms. Lui, who
possesses the qualifications or experience as required under Rule 3.28 of the Listing Rules and is
appointed as our joint company secretary throughout the three-year waiver period, to discharge his
function as a company secretary and gain the relevant experience under Rule 3.28 of the Listing Rules;
and (ii) this waiver will be revoked in the event of any material breaches of the Listing Rules by our
Company.
In addition, Dr. Chai will comply with the annual professional training requirements under Rule
3.29 of the Listing Rules and enhance his understanding of the Listing Rules during the three-year
period from the Listing Date. Our Company will further ensure that Dr. Chai has access to the relevant
training and support to familiarise himself with the Listing Rules and the duties of a company secretary
of an issuer listed on the Stock Exchange. Prior to the expiration of the three-year period, our Company
will further evaluate the qualifications and experience of Dr. Chai to determine whether he has satisfied
the requirements as stipulated under the Listing Rules and whether he needs further assistance. We will
liaise with and seek the Stock Exchange’s confirmation on whether Dr. Chai, having benefited from the
assistance of Ms. Lui for three-year period, has acquired the skills necessary to carry out the duties of a
company secretary and the relevant experience within the meaning of Note 2 to Rule 3.28 of the Listing
Rules and is capable of discharging the functions of company secretary alone so that a further waiver
will not be necessary.
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, an issuer must have sufficient management presence in
Hong Kong, which normally means that at least two executive Directors must be ordinarily resident in
Hong Kong. Pursuant to Rule 19A.15 of the Listing Rules, the requirement under Rule 8.12 may be
waived at the discretion of the Stock Exchange having regard to, among other considerations, the
arrangements for maintaining regular communication with the Stock Exchange.
Our Company does not have two executive Directors who are ordinarily resident in Hong Kong
for the purposes of Rule 8.12 of the Listing Rules. Since most of the business operations of our Group
are conducted outside of Hong Kong, our Company considers that it would be difficult and unnecessary
to arrange for two executive Directors to be ordinarily resident in Hong Kong, either by means of
relocation of existing executive Directors or appointment of additional executive Directors, which is not
in the best interests of our Company and our Shareholders as a whole. Therefore, our Company does
not, and does not contemplate in the foreseeable future that we will, have sufficient management
presence in Hong Kong for the purpose of satisfying the requirements under Rule 8.12 of the Listing
Rules.
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Accordingly, our Company has applied for, and the Stock Exchange has granted us, a waiver from
strict compliance with Rules 8.12 and 19A.15 of the Listing Rules, on the basis that our Company
implements the following arrangements to ensure there is an effective channel of communication
between our Company and the Stock Exchange:
(a) Authorised representatives : The chairman of our Board, executive Director, general
manager, Mr. Zhou, and our executive Director, Board secretary, Dr. Chai, have been
appointed to act as the authorised representatives of our Company (the “ Authorised
Representatives ”) for the purpose of Rule 3.05 of the Listing Rules, who will act as our
principal channel of communication with the Hong Kong Stock Exchange and would be
readily contactable by phone, facsimile and email to deal promptly with enquiries from the
Hong Kong Stock Exchange. The Authorised Representatives possess valid travel documents
and are able to renew such travel documents when they expire in order to visit Hong Kong,
and accordingly, they will be available to meet with the Hong Kong Stock Exchange to
discuss any matters on short notice;
(b) Directors : each Director will provide his or her mobile phone number, office phone number,
facsimile number (if any) and email address to the Authorised Representatives of our
Company and the Stock Exchange. In the event that any Director expects to travel or
otherwise be out of the office, he or she will provide the phone number of the place of
accommodation to the Authorised Representatives.
Each of our Directors not ordinarily residing in Hong Kong possesses or can apply for valid
travel documents to visit Hong Kong and will be able to meet with the relevant members of
the Stock Exchange within a reasonable period of time;
(c) Compliance Adviser : our Company has appointed China Harbour International Capital
Limited as our Compliance Adviser pursuant to Rule 3A.19 of the Listing Rules, who will,
among other things and in addition to the Authorised Representatives and our Directors, also
act as an additional channel of communication with the Stock Exchange for at least a period
from the Listing Date to the date when our Company complies with Rule 13.46 of the
Listing Rules in respect of our financial results for the first full financial year immediately
following the Listing Date. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance
Adviser will have access at all times to our Authorised Representatives, Directors and senior
management. We shall also ensure that our Authorised Representatives, Directors and senior
management will promptly provide such information and assistance as the Compliance
Adviser may need or may reasonably require in connection with the performance of the
Compliance Adviser’s duties as set forth in Chapter 3A of the Listing Rules. We shall ensure
that there are adequate and efficient means of communication among our Company,
Authorised Representatives, Directors, senior management and the Compliance Adviser, and
will keep the Compliance Adviser fully informed of all communications and dealings
between the Stock Exchange and us.
Any meeting between the Stock Exchange and our Directors will be arranged through the
Authorised Representatives or the Compliance Adviser or directly with our Directors within
a reasonable time frame. We will inform the Stock Exchange promptly in respect of any
changes in our Authorised Representatives and/or our Compliance Adviser; and
(d) Legal Advisers : we will also engage legal advisers to advise on compliance requirements as
well as other issues arising under the Listing Rules and other applicable laws and regulations
of Hong Kong.
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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors (including any proposed Director who is named as such
in this prospectus) collectively and individually accept full responsibility, includes particulars given in
compliance with the Companies (WUMP) 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 Company. 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 aspects and is not misleading or deceptive, and there
are no other matters the omission of which would make any statement herein or this prospectus
misleading.
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering which
forms part of the Global Offering. For applicants under the Hong Kong Public Offering, this prospectus
set out the terms and conditions of the Hong Kong Public Offering.
The Listing is sponsored by the Joint Sponsors. The Hong Kong Public Offering will be fully
underwritten by the Hong Kong Underwriters under the terms of the Hong Kong Underwriting
Agreement. The Global Offering is managed by the Overall Coordinators. The International Placing will
be fully underwritten by the International Underwriters under the terms of the International
Underwriting Agreement. For further information about the Underwriters and the underwriting
arrangements, please see the section headed “Underwriting” in this prospectus.
RESTRICTIONS ON OFFER AND SALE OF OFFER SHARES
No action has been taken to permit a public offering of the Offer Shares or the distribution of this
prospectus in any jurisdiction other than Hong Kong. Accordingly, this prospectus may not be used for
the purpose of, and does not constitute, an offer or invitation, nor is it calculated to invite or solicit
offers in any jurisdiction or in any circumstances in which such an offer or invitation is not authorised
or to any person to whom it is unlawful to make such an offer or invitation. The distribution of this
prospectus and the offering of the Offer Shares in other jurisdictions are subject to restrictions and may
not be made except as permitted under the securities laws of such jurisdiction pursuant to registration
with or an authorisation by the relevant securities regulatory authorities or an exemption therefrom. In
particular, the Offer Shares have not been offered and sold, and will not be offered or sold, directly or
indirectly in the United States, except in compliance with the relevant laws and regulations of such
jurisdiction.
INFORMATION ON THE GLOBAL OFFERING
The Offer Shares are offered to the public in Hong Kong for subscription solely on the basis of
the information contained and the representations made in this prospectus. No person is authorised in
connection with the Global Offering to give any information or to make any representation not
contained in this prospectus, and any information or representation not contained in this prospectus
must not be relied upon as having been authorised by our Company, the Joint Sponsors, the
Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Underwriters or the Capital Market Intermediaries, any of
their respective directors, agents, employees or advisers or any other persons involved in the Global
Offering.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Each person acquiring the Global Offering will be required, and is deemed by his or her
acquisition of the Offer Shares, to confirm that he or she is aware of the restrictions on offers of the
Offer Shares described in this prospectus and that he or she is not acquiring, and has not been offered
any Offer Shares in circumstances that contravene any such restrictions.
Prospective applicants for the Offer Shares should consult their financial advisers and take legal
advice, as appropriate, to inform themselves of, and to observe, all applicable laws and regulations of
any relevant jurisdiction. Prospective applicants for the Offer Shares should inform themselves as to the
relevant legal requirements of applying for the Offer Shares and any applicable exchange control
regulations and applicable taxes in the countries of their respective citizenship, residence or domicile.
APPLICATION FOR LISTING OF THE H SHARES ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the listing of, and
permission to deal in, our H Shares in issue and to be issued as mentioned in this prospectus.
No part of our H Shares is listed on or dealt in on any other stock exchange and no such listing or
permission to list is being or currently proposed to be sought in the near future.
H SHARE REGISTER OF MEMBERS AND STAMP DUTY
All H Shares issued pursuant to applications made in the Hong Kong Public Offering and the
Global Offering will be registered on our Company’s H Share register of members to be maintained by
our H Share Registrar, Tricor Investor Services Limited, in Hong Kong. We will maintain our
Company’s principal register of members at our current registered office in the PRC.
Dealings in our H Shares registered in the H Share register of members of our Company in Hong
Kong will be subject to Hong Kong stamp duty. The current rate of stamp duty in Hong Kong is 0.2%
of the consideration or, if higher, the market value of the H Shares being sold or transferred.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
We have instructed our H Share Registrar, and our H Share Registrar has agreed, not to register
the subscription, purchase or transfer of any H Shares in the name of any particular holder unless and
until such holder delivers a signed form to our 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, the Overseas Listing Trial Measures and our
Articles of Association;
 agrees with us, each of our Shareholders, Directors, managers and officers, and we, acting
for ourselves and for each of our Directors, managers and officers agree with each of our
Shareholders, to refer all differences and claims arising from our Articles of Association or
any rights or obligations conferred or imposed by the PRC Company Law or other relevant
laws and administrative regulations concerning our affairs to arbitration, and any reference
to arbitration shall be deemed to authorise the arbitration tribunal to conduct hearings in
open session and to publish its award, which arbitration shall be final and conclusive;
 agrees with us and each of our Shareholders that the H Shares are freely transferable by the
holders thereof; and
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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 authorises us to enter into a contract on his or her behalf with each of our Directors,
managers and officers whereby such Directors, managers and officers undertake to observe
and comply with their obligations to our Shareholders as stipulated in our Articles of
Association. Persons applying for or purchasing H Shares under the Global Offering are
deemed, by their making an application or purchase, to have represented that they are not
associates of any of our Directors, or existing Shareholder or a nominee of any of the
foregoing.
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 the H Share register of our Company in
Hong Kong and sent by ordinary post, at the Shareholders’ risk, to the registered address of each
Shareholder.
According to the Business Guide of the Shenzhen subsidiary of China Securities Depository and
Clearing Corporation Limited to the “Full Circulation” of H shares promulgated by Shenzhen subsidiary
of CSDC and effective from 23 September 2024, cash dividends to domestic investors of H-share “full
circulation” shall be distributed through Shenzhen subsidiary of CSDC. A H-share listed company shall
transfer RMB cash dividends to the designated bank account of the Shenzhen subsidiary of CSDC,
which shall complete the clearing of cash dividends by distributing the cash dividends to investors
through domestic securities companies.
PROFESSIONAL TAX ADVICE RECOMMENDED
If you are unsure about the taxation implications of subscribing for, or purchasing, holding or
disposing of or dealing in the Offer Shares, you should consult your professional advisers. None of our
Company, the Joint Sponsors, Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital Market
Intermediaries, their respective directors, agents, employees or advisers and any other persons involved
in the Global Offering accepts responsibility for any tax effects on, or liability of, any person or holders
of H Shares resulting from subscribing for, purchasing, holding or disposing of or dealing in the Offer
Shares.
PROCEDURE FOR APPLICATION FOR THE HONG KONG OFFER SHARES
The procedure for application for the Hong Kong Offer Shares is set out in the section headed
“How to Apply for Hong Kong Offer Shares” in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Offering, including conditions of the Global Offering, are set out in
the section headed “Structure and Conditions of the Global Offering” in this prospectus.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the Stock
Exchange and we comply with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect
from the date of commencement of dealings in the H Shares on the Stock Exchange or such other date
HKSCC chooses. Investors should seek the advice of their stockbroker or other professional advisers
for details of those settlement arrangements as such arrangements will affect their rights, interests and
liabilities.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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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 necessary arrangements have been made for the H Shares to be admitted to CCASS.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC Operational
Procedures in effect from time to time.
COMMENCEMENT OF DEALINGS IN THE H SHARES
Dealings in the H Shares on the Stock Exchange are expected to commence at 9:00 a.m. on
Monday, 22 June 2026.
The H Shares will be traded in board lots of 500 H Shares each. The stock code for the H Shares
is 1392.
FILING PROCEDURES WITH THE CSRC
Our filing procedures with the CSRC for the submission of the application to list our H Shares on
the Hong Kong Stock Exchange and for the Global Offering were completed on 30 January 2026. In
completing such filing, the CSRC accepts no responsibility for our financial soundness, nor for the
accuracy of any of the statements made or opinions expressed in this Prospectus. No other filings in the
PRC are required to be completed for the listing of the H Shares on the Hong Kong Stock Exchange.
ROUNDING
Unless otherwise stated, all the numerical figures are rounded to one decimal place. Any
discrepancies in any table or chart between totals and sums of amounts listed therein are due to
rounding.
LANGUAGE
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail. If there is any inconsistency between the names of any of the
entities mentioned in this prospectus which are not in the English language and their English
translations, the names in their respective original languages shall prevail.
EXCHANGE RATES CONVERSION
For illustrative purpose only, unless otherwise indicated, this prospectus contains translations
among certain amounts denominated in Hong Kong dollars and Renminbi, at the following rate:
HK$1 to RMB0.86986
For exchange rates translations throughout this prospectus (if any), we make no representations
and none should be construed as being made, that any of Hong Kong dollars, and Renminbi contained
in this prospectus could have been or could be converted into amounts of any other currencies at any
particular rate or at all on such date or any other date.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–5 7–


--- page 66 ---
DIRECTORS
Name Residential Address Nationality
Executive Directors
Mr. Zhou Bo (تRoom A-1313, Xinyu Garden
Qianhai Road
Nanshan District
Shenzhen, Guangdong
PRC
Chinese
Mr. Miao Rui (๿) Room 2502, Block B
Building 1, Tianxia Emerald Pearl Garden
No. 5 Jinji Road, Nanshan District
Shenzhen, Guangdong
PRC
Chinese
Dr. Chai Jian (ᄏ) Room 4D, Unit 2
Block D, Building 1
Nanhang Mingzhu
Hangcheng Street
Bao’an District
Shenzhen, Guangdong
PRC
Chinese
Mr. Zou Xiaogang (࡝A-13D, Yuehai Building
Longcheng Road, Nanhai Avenue
Nanshan District
Shenzhen, Guangdong
PRC
Chinese
Mr. Chen Yonggang (࡝Room 35, 4/F
Unit 1, Building 1
No. 368 Jing’an Road
Jinjiang District
Chengdu, Sichuan
PRC
Chinese
Non-executive Directors
Mr. Yu Lijie (؏No. 1010 Shangbu Road
Futian District
Shenzhen, Guangdong
PRC
Chinese
Independent non-executive
Directors
Mr. Chen Haiping ( ௓ऎ̻) Apartment A, No. 2 South Yanta Road
Yanta District
Xi’an, Shaanxi
PRC
Chinese
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 67 ---
Name Residential Address Nationality
Mr. Zhong Luhuan ( ᒤ௔ᛇ) Room 501, No. 37, Lane 2777
Langu Road, Gaohang Town
Pudong New Area, Shanghai
PRC
Chinese
Ms. Ho Ka Cin Verona
(࠺)
Flat 1B, Maryland Court
3 Magnolia Road
Yau Yat Chuen
Kowloon
Hong Kong
Chinese
(Hong Kong)
For further information regarding our Directors, please see the section headed “Directors and
Senior Management” of this prospectus.
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors CMBC International Capital Limited
34/F, One Exchange Square
8 Connaught Place
Central, Hong Kong
SPDB International Capital Limited
33/F, SPD Bank Tower
1 Hennessy Road
Hong Kong
Financial adviser China Harbour International Capital Limited
23A/F, YF Life Centre
38 Gloucester Road
Wanchai, Hong Kong
Sponsor-Overall Coordinators, Overall
Coordinators, Joint Global
Coordinators, Joint Bookrunners,
Joint Lead Managers and Capital
Market Intermediaries
CMBC Securities Company Limited
34/F, One Exchange Square
8 Connaught Place
Central, Hong Kong
SPDB International Capital Limited
33/F, SPD Bank Tower
1 Hennessy Road
Hong Kong
Overall Coordinator, Joint Global
Coordinator, Joint Bookrunner, Joint
Lead Manager and Capital Market
Intermediary
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon, Hong Kong
Joint Bookrunners, Joint Lead Managers
and Capital Market Intermediaries
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central, Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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CEB International Capital Corporation Limited
34/F−35/F, Everbright Centre
108 Gloucester Road
Wan Chai, Hong Kong
China Harbour International Securities Limited
23A/F, YF Life Centre
38 Gloucester Road
Wanchai, Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central, Hong Kong
DL Securities (HK) Limited
DL Tower 21/F
92 Wellington Street
Central, Hong Kong
Huafu International Securities Limited
Units 2603−2606, 26/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan, Hong Kong
Skyvast Securities Limited
Flat 3304, 33/F, Bank Of America Tower
12 Harcourt Road
Central, Hong Kong
Somerley Capital Limited
20/F China Building,
29 Queen’s Road Central
Hong Kong
Yuen Meta (International) Securities Limited
2601, 26/F, Wanchai Central Building
89 Lockhart Road
Wanchai, Hong Kong
Yunfeng Securities Limited
Rooms 1803−1806, 18th Floor
YF Life Centre, 38 Gloucester Road
Wanchai, Hong Kong
Zheshang International Financial Holdings Co.,
Limited
1703−1706, 17/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan, Hong Kong
Zhongtai International Securities Limited
19/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Legal advisers to our Company As to Hong Kong law
AllBright Law (Hong Kong) Offices LLP
in association with Stevenson, Wong & Co.
Units 1801−08 & 1810, 18/F, Gloucester Tower
The Landmark, 15 Queen’s Road Central
Hong Kong
Stevenson, Wong & Co. in association with
AllBright Law (Hong Kong) Offices LLP
Units 1801−08 & 1810, 18/F, Gloucester Tower
The Landmark, 15 Queen’s Road Central
Hong Kong
As to PRC law
AllBright Law Offices (Shenzhen)
21, 22, 23/F, Excellence Century Centre
Fu Hua 3 Road
Futian District
Shenzhen, PRC
As to PRC data compliance law
AllBright Law Offices (Shanghai)
9/F, 11/F, 12/F
Shanghai Tower
501 Yincheng Middle Road
Pudong New Area
Shanghai, PRC
As to U.S. export controls and sanctions
DeHeng Law Offices
12th Floor, Tower B
Focus Place, No. 19 Finance Street
Xicheng District
Beijing, PRC
Legal advisers to the Joint Sponsors and
the Underwriters
As to Hong Kong law
Loeb & Loeb LLP
2206−19 Jardine House
1 Connaught Place
Central, Hong Kong
As to PRC law
Jia Yuan (Shenzhen) Law Offices
45/F, Guangdian Financial Center
Pengcheng First Road
Futian District
Shenzhen, PRC
Auditors and reporting accountants Confucius International CPA Limited
Rooms 1501-8, 15/F
Tai Yau Building
181 Johnston Road
Wanchai, Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 70 ---
Industry consultant Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Room 2504, Wheelock Square
No. 1717 West Nanjing Road
Jing’an District
Shanghai, PRC
Compliance adviser China Harbour International Capital Limited
23A/F, YF Life Centre
38 Gloucester Road
Wanchai, Hong Kong
Receiving Bank Bank of Communications (Hong Kong) Limited
Unit B B/F & G/F, Unit C G/F, 1-3/F,
16/F Room 01 & 18/F
Wheelock House
20 Pedder Street, Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Registered office, headquarters and
principal place of business in the PRC
3/F, Building 8
Taihua Wutong Industrial Park
Gushu Development Zone
Xixiang Street, Bao’an District
Shenzhen
PRC
Principal place of business in Hong
Kong
Room 1802, 18th Floor
Ruttonjee House, Ruttonjee Centre
11 Duddell Street
Central, Hong Kong
Joint company secretaries Dr. Chai Jian (ᄏ)
Room 4D, Unit 2
Block D, Building 1
Nanhang Mingzhu
Hangcheng Street
Bao’an District
Shenzhen, Guangdong
PRC
Ms. Lui Mei Ka (ྗ) (HKICP A)
Flat A, 10/F
Tower 2
Providence Bay Phase 1
5 Fo Chun Road
Tai Po District
Hong Kong
Authorised representatives Mr. Zhou Bo (ت)
Dr. Chai Jian (ᄏ)
Strategy and Sustainable Development
Committee
Mr. Zhou Bo (ت)Chairperson)
Mr. Miao Rui (๿)
Ms. Ho Ka Cin Verona (࠺)
Audit Committee Mr. Chen Haiping ( ௓ऎ̻) (Chairperson)
Ms. Ho Ka Cin Verona (࠺)
Mr. Yu Lijie (؏)
Remuneration and Appraisal Committee Mr. Chen Haiping ( ௓ऎ̻) (Chairperson)
Ms. Ho Ka Cin Verona (࠺)
Mr. Miao Rui (๿)
Nomination Committee Mr. Chen Haiping ( ௓ऎ̻) (Chairperson)
Ms. Ho Ka Cin Verona (࠺)
Mr. Miao Rui (๿)
H Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre,
16 Harcourt Road,
Hong Kong
CORPORATE INFORMATION
–6 3–


--- page 72 ---
Principal banks China Everbright Bank Company Limited
18 Zizhu 7th Road
Zhuzilin 4th Road, Futian District
Shenzhen, PRC
China Merchants Bank Co., Ltd.
7088 Shennan Boulevard
Futian District, Shenzhen, Guangdong Province
PRC
China CITIC Bank Corporation Limited
Floors 5−10, North Tower,
Phase II, Zhuoyue Times Square
Zhongxin 3rd Road, Futian District
Shenzhen, PRC
Company website www.hqvt.com
(information on this website does not form part of
this prospectus)
CORPORATE INFORMATION
–6 4–


--- page 73 ---
The information and statistics set out in this section and other sections of this prospectus were
extracted from the report prepared by Frost & Sullivan, which was commissioned by us, and from
various official government publications and other publicly available publications. We engaged
Frost & Sullivan to prepare the F&S Report, an independent industry report, in connection with the
Global Offering. We believe that these sources are appropriate sources for such information and
statistics and reasonable care has been exercised by us in selecting and identifying the named
information sources, compiling, extracting and reproducing the information, and ensuring no
material omission of the information. The information from official government sources has not been
independently verified by us, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters, the Capital Market Intermediaries or any of our or their respective directors, senior
management, representatives or any other person involved in the Global Offering and no
representation is given as to its accuracy.
1. Overview of China’s Perceptual Intelligence Industry
 Definition and Classification of Perceptual Intelligence
Perceptual intelligence refers to technologies that emulate human perceptual faculties through the
application of artificial intelligence, particularly machine learning and computer vision, thereby
enabling machines to perceive, interpret and respond to their surroundings via sensors and other
devices. Based on the classification method of emulated human sensory, perceptual intelligence can be
categorised into visual, auditory, tactile, olfactory and gustatory perceptions.
 Market Size of China’s Perceptual Intelligence Industry
As the connection and interaction between AI and the physical world deepens, the perceptual
intelligence industry continues to expand at a rapid pace. The market size of perceptual intelligence in
China increased from RMB200.1 billion in 2020 to RMB337.0 billion in 2025, with a CAGR of 11.0%
during the period. With continued technological advances and further commercialisation in the future,
the overall market growth rate is expected to further increase, and the market size is expected to surge
to RMB695.2 billion in 2030, with a CAGR of 15.6%.
In 2025, visual perception remains dominant in the perceptual intelligence market, accounting for
65.0% of the total market size. The market size for visual perception can be categorised by product
form factor/delivery model. Vision AI modules represent one such product form; in addition to vision
AI modules, other products include: integrated systems (terminals), industrial cameras, optics products,
lighting systems, software, processor boards and other accessories, etc.. Visual perception is expected to
maintain its position, supported by its technological maturity and application base.
65.0%
22.0%
13.0%
China’s Market Share of Perceptual Intelligence Segments (2025)
Auditory
Visual
Others
Source: Frost & Sullivan, China Machine Vision Union (CMVU)
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 Development Trends of Perceptual Intelligence
Expanding Sensory Boundaries: the perceptual scope of perceptual intelligence is increasingly
surpassing human sensory limits. Taking visual perception as an example, multispectral imaging
technology breaks through the limitations of human visible light perception and enables the capture of
non-visible spectra such as ultraviolet, infrared and terahertz spectra, and then interprets data from
beyond human perception with AI algorithms. For example, early signs of mechanical failure can be
identified from infrared thermal imaging data, or molecular signatures of substances can be extracted
from terahertz spectroscopy.
Comprehensive Analysis of Multimodal Data: single-modal analysis is difficult to cope with
complex scenarios. The industry tends to build cross-modal feature integration models by using AI
algorithms to fuse diverse data types, such as infrared, ultraviolet, visible light, acoustic spectra,
electrical signals and others. For example, in industrial risk monitoring, AI can simultaneously analyse
spectral images and acoustic signatures from equipment operation to accurately identify early signs of
mechanical failure.
Integration of receiving, sensing, processing and judgement capabilities as a key competitive
factor: the combination of edge computing and on-device AI is propelling a shift of multispectral
imaging systems from “data acquisition–cloud analysis” to “real-time local closed-loop”. Leading
enterprises are embedding AI algorithms directly into on-device modules, enabling integrated
“reception, perception, processing and judgement” of multispectral data. In 2025, for instance,
embedded AI modules in smart terminals for multi-scenario safety enabled swift multispectral image
analysis and early warnings, reducing latency by 90% compared to traditional cloud-based solutions.
 Key Downstream Applications of Perceptual Intelligence
The multi-scenario safety and robotics markets are key downstream applications of perceptual
intelligence, as they require highly reliable perception in complex environments. The multi-scenario
safety sector is a demand-driven market encompassing diverse application areas such as fire safety,
food safety, urban surveillance and industrial hazard prevention. It integrates advanced perception,
intelligent decision-making, and cost-effective deployment to enable real-time risk detection and rapid
response across complex environments. The robotics sector currently places higher demands on the
ability to perceive the physical world, which is a potential application scenario for perceptual
intelligence. The following diagram illustrates the market size of these emerging downstream industries
in the perceptual intelligence field:
1,304.1
364.5
RMB Billion
Market Size of the Multi-scenario Safety Sector,
China & ROW, 2025 & 2030E
270.9
884.1180.6
541.9
2025 2030E
451.6
1,425.9
RMB Billion
Market Size of the Robotics Sector,
China & ROW, 2025 & 2030E
2025 2030E
552.3
2,137.8
China
ROW
China
ROW
CAGR 2025-2030E
Total
CAGR 2025-2030E
Total
833.8
187.8
Source: Frost & Sullivan, National Bureau of Statistics of China, Annual Reports
INDUSTRY OVERVIEW
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2 Overview of China’s Multispectral AI Industry
2.1 Definition of Multispectral AI
 Multispectral AI technology refers to the integration of multispectral signal acquisition including
ultraviolet, infrared, and visible light with perception, spectral modelling, and intelligent
computing into a unified system. It enables on-device closed-loop processing from data capture to
preliminary reasoning, offering ultra-wide spectral sensing and high sensitivity, while also
supporting cloud-based services for centralised model training, data aggregation, and remote
optimisation.
 With the features of perception-computing integration, localised decision-making, low power
consumption and high safety, this technology is widely used in fire safety, industrial hazard
prevention and other complex scenarios. To meet diversified business needs, three business
models have been formed, namely, modules, large model services and perception terminals,
enabling a closed-loop delivery from algorithms to products.
2.2 Classifications of Multispectral AI
 Multispectral AI Modules: embedded AI vision modules designed to capture information across
multiple spectral bands, including infrared, ultraviolet, and visible light, enabling simultaneous
multispectral data acquisition and overcoming the perceptual limits of traditional visible-light
imaging. By integrating AI algorithms for multi-band data fusion and analysis, the module enables
high-dimensional perception and on-device decision-making in complex environments. It is widely
used in refined scenarios requiring precise recognition of information such as material
composition, temperature changes, and hidden defects.
 Multispectral AI Large Model Services: multispectral AI large-model services integrate
multispectral data with domain-specific AI to support training, compression, and secure on-device
deployment. Built on a unified architecture, the services enable cross-band imaging, analysis, and
efficient local reasoning adapted to the complex needs of the multi-scenario safety sector.
 Multispectral AI Perception Terminals: multispectral AI perception terminals is an intelligent
terminal device integrating spectral imaging and AI algorithms, capable of capturing data across
multiple spectral bands for enhanced perception and understanding of object characteristics. It
combines optical components, sensors, local storage, and AI processing to enable on-device
imaging, analysis, recognition, and reasoning.
Its main target customers are industry solution integrators and enterprise customers. Multispectral
AI companies directly sell front-end perception devices in integrated software-hardware form,
which are capable of on-device integrated computing and perception capabilities.
 The core values of multispectral AI compared to visible light vision include:
Rich Data Dimensions : multispectral imaging captures object information across diverse spectral
bands, such as infrared, ultraviolet and visible light. Compared with traditional single-spectrum
imaging, it can capture more comprehensive and detailed spectral features. When coupled with AI deep
learning algorithms, the spectral data can be efficiently processed and analysed.
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High-Precision Recognition : the combination of multispectral data and AI algorithms enables
highly accurate object recognition. In 2025, in the multi-scenario safety sector, the AI multispectral fire
warning platform uses ultraviolet light, infrared thermal imaging and visible light to conduct
multi-spectrum monitoring, which can detect early signs of ignition, electric arcs and abnormal heat
spikes 10-20 minutes in advance, with false alarms reduced by 90%.
Real-Time Responsiveness : the integration of multispectral data with AI enables rapid analysis
and decision-making, as demonstrated by the fire warning platform’s early detection capabilities. This
supports time-critical applications in healthcare, and industrial monitoring.
2.3 Analysis of Multispectral AI Industry Chain
 The industrial chain of multispectral AI covers upstream suppliers of core materials and key
components, midstream multispectral companies offering diverse multispectral AI technological
services, and downstream industry applications, all of which collaborate closely.
 The upstream segment provides critical components for devices and platform software, including
precision mechanical parts, image sensors, optical elements, imaging modules, computing units,
and AI chips.
 The midstream segment comprises multispectral AI technology companies who mainly provide
technical services tailored to various customer needs, including Multispectral AI Modules,
multispectral perception terminals, multispectral AI algorithms and large model services.
 The downstream segment includes the primary application scenarios of multispectral AI, such as
fire detection, food quality management, skin diagnostics, and embodied intelligence, and serves
key customer groups including system integrators and enterprise-level users.
 As multispectral AI is increasingly applied in areas such as multi-scenario safety, the industry is
moving toward vertical integration across the perception, understanding, and decision chain. This
shift is fostering a comprehensive closed-loop system from optical imaging to algorithm-driven
intelligence, encompassing full-chain capabilities that span the entire process from optical
components and signal acquisition to data processing, analysis, and decision-making.
澳
Source: Frost & Sullivan
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2.4 Market Size of China’s Multispectral AI Market
 In recent years, the market of China’s multispectral AI industry has experienced sustained growth.
The China’s multispectral AI market increased from RMB6.3 billion in 2020 to RMB20.0 billion
in 2025, with a CAGR of 26.0% during the period. Driven by technological advances, this
momentum is expected to accelerate further, and the market size is expected to surge to RMB79.4
billion in 2030, with a CAGR of 31.8%.
 The market of China’s multispectral AI modules industry increased from RMB2.5 billion in 2020
to RMB5.5 billion in 2025, with a CAGR of 17.1% during the period. Driven by technological
advances, this momentum is expected to accelerate, and the market size is expected to surge to
RMB20.2 billion in 2030, with a CAGR of 29.7%.
 China’s multispectral AI large model services market has grown rapidly, increasing from RMB0.3
billion in 2020 to RMB1.5 billion in 2025, with a CAGR of 38.0% during the period. Driven by
technological advances, this momentum is expected to accelerate further, and the market size is
expected to surge to RMB8.4 billion in 2030, with a CAGR of 41.1%.
 Downstream applications of multispectral AI are primarily found in multi-scenario safety sector,
which encompass common requirements for quality and safety across a variety of sub-scenarios.
These can be further subdivided into areas such as security and disaster prevention, industrial
quality inspection, healthcare, and food safety. Among these, security and disaster prevention
represent the most mature sub-scenarios, specifically including fire detection and hazardous
material detection in urban areas, energy facilities, data centres, and commercial premises. In
addition to multi-scenario safety sector, multispectral AI is also being continuously applied in the
perception layer of autonomous driving and embodied intelligence, helping vehicles and robots to
better understand the physical world. China’s multispectral AI perception terminals market
increased from RMB3.5 billion in 2020 to RMB12.9 billion in 2025, with a CAGR of 29.8%
during the period. With the continuous expansion of downstream application scenarios, this
momentum is expected to accelerate further, and the market size is expected to surge to RMB50.8
billion in 2030, with a CAGR of 31.5%.
0.30.3
20.2
15.3
11.6
8.9
7.0
5.5
8.06.15.0
Multispectral AI Market Size in China, 2020–2030E
2.53.5
2020
2.94.1
2021
0.5 3.3
2022
0.6 3.8
2023
1.04.5
2024 2025 2026E 2027E 2028E 2029E 2030E
6.3 7.4 8.8 10.6 13.5
RMB Billion
Multispectral AI Large Model Services
Multispectral AI Modules
Multispectral AI Perception Terminals
CAGR 2020-2025 2025-2030E
Total
8.4
50.8
20.2
79.4
6.0
37.5
15.3
58.8
27.7
11.6
4.3
43.6
21.3
8.9
3.0
33.3
16.5
7.0
25.7
2.2
12.9
5.5 1.5
20.0
Source: Frost & Sullivan, China Machine Vision Union (CMVU), Annual Reports
2.5 Overview of the Overseas Multispectral AI Market
Driven by increasing demand for sensing capabilities across industries such as security, industrial
applications and healthcare, the global multispectral AI market has experienced rapid growth in recent
years. The global multispectral AI market increased from RMB34.8 billion in 2020 to RMB85.0 billion
INDUSTRY OVERVIEW
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in 2025 and is expected to reach RMB305.4 billion by 2030, representing a CAGR of 29.1% during the
forecast period. Market demand for multispectral AI is growing rapidly worldwide, which is driven by
the growth of the major regions, mainly, China, North America, Europe and South-East Asia. The chart
below shows the market size and forecast growth rates for major regions worldwide.
Source: Frost & Sullivan, Annual Reports
 North America Market
Market demand in North America comes mainly from the United States. There are a significant
number of multispectral AI companies in the United States, totalling more than 150, including business
units of large technology groups, medium-sized multispectral AI firms, and a number of specialist
start-ups. The North American multispectral AI market is characterised by strengths in sensor
technologies, optical components and AI algorithms, while remaining relatively less advanced in the
design and customisation of end-user hardware products.
 Europe Market
In Europe, Germany, France and the United Kingdom account for the bulk of market demand,
whilst countries such as Finland and the Netherlands possess a competitive edge in multispectral
technology. There are around 60 to 80 multispectral AI companies in the European market, which hold
a competitive edge in optical imaging technology.
 Southeast Asia Market
Within the Southeast Asian market, Indonesia, Thailand, Vietnam and Malaysia are developing at
a relatively faster pace, whilst Singapore is the most technology-intensive country in the region. There
are no more than 30 multispectral AI companies in the Southeast Asian market, the majority of which
rely on sourcing core multispectral technology from other developed markets to integrate into their
solutions.
2.6 Introduction and Market Size of AI Vision Modules
 AI vision modules refer to compact intelligent chip modules integrating image sensors, processors,
software algorithms and interface components. Depending on the technology routes of integrated
perception technology, it can be divided into multispectral AI modules and other AI vision
modules.
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➢ Multispectral AI Modules: embedded AI vision modules designed to capture information
across multiple spectral bands, including infrared, ultraviolet, and visible light, enabling
simultaneous multispectral data acquisition and overcoming the perceptual limits of
traditional visible-light imaging.
➢ Other AI Vision Modules: designed for visible-light perception, these compact intelligent
chip modules integrate image acquisition, on-device computing, and AI analysis.
Other Al Vision Modules Multispectral Al Modules
Simple examples of
recognition
ability .........
“This apple is red and round.”
“This metal part looks scratched.”
“This apple is starting to rot even
though it looks fine.”
“This material has changed slightly
even if the surface looks perfect.”
Functionality ..... Use three RGB channels with mature
and efficient model architectures.
Limited identification under
low-visibility conditions.
Capture multispectral information,
enabling fusion across multiple
bands.
Enhanced identification under
low-visibility conditions.
Applications ...... Used for common visual task
scenarios such as target recognition
Used in the multi-scenario safety
sector like fire risk perception or
food and material detection.
Source: Frost & Sullivan, China Machine Vision Union (CMVU)
 Market Size of China’s AI Vision Modules
➢ The market of China’s AI vision module industry increased from RMB22.6 billion in 2020 to
RMB38.1 billion in 2025, with a CAGR of 11.0% during the period. This momentum is
expected to accelerate further in the future, and the market size is expected to increase to
RMB98.3 billion in 2030, with a CAGR of 20.9%.
2.7 Key Drivers and Development Trends of Multispectral AI Industry
 Integrated technological capabilities as the core competitive advantage: multispectral AI is
transitioning from an early-stage module-based segmented product model to a full-chain model
with system integration capabilities. Companies who have full-chain capabilities in embedded
modules, large models and integrated hardware terminals possess greater delivery flexibility,
broader customer reach and more integrated technical solutions, and will have unique advantages
in the future industry through platformisation and integrated delivery.
 Miniaturisation of computing power: the core element lies in delivering superior application
performance at lower cost and reduced computing power requirements. For example, leading
companies use underlying C-language optimisation and task decomposition capabilities to
eliminate redundant images and avoid invalid calculations, thereby significantly reducing
computing power requirements.
 Sensor integration: improvements in sensor integration and optical stacking allow ultraviolet,
infrared, and other visible spectra to be combined within compact, low-power modules, enabling
multispectral perception to be deployed across consumer, industrial and automotive terminals.
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 Edge AI computing architectures: advancements in edge AI computing architectures —
including lightweight neural networks, on-device computing and high-efficiency DSP/NPU
designs — enable real-time fusion of multispectral data, significantly enhancing performance in
scenarios such as low-light imaging, material recognition and safety monitoring.
 Rising degree of customisation is adapting to complex industrial scenarios: in the field of
multispectral AI, the growing demand for customised solutions is driving customised services to
become a mainstream trend. In 2024, 55% of multispectral AI large model applications adopted
customised delivery models, primarily serving large enterprises and other types of users.
2.8 On-device AI Technology and Cloud-Edge-Device Architecture
The adoption of on-device AI technology and cloud-edge-device architecture is one of the
important features of multispectral AI. The cloud-edge-device architecture is a distributed model that
integrates cloud computing, edge computing and terminal devices. The cloud typically undertakes
complex computations and large-scale data storage, such as AI model training. The edge layer handles
real-time local analysis, including industrial quality inspection and fire warnings. The terminal layer is
further divided into personal terminals (such as smart speakers, smartphones and smart office devices)
and industry-specific terminals (including industrial sensors, robotics and surveillance equipment).
On-device AI technology enables the deployment of artificial intelligence capabilities onto a wide array
of terminal devices such as sensors and IoT endpoints, empowering them with localised data processing
and decision-making capabilities. This technology supports devices in executing AI tasks either
independently or in conjunction with the cloud, and allows for data processing at the data source, thus
reducing latency, enhancing privacy and optimising bandwidth usage while maintaining compatibility
with the cloud-based architecture.
Terminal Device
Personal Terminal
Industry Terminal
Smart
Speakers
Smartphones Smart
Office
Devices
Sensors Robots
Food & Drug
Residue Testing Monitoring
Edge Layer
Edge Infrastructure
Edge Manager
Cloud Computing Layer
Public Cloud / Private Cloud
SaaS / Network
Data Centres
Edge Gateway Lightweight AI Model
Edge Controller
Network Computing Storage
Data Lifecycle Management
Service Management
Resource Invocation
LLM
Servers
Database / Storage
Source: Frost & Sullivan, Expert Interview
2.9 Analysis of Component Prices
The key raw materials and components for multispectral AI products include microprocessors,
CMOS image sensors, printed circuit boards (PCBs), power management modules, optical elements,
precision mechanical parts, and imaging modules among others. Microprocessors and CMOS image
sensors are the most impactful cost items due to their higher cost contribution and price fluctuations. In
2024, microprocessors account for 15−30% of the product cost and CMOS image sensors account for
10−20% of the product cost.
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Historically, the price of microprocessors used in the multispectral field were relatively stable. As
the industry requirements for microprocessor technology capabilities increase and low-quality
production capacity is phased out, costs are expected to gradually return to an upward trend. This trend
will place higher demands on the supply chain negotiation capabilities of companies in the
multispectral AI industry.
60
55
50
45
40
35
30
25
51.2
48.7
46.4
44.2
42.1
40.1
28.9
37.5
42.8
2020 2021
31.0
2022 2023
30.2
2024 2025 2026E 2027E 2028E 2029E 2030E
Average Price of Microprocessors Applied in China’s Multispectral AI Industry, 2020-2030E
RMB/piece
Projected
Source: Frost & Sullivan, Expert Interview
The price of CMOS image sensors (CIS) in China experienced a gradual decline from
approximately RMB 13.1 per piece in 2020 to around RMB 12.1 per piece by 2025, but overall the
fluctuations at this price level are not significant. This downward trend was largely driven by intense
market competition and continuous improvements in production technology, which enabled
manufacturers to reduce costs and enhance efficiency. At the same time, the intensified trend of
domestic substitution has also brought about more intense price competition, causing prices to fall.
Domestic substitution refers to the accelerated replacement of imported CMOS image sensors (CIS)
with products supplied by Chinese manufacturers. This trend is driven by improvements in domestic
suppliers’ technology, increased supply chain security requirements and the need for cost-competitive
components across downstream applications. The intensified pace of substitution led to heightened
supply competition in the domestic market. Consequently, the average selling price of CIS decreased,
reflecting both capacity expansion and more aggressive pricing strategies associated with domestic
substitution. However, as the potential for further technological upgrades diminished by 2024, the rate
of cost reduction began to moderate. This stabilisation is expected to make costs more predictable and
manageable for multispectral AI companies, which rely on these sensors for various applications.
15.0
14.5
14.0
13.5
13.0
12.5
12.0
11.5
11.912.012.012.012.112.112.2
12.4
12.7
12.9
13.1
2020 2021 2022 2023 2024 2025 2026E 2027E 2028E 2029E 2030E
Average Price of CIS Applied in China’s Multispectral AI Industry, 2020-2030E
RMB/piece
Projected
Source: Frost & Sullivan, Expert Interview
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3 Market Competition Analysis
3.1 Rankings of Multispectral AI Enterprises in China
 In 2025, as measured by revenue, the Company ranked No. 1 among multispectral AI companies
in China, accounting for a market share of 3.3%. The following chart illustrates the market shares
of the top five market players.
1 The Company 657.0 3.3%
2 Company A 542.0 2.7%
3 Company B 180.0 0.9%
4 Company C 121.0 0.6%
5 Company D 103.0 0.5%
19,978.1 100%
Rankings of Multispectral AI Companies in China, by Revenue (2025)
Rank Name Revenue
(RMB million)
Market Share
(%)
Total
Source: Frost & Sullivan, Annual Reports, Expert Interview
* Multispectral AI enterprises: Companies with multispectral-related revenue accounting for 50% or more are defined as
multispectral AI companies.
Notes:
1. All figures in the above table have been rounded.
2. Company A, is a publicly listed company headquartered in the United States. It provides advanced sensing and imaging
solutions — including X-ray, infrared, multispectral, and industrial vision systems — serving sectors such as aerospace,
defence, healthcare, and industrial automation in the China market.
3. Company B, is a privately held company headquartered in China. It specialises in hyperspectral imaging systems and
intelligent spectral analysis technologies, serving applications in agriculture, food safety, environmental monitoring, and
industrial inspection.
4. Company C, is a privately held company headquartered in China. It focuses on the development of large language models
and generative AI platforms, enabling enterprise-level applications in education, research, finance, and public services.
5. Company D, is a privately held company headquartered in China. It develops edge AI vision systems including 3D and
depth-sensing cameras, supporting intelligent perception applications in robotics, smart vehicles, and industrial automation.
3.2 Rankings of Multispectral AI Modules Enterprises in China
 In 2025, as measured by revenue, the Company ranked No. 4 in the multispectral AI module
market in China, accounting for a market share of 3.8%. The following chart illustrates the market
shares of the top five market players.
1 Company A 530.0 9.6%
2 Company E 421.0 7.6%
3 Company F 352.0 6.4%
4 The Company 209.0 3.8%
5 Company B 165.0 3.0%
5,530.0 100.0%
Rank Name Revenue Market Share
(RMB million) (%)
Rankings of Multispectral AI Module Companies in China, by Revenue (2025)
Total
Source: Frost & Sullivan, Annual Reports, Expert Interview
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Notes:
1. All figures in the above table have been rounded.
2. Company E, is a publicly listed company headquartered in China. It develops CMOS image sensors widely used in
smartphones, surveillance, automotive electronics, machine vision, and consumer devices.
3. Company F, is a privately held regional branch of a Swiss company headquartered in China. It provides ARM-based
system-on-modules and embedded computing platforms for applications in industrial automation, medical equipment, and
transportation.
3.3 Rankings of Multispectral AI Large Model Services Enterprises in China
 In 2025, as measured by revenue, the Company ranked No. 1 in the multispectral AI large model
services market in China, accounting for a market share of 23.0%, demonstrating significant
market leadership. The following chart illustrates the market shares of the top five market players.
1 The Company 355.4 23.0%
2 Company G 113.0 7.3%
3 Company A 111.0 7.2%
4 Company C 98.0 6.3%
5 Company D 45.0 2.9%
1,545.1 100.0%
Total
Rankings of Multispectral AI Large Model Services Companies in China,
by Revenue (2025)
Rank Name Revenue
(RMB million) (%)
Market Share
Source: Frost & Sullivan, Annual Reports, Expert Interview
Notes:
1. All figures in the above table have been rounded.
2. Company G, is a publicly listed company headquartered in China. It develops foundational AI algorithms and platforms in
computer vision.
3.4 Rankings of Multispectral AI Perception Terminals Enterprises in China
In 2025, the Company ranked No. 4 in the multispectral AI perception terminal market in China,
accounting for a market share of 0.7%. The following chart illustrates the market shares of the top five
market players.
11 Company H 953.0 7.4%
2 Company I 634.0 4.9%
3 Company J 503.0 3.9%
4 The Company 92.6 0.7%
5 Company K 70.0 0.5%
12,903.0 100.0%
Rankings of Multispectral AI Perception Terminal Companies in China,
by Revenue (2025)
Rank Name Revenue
(RMB million) (%)
Market Share
Total
Source: Frost & Sullivan, Annual Reports, Expert Interview
Notes:
1. All figures in the above table have been rounded.
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2. Company H, is a publicly listed company headquartered in Wuhan, China. Its business covers military equipment,
industrial detection, public safety, and smart hardware.
3. Company I, is a privately held high-tech enterprise in ICT and smart devices filed, headquartered in Shenzhen, China. Its
business covers telecommunications, cloud computing, AI, and intelligent terminals.
4. Company J, is a publicly listed company headquartered in the United States. Its business covers industrial manufacturing,
safety systems, and energy efficiency.
5. Company K, is a privately held company headquartered in Hangzhou, China. Its business covers fire prevention, industrial
diagnostics, public safety, and smart sensing.
4 Market Entry Barriers
4.1 Technological Barrier
This industry integrates multiple disciplines such as optics, electronics, software development,
automatic control, digital image processing, artificial intelligence and pattern recognition, mechanical
design and manufacturing, and is a typical technology-intensive industry. Entry into this industry
requires not only high-end technical talents and management teams with the above expertise and
practical experience, but also relies on a large number of R&D personnel to promote technological
upgrades as well as process personnel to continuously optimise product quality. Meanwhile,
technological breakthroughs require long-term and continuous R&D investment. Currently, only leading
companies in the industry have strong independent innovation capabilities and can quickly respond to
market changes, develop high-quality new products and seize market opportunities, thus forming
significant technical barriers for new entrants.
4.2 Talent Barrier
This industry involves a wide range of disciplines, including mechanics, optoelectronics,
automation, computers and other basic disciplines. Therefore, companies require a large number of
R&D talents with complex backgrounds to achieve multidisciplinary integration.
In addition, due to the highly customised nature of products demands, R&D personnel need to
conduct feasibility assessments and develop process plans. The entire production process is
characterised by clear professional division, complex technology and strong system coordination.
Customised production imposes high talent requirements across technical R&D, after-sales support and
marketing. Relevant talent training and team building require long-term accumulation, thus forming a
significant talent barrier.
4.3 Capital Barrier
This industry is a capital- and technology-intensive industry, and its products involve high-tech. In
order to meet customers’ demand for precision and quality, products require continuous technological
iteration and rely on substantial R&D investment and financial support. Meantime, large-scale
production requires a large number of testing and process equipment, and a comprehensive sales and
service network requires considerable capital investment, thus forming a significant capital barrier.
4.4 Data Barrier
Multispectral AI data includes not only conventional image data, but also the original spectral
information collected in different bands. The collection of such data is costly and requires specialised
hardware and on-site deployment, along with professional annotation teams to construct scenario-based
semantic layers. Meantime, the high-dimensional nature of spectral data with more than hundreds of
dimensions makes data cleaning and augmentation more complicated. Long-term operating companies
have built proprietary data asset pools tightly coupled with model iteration through closed-loop data
collection and feedback mechanisms in real-world scenarios, thus forming a notable data entry barrier.
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4.5 Downstream Know-how Barriers
The application of multispectral AI technology in downstream industries relies heavily on the
long-term accumulation of industry-specific knowledge. Enterprises must have a profound
understanding of the downstream industry’s business processes, inspection standards, anomaly patterns,
and response mechanisms to achieve precise alignment between perception algorithms and scenario
requirements, thereby enhancing system practicality and robustness.
Additionally, customers often have differentiated needs for model customisation, interface
integration, and terminal adaptation, requiring technology providers to possess cross-industry
engineering experience and rapid response capabilities. Such experience cannot be acquired through
short-term imitation but must be gradually accumulated through long-term service to leading customers,
participation in scenario validation, and iterative optimisation. Leading enterprises build
industry-specific knowledge systems that are deeply intertwined with customer operations through
continuous project delivery, creating significant downstream know-how barriers that pose high entry
thresholds for new entrants.
SOURCES OF INFORMATION
This section includes information from the F&S Report, a report commissioned by us from Frost
& Sullivan, as we believe such information imparts a greater understanding of the industry. Frost &
Sullivan is a global consulting company and an independent third party. Frost & Sullivan provides
market research on a variety of industries, among other services. We have agreed to pay Frost &
Sullivan a total of RMB500,000 in fees for its commissioned undertakings, which we believe to be
consistent with market rates. We are of the view that the payment of such fee does not impair the
fairness of the conclusions drawn in the F&S Report.
In preparing the F&S Report, Frost & Sullivan performed both primary research which involved
conducting interviews with leading industry participants and experts and secondary research which
involved reviewing company reports, independent research reports and data based on Frost & Sullivan’s
research database. Frost & Sullivan also assumed that China’s economy is likely to maintain its steady
growth in the forecast period, and that China’s social, economic and political environment is likely to
remain stable in the forecast period.
DIRECTORS’ CONFIRMATION
After making reasonable inquiries, our Directors confirm that, to the best of their knowledge,
there has been no detrimental change in the market information demonstrated in the F&S Report since
the date of the report that may qualify, contradict or have an impact on the information in this
prospectus.
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This section sets out a summary of the laws and regulations which are relevant to the business
and operations of our Group. The principal objective of this summary is to provide potential
investors with an overview of the key laws and regulations applicable to us. This summary does not
purport to be a comprehensive description of all the laws and regulations applicable to our business
and operations and/or which may be important to potential investors. Investors should note that the
following summary is based on laws and regulations in force as at the date of this prospectus, which
may be subject to change.
PRC LA WS AND REGULATIONS
This section sets out a summary of the laws and regulations, which are relevant to the business
and operations of our Group.
Laws and Regulations in Relation to the Artificial Intelligence Industry
According to the Provisional Measures for the Administration of Generative Artificial Intelligence
Services () (the “ Interim Measures ”) jointly promulgated by the
Cyberspace Administration of China (the “ CAC”), the NDRC, the Ministry of Education, the Ministry
of Science and Technology, the Ministry of Industry and Information Technology, the MPS, and the
National Radio and Television Administration on 10 July 2023 and implemented on 15 August 2023,
services that use generative artificial intelligence technology to provide content generation of text,
images, audio, video and other content to the public within the territory are managed, and it stipulates
the obligations and responsibilities of providers in terms of technological development and governance,
service standards and other aspects. Any provider of generative artificial intelligence services with
attribute of public opinions or capable of social mobilisation shall conduct security assessment in
accordance with the relevant provisions of the State, and complete the formalities for algorithm filing,
change or deregistration in accordance with the Administrative Provisions on the Recommendation of
Internet-based Information Service Algorithms ().
According to the Administrative Provisions on Algorithm Recommendation for Internet
Information Services () promulgated by the CAC, the Ministry of
Industry and Information Technology, the MPS, and the SAMR on 31 December 2021 and implemented
on 1 March 2022, algorithmic recommendation service providers are required to disclose basic
principles, purposes and operating mechanisms, and prevent algorithmic discrimination or manipulation
of user choices and an algorithm recommendation service provider with public opinion attribute or
social mobilisation ability shall, within ten working days from the date of provision of services, fill in
such information as the service provider’s name, service form, application field, algorithm type,
algorithm self-assessment report and content to be disclosed via the internet information service
algorithm record-filing system to go through record-filing formalities.
According to the Administrative Provisions on Deep Synthesis of Internet-based Information
Services () promulgated by the CAC, the Ministry of Industry
and Information Technology, and the MPS on 25 November 2022 and implemented on 10 January 2023,
providers and users of deep synthesis services are regulated. Providers of deep synthesis services are
required to implement the main responsibility for information security management, establish and
improve management systems and technical safeguard measures, and ensure the security, legality and
compliance of deep synthesis services. Deep synthesis service providers with public opinion attributes
or social mobilisation capabilities, along with their technical supporters, shall comply with algorithmic
filing procedures as required by relevant regulations and prominently display their filing numbers with
accessible links on public-facing platforms.
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According to the Promulgation of the Measures for the Review of Sci-tech Ethics (for Trial
Implementation) (ج( ༊Б)) promulgated by the Ministry of Science and Technology,
the Ministry of Education, the Ministry of Industry and Information Technology, the Ministry of
Agriculture and Rural Affairs, the National Health Commission, the Chinese Academy of Sciences, the
Chinese Academy of Social Sciences, the Chinese Academy of Engineering, the China Association for
Science and Technology, and the Science and Technology Commission of the Central Military
Commission on 7 September 2023 and implemented on 1 December 2023, scientific and technological
activities utilising data and algorithms are clearly included in the review scope. Enterprises engaged in
artificial intelligence and other technological activities should be subject to scientific and technological
ethics review.
According to the Guiding Opinions on Accelerating Innovation in Scenarios to Promote High-level
Economic Development through High-level Application of Artificial Intelligence (̋Ҟఙ౻௴อ
ኬจԈ ) promulgated and implemented by the
Ministry of Science and Technology, the Ministry of Education, the Ministry of Industry and
Information Technology, the Ministry of Transport, the Ministry of Agriculture and Rural Affairs, and
the National Health Commission on 29 July 2022, the state takes promoting the deep integration of
artificial intelligence with the real economy as the main line, takes promoting the opening of scenario
resources and enhancing scenario innovation capabilities as the direction, strengthens entity cultivation,
increases application demonstration, innovates institutional mechanisms, improves scenario ecology,
accelerates artificial intelligence technology research, product development and industrial cultivation,
explores new models and new paths for artificial intelligence development, and promotes high-quality
economic development with high-level application of artificial intelligence.
The NPC promulgated and implemented the Outline of the 14th Five-Year Plan (2021-2025) for
National Economic and Social Development and Long-Range Objectives for 2035 ( ʕശɛ͏΍ձ਷਷
ʞϋ஝ྌձ 2035) (the “ Outline ”) on 12 March 2021. The
Outline points out that China should target frontier fields such as artificial intelligence, quantum
information, integrated circuits, life and health, brain science, biological breeding, aerospace science
and technology, and deep earth and deep sea, and implement a series of forward-looking and strategic
major national science and technology projects. Emphasis will be placed on key areas such as high-end
chips, operating systems, key artificial intelligence algorithms, and sensors, accelerating the promotion
of research and development breakthroughs and iterative applications in basic theories, basic
algorithms, equipment materials and other areas.
The Guidelines for the Development of National Open Innovation Platforms for Next Generation
Artificial Intelligence (ˏ ) promulgated and
implemented by the Ministry of Science and Technology on 1 August 2019 points out that “openness
and sharing” are important concepts for promoting China’s artificial intelligence technology innovation
and industrial development, encouraging companies to open innovation platform test datasets, form
standardised and modular models, middleware and application software, and provide open sharing
services of software and hardware to society through open interfaces, model libraries, algorithm
packages and other means. The Guidelines for the Construction of the National New Generation
Artificial Intelligence Innovation and Development Pilot Zone (Revised Version) (อɓ˾ɛʈ౽
ˏ (وࠈࡌ)) promulgated and implemented by the Ministry of Science
and Technology on 29 September 2020 emphasises creating an institutional environment conducive to
artificial intelligence innovation and development, promoting artificial intelligence infrastructure
construction, and strengthening the conditional support for artificial intelligence innovation and
development.
The NDRC promulgated the Guidance Catalogue for Industrial Structure Adjustment (2024
Version) (ኬͦ፽ (2024 ϋ͉)) on 27 December 2023, which was implemented on 1
February 2024. It encourages the development of artificial intelligence in the following directions:
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artificial intelligence chips, intelligent manufacturing key technology equipment, intelligent
manufacturing factories, park transformation, intelligent robots, smart homes, intelligent security, video
and image identity recognition systems, intelligent transportation, intelligent transport vehicles,
intelligent health and elderly care, intelligent education, intelligent environmental protection, and smart
cities.
Laws and Regulations in Relation to Consumer Protection
Law of the People’s Republic of China on the Protection of Rights and Interests of Consumers
(), which was promulgated by the SCNPC on 31 October 1993,
last amended on 25 October 2013 and implemented on 15 March 2014, was aimed at protecting
consumers’ rights when they purchase or use goods and accept services. All business operators must
comply with this law when they manufacture or sell goods or provide services to customers. Under the
amendments made on 25 October 2013, all business operators must pay high attention to protecting
customers’ privacy and must strictly keep confidential any personal information of consumers obtained
during their business operations.
The Implementing Regulation for the Law of the People’s Republic of China on the Protection of
Consumer Rights and Interests (ૢԷ ) was promulgated by
the State Council of the People’s Republic of China (the “ State Council ”) on 15 March 2024 and
implemented on 1 July 2024 (the “ Regulations on the Implementation of the Law on the Protection
of Consumer Rights and Interests ”). The Regulations on the Implementation of the Law on the
Protection of Consumer Rights and Interests mainly refine and supplement the obligations of operators
and improve the relevant provisions on online consumption, strengthen the obligations of prepaid
consumer operators, regulate the behaviour of consumer claims and clarify the responsibilities of the
government for the protection of consumer rights and interests.
Laws and Regulations in Relation to Tendering and Bidding
According to the Bidding Law of the People’s Republic of China ()
(the “ Bidding Law ”) promulgated by the SCNPC on 30 August 1999, amended on 27 December 2017
and implemented from 28 December 2017, tenderers shall not collude with each other in setting bidding
prices, nor shall they exclude other tenderers from fair competition and harm the lawful rights and
interests of the tenderee and other tenderers. Tenderers shall not participate in the bidding competition
by offering a price lower than the cost, nor shall they attempt to win the bid in the name of other
persons or through other fraudulent means.
According to the Implementation Regulations for the Law of the People’s Republic of China on
Tenders and Bids (ૢԷ ), which was promulgated by the State
Council on 20 December 2011, last amended on 2 March 2019 and implemented on the same day,
where the tender invitation and bidding activities of a project required by law to call for tenders violate
the provisions of the Tendering and Bidding Law and such regulations, and have a substantive influence
on the outcome of award of tender, if it is impossible to adopt remedial measures to rectify the tender
invitations, the bidding and award of tender shall be void, and the tender exercise or bid evaluation
shall be organised anew pursuant to the law.
Laws and Regulations in Relation to Data, Network and Information Security
The Chinese government has promulgated laws and regulations in relation to internet information
security and the protection of personal information from abuse and unauthorised disclosure. To maintain
national security, internet information is regulated in China. The Decision on Maintaining Internet
Security () promulgated and implemented by the SCNPC on 28
December 2000 and amended and implemented on 27 August 2009 pursues criminal liability against
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persons who engage in the following acts: (i) illegally intruding into computers or systems of strategic
importance; (ii) disseminating politically harmful information; (iii) leaking state secrets; (iv)
disseminating false commercial information; or (v) infringing others’ intellectual property rights.
According to the Administrative Measures on Security Protection for International Connections to
Computer Information Networks ( ) promulgated by the
State Council on 16 December 1997, effective on 30 December 1997, and last amended and
implemented on 8 January 2011, it is prohibited to use the internet to (among other things) leak state
secrets and disseminate content that disrupts social order. The MPS has supervisory and inspection
authority, and local public security bureaus may also exercise jurisdiction. If internet information
service providers violate any of such administration measures, the competent authorities may revoke
their business licences and shut down their websites.
According to the Administrative Measures for the Hierarchical Protection of Information Security
() jointly promulgated and implemented by the MPS, the National
Administration of State Secrets Protection, the State Cryptography Administration Office of Security
Commercial Code Administration and the Informatisation Work Office of the State Council on 22 June
2007, the entities that operate and use information systems are required to fulfil the obligation of
protection the information system at multi-level. The entities that operate the information systems at
above Grade II shall, within 30 days since the date when its security protection grade is determined,
handle the record-filing procedures at the local public security authority.
According to the Administrative Measures for Personal Information Protection Compliance Audits
() promulgated by the CAC on 12 February 2025 and implemented
on 1 May 2025, the personal information processors processing data of over 10 million individuals shall
conduct personal information protection compliance audits at least once every two years.
According to Article 39 of the Security Protection Regulations for Critical Information
Infrastructure (ᚐૢԷ) promulgated by the State Council on 30 July 2021
and implemented on 1 September 2021, where an operator fails to report as required or fails to establish
and improve relevant mechanisms and systems, etc., the competent authority shall, in accordance with
its duties, order corrections and issue a warning; if the operator refuses to make corrections or such acts
result in consequences such as endangering cybersecurity, a fine ranging from RMB100,000 to
RMB1,000,000 shall be imposed, and the directly responsible personnel in charge shall be fined
between RMB10,000 and RMB100,000.
According to the Cybersecurity Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ၣഖτ
) (the “ Cybersecurity Law ”) promulgated by the SCNPC on 7 November 2016 and implemented
on 1 June 2017, network operators must comply with applicable laws and administrative regulations
and fulfil their obligations to safeguard cyber security in conducting business and providing services.
For the construction and operation of the network or the provision of services through the network,
technical and other necessary measures shall be taken as required by laws, administrative regulations
and the compulsory requirements of national standards to ensure the safe and stable operation of the
network, respond to cyber security incidents effectively, prevent illegal and criminal network activities,
and maintain the integrity, confidentiality and usability of network data.
According to the Administrative Provisions on Security Vulnerabilities of Cyber Products ( ၣഖ
) jointly promulgated by the MIIT, the CAC and the MPS on 12 July 2021 and
implemented from 1 September 2021, network product providers, network operators as well as
organisations or individuals engaging in the discovery, collection, release and other activities of
network product security vulnerability are subject to the provisions and shall establish channels to
receive information of security vulnerability of their respective network products and shall examine and
fix such security vulnerability in a timely manner. In response to the Cyber Security Law, network
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product providers are required to report relevant information of security vulnerability of network
products with the MIIT within two days and to provide technical support for network product users.
Network operators shall take measures to examine and fix security vulnerability after discovering or
acknowledging that their networks, information systems or equipment have security loopholes.
The Data Security Law of the PRC () (the “ Data Security Law ”)
was promulgated by the SCNPC on 10 June 2021 and implemented on 1 September 2021. The Data
Security Law stipulates the measures to support and promote data security and development, to
establish and optimise the national data security management system, and to clarify organisations’ and
individuals’ responsibilities in data security. The Data Security Law introduces a data classification and
hierarchical protection system based on the materiality of data in economic and social development, as
well as the degree of harm it will cause to national security, public interests, or legitimate rights and
interests of individuals or entities when such data is tampered with, destroyed, divulged, or illegally
acquired or used.
The Cybersecurity Review Measures (2021) (ج2021) ) was jointly
promulgated by the CAC and other certain Chinese regulatory authorities on 28 December 2021 and
implemented on 15 February 2022. Critical Information Infrastructure Operator purchasing network
products and services, and online platform operators carry out data processing activities that affect or
may affect national security, shall conduct cyber security review according to the Cyber Security
Review Measures. In addition, an online platform operator in possession of more than one million
users’ personal information must report to the cyber security review office for a cyber security review if
it intends to list its securities abroad.
According to the Regulation on Network Data Security Management ( ၣഖᅰኽτΌ၍ଣૢԷ)
promulgated by the State Council on 24 September 2024 and implemented on 1 January 2025, when the
network data processors carry out network data processing activities that affect or may affect national
security, they shall undergo a national security review in accordance with relevant national regulations.
According to the Measures for Data Cross-border Transfer Security Assessment ( ᅰኽ̈ྤτΌ
) promulgated by the CAC on 7 July 2022 and implemented on 1 September 2022, where a
data processor transfers data abroad, the data processor shall apply to the national cyberspace
administration for a data cross-border transfer security assessment through the local cyberspace
administration at the provincial level when: (i) a data processor transfers important data abroad; (ii) a
critical information infrastructure operator and a data processor processing the personal information of
more than one million persons transfers personal information abroad; (iii) a data processor has provided
a total of 100,000 persons’ personal information or 10,000 persons’ sensitive personal information to
overseas since 1 January of the previous year; and (iv) other circumstances in which the data processor
shall apply for a data cross-border transfer security assessment as stipulated by the national cyberspace
administration.
According to the Provisions of the Supreme People’s Court on Several Issues concerning the
Application of Law in the Trial of Civil Cases Relating to the Use of Facial Recognition Technologies
to Process Personal Information (ࣩ
) (the “ Face Recognition Provisions ”) promulgated by the Supreme
People’s Court of China on 27 July 2021 and implemented on 1 August 2021. The Face Recognition
Provisions apply to civil disputes arising from the use of face recognition technology to deal with facial
information between civil subjects. The Face Recognition Provisions clarify the nature and
responsibilities of the abuse of utilising face recognition technologies to process facial information. To
process the facial information of a natural person, the individual consent of such natural person or
his/her guardian must be obtained.
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According to the Administrative Measures for the Application Security of Facial Recognition
Technology () jointly promulgated by the CAC and the MPS on 13
March 2025 and implemented on 1 June 2025, the aim is to regulate the application scenarios of facial
recognition technology and protect the rights and interests of personal information. They apply to
activities within the territory that use facial recognition technology to process facial information,
excluding research and development and algorithm training activities.
According to the Ninth Amendment to the Criminal Law of the PRC (͍
ɘ) promulgated by the SCNPC on 29 August 2015 and implemented on 1 November 2015, any
internet service provider that fails to fulfil the obligations related to the internet information security
administration as required by the applicable laws and refuses to rectify upon orders, shall be subject to
criminal penalty. According to the Notice of the Supreme People’s Court, the Supreme People’s
Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing
upon the Personal Information of Citizens (ڧ
) issued and implemented on 23 April 2013, Article 253 of the
Criminal Law of the PRC (), and the Interpretation of the Supreme People’s
Court and the Supreme People’s Procuratorate on Several Issues regarding Legal Application in
Criminal Cases Infringing upon the Personal Information of Citizens (৫e௰৷ɛ͏Ꮸ࿀
༆ᙑ ) issued on 8 May 2017 and took
effect on 1 June 2017, the following activities may constitute the crime of infringing upon a citizen’s
personal information: (i) providing a citizen’s personal information to specified persons or releasing a
citizen’s personal information online or through other methods in violation of relevant national
provisions; (ii) providing a citizen’s personal information collected legitimately to others without such
citizen’s consent (unless the information is processed, not traceable to a specific person and not
recoverable); (iii) collecting a citizen’s personal information in violation of relevant rules and
regulations in the process of performing duties or providing services; or (iv) obtaining a citizen’s
personal information by purchasing, accepting or exchanging such information in violation of relevant
rules and regulations.
According to the provisions of the Civil Code (Պ) promulgated by the NPC on 28 May
2020 and implemented on 1 January 2021, natural persons’ personal information shall be protected by
law, and any organisations and individuals shall legally collect personal information and ensure the
security of personal information collected. It is not allowed to illegally collect, use, process or transfer
the personal information, or illegally buy or sell, provide or make public the personal information of
others. Personal information of natural persons refers to all kinds of information that are recorded in
electronic or other ways and that can be used alone or in combination with other information to identify
a specific natural person, including the natural persons’ names, dates of birth, ID numbers, biometric
information, addresses, telephone numbers, e-mails, health information, whereabouts, etc.. The
processing of personal information shall be subject to the principle of legitimacy, rightfulness and
necessity, with no excessive processing, and shall meet the following conditions: (i) with the consent of
the natural person or the guardian thereof, unless otherwise provided by laws or administrative
regulations; (ii) expressly stating the purpose, method and scope of information to be processed; and
(iii) not violating the provision of the laws and administrative regulations and the agreement of both
parties. The Civil Code (Պ) has revised the Internet tort liability and further elaborated on “safe
harbour” rule with respect to an internet service provider from both the aspects of notice and
counter-notice, including (i) upon receiving notice from the right holder, promptly adopting necessary
measures such as deletion, screening or disconnection of hyperlinks and reefing right holder’s notice to
disputed internet user; and (ii) upon receiving counter-notice from the disputed internet user, referring
such counter-notice to the claiming right holder and informing him/her to take other corresponding
measures such as filing complaints with competent authorities or suits with courts. The Civil Code ( ͏
Պ) has also provided that where the internet service provider who knew or should have known the
infringing acts of the internet user fails to take necessary measures, it shall be severally liable with
such internet user.
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Laws and Regulations in Relation to Enterprise Investment Projects
According to Administrative Regulations on Approval and Filing of Projects Invested by
Enterprises (၍ଣૢԷ) promulgated by the State Council on 30 November
2016 and implemented on 1 February 2017, the Chinese government exercises approval management
over fixed asset investment projects that are invested in construction by enterprises within the territory
of China, are related to national security, and involve major production capacity layout, strategic
resource development and significant public interests. The specific project scopes, approval authorities
and approval powers are implemented according to the catalogue of investment projects approved by
the government, while other projects are subject to filing management.
The Notice of the State Council on Issuing the Catalogue of Investment Projects Subject to
Governmental Approval (2016 Version) (ҳ༟ධͦͦ፽ (2016 ϋ
͉)) promulgated and implemented by the State Council on 20 December 2016 stipulates the
projects that may be subject to approval.
Laws and Regulations in Relation to Intellectual Property
Trademarks
The Trademark Law of the People’s Republic of China () (the
“Trademark Law ”) promulgated by the SCNPC on 23 August 1982, effective on 1 March 1983, and
last amended on 23 April 2019 and implemented on 1 November 2019, and the Implementation
Regulations of the Trademark Law of the People’s Republic of China (ૢ
Է) promulgated by the State Council on 3 August 2002, effective on 15 September 2002, and last
amended on 29 April 2014 and implemented on 1 May 2014 provide the basic legal framework for
regulating trademarks in the PRC. According to relevant laws and regulations, registered trademarks
include commodity trademarks, service trademarks, collective marks and certification marks. The
validity period of a registered trademark is ten years, calculated from the date of approval for
registration.
Patents
According to the Patent Law of the People’s Republic of China ()
promulgated by the SCNPC on 12 March 1984, last amended on 17 October 2020 and implemented on
1 June 2021, and the Implementation Regulations of the Patent Law of the People’s Republic of China
() promulgated by the State Council on 15 June 2001, last amended
on 11 December 2023 and implemented on 20 January 2024, there are three types of patents, namely,
invention, utility model and design. Invention patents are valid for 20 years, design patents are valid for
15 years and utility model patents are valid for 10 years from the date of application.
Copyright and software copyright
According to the Copyright Law of the People’s Republic of China ()
promulgated by the SCNPC on 7 September 1990, last amended on 11 November 2020 and
implemented on 1 June 2021, and the Implementing Regulations of the Copyright Law of the People’s
Republic of China (ૢԷ) promulgated by the State Council on 2
August 2002, last amended on 30 January 2013 and implemented on 1 March 2013, Chinese citizens,
legal persons or other organisations enjoy copyright protection over their works, whether published or
not, in the domain of literature, art and science. In addition, internet activities, products disseminated
over the internet and software products also enjoy copyright.
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According to the Regulations on Protection of Computer Software (ᚐૢԷ)
promulgated by the State Council on 4 June 1991, effective on 1 October 1991, last amended on 30
January 2013 and implemented on 1 March 2013, the software registration authority shall grant
certificates of registration to computer software copyright applicants in compliance with the Regulation
on Protection of Computer Software.
Domain names
According to the Administrative Measures on Internet Domain Names ()
promulgated by the MIIT on 24 August 2017 and implemented on 1 November 2017, and the
Implementation Rules for the Registration of National Top-level Domain Names (௟ॴਹΤൗ̅
) promulgated by China Internet Network Information Centre and implemented on 18 June
2019, the MIIT is in charge of the administration of PRC internet domain names. The domain name
services follow a “first come, first file” principle. The applicants will become the holders of such
domain names upon the completion of the registration procedure.
Laws and Regulations in Relation to Labour Protection, Social Insurance and Housing Provident
Funds
Labour security
According to the Labour Contract Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷௶ਗ
) (the “ Labour Contract Law ”) promulgated on 29 June 2007, effective on 1 January 2008,
and last amended on 28 December 2012 and implemented on 1 July 2013, labour contracts must be
concluded in writing if labour relationships are to be or have been established between enterprises,
individual economic organisations, private non-enterprise entities, etc,. and the employees. Employers
are forbidden to force employees to work overtime or to do so in a disguised manner and employers
must pay employees overtime wages in accordance with the regulations of the state. In addition, wages
may not be lower than local standards on minimum wages and must be paid to the employees timely.
According to the Labour Law of the People’s Republic of China ()
promulgated by SCNPC on 5 July 1994, effective on 1 January 1995, and last amended and
implemented on 29 December 2018, employers shall establish and improve a system of labour safety
and sanitation and shall strictly abide by national rules and standards on labour safety and sanitation,
educate employees on labour safety and sanitation as well as provide employees with labour safety and
sanitation conditions that comply with national standards and necessary articles for labour protection.
Social insurance
According to the Social Insurance Law of the People’s Republic of China (ึ
) promulgated by the SCNPC on 28 October 2010, effective on 1 July 2011, and amended and
implemented on 29 December 2018, each employer and individual in the PRC shall make contributions
to social insurance fund, including basic pension insurance, basic medical insurance, work-related
injury insurance, unemployment insurance and maternity insurance. An employer who fails to make
adequate contributions to social insurance fund shall be ordered to pay or supplement within a
stipulated period, and shall be subject to a late fee computed from the date of default at the rate of
0.05% per day. Where payment is not made within the stipulated period, the relevant administrative
authorities shall impose a fine ranging from one to three times of the overdue amount.
Housing provident fund
According to the Regulations on the Housing Provident Fund (၍ଣૢԷ) passed by
the State Council on 3 April 1999, last amended and implemented on 24 March 2019, each employer
and individual in the PRC shall make contributions to housing provident fund. Where, in violation of
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the provisions of the regulations, an employer is overdue in the contribution of, or underpays, the
housing provident fund, the competent PRC government authorities shall order it to make contributions
to the housing provident fund within a stipulated period. If the payment is not made within such
stipulated period, an application may be made to the People’s Court for compulsory enforcement.
Regulations on Equity Incentive Plans
According to the Circular of the State Administration of Foreign Exchange on Issues concerning
the Foreign Exchange Administration of Domestic Individuals’ Participation in Equity Incentive Plans
of Overseas Listed Companies (ྌ̮ි
) promulgated and implemented by the SAFE on 15 February 2012 and other
relevant regulations, directors, supervisors, senior management and other employees participating in any
equity incentive plan of an overseas listed company who are PRC citizens or non-PRC citizens residing
in China for a continuous period of not less than one year, subject to certain exceptions, are required to
handle matters such as foreign exchange registration with SAFE, account establishment, funds transfer
and remittance through a domestic agency.
Laws and Regulations in Relation to Foreign Exchange
According to the Foreign Exchange Control Regulations of the People’s Republic of China ( ʕശ
ɛ͏΍ձ਷̮ි၍ଣૢԷ) (the “ Foreign Exchange Regulations ”) promulgated by the State Council
on 29 January 1996, effective on 1 April 1996, and last amended and implemented on 5 August 2008,
international payments and transfers under the current accounts in PRC shall not be subject to any
restriction. Foreign currency transactions under the capital accounts, such as direct investment and
capital contribution, are still restricted and require approvals from, or registration with, the foreign
exchange administrative authorities. In addition, according to the Notice of the PBOC and the SAFE on
Issues Concerning the Administration of Capital Management of Domestic Enterprises in Overseas
Listing ( ), which
was issued by the PBOC and the SAFE on 24 December 2025 and implemented on 1 April 2026, a
domestic enterprise listed overseas shall, within 30 working days from the first trading day of its
overseas listing or upon completion of the over-allotment, submit the prescribed documents to a bank in
its registered province or municipality separately listed on the State plan to apply for overseas listing
registration. Proceeds from overseas listings shall, in principle, be repatriated to the PRC in a timely
manner. If such proceeds are to be retained overseas for the purpose of overseas direct investment,
overseas securities investment, or overseas lending, the enterprise shall obtain the approval or filing
documents from the competent authorities prior to the completion of the overseas issuance and listing
or the completion of the over-allotment and shall comply with the relevant cross-border capital
administration regulations.
According to the Circular of the State Administration of Foreign Exchange on Reforming and
Regulating Policies for the Administration over Foreign Exchange Settlement of Capital Accounts ( ਷
 ) promulgated by SAFE and
implemented on 9 June 2016, and the Circular of the State Administration of Foreign Exchange on
Further Deepening Reform to Promote Cross-border Trade and Investment Facilitation (̮ි၍ଣ
 ) promulgated by SAFE and implemented on
4 December 2023, the foreign exchange receipts under capital accounts of domestic institutions are
subject to discretionary settlement policies. The foreign exchange receipts under capital accounts
(including foreign exchange capital, foreign debts, and repatriated funds raised through overseas listing)
subject to discretionary settlement as expressly prescribed in the relevant policies may be settled with
banks according to the actual needs of the domestic institutions for business operation. Domestic
institutions may, at their discretion, settle up to 100% of foreign exchange receipts under capital
accounts for the time being. SAFE may adjust the above proportion in due time according to the
balance of payments. While eligible for the discretionary settlement of foreign exchange receipts under
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capital accounts, domestic institutions may also opt to use their foreign exchange receipts according to
the payment-based settlement system. A bank shall, in handling each transaction of foreign exchange
settlement for a domestic institution according to the principle of payment-based settlement, review the
authenticity and compliance of the use of the funds settled in the previous foreign exchange settlement
(including discretionary settlement and payment-based settlement) of such domestic institution.
Domestic institutions’ foreign exchange receipts under the capital accounts and the Renminbi funds
obtained from the settlement thereof shall not, directly or indirectly, be used for expenditure beyond the
enterprise’s business scope or expenditure prohibited by laws and regulations of the state. Unless
otherwise specified, the funds shall not, directly or indirectly, be used for investments in securities or
other investments or wealth management other than banks’ principal-secured products. The funds shall
not be used for the granting of loans to non-affiliated enterprises, except where it is expressly permitted
in the business scope. The funds shall not be used for the construction or purchase of real estate for
purposes other than self-use (except for real estate enterprises).
According to the Circular on Optimising Administration of Foreign Exchange to Support the
Development of Foreign-related Business by the State Administration of Foreign Exchange (̮ි
 ) promulgated and implemented by SAFE on 10
April 2020, eligible enterprises are allowed to make domestic payments by using receipts under capital
accounts, such as their capital funds, foreign credits and the income from overseas listing, with no need
to provide the evidentiary materials concerning authenticity on a transaction-by-transaction basis to
banks in advance, provided that their capital use shall be authentic and in line with provisions, and
conform to the prevailing administrative regulations on the use of receipts under capital accounts. Local
foreign exchange authorities shall strengthen monitoring analysis and interim and post regulation.
Laws and Regulations in Relation to Taxation
Enterprise Income Tax Law
According to the Corporate Income Tax Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) (the “ CIT Law ”) promulgated on 16 March 2007, effective on 1 January 2008, and
last amended and implemented on 29 December 2018, and the Implementing Regulations of the
Corporate Income Tax Law of the People’s Republic of China (ૢ
Է) (the “ Implementing Regulations of the CIT Law ”) promulgated on 6 December 2007, effective
on 1 January 2008, last amended on 6 December 2024, and effective on 20 January 2025, enterprise
income taxpayers shall include resident and non-resident enterprises. Resident enterprise refers to an
enterprise established within China or is established under the law of a foreign country (region) but
whose actual institution of management is within China. Non-resident enterprise refers to an enterprise
established under the law of a foreign country (region), whose actual institution of management is not
within China but has offices or establishments within China, or which does not have any offices or
establishments within China but has incomes sourced from China. The rate of enterprise income tax
shall be 25%. Qualified small low-profit enterprises are given the reduced enterprise income tax rate of
20%. High-tech enterprises in need of key support from the State may enjoy a reduced enterprise
income tax rate of 15%.
V alue-added tax
According to the Value-Added Tax Law of the People’s Republic of China (࠽
) (the “ V AT Law”) promulgated by the SCNPC on December 25, 2024 and became effective on
January 1, 2026, and the Implementation Rules for the Value-Added Tax Law of the PRC ( ʕശɛ͏
ૢԷ ) promulgated by the State Council and became effective as of the same
date of the V AT Law, all enterprises and individuals that engage in the sale of goods, the provision of
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processing, repair and replacement services, sales of service, intangible assets and real estate and the
importation of goods within the territory of the PRC shall pay value-added tax at the rate of 0%, 6%,
9% and 13% for the different goods it sells and different services it provides, except when specified
otherwise.
According to the Circular on Adjusting Value-added Tax Rates (ሜ዆
) announced by the MOF and the SAT on 4 April 2018, and effective on 1 May
2018, where a taxpayer engages in a value-added tax taxable sales activity or imports goods, the
previous applicable 17% and 11% tax rates are adjusted to be 16% and 10%, respectively.
According to the Announcement on Relevant Policies for Deepening Value-Added Tax Reform
(ʮѓ ) promulgated by the MOF, the SAT and the General
Administration of Customs on 20 March 2019, and effective on 1 April 2019, with respect to
value-added tax taxable sales or imported goods of a value-added tax general taxpayer, the originally
applicable value-added tax rate of 16% and 10% shall be adjusted to 13% and 9%, respectively.
Laws and Regulations in Relation to Environmental Protection and Fire Control
Environment protection
The Environmental Protection Law of the PRC () promulgated by
the SCNPC on 26 December 1989, implemented on the same day and last amended on 24 April 2014
and implemented on 1 January 2015, outlines the authorities and duties of environmental protection
regulatory agencies. The Ministry of Environmental Protection under the State Council is authorised to
issue national standards for environmental quality and discharge of pollutants, and to exercise unified
supervision and administration over environmental protection scheme of the PRC. Meanwhile, local
environment protection authorities may formulate local standards for discharge of pollutants which are
more rigorous than the national standards, in which case, the concerned enterprises must comply with
both the national standards and the local standards.
Environmental impact appraisal
According to the Administrative Regulations on Environmental Protection for Construction
Projects (ᚐ၍ଣૢԷ) promulgated by the State Council on 29 November 1998, last
amended on 16 July 2017 and implemented on 1 October 2017, and according to the Environmental
Impact Appraisal Law of PRC () promulgated by the SCNPC on 28
October 2002 and last amended and implemented on 29 December 2018, the construction employer is
required to submit an environmental impact report or an environmental impact statement, or file a
registration form depending on the seriousness of effect that may be exerted on the environment.
Pollutant discharge
According to the Categorised Management Catalogue of Pollutant Discharge Permits for
Stationary Sources of Pollution (2019 Version) (๕રϮ஢̙ʱᗳ၍ଣΤ፽ (2019و))
promulgated and implemented by the MEE on 20 December 2019, key management, simplified
management and registration management of pollutant discharge permits are implemented according to
factors such as the amount of pollutants generated, the amount of emissions, the degree of impact on
the environment, etc., and pollutant discharge entities that implement registration management do not
need to apply for a pollutant discharge permit.
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Acceptance inspection on environmental protection facilities
According to Administrative Regulations on Environmental Protection for Construction Projects
(ᚐ၍ଣૢԷ) promulgated by the State Council and implemented on 29 November
1998, last amended on 16 July 2017 and implemented on 1 October 2017, upon completion of
construction for which an environment impact report or environment impact statement is formulated,
the constructor shall conduct acceptance inspection of the environmental protection facilities pursuant
to the standards and procedures stipulated by the environmental protection administrative authorities of
the State Council and formulate the acceptance inspection report.
Laws and Regulations in Relation to Import and Export of Goods
Foreign Trade Law of the PRC
According to the Foreign Trade Law of the PRC () promulgated by
the SCNPC on 12 May 1994 and implemented on 1 July 1994, and last amended and implemented on
27 December 2025 and effective on 1 March 2026, the consignee or consignor of imported or exported
goods applying for filing should obtain the qualification of the market entity, but no filing for foreign
trade operators is required.
Customs Law of the PRC
According to the Customs Law of the PRC () promulgated by the
NPCSC on 22 January 1987, and implemented on 1 July 1987, and last amended and implemented on
29 April 2021, the consignees and consignors for imported or exported goods and the customs brokers
engaged in customs declaration shall be filed with the customs in accordance with the law.
Administration of Recordation of Customs Declaration Entities of the PRC
According to the Administrative Provisions of the Customs of the People’s Republic of China on
Record-filing of Customs Declaration Entities ( )
promulgated by the GACC of the PRC on 19 November 2021, and implemented from 1 January 2022,
where the consignee or consignor of imported or exported goods or a customs declaration enterprise
applies for filing, it shall obtain the qualification of market entities.
Administrative Provisions of the Customs of the PRC on the Declaration of Imported and Exported
Goods
According to the Administrative Provisions of the Customs of the People’s Republic of China on
Declaration of Imports and Exports ( ) promulgated by
GACC on 18 September 2003 and implemented on 1 November 2003, and last amended on 27 March
2025 and implemented on 1 May 2025, consignors or consignees of import and export goods may either
make declarations to the customs themselves or entrust a customs brokerage enterprise. Consignors or
consignees of import and export goods handling customs declaration procedures, and entrusted customs
brokerage enterprises, shall complete the record-filing formalities with the customs in accordance with
the law in advance.
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I. Principal Laws and Regulations in Relation to Foreign Investment
(I) Foreign Investment Law of the People’s Republic of China and Implementation Regulation of
the Foreign Investment Law of the People’s Republic of China
Foreign invested entities in the PRC are subject to the foreign investment laws and regulations
including the Foreign Investment Law of PRC () (the “ Foreign
Investment Law ”), which was promulgated by the National People’s Congress and became effective on
1 January 2020, and the Regulations on Implementing the Foreign Investment Law of PRC ( ʕശɛ͏
ૢԷ), which were promulgated by the State Council on 26 December 2019
and became effective on 1 January 2020. According to the Foreign Investment Law, the PRC adopts a
system of national treatment which includes a negative list with respect to foreign investment
administration. The negative list will be issued by, amended, or released upon approval by the State
Council, from time to time.
(II) Special Administrative Measures for Access of Foreign Investment (Negative List)
On 6 September 2024, the NDRC and the Ministry of Commerce of the PRC (“ MOFCOM ”)
jointly issued the Special Administrative Measures for Access of Foreign Investment (Negative List)
(2024 Edition)݄( ૶ఊ)(2024و)) (the “ 2024 Negative List ”),
which came into effect on 1 November 2024. The 2024 Negative List uniformly sets forth the
ownership requirements, requirements for senior executives, and other special administrative measures
for the access of foreign investment. Fields not on the 2024 Negative List shall be administered under
the principle of equal treatment for both domestic and foreign investment. As of the Latest Practicable
Date, our business does not fall within the scope of the 2024 Negative List.
(III) Catalogue of Industries for Encouraging Foreign Investment
On 2 February 2026, the MOFCOM and the NDRC promulgated the Catalogue of Industries for
Encouraging Foreign Investment (2025 Version) ( ོᎸ̮ਠҳ༟ପุͦ፽ (2025و)) (the
“Encouraging Catalogue ”), which came into effect on 1 January 2023. The Encouraging Catalogue
lists the industries that encourage foreign investment. As of the Latest Practicable Date, our business
falls within the scope of (XXIl) Computer, telecommunication and other electronic equipment
manufacturing under the Encouraging Catalogue.
Laws and Regulations in Relation to Overseas Listing
According to the Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies ( ) (the “ Overseas Listing Trial
Measures ”) and five relevant guidelines promulgated by the CSRC on 17 February 2023 and
implemented on 31 March 2023, PRC domestic companies that seek to offer and list securities in
overseas markets, either in direct or indirect means, shall file with the CSRC and submit relevant
information within three business days after submitting the application documents for issuance and
listing overseas.
Laws and Regulations in Relation to the H Share “Full Circulation”
Our Company shall comply with regulations on the H share “full circulation” to converse its
domestic shares into H shares and circulate on the Stock Exchange. According to the Guidelines on
Application for Full Circulation of Domestic Unlisted Shares of H-share Companies ( Hʮ̡ྤʫ͊
ˏ) (the “ Full Circulation Guidelines ”) promulgated and implemented by
the CSRC on 14 November 2019, and last amended and effective on 10 August 2023, Full Circulation
represents the shareholders of domestic unlisted shares of domestic companies (including the unlisted
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domestic shares held by domestic shareholders before overseas listing, the unlisted domestic shares
additionally issued in the territory after overseas listing and the unlisted shares held by foreign
shareholders) are listed and circulated on the Stock Exchange. An unlisted domestic joint stock
company may file with the CSRC for “full circulation” at the time of its initial public offering and
listing overseas.
Pursuant to the Overseas Listing Trial Measures, for a domestic company directly offering and
listing overseas, shareholders of its domestic unlisted shares applying to convert such shares into shares
listed and traded on an overseas trading venue shall conform to relevant regulations promulgated by the
CSRC and entrust the domestic company to file with the CSRC.
U.S. LA WS AND REGULATIONS
This section sets out a summary of certain aspects of laws and regulations of the U.S., which are
relevant to the business and operations of our Group.
U.S. Export Restrictions
The U.S. has implemented export control laws and regulations, including the EAR administered
by the BIS of the U.S. Department of Commerce. BIS regulates the export, reexport and in-country
transfer of items that are “subject to the EAR.” The following items are subject to the EAR: (i) all
U.S.-origin items wherever they are located in the world; (ii) any item physically in or moving in
transit through the United States or U.S. Foreign Trade Zone (including items of foreign origin); (iii)
any foreign-made item containing more than a de minimis amount of certain controlled U.S.-origin
content (“ de minimis rule ”); and (iv) certain non-U.S.-produced “direct products” of specified
“technology” and “software”; and certain non-U.S.-produced products of a complete plant or any major
component of a plant that is a “direct product” of specified “technology” or “software” (“ Foreign
Direct Product Rule ”,“ FDP rule ”o r“ FDPR”). According to the FDP rules, certain non-U.S. origin
items are still subject to the EAR under specific circumstances. A transaction involving a
non-U.S.-produced item incorporating certain U.S. controlled software or technology may require a
licence if it meets the product scope and end-user or country scope. Building upon the FDPR, the BIS
has further expanded its jurisdiction through the advanced computing and supercomputer-related FDP
rule. These controls primarily target advanced computing items, including high-performance integrated
circuits, computers, and related assemblies. In addition to product scope, such rules incorporate broad
destination, end-use, and end-user concepts. In particular, licensing requirements may be triggered
where the exporter has “knowledge” that the relevant items are destined for use in connection with
advanced computing, semiconductor manufacturing, or supercomputing activities involving the PRC
(including Macau) or PRC-headquartered entities, regardless of where such activities occur. As a result,
certain non-U.S.-origin items may still be subject to the EAR and require a licence under these
expanded jurisdictional rules. Generally, foreign-made items that incorporate controlled U.S.-origin
content accounting for less than 25% of the value of such items are not subject to the EAR when
exported, reexported or transferred (in-country) to any country except for Cuba, Iran, North Korea or
Syria (for which the de minimis threshold is 10%), unless the controlled content is of a certain type for
which there is no de minimis threshold. For purposes of the de minimis analysis, any item that by itself
requires a destination-based licence to be exported to, reexported to or transferred (in-country) within
the country at issue is considered to be a controlled item. BIS maintains the Commerce Control List
(“CCL”) which includes items (i.e., commodities, software, and technology) subject to the authority of
the BIS. Items are identified by their Export Control Classification Numbers (“ ECCNs ”) on the CCL.
In addition, those items subject to the EAR but not identified on the CCL are identified by the
designator “EAR99”. EAR99 items generally consist of low-level technology, consumer goods, etc. and
do not require a licence in most situations for exports, re-exports, or transfers (in-country). However, if
the proposed export, re-export, or transfer of an EAR99 item is to an embargoed country, to an end user
of concern, or is in support of a prohibited end use, a BIS licence may be required.
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BIS maintains several restricted party lists, which include companies, organisations, and
individuals that may be subject to additional licensing requirements regardless of an item’s ECCN. For
example, parties listed on the Entity List under Supplement No. 4 to Part 744 of Title 15 of the Code of
Federal Regulations are generally prohibited from receiving certain or all items subject to the EAR
without prior BIS authorisation. Licence requirements for such parties may apply to specific ECCNs of
concern or, in some cases, to all items subject to the EAR.
In recent years, the United States has expanded export controls restrictions on China through the
EAR, as administered by the BIS. In particular, on 7 October 2022, the BIS issued an interim final rule
amending the EAR to impose new licensing restrictions on exports, re-exports and in-country transfers
of items intended for use in semiconductor fabrication facilities in the PRC and supercomputers located
in or destined for the PRC. The rule amends the U.S. EAR to add new export control entries to the
Commerce Control List for advanced computing integrated circuits and the computers, electronic
assemblies, and components that contain them. Specifically, new ECCNs 3A090 (for certain
high-performance integrated circuits), 4A090 (for computers and assemblies containing such integrated
circuits) and 3B090 (for advanced semiconductor manufacturing equipment) were added. On 17 October
2023, the BIS issued two interim final rules further amending the EAR to impose new restrictions on
the export, re-export or in-country transfer of certain semiconductor and advanced computing items to
the PRC, expanding the range of advanced chips and semiconductor manufacturing equipment subject
to special licensing requirements. Specifically, the rule revises the scope of ECCN 3A090 by amending
how performance criteria and control parameters for advanced computing integrated circuits are defined
and applied, including adjustments to the metrics used to determine whether a given product meets the
controlled performance thresholds.
On 16 January 2025, the BIS issued an interim final rule (the “ January 2025 DD IFR ”) further
refining controls on advanced computing items. Notably, the January DD 2025 IFR introduced “Note 1
to ECCN 3A090.a,” establishing a rebuttable presumption that “applicable advanced logic integrated
circuits” defined as those produced at the 16/14 nanometer node or below, or utilising non-planar
transistor architecture are classified under ECCN 3A090.a and deemed “designed or marketed for data
centres”. This presumption applies to exports, re-exports, or in-country transfers by front-end
fabricators or Outsourced Semiconductor Assembly and Test (“ OSAT”) companies. To overcome this
presumption, parties must provide specific attestations or documentation, such as: (i) confirmation from
an authorised designer that the item does not meet specified Total Processing Performance (“ TPP”) or
Performance Density (“ PD”) thresholds; (ii) evidence that packaging occurs outside of Macau or
Country Group D:5 destinations and meets specific transistor count (e.g., below 30 billion) or
high-bandwidth memory limits; or (iii) utilisation of approved OSATs listed in the EAR. Failure to
rebut this presumption subjects the items to the stringent licensing requirements of ECCN 3A090.a,
potentially restricting the movement of finished wafers between fabricators and OSATs. Our current
business operations do not involve semiconductor fabrication, assembly, or testing activities, including
outsourced semiconductor assembly and test (OSAT) processes. Accordingly, the IFR and the associated
presumption under Note 1 to ECCN 3A090.a are not applicable to our business activities and are not
expected to have a material impact at this time.
U.S. Economic Sanctions
The OFAC is the key agency of the U.S. government responsible for administering and enforcing
economic sanctions programmes. These programmes target countries and groups of individuals, such as
terrorists and narcotics traffickers. Sanctions may be comprehensive or selective, and typically use asset
blocking and trade restrictions to accomplish foreign policy and national security goals.
U.S. economic sanctions are generally categorised into “primary sanctions” and “secondary
sanctions”. Whether a transaction triggers primary or secondary sanctions primarily depends on whether
it involves a U.S. nexus. Primary sanctions typically involve a U.S. nexus (such as U.S. persons,
REGULATORY OVERVIEW
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U.S.-origin products/software/technology, or if it causes or involves activity within the U.S. territory
such as transactions involving the U.S. financial system or U.S. commodity brokers) and a sanctioned
person (including individuals and entities) or a sanctioned jurisdiction. Non-U.S. persons may violate
U.S. primary sanctions by engaging in U.S.-nexus transactions. For transactions without any U.S.
nexus, the U.S. government may still threaten to impose secondary sanctions (such as designation to
relevant sanction lists) to deter non-U.S. persons from engaging in specific activities involving
sanctioned countries, industries, and/or persons. The comprehensive sanctions programmes of OFAC are
currently applicable to Cuba, Iran, North Korea, the Crimean Region, as well as the self-proclaimed
Luhansk People’s Republic and Donetsk People’s Republic. In addition to the comprehensive sanctions
programmes, the U.S. maintains “list-based” sanctions programmes against targeted regimes, entities
and individuals that have been found to have taken actions contrary to U.S. foreign policy or national
security interests. OFAC also prohibits U.S. persons from engaging in transactions with the persons and
entities identified on the List of Specially Designated Nationals and Blocked Persons (the “ SDN List ”).
Entities owned (defined as holding a 50% or greater ownership interest, solely or jointly, directly or
indirectly) by persons on the SDN List are also blocked, regardless of whether such entities are
explicitly listed on the SDN List.
U.S. Tariffs
Under Section 301 of the Trade Act of 1974, the Office of the U.S. Trade Representative may
impose tariffs or other trade restrictions if it determines that a foreign government has engaged in
unfair trade practices. Under Section 232 of the Trade Expansion Act of 1962, the Secretary of
Commerce is authorised to investigate the effects of imports of any article on the national security of
the United States. If the Secretary’s investigation indicates that imports of the article in question
threaten to impair national security, and the President concurs with the findings, the statute grants
authority to adjust the imports of the article in question and its derivatives, or to take other lawful
action as deemed necessary. Under Section 122 of the Trade Act of 1974, the President is given
authority to impose temporary import surcharges of up to 15% and implement temporary import quotas,
to address serious balance-of-payments deficits or significant declines in the value of the U.S. dollar.
Such temporary measures generally cannot exceed 150 days unless extended through other trade
authorities, and the administration must consult with the United States Congress.
The trade and tariff tension between the U.S. and China intensified since early 2025 and
negotiations on tariffs between the two countries are still ongoing, creating uncertainties on trades and
exports between the U.S. and China. In 2025, President Donald J. Trump, exercising authority under
IEEPA, imposed a series of additional tariffs. On 20 February 2026, the Supreme Court of the United
States issued a decision holding that the President lacks authority under the IEEPA to impose tariffs. As
a result, tariffs imposed pursuant to IEEPA, were held to be unlawful and invalid, after which the White
House issued an executive order terminating the tariffs previously imposed under IEEPA. Also on 20
February 2026, the White House issued a Presidential Proclamation, “Imposing a Temporary Import
Surcharge to Address Fundamental International Payments Problems,” pursuant to Section 122 of the
Trade Act of 1974, imposing a 10% temporary global import surcharge on most imports into the United
States effective 24 February 2026, and set to remain in effect for up to 150 days. Depending on the
latest development of the trade negotiations between the U.S. and China, the level and number of
products subject to additional tariffs may change over time.
Outbound Investment Rule by the U.S. Department of the Treasury
On 28 October 2024, the U.S. Department of the Treasury issued the Outbound Investment Rule,
implementing the Executive Order 14105 of 9 August 2023 titled “Addressing United States
Investments in Certain National Security Technologies and Products in Countries of Concern” which
addresses U.S. investments in certain national security technologies and products in countries of
concern. The Outbound Investment Rule became effective on 2 January 2025.
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The Outbound Investment Rule imposes investment prohibition and notification requirements on
U.S. persons for a wide range of investments in entities associated with China (including Hong Kong
and Macau) that are engaged in activities relating to three sectors: (i) semiconductor and
microelectronics, (ii) quantum information technologies, and (iii) AI systems (collectively defined as
“Covered Foreign Persons ”). U.S. persons subject to the Outbound Investment Rule are prohibited
from making, or required to report, certain investments in Covered Foreign Persons, which are defined
as “Covered Transactions”, and include certain acquisitions of an equity interest, certain debt financing,
joint ventures, and certain investments as a limited partner in a non-U.S. person pooled investment
fund. The Outbound Investment Rule contains exceptions for certain investments, including those in
publicly traded securities, except when the U.S. person investor secures rights that go beyond standard
minority shareholder protections (the “ Publicly Traded Securities Exemption ”).
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OVERVIEW
We are a multispectral AI technology enterprise in China, specialising in the acquisition,
processing, and analysis of optical information captured from multiple specific spectrum bands to
provide more comprehensive data than visible-light imaging. Leveraging our proprietary technology in
multispectral perception and AI algorithms, we offer products and services designed to detect both
visible and invisible spectral information to human eyes, which includes Multispectral AI Modules,
Multispectral AI Perception Terminals and Multispectral AI Large Model Services. Our solutions
deliver enhanced perception and safety monitoring, providing additional information decisions for
multi-scenario safety and intelligent perception purposes for diverse customers who are mainly engaged
in business related to software and information technology services, electronic products, IDCs,
intelligent driving systems, telecommunication operators, IoT, system integration, and construction. Our
technologies have been widely applied across numerous application scenarios beyond traditional safety
solutions, including smart cities, intelligent campus management, IDC safety optimisation, industrial
and commercial safety and loT-enabled facility management, showcasing the applicability of our
multispectral AI solutions.
Key Development Milestones
The following table outlines our key development milestones:
Y ear Key development milestones
2013  Our Company was established in Shenzhen in the PRC.
2015  We launched our AI vision scenario training technology.
 We were recognised as a High and New Technology Enterprise ( ৷อҦஔ
Άุ).
2016  We launched the HtFS file system specifically designed for vision
scenario applications, significantly extending the service life of terminals
storage.
2018  We launched the HtOS operating system, designed for edge AI
computing, which fundamentally overcame key technical bottlenecks in
computational miniaturisation.
2020  We entered into a capital increase agreement with Series A investors led
by Zheshang Capital.
 We launched the multispectral AI perception-computing integration
technology.
2021  We entered into a capital increase agreement with Series B investors led
by Gaoxintou.
 We leased and established the Shenzhen production facility.
2022  We released the prototype of the fire computing product.
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Y ear Key development milestones
 We launched our AI computing power miniaturisation modules solution.
 We completed the conversion of our Company from a limited liability
company into a joint stock company with limited liability.
 We were accredited as a National-level Specialised and Sophisticated
“Little Giant” Enterprise (ॴਖ਼ၚतอʃ̶ɛΆุ )b yt h e
Ministry of Industry and Information Technology.
 Our Shenzhen production facility officially commenced production.
2024  We launched the Multispectral AI anomalous fire source detector.
 We achieved commercialisation and recorded first revenue from our
Multispectral AI Large Model Services.
 Our “Zhiyuan Origin Large Model” (ۨpassed the ninth
batch of Deep Synthesis Service Algorithm Filing by the CAC.
 We leased and established the Zhejiang production facility in Longyou
Economic Development Zone.
 We entered into a capital increase agreement with Series C investor and
Series C+ investor, respectively.
2025  Our “Zhiyuan Origin Large Model” (ۨwas selected for
Guangdong Province’s first batch of AI industry models by the
Department of Industry and Information Technology of Guangdong
Province.
 We were enlisted in the “List of Typical Application Scenarios and Cases
of Robot + (First Batch) in Guangdong Province (޲؇“ዚኜɛ+”ۨ
ԷΤఊ (ୋɓҭ))” by the Department of Industry and
Information Technology of Guangdong Province (ʷ
ᝂ).
 We entered into a capital increase agreement with Series D investor.
 Our Zhejiang production facility officially commenced production.
 We were accredited as a National-level Specialised and Sophisticated “Little
Giant” Enterprise (ॴਖ਼ၚतอʃ̶ɛΆุ ) and a National-level
Specialised and Sophisticated Key “Little Giant” Enterprise (ॴਖ਼ၚत
ᓃʃ̶ɛΆุ ) by the Ministry of Industry and Information
Technology (ʷ௅).
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OUR MAJOR SUBSIDIARIES
As at the Latest Practicable Date, we carried out our business through our Company and our
major operating subsidiaries in the PRC. Set out below is the corporate information of our major
subsidiaries that made a material contribution to our performance during the Track Record Period:
1. Shenzhen Haiqing Digital Technology Co., Ltd. * (ʮ̡ )
Shenzhen Haiqing Digital Technology Co., Ltd.* (ʮ̡ ) was established
as a limited liability company under the laws of the PRC on 9 November 2021 with a registered share
capital of RMB20 million (“ Haiqing Digital ”). It is a wholly-owned subsidiary of our Company. This
subsidiary is primarily responsible for R&D, product innovation, and process optimisation. It has leased
a factory premise located in Shenzhen, Guangdong. As at the Latest Practicable Date, the Shenzhen
production base mainly undertakes the subsequent production processes after SMT automated assembly,
including sensor optical calibration and firmware programming, product configuration and assembly,
quality sampling and automated testing, product ageing and packaging and warehousing. In addition,
the Shenzhen production base can also undertake activities including R&D as required.
2. Zhejiang Haiqing Zhiyuan Technology Co., Ltd. * (ʮ̡ )
Zhejiang Haiqing Zhiyuan Technology Co., Ltd.* (ʮ̡ ) was established
as a limited liability company under the laws of the PRC on 26 June 2024 with a registered share
capital of RMB10 million (“ Zhejiang Haiqing ”). It is a wholly-owned subsidiary of our Company. This
subsidiary has leased a production facility located in Longyou Economic Development Zone, Zhejiang.
Following the relocation of the SMT automated assembly lines and as at the Latest Practicable Date,
the Zhejiang production base performs the full range of production processes, including SMT automated
assembly, sensor optical calibration and firmware programming, product configuration and assembly,
quality sampling and automated testing, product ageing and packaging and warehousing.
ESTABLISHMENT AND DEVELOPMENT OF OUR COMPANY
1. Establishment of our Company and Early Shareholding Arrangements
Our Company was established as a limited liability company under the laws of the PRC on 3 April
2013, with Mr. Zhou as our founder and ultimate beneficial owner. At establishment, our registered
share capital of RMB1.00 million was held by Mr. Zhou (through his two nominees).
During the early stage of our Company’s development in 2014, Mr. Zhou sought to strengthen our
Company’s capital base and support its long-term growth by introducing additional shareholders.
Specifically, through a series of equity transfers agreed among Mr. Zhou and the then existing
Shareholders, the equity interests in our Company were as follows: (a) 6.00% to Mr. Chen Yonggang
(࡝being a key early employee of our Company), (b) 60.00% to Zhongcheng Chuangzhan, which
served as our Company’s initial employee shareholding platform, (c) 25.00% to Beward Invest Limited*
(׸( ଉέ)ʮ̡)( “ Beward ”) and 3.00% to Shenzhen Langke Investment Co., Ltd.* ( ଉέ
ʮ̡ )( “ Langke Investment ”), both as external shareholders introduced for the
purpose of their industry resources and potential strategic cooperation.
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The shareholding structure of our Company at the early stage of development was as follows:
Name of Shareholders
Equity interests in
our Company
Mr. Zhou (Note) ................................................... 6.00%
Mr. Chen Yonggang (Note) ........................................... 6.00%
Zhongcheng Chuangzhan ............................................ 60.00%
Beward ........................................................ 25.00%
Langke Investment (Note) ............................................ 3.00%
Note:
For administrative conveniences, the shareholding of Mr. Zhou, Mr. Chen Yonggang and Langke Investment was held by two
nominees, namely Ms. He Shubing ( Оૺж) (mother of Mr. Zhou) and Mr. Pu Minjun (ࠏemployee of our Company).
These shareholding nominee arrangements were terminated in 2020.
2. Lebo Technology Equity Swap and Equity Transfers
Hunan Lebo Technology Co., Ltd.* (ʮ̡ )( “ Lebo Technology ”) is a company
established in the PRC principally engaged in AI research, development and production of enterprise
and car parking big data operation platforms, and provision of smart parking solutions. In 2016, Mr.
Xia Dong (؇ࢀchairman of Lebo Technology, became acquainted with us at a trade exhibition. In
late 2017, the shareholders of our Company were anticipating a proposed equity swap with Lebo
Technology, pursuant to which, all original shareholders of our Company would sell their equity
interests in our Company to Lebo Technology in exchange for a portion of the equity interests in Lebo
Technology (the “ Equity Swap Transaction ”).
Prior to the finalisation of the contract terms of the Equity Swap Transaction, on 28 November
2017, Beward transferred a total of 10.00% equity interests in our Company (5.00% each to Mr. Zhou
and Mr. Xia Dong) at a total consideration of RMB1.9 million. Having considered the future prospect
of our Company, Mr. Xia acquired the 5% equity interests in our Company from Beward as his own
investment based on arm’s length negotiations. Mr. Xia Dong has not been involved in the management
of our Company since he became a shareholder of our Company. On 18 December 2017, for the
purpose of business development and capital needs, our Company’s registered capital was increased
from RMB1.0 million to RMB6.0 million, with each Shareholder subscribing for their respective
portions. On 21 December 2017, all Shareholders at the time agreed to transfer their equity interests to
Lebo Technology, which became the sole Shareholder of our Company. It was agreed that the senior
management of our Company would stay after the Equity Swap Transaction.
In January 2020, in view of the non-materialisation of the anticipated synergy and strategic
benefits arising from differences in the long-term business development focus on products and services
between our Company’s original shareholders and those of Lebo Technology, the original shareholders
of our Company and Lebo Technology mutually agreed to unwind the Equity Swap Transaction in its
entirety. As a result, our Company’s equity interests, as well as all original considerations paid by Lebo
Technology in connection with the Equity Swap Transaction, were fully unwound and our Company’s
equity interests were ultimately transferred back to the original shareholders of our Company. The
Equity Swap Transaction and the subsequent unwinding did not have any material adverse impact to our
business operations as our Company was managed by the same senior management during the relevant
time.
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As a result, the shareholding structure of our Company was as follows:
Name of Shareholders
Equity interests in
our Company
(%)
Mr. Zhou ....................................................... 11.00%
Mr. Chen Yonggang ............................................... 6.00%
Zhongcheng Tianying LP (Note 2) ...................................... 60.00%
Beward (Note 1) ................................................... 15.00%
Mr. Xia Dong .................................................... 5.00%
Langke Investment ................................................ 3.00%
Total .......................................................... 100.00%
Notes:
(1) Beward’s 15.00% equity interest was legally held by Mr. Gao Xiaochun (the legal representative of Beward) as its
nominee. Such nominee shareholding arrangement was unwound in December 2020.
(2) Zhongcheng Tianying LP was a newly formed employee shareholding platform to take up the equity interests of our
Company previously held by Zhongcheng Chuangzhan.
3. Series A Financing in November 2020
On 30 November 2020, we entered into a capital increase agreement with our Series A investors
and increased our registered capital from RMB6,000,000 to RMB6,774,193 (“ Series A Financing ”).
Details of our Series A Financing is set out below:
Subscriber Registered capital Consideration
(RMB) (RMB)
Shenzhen Taolue New Energy Equity Investment Fund
Partnership Enterprise (Limited Partnership)* ( ଉέᗱଫอঐ
ΥྫΆุ (Υྫ)) (“ Taolue New
Energy ”) ....................................... 580,645 30 million
Shenzhen Kaiying No. 8 Venture Capital Partnership (L.P.)*
(ɞ໮௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Kaiying
No. 8 ”) ......................................... 96,774 5 million
Shenzhen Kaiying No. 9 Venture Capital Partnership (Limited
Partnership)* (ɘ໮௴ุҳ༟ΥྫΆุ (Υྫ))
(“Kaiying No. 9 ”) ................................. 96,774 5 million
Total ............................................ 774,193 40 million
4. Equity Transfers to Employee Shareholding Platform in December 2020
On 21 December 2020, Mr. Zhou transferred 0.71% equity interest in our Company to
Zhongzheng Tianying LP at a consideration of RMB637,700, Beward (through Mr. Gao Xiaochun as his
nominee) transferred 0.53% equity interest in our Company to Zhongzheng Tianying LP at a
consideration of RMB478,300, Mr. Xia Dong transferred 0.18% equity interest in our Company to
Zhongzheng Tianying LP at a consideration of RMB159,500 and Zhongcheng Tianying LP transferred
2.13% equity interest in our Company to Zhongzheng Tianying LP at a consideration of RMB1,913,100.
This transfer was implemented to establish Zhongzheng Tianying LP as a separate employee
shareholding platform, enabling a new group of employee participants to benefit from equity incentives
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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under a dedicated structure. It was decided by the Shareholders at the time, based on discussions among
them, that only certain Shareholders, namely Mr. Zhou, Beward, Mr. Xia Dong and Zhongcheng
Tianying LP, would transfer shares to Zhongzheng Tianying LP.
5. Series B Financing in July 2021
On 30 July 2021, we entered into a capital increase agreement with our Series B investors,
resulting in the increase of our registered capital from RMB6,774,193 to RMB7,903,225 (“ Series B
Financing ”). Details of our Series B Financing are set out below:
Subscriber Registered capital Consideration
(RMB) (RMB)
Shenzhen HTI Venture Capital Co., Ltd.* ( ଉέ̹৷อҳ௴ุҳ
ʮ̡ )( “ Gaoxintou ”).......................... 225,806 20.0 million
Chengdu Shengao Investment Zhongxiaodan Entrepreneurship
Equity Investment Fund Partnership Enterprise (Limited
Partnership)* (ΥྫΆ
ุ(Υྫ)) (“ Chengdu Zhongxiaodan ”) .............. 191,935 17.0 million
Shenzhen Shenrong Ruihe Venture Capital Partnership (Limited
Partnership)* ( ଉέଉႂ๿Υ௴ุҳ༟ΥྫΆุ (Υྫ))
(“Shenrong Ruihe ”) ............................... 33,871 3.0 million
Shenzhen City Talent Innovation Venture II Equity Investment
Fund Partnership (L.P.)* (ᛆҳ༟
ΥྫΆุ (Υྫ)) (“ Rencai No. 2 ”) .............. 90,323 8.0 million
Shenzhen Xiaohe Investment Partnership (L.P.)* ( ଉέ̹ʃͫ௴
ุҳ༟ΥྫΆุ (Υྫ)) (“ Xiaohe Investment LP ”) ..... 22,581 2.0 million
Shenzhen Taolue Xinwang Venture Capital Partnership
Enterprise (Limited Partnership)* (௴ุҳ༟Υ
ྫΆุ(Υྫ)) (“ Taolue Xinwang ”)................. 112,903 10.0 million
Shenzhen Kaiying No. 10 Venture Capital Partnership Enterprise
(Limited Partnership)* (ɤ໮௴ุҳ༟ΥྫΆุ (ࠢ
Υྫ)) (“ Kaiying No. 10 ”)........................... 158,065 14.0 million
Mr. Zhu Zhenkui (۲ࣈ)............................ 225,806 20.0 million
Shenzhen Fuquan No. 1 Investment Partnership Enterprise
(Limited Partnership)* (ఠ໮ҳ༟ΥྫΆุ (Υ
ྫ)) (“ Fuquan No. 1 ”) ............................. 67,742 6.0 million
Total ............................................ 1,129,032 100.0 million
6. Equity Transfer to Employee Shareholding Platform in April 2022
On 2 April 2022, Zhongcheng Tianying LP transferred 1.95% equity interest in our Company to
Zhongzhi Tianying LP for a total consideration of RMB6,825,000. This transfer was implemented to
establish Zhongzhi Tianying LP as a separate employee shareholding platform, enabling a new group of
employee participants to benefit from equity incentives under a dedicated structure.
As a result, the shareholding structure of our Company was as follows:
Name of Shareholders
Approximate
equity interests in
our Company
Zhongcheng Tianying LP ........................................... 41.78%
Beward ........................................................ 10.93%
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Name of Shareholders
Approximate
equity interests in
our Company
Mr. Zhou ....................................................... 7.74%
Mr. Chen Yonggang ............................................... 4.55%
Mr. Xia Dong .................................................... 3.64%
Zhongzheng Tianying LP ........................................... 3.04%
Langke Investment ................................................ 2.28%
Kaiying No. 8 ................................................... 1.22%
Kaiying No. 9 ................................................... 1.22%
Taolue New Energy ............................................... 7.35%
Gaoxintou ...................................................... 2.86%
Chengdu Zhongxiaodan ............................................. 2.43%
Shenrong Ruihe .................................................. 0.43%
Rencai No. 2 .................................................... 1.14%
Xiaohe Investment LP .............................................. 0.29%
Taolue Xinwang .................................................. 1.43%
Kaiying No. 10 ................................................... 2.00%
Mr. Zhu Zhenkui ................................................. 2.86%
Fuquan No. 1 .................................................... 0.86%
Zhongzhi Tianying LP ............................................. 1.95%
Total .......................................................... 100.00%
7. Conversion into a Joint Stock Limited Company in November 2022
On 8 November 2022, our Company was converted into a joint stock company and was renamed
as Shenzhen HQVT Technology Co., Ltd. (ʮ̡ ), with a registered capital
of RMB7,903,225 and divided into 7,903,225 Shares with a nominal value of RMB1.00 each.
8. Series C Financing in October 2024
On 18 October 2024, we entered into a capital increase agreement with Series C investor,
resulting in the increase in our registered capital from RMB7,903,225 to RMB8,407,686 (“ Series C
Financing ”). Details of our Series C Financing is set out below:
Subscriber Number of Shares Consideration
(RMB)
Jinhua Jinlan Sunshine Strategy Venture Capital Partnership
(Limited Partnership)* (ᚆජΈᗱଫ௴ุҳ༟ΥྫΆ
ุ(Υྫ)) (“ Jinlan Sunshine ”) .................... 504,461 60.0 million
9. Series C+ Financing in December 2024
On 31 December 2024, we entered into a capital increase agreement with Series C+ investor and
our registered capital increased from RMB8,407,686 to RMB8,491,763 (“ Series C+ Financing ”).
Details of our Series C+ Financing is set out below:
Subscriber Number of Shares Consideration
(RMB)
Shenzhen Panhui Investment Development Co., Ltd.* ( ଉέ̹ᖂ
ʮ̡ )( “ Panhui Investment ”) ............ 84,077 10.0 million
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10. Share Transfers in May 2025
On 12 May 2025, following the triggering of (i) certain performance-based covenants originally
agreed with Series A investors, whereby Mr. Zhou and Mr. Chen Yonggang undertook to adjust the
shareholding proportions of the Series A investors by way of transfer of their shareholdings to the
Series A investors at nominal consideration based on adjusted valuation if our aggregate net profits for
2020, 2021 and 2022 is less than a prescribed amount, and (ii) the equality treatment covenants
originally agreed with Series B investors, whereby Series B investors may receive the same preferential
rights or benefits given to other shareholders or investors of our Company, Mr. Zhou and Mr. Chen
Yonggang entered into an agreement with relevant investors. Pursuant to such agreement, which was
entered into based on negotiations among Mr. Zhou, Mr. Chen Yonggang and the relevant Series A and
Series B investors, and Mr. Zhou and Mr. Chen Yonggang agreed to transfer portions of their
shareholdings to certain Series A and Series B investors each at a nominal consideration, as share
compensation for such investors.
Specifically, (i) Mr. Zhou agreed to transfer an aggregate of approximately 98,474 shares to 11
institutional investors, including Taolue New Energy, Kaiying No. 9, Kaiying No. 8, Gaoxintou,
Chengdu Zhongxiaodan, Rencai No. 2, Xiaohe Investment LP, Taolue Xinwang, Kaiying No. 10,
Fuquan No. 1 and Shenrong Ruihe, each at a nominal consideration of RMB1.00; and (ii) Mr. Chen
Yonggang agreed to transfer an aggregate of approximately 62,815 shares to the same group of
investors, each at a nominal consideration of RMB1.00.
Upon completion of the transfers, the registered capital of our Company remained unchanged at
RMB8,491,763. The equity interest of Mr. Zhou in our Company decreased from approximately 7.21%
to 6.05%, and that of Mr. Chen Yonggang decreased from approximately 4.24% to 3.50%. Each of the
transferee shareholders increased their respective shareholdings accordingly.
Transferor(s) Transferee(s) Number of Shares
Mr. Zhou .................. Taolue New Energy 44,906
Kaiying No. 9 7,484
Kaiying No. 8 7,484
Gaoxintou 9,650
Chengdu Zhongxiaodan 8,204
Rencai No. 2 3,857
Xiaohe Investment LP 964
Taolue Xinwang 4,829
Kaiying No. 10 6,757
Fuquan No. 1 2,893
Shenrong Ruihe 1,446
Mr. Chen Yonggang (࡝)... Taolue New Energy 28,641
Kaiying No. 9 4,774
Kaiying No. 8 4,774
Gaoxintou 6,157
Chengdu Zhongxiaodan 5,232
Rencai No. 2 2,466
Xiaohe Investment LP 616
Taolue Xinwang 3,074
Kaiying No. 10 4,307
Fuquan No. 1 1,849
Shenrong Ruihe 925
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11. Share Transfers to Kezhihua in May 2025
Pursuant to share transfer agreements entered into in May 2025, six existing shareholders, namely
Beward, Gaoxintou, Chengdu Zhongxiaodan, Shenrong Ruihe, Rencai No. 2, and Xiaohe Investment LP,
agreed to transfer an aggregate of approximately 174,082 Shares to Hainan Kezhihua Digital
Technology Co., Ltd.* (ʮ̡ )( “ Kezhihua ”) for a total consideration of
RMB20,705,000. The consideration was agreed among the six existing shareholders and Kezhihua
based on arm’s length negotiations.
Details of the transfers are as follows:
Transferor Transferee
Number of Shares
Transferred Consideration
(RMB)
Beward ............................. Kezhihua 4,246 505,000
Gaoxintou ........................... 67,934 8,080,000
Chengdu Zhongxiaodan .................. 57,743 6,868,000
Shenrong Ruihe ....................... 10,191 1,212,000
Rencai No. 2 ......................... 27,175 3,232,000
Xiaohe Investment LP ................... 6,793 808,000
Total .............................. 174,082 20,705,000
Upon completion of the transfers, Kezhihua became a shareholder of our Company holding
approximately 2.05% of our Company’s equity interest and the registered capital of our Company
remained unchanged at RMB8,491,763.
12. Series D Financing in July 2025
On 18 July 2025, we entered into a capital increase agreement with Series D investor and our
registered capital increased from RMB8,491,763 to RMB8,613,074 (“ Series D Financing ”). Details of
our Series D Financing are set out below:
Subscriber Number of Shares Consideration
(RMB)
Shanghai No. 9 Private Investment Fund Partnership Enterprise
(Limited Partnership)* (ΥྫΆ
ุ(Υྫ)) (“ Zhide No. 9 ”) ....................... 121,311 50.0 million
13. Share Subdivision
Immediately prior to the Listing, we expect to implement the Share Subdivision, pursuant to
which each of our Share with par value of RMB1.00 was subdivided into 80 Shares with par value of
RMB0.0125 each. Upon completion of such Share Subdivision, the registered capital of our Company,
which is RMB8,613,074, was divided into 689,045,920 Shares with par value of RMB0.0125 per Share,
which was subscribed by all our then Shareholders in proportion to their respective equity interests in
our Company immediately before the Listing, and the number of our issued Shares will be 689,045,920,
without taking into consideration the new Shares to be issued for the Global Offering.
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PRE-IPO INVESTMENTS
The following table summarises the key terms of the Pre-IPO Investments to our Company made by the Pre-IPO Investors:
Pre-IPO Investment
Date of relevant pre-IPO
agreement
Date of last payment of
consideration
Number of Shares
subscribed/
acquired
Number of Shares
subscribed/
acquired as adjusted by the
Share Subdivision
Implied post-money
valuation (Note 1) Consideration paid
1. Series A .................... 30 November 2020 7 December 2020 774,193 Shares 61,935,440 Shares RMB350,000,000 RMB40,000,000
2. Series B .................... 30 July 2021 24 September 2021 1,129,032 Shares 90,322,560 Shares RMB700,000,000 RMB100,000,000
3. Series C ................... 18 October 2024 9 June 2025 504,461 Shares 40,356,880 Shares RMB1,000,000,000 RMB60,000,000
4. Series C+ ................... 31 December 2024 14 January 2025 84,077 Shares 6,726,160 Shares RMB1,010,000,000 RMB10,000,000
5. Series D ................... 18 July 2025 25 July 2025 121,311 Shares 9,704,880 Shares RMB3,550,000,000 RMB50,000,000
Notes:
(1) The implied post-money valuation is calculated based on (i) the cost per Share paid to our Company for the corresponding round of the Pre-IPO Invest ment and (ii) the total
registered share capital or issued shares of our Company immediately following the corresponding round of the Pre-IPO Investment.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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The consideration for each round of the Pre-IPO Investments was determined based on arm’s
length negotiation among the respective Pre-IPO Investors and our Group after taking into
consideration of the timing of the investments and the status of our business operations.
Pursuant to the applicable PRC law, within the 12 months following the Listing Date, all existing
Shareholders (including the Pre-IPO Investors) cannot dispose of any of the Shares held by them.
We utilised the proceeds from the Pre-IPO Investments for the principal business of our Group,
including but not limited to the growth and expansion of our Group’s business within the PRC and the
general working capital purposes. As at the Latest Practicable Date, the funds raised from the Pre-IPO
Investments have not been fully utilised.
At the time of the Pre-IPO Investments, our Directors were of the view that our Company could
benefit from the additional capital provided by the Pre-IPO Investors’ investments in our Company, as
well as the Pre-IPO Investors’ knowledge and experience. Our Directors were also of the view that our
Company could benefit from the Pre-IPO Investors’ commitment to our Company as their investment
demonstrates their confidence in the operations of our Group and serves as an endorsement of our
Company’s performance, strengths and prospects.
Further details of the investment of each of our Pre-IPO Investors are set out below:
Name of Shareholders
Number of Net Shares
subscribed/acquired (Note 3)
Number of Net Shares
subscribed/acquired
as adjusted by
the Share Subdivision Net Consideration (RMB)
Cost per
Share (Notes 1, 3)
Discount to the
Offer
Price (Notes 2, 3)
1 Kaiying No. 9 .......... 109,032 Shares 8,722,560 Shares RMB5,000,000 RMB0.57 90.9%
2 Kaiying No. 8 ........... 109,032 Shares 8,722,560 Shares RMB5,000,000 RMB0.57 90.9%
3 Taolue New Energy ........ 654,192 Shares 52,335,360 Shares RMB30,000,000 RMB0.57 90.9%
4 Gaoxintou ............. 173,679 Shares 13,894,320 Shares RMB11,920,000 RMB0.86 86.3%
5 Chengdu Zhongxiaodan ...... 147,628 Shares 11,810,240 Shares RMB10,132,000 RMB0.86 86.3%
6 Shenrong Ruihe .......... 26,051 Shares 2,084,080 Shares RMB1,788,000 RMB0.86 86.3%
7 Rencai No. 2 ........... 69,471 Shares 5,557,680 Shares RMB4,768,000 RMB0.86 86.3%
8 Xiaohe Investment LP ...... 17,368 Shares 1,389,440 Shares RMB1,192,000 RMB0.86 86.3%
9 Taolue Xinwang ......... 120,806 Shares 9,664,480 Shares RMB10,000,000 RMB1.03 83.6%
10 Kaiying No. 10 .......... 169,129 Shares 13,530,320 Shares RMB14,000,000 RMB1.03 83.6%
11 Mr. Zhu Zhenkui ......... 225,806 Shares 18,064,480 Shares RMB20,000,000 RMB1.11 82.3%
12 Fuquan No. 1 ........... 72,484 Shares 5,798,720 Shares RMB6,000,000 RMB1.03 83.6%
13 Jinlan Sunshine .......... 504,461 Shares 40,356,880 Shares RMB60,000,000 RMB1.49 76.2%
14 Panhui Investment ........ 84,077 Shares 6,726,160 Shares RMB10,000,000 RMB1.49 76.2%
15 Kezhihua ............. 174,082 Shares 13,926,560 Shares RMB20,705,000 RMB1.49 76.2%
16 Zhide No. 9 ............ 121,311 Shares 9,704,880 Shares RMB50,000,000 RMB5.15 17.8%
Note:
(1) The cost per Share is calculated based on dividing the net consideration by the net number of Shares subscribed or
acquired, taking into account the share transfers to Series A and Series B investors as compensation shares and share
transfers to Kezhihua in May 2025, as adjusted by the Share Subdivision to be undertaken immediately prior to the Listing.
(2) The discount to the Offer Price is calculated based on the Offer Price of HK$7.20 per H Share.
(3) The number of net shares subscribed/acquired set out in the table may differ from the original number of shares initially
subscribed or acquired by the relevant Pre-IPO Investors at the time of the respective Pre-IPO Investments for reasons that
(i) investors of Series A Financing and certain investors of Series B Financing subsequently acquired Shares from Mr.
Zhou and Mr. Chen Yonggang in May 2025, and (ii) certain investors of Series B financing transferred a portion of their
shareholdings to Kezhihua in May 2025. For details, please refer to the subsections headed “Establishment and
Development of Our Company — 10. Share Transfers in May 2025” and “Establishment and Development of Our
Company — 11. Share Transfers to Kezhihua in May 2025”. The number of net shares subscribed/acquired set out in the
table is the number of Shares held by the Pre-IPO Investors after Series D Financing in July 2025, taking into account the
aforementioned Share transfers in May 2025, which is also reflected in the calculations of the cost per Share and discount
on the Offer Price in the table, resulting in the different cost per Share of investments among investors of Series B
Financing.
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Special Rights of the Pre-IPO Investors
In connection with the Pre-IPO Investments, our Pre-IPO Investors were granted certain special
rights, including, among others, right of co-sale and redemption right against Mr. Chen Yonggang and
our Controlling Shareholders, information right and anti-dilution right against Mr. Chen Yonggang, our
Controlling Shareholders and our Company, and pre-emptive right and liquidation preference right
against our Company. In anticipation of the Global Offering, all such special rights granted to our
Pre-IPO Investors have been terminated prior to the filing of the listing application by our Company
with the Stock Exchange in compliance with Chapter 4.2 of the Guide for New Listing Applicants
issued by the Stock Exchange.
In relation to special rights of the Pre-IPO investments, anti-dilution right and liquidation
preference right against our Company, were irrevocably terminated upon the filing of the listing
application by our Company with the Stock Exchange, and shall not be reinstated under any
circumstances. For the vast majority of Pre-IPO Investors, the remaining special rights, namely
redemption right, anti-dilution right, pre-emptive right, right of first refusal, right of co-sale, equality
treatment right and information right against Mr. Chen Yonggang, our Controlling Shareholders and/or
our Company, as the case may be, will be reinstated if (i) the listing application is withdrawn, rejected,
returned or lapses and a new application is not submitted within six months; or (ii) our Company fails
to complete the listing within 18 months after the submission of the listing application to the Stock
Exchange. For one Pre-IPO Investor, namely Mr. Zhu Zhenkui, the remaining special right, namely
redemption right, will be reinstated if the listing application is withdrawn, rejected, returned, terminated
or lapses and a new application is not submitted within 12 months thereafter. Our Company did not
provide any guarantee or enter into any side agreement with the pre-IPO investors in respect of the
aforementioned redemption rights granted to pre-IPO investors against Mr. Zhou, Mr. Chen Yonggang
and our Controlling Shareholders. Our Company is not obligated to repurchase or settle the relevant
amounts considering that it is not a party to the relevant clauses of the relevant agreements. The
redemption rights do not constitute financial liabilities to our Company as they are private arrangements
among Mr. Zhou, Mr. Chen Yonggang, our Controlling Shareholders and each of the Pre-IPO Investors,
and no liability regarding such redemption rights was recorded during the Track Record Period. For
details, please refer to Note 33(d) to the Accountants’ Report set forth in Appendix I to this prospectus.
On the basis that (i) all special rights of the Pre-IPO Investors were terminated upon the filing of
the listing application by our Company, (ii) certain special rights of the Pre-IPO Investors will only be
reinstated under circumstances that the Listing does not complete, and (iii) no effective special rights of
the Pre-IPO Investors will exist after the Listing, the treatment of special rights of the Pre-IPO
Investors are in compliance with Chapter 4.2 of the Guide for New Listing Applicants.
OUR EMPLOYEE SHAREHOLDING PLATFORMS
To recognise the contributions of our employees and to further incentivise them to promote our
Group’s development, we established three employee shareholding platforms under PRC law, namely
Zhongcheng Tianying LP, Zhongzheng Tianying LP and Zhongzhi Tianying LP (collectively the “ ESOP
Platforms ”).
As at the Latest Practicable Date, all of the awards under the ESOP Platforms had been granted,
and the grantees held the limited partnership interests in the respective ESOP Platforms. Pursuant to the
relevant partnership agreements, the general partner is responsible for the management and
administration of each ESOP Platform.
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Each of the ESOP Platforms is structured as a limited partnership, with Mr. Zhou, our founder and
executive Director, acting as the sole general partner. Mr. Zhou hold approximately 35.05% of the
partnership interest in Zhongcheng Tianying LP, approximately 3.22% partnership interest in
Zhongzheng Tianying LP, and approximately 18.46% partnership interest in Zhongzhi Tianying LP. The
limited partners of the ESOP Platforms are primarily employees of our Group.
As at the date of this prospectus, Zhongcheng Tianying LP, Zhongzheng Tianying LP, and
Zhongzhi Tianying LP held 38.34%, 2.79%, and 1.79% of the issued share capital in our Company,
respectively.
Zhongcheng Tianying LP
Zhongcheng Tianying LP is a limited partnership established under the laws of the PRC on 21
August 2017. As at the Latest Practicable Date, Mr. Zhou is the general partner and holds
approximately 35.05% of the partnership interests, with the remaining approximately 64.95% held by
limited partners, of which Mr. Zou Xiaogang (࡝Mr. Chen Yonggang (࡝Mr. Miao Rui (ߴ
๿) and Dr. Chai Jian (ᄏ), each a Director, holds approximately 7.33%, 25.56%, 6.67% and 2.39% of
the partnership interests, respectively. There are no limited partners who individually holds more than
30% partnership interests in Zhongcheng Tianying LP.
Zhongzheng Tianying LP
Zhongzheng Tianying LP is a limited partnership established in the PRC on 8 December 2020. As
at the Latest Practicable Date, Mr. Zhou is the general partner and holds approximately 3.22% of the
partnership interests, and the remaining approximately 96.78% is held by limited partners. Other than
Mr. Zhou, no Director holds any partnership interests in Zhongzheng Tianying LP, and there are no
limited partners who individually holds more than 30% partnership interests in Zhongzheng Tianying
LP.
Zhongzhi Tianying LP
Zhongzhi Tianying LP is a limited partnership established in the PRC on 25 February 2022. As at
the Latest Practicable Date, Mr. Zhou is the general partner and holds approximately 18.46% of the
partnership interests, and the remaining approximately 81.54% is held by limited partners. Other than
Mr. Zhou, no Director holds any partnership interests in Zhongzhi Tianying LP, and there are no limited
partners who individually holds more than 30% partnership interests in Zhongzhi Tianying LP.
Joint Sponsors’ Confirmation
On the basis that (i) the Listing Date, being the first day of trading of the H Shares on the Stock
Exchange, will take place no earlier than 120 clear days after completion of the Pre-IPO Investments;
and (ii) the special rights of the Pre-IPO Investors have been terminated immediately before submission
of the first listing application as disclosed in “— Special Rights of the Pre-IPO Investors” above, the
Joint Sponsors confirm that the Pre-IPO Investments are in compliance with the Pre-IPO Investment
Guidance as defined in Chapter 4.2 of the Guide for New Listing Applicants issued by the Stock
Exchange.
Information about our Pre-IPO Investors
Set out below is a description of our Pre-IPO Investors as at the date of this prospectus, most of
them being private equity funds and strategic investment corporations, which have made meaningful
investments in our Company. To the best knowledge of our Directors, each of the following Pre-IPO
Investors is an Independent Third Party.
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Langke Group (ҳ༟ӻ )
Kaiying No. 8 is registered venture capital fund established as a limited partnership in the PRC on
15 February 2015. Kaiying No. 9 is a registered venture capital fund established as a limited
partnership in the PRC on 13 June 2018. Kaiying No. 10 is a registered venture capital fund established
as a limited partnership in the PRC on 29 September 2020. The general partner of these funds is
Shenzhen Kingcaptial-TC Investment Management Partnership (Limited Partnership)* (˂ϓҳ
༟၍ଣΥྫΆุ (Υྫ)), an Independent Third Party, whose general partner, Shenzhen Kaiying
Jicheng Investment Management Co., Ltd.* (ʮ̡ ), an Independent Third
Party, is controlled by Langke Investment.
Langke Investment is a limited liability company established in the PRC on 1 December 2014 and
principally engaged in venture capital, and related advisory services. Langke Investment is 99% owned
by Wanwuwei (Shenzhen) Entrepreneurship Investment Centre (Limited Partnership)* (މي(ଉέ)௴
ุҳ༟ʕː (Υྫ)), whose general partner is Everything For Smart Industry (Shenzhen) Co., Ltd.*
(౽ᅆପุ (ଉέ)ʮ̡), which is ultimately controlled by Pu Zuli ( ႈख़ᘆ), an Independent
Third Party.
As at the date of this prospectus, Langke Investment, together with Kaiying No. 8, Kaiying No. 9
and Kaiying No. 10 (collectively, “ Langke Group ”), collectively held approximately 6.59% of the total
issued share capital of our Company. To the best of our Directors’ knowledge, the limited partners of
Kaiying No. 8, Kaiying No. 9 and Kaiying No. 10 are Independent Third Parties, and save for Mr. Li
Zhe (ࡪand Mr. Li Jian (ܔeach an individual investor, who directly holds 55.67% and 43.89%
of the partnership interests in Kaiying No. 9, respectively, there are no individuals or entities which
individually controls or holds more than 30% partnership interests in Kaiying No. 8, Kaiying No. 9 and
Kaiying No. 10.
Zheshang Capital Group ( एਠ௴ҳӻ )
Zheshang Venture Capital Co., Ltd.* (ʮ̡ )( “ Zheshang Capital ”), is an
Independent Third Party and a private equity and venture capital fund manager established in the PRC.
Zheshang Capital is listed on the National Equities Exchange and Quotations (stock code: 834089). Its
business primarily focuses on venture capital investments in high-technology enterprises, with an
emphasis on manufacturing, digital intelligence, and industrial upgrades. As at the date of this
prospectus, the following three entities affiliated with Zheshang Capital collectively held approximately
14.86% of the share capital of our Company:
 Taolue New Energy : 7.60% of the share capital of our Company;
 Taolue Xinwang: 1.40% of the share capital of our Company;
 Jinlan Sunshine: 5.86% of the share capital of our Company.
(together with Zheshang Capital and Zhejiang Business Venture, collectively the “ Zheshang Capital
Group ”).
Each of the above funds is managed by Zhejiang Business Venture Capital Management
(Shenzhen) Co., Ltd.* ( एਠ௴ุҳ༟၍ଣ (ଉέ)ʮ̡)( “ Zhejiang Business Venture ”), an
Independent Third Party, which serves as the general partner. Zhejiang Business Venture is a registered
private fund manager in PRC and is a non-wholly owned subsidiary of Zheshang Capital, which holds
51% of its equity interest.
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Taolue New Energy is a registered venture capital fund established as a limited partnership in the
PRC on 8 January 2018, Taolue Xinwang is registered venture capital fund established as a limited
partnership in the PRC on 17 December 2020 and Jinlan Sunshine is a venture capital fund established
as a limited partnership in the PRC on 25 March 2022. These funds are managed and advised by the
same investment team under Zheshang Capital and adopt unified investment strategies across their
portfolio companies.
To the best of our Directors’ knowledge, all limited partners of these funds are Independent Third
Parties, and save for (i) Zheshang Capital (a) directly holding approximately 34.21% of the partnership
interests in Taolue New Energy, and (b) indirectly holding approximately 0.51% of the partnership
interests in Taolue New Energy through its 51.00% interests in Zhejiang Business Venture, which in
turn holds 1.00% interests in Taolue New Energy, (ii) Du Qinde ( Ӂාᅃ), an individual investor,
directly holding 50.00% of the partnership interests in Taolue Xinwang, and (iii) Shenzhen Shihai
Taolue Venture Capital Partnership Enterprise (Limited Partnership)* ( ଉέ˰ऎᗱଫ௴ุҳ༟ΥྫΆ
ุ(Υྫ)), a registered venture capital funds established as a limited partnership in the PRC on 6
January 2021, holding 42.00% of the partnership interests in Jinlan Sunshine, there are no individuals
or entities which individually controls or holds more than 30% partnership interests in Taolue New
Energy, Taolue Xinwang and Jinlan Sunshine.
Shenzhen HTI Group ( ৷อҳණྠӻ )
As at the date of this prospectus, a group of PRC institutional investors affiliated with Shenzhen
HTI Group Co., Ltd.* (ʮ̡ )( “ HTI Group ”), collectively held approximately
4.54% of the issued share capital of our Company. These investors comprise the following entities:
 Gaoxintou was established as a limited liability company in the PRC on 29 June 2010 and is
an Independent Third Party and a wholly owned subsidiary of HTI Group, and a PRC
state-owned venture capital enterprise principally engaged in equity investments in
technology and innovation-driven sectors. As at the date of this prospectus, it held
approximately 2.02% of the share capital in our Company.
 Chengdu Zhongxiaodan is a registered private equity investment fund established as a
limited partnership in the PRC on 9 December 2020 and its general partner is Chengdu
Shengao Investment Zhongxiaodan Equity Investment Management Co., Ltd.* ( ϓேଉ৷ҳ
ʮ̡ ), an Independent Third Party and a non-wholly owned
subsidiary of HTI Group. The fund held approximately 1.71% of the share capital in our
Company as at the date of this prospectus.
 Rencai No. 2 is registered venture capital fund established as a limited partnership in the
PRC on 18 April 2017. Its general partner is Shenzhen High-Tech Investment and Equity
Investment Fund Management Co., Ltd.* (ʮ̡ ),
an Independent Third Party and a non-wholly owned subsidiary of HTI Group. As at the date
of this prospectus, it held approximately 0.81% of the share capital in our Company.
Each of the above entities is ultimately controlled by HTI Group, which in turn is controlled by
Shenzhen Investment Holdings Co., Ltd.* (ʮ̡ ), a municipal state-owned assets
supervision and administration entity under Shenzhen Municipal People’s Government State-owned
Assets Supervision and Administration Commission (ึ )
(together with HTI Group, Gaoxintou, Chengdu Zhongxiaodan and Rencai No. 2, collectively the
“Shenzhen HTI Group ”).
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To the best of our Directors’ knowledge, all limited partners of Chengdu Zhongxiaodan and
Rencai No. 2 are Independent Third Parties, and save for (i) Shenzhen Huabai Chuangfu Investment
Enterprise (Limited Partnership)* (௴బҳ༟Άุ (Υྫ)) directly holding 40.00% of the
partnership interests in Rencai No. 2, and (ii) Chen Xingpeng ( ௓፴ᘄ), an Independent Third Party, (a)
directly holding 2.00% of the partnership interests in Rencai No. 2, (b) indirectly holding 39.60% of the
partnership interests in Rencai No. 2 through his 99% partnership interests in Shenzhen Huabai
Chuangfu Investment Enterprise (Limited Partnership)* (௴బҳ༟Άุ (Υྫ)), and (c)
indirectly holding approximately 0.13% of the partnership interests in Rencai No. 2 through his 30%
interests in Shenzhen Jianfu Investment Co., Ltd.* (ʮ̡ ), which in turn holds
90% interests in Shenzhen Waratah Group Limited Company* (ʮ̡ ), which in
turn holds 100% interests in Shenzhen Qianhai Zhaohuan Capital Co., Ltd.* (༟͉
ʮ̡), which in turn holds 49% interests in Shenzhen High Tech Investment and Equity Investment
Fund Management Co., Ltd.* (ʮ̡ ), which in turns hold 1%
of the partnership interests in Rencai No. 2, there are no individuals or entities which individually
controls or holds more than 30% partnership interests in Chengdu Zhongxiaodan and Rencai No. 2.
Xiaohe Investment LP
Xiaohe Investment LP is a limited partnership established in the PRC on 15 June 2018 under the
laws of the PRC. The fund is primarily engaged in equity investment using its proprietary capital. Its
business scope includes venture capital, investment consulting, business information consulting and
enterprise management consulting (excluding financial, securities, insurance, banking or other regulated
businesses). The general partner of Xiaohe Investment LP is Liu Lili ( ᄎᘆᘆ), who directly holds a
70% partnership interest. The remaining 30% interest is held directly by Ji Jiajun (Գё). To the best
of our Directors’ knowledge, each of Liu Lili and Ji Jiajun is an Independent Third Party.
Xiaohe Investment LP holds approximately 0.20% of the share capital in our Company as at the
date of this prospectus.
Shenrong Ruihe
Shenrong Ruihe is a limited partnership established in the PRC on 5 January 2021. The fund is
primarily engaged in equity investment using its proprietary capital. The fund is managed and
controlled by its general partner, Zhang Huaxue ( ੵശ௛), an Independent Third Party who directly
holds 55.00% partnership interests in Shenrong Ruihe. The fund’s business scope includes proprietary
investment, investment management, and investment advisory. As at the date of this prospectus,
Shenrong Ruihe held approximately 0.30% of the share capital in our Company.
To the best of our Directors’ knowledge, (i) all limited partners of Shenrong Ruihe are
Independent Third Parties, and (ii) save for Zhang Huaxue ( ੵശ௛), there are no individuals or entities
which individually controls or holds more than 30% partnership interests in Shenrong Ruihe.
Zhu Zhenkui۲ࣈ
Zhu Zhenkui (۲ࣈis an individual independent financial investor who subscribed in the Series
B financing. As at the date of this prospectus, he held approximately 2.62% of the share capital in our
Company.
Fuquan No. 1
Fuquan No. 1 is a private equity investment fund established as a limited partnership in the PRC
on 21 June 2021. The partnership was established for the purpose of private equity investment. The
general partner of the fund is Shenzhen Fountain Investment Management Ltd* (ҳ༟၍ଣϞ
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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ʮ̡), an Independent Third Party which is held as to 47.5% by Wu Xiong ( юඪ), 32.5% by
Shenzhen Guofang Venture Capital Co., Ltd.* (ʮ̡ ) and 20% by Xiao Yajun ( ӽ
ࠏeach an Independent Third Party. Shenzhen Guofang Venture Capital Co., Ltd.* ( ଉέ̹਷˙௴
ʮ̡ ) is in turn held as to 60% by Shen Hao (؀and 40% by Pan Hongfen (ځߎeach an
Independent Third Party. As at the date of this prospectus, Fuquan No. 1 held approximately 0.84% of
the share capital of our Company.
To the best of our Directors’ knowledge, (i) all limited partners of Fuquan No. 1 are Independent
Third Parties, and (ii) there are no individuals or entities which individually controls or holds more
than 30% partnership interests in Fuquan No. 1.
Panhui Investment
Panhui Investment is a limited liability company established in the PRC on 8 December 2010. Its
principal business includes equity investment, investment in industrial projects, investment management
and consulting, as well as domestic trading activities. Panhui Investment is wholly privately owned,
with Huang Suqin ( ර९ೞ), an Independent Third Party, holding a 70% equity interest and acting as
supervisor, and Weng Wenbing (ފan Independent Third Party, directly holding a 30% equity
interest and serving as its executive director and general manager. As at the date of this prospectus,
Panhui Investment held approximately 0.98% of the share capital of our Company.
Kezhihua
Kezhihua is a limited liability company established in the PRC on 17 March 2025. Its principal
business scope includes data processing and storage support services, information technology
consulting, and enterprise management consulting. Its equity is held as to 70% by Zhang Ying (ߵ,)
an Independent Third Party and who serves as general manager, and 30% by Zhang Sujiang ( ੵᘽϪ),
an Independent Third Party and who serves as director and chief financial officer. Both shareholders are
PRC nationals and, to the best of our Company’s knowledge, are Independent Third Parties. As at the
date of this prospectus, Kezhihua held approximately 2.02% of the share capital of our Company.
Zhide No. 9
Zhide No. 9 is a private equity investment fund established under the laws of the PRC on 27 April
2025, principally engaged in private equity investments. Its general partner is Shanghai Worth Asset
Management Co., Ltd.* (ʮ̡ ), an Independent Third Party, which was
owned as to 40% by Yingke Innovation Asset Management Co., Ltd.* (ʮ̡ ), an
Independent Third Party, 35% by Shanghai Qianchang Investment Management Co., Ltd.* ( ɪऎ፺ᬅҳ
ʮ̡ ), an Independent Third Party, (which was owned as to 50% by Liao Jianfeng ( ࿋ᄏቜ),
an Independent Third Party) and 25% by Shanghai Zhiji Enterprise Management Co., Ltd.* (ʿ
ʮ̡ ) (an Independent Third Party ultimately controlled by Huang Zhongshao (ደ),
an Independent Third Party). As at the date of this prospectus, Zhide No. 9 held approximately 1.41%
of the share capital of our Company.
To the best of our Directors’ knowledge, all limited partners of Zhide No. 9 are Independent Third
Parties, and save for (i) Shenzhen Qiansheng Optoelectronics Co., Ltd.* (ʮ̡ )
(“Qiansheng Optoelectronics ”) directly holding 39.60% of the partnership interests in Zhide No. 9,
and (ii) Yang Puli ( เ౷ᓿ), an Independent Third Party, indirectly holding 39.60% of the partnership
interests in Zhide No. 9 through Qiansheng Optoelectronics, there are no other limited partners who
individually controls or holds more than 30% partnership interests in Zhide No. 9.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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MAJOR ACQUISITIONS, DISPOSALS AND MERGERS
Our Company had not carried out any major acquisitions, disposals or mergers during the Track
Record Period and up to the Latest Practicable Date.
PUBLIC FLOAT AND FREE FLOAT
The 18,064,480 Unlisted Shares that will not be converted into H Shares (representing
approximately 2.33% of our total issued Shares upon the Listing) will not be considered as part of the
public float as such Unlisted Shares will not be converted into H Shares and will not be listed on the
Stock Exchange following the completion of the Share Subdivision, the Global Offering and the
conversion of Unlisted Shares into H Shares.
Among the 670,981,440 H Shares to be converted from Unlisted Shares and listed on the Stock
Exchange following the completion of the Share Subdivision, the Global Offering and the conversion of
Unlisted Shares into H Shares:
(a) 462,893,600 H Shares (representing approximately 59.79% of our total issued Shares upon
the Listing) will not be counted towards the public float for the purpose of Rule 19A.13A of
the Listing Rules upon the Listing as such H Shares are held by Mr. Zhou, Zhongcheng
Tianying LP, Zhongzheng Tianying LP, Zhongzhi Tianying LP, Mr. Chen Yonggang, Taolue
New Energy, Taolue Xinwang and Jinlan Sunshine, the core connected persons of our
Company; and
(b) the remaining 208,087,840 H Shares (representing approximately 26.88% of our total issued
Shares upon the Listing) will be counted towards the public float for the purpose of Rule
19A.13A of the Listing Rules after the Listing as such Shareholders are not core connected
persons of our Company upon the Listing nor accustomed to take instructions from our
Company’s core connected persons in relation to the acquisition, disposal, voting or other
disposition of their Shares and their acquisition of Shares were not financed directly or
indirectly by our Company’s core connected persons.
See “Share Capital — Conversion of our Unlisted Shares into H Shares” for more details of the H
Shares to be converted from Unlisted Shares and listed on the Stock Exchange following the completion
of the Share Subdivision, the Global Offering and the conversion of Unlisted Shares into H Shares.
Pursuant to Rule 19A.13A of the Listing Rules, the minimum percentage of the H Shares to be
held by the public at Listing if the expected market value of the class of shares to which H Shares
belong at the time of listing does not exceed HK$6,000 million, shall be 25%, which is applicable to
our Company based on the expected market value calculated based on the Offer Price of HK$7.20.
Immediately upon completion of the Share Subdivision, the Global Offering and the conversion of
Unlisted Shares into H Shares, taking into account 85,162,500 H Shares to be offered pursuant to the
Global Offering, an aggregate of 293,250,340 H Shares will count towards the public float of our
Company, representing 37.88% of the total issued Shares of our Company, which is higher than the
prescribed percentage of H Shares required to be held in public hands under Rule 8.08 (as amended and
replaced by Rule 19A.13A) of the Listing Rules, and accordingly, our Company will be able to meet the
minimum public float requirements under Rules 8.08 (as amended and replaced by Rule 19A.13A) of
the Listing Rules.
Pursuant to Rule 19A.13C of the Listing Rules, where a new applicant is a PRC issuer with no
other listed shares at the time of listing, this will normally mean that the portion of H shares for which
listing is sought that are held by the public and not subject to any disposal restrictions (whether under
contract, the Listing Rules, applicable laws or otherwise), at the time of listing, must: (a) represent at
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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least 10% of the total number of issued shares in the class to which H shares belong at the time of
listing (excluding treasury shares), with an expected market value at the time of listing of not less than
HK$50,000,000; or (b) have an expected market value at the time of listing of not less than
HK$600,000,000. On the basis that there are no cornerstone investors, 85,162,500 H Shares, which are
to be newly issued under the Global Offering (representing 11.00% of our total issued Shares
immediately upon Listing) will be freely tradable and will count towards the free float of our Company
for the purpose of Rule 19A.13C of the Listing Rules, and our Company will satisfy the free float
requirement under Rule 19A.13C of the Listing Rules.
PREVIOUS A SHARE LISTING PLAN
In 2021, following the continued growth in our scale of business and with a view to broadening
our investor base, we commenced preparatory work for a potential listing on the Shenzhen Stock
Exchange or the Shanghai Stock Exchange. In connection with this initiative, we entered into a
cooperation agreement with Minsheng Securities Co., Ltd. (ʮ̡ )( “ Minsheng
Securities ”), for the A share listing plan for a term of three years commencing from 18 March 2021.
The cooperation agreement was a framework agreement which establishes the cooperation relationship
between our Company and Minsheng Securities prior to entering into further agreements for Minsheng
Securities to provide our Company with financial advisory, pre-IPO guidance, sponsorship and
underwriting services. We did not enter into any such further agreements with Minsheng Securities.
We did not enter into any formal tutoring agreement in respect of such A share listing plan, nor
did we file notice of pre-listing tutoring for A-share listing application (͡ሗ ) with the
CSRC or any of its local offices. As such, no formal guidance process was initiated or undertaken, and
no application for A share listing was submitted to any PRC stock exchange. The contemplated A share
listing did not proceed as we decided that the Hong Kong Stock Exchange would be a more suitable
venue for the Listing of our Company, for reasons further elaborated below, and the relevant
preparatory work was subsequently terminated.
As at the Latest Practicable Date, our Group has not submitted any formal application for an A
share listing, and no definitive timetable or material steps towards the implementation of the A share
listing plan have been undertaken.
In view of our strategic development and internationalisation, we subsequently decided to pursue
a Listing on the Stock Exchange. We believe that the Stock Exchange would provide us with access to
the international equity market, enhance our brand awareness in both domestic and overseas markets,
and improve our corporate governance in line with global standards. Following the completion of the
Listing, we will continue to monitor such opportunities, subject to market conditions and compliance
with applicable rules, and any proposal to seek a listing of the Shares in the PRC will be subject to the
approval of the Shareholders and will comply with all applicable rules.
Our Directors confirm that they are not aware of any other matters in relation to the previous A
Share listing plan that need to be brought to the attention of the Stock Exchange and potential
investors.
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.
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COMPLIANCE WITH PRC LA WS AND REGULATIONS
Our PRC Legal Advisors have confirmed that, according to applicable PRC laws and regulations,
all equity transfers and changes in the registered capital of our Company set out in this section have
been properly and legally completed and our Company has obtained all necessary approvals and made
all necessary filings, and has complied with applicable PRC laws and regulations in relation to the
changes of shareholdings as set out in this section.
CAPITALISATION OF OUR COMPANY
Following completion of the Share Subdivision, the Global Offering and the conversion of our
Unlisted Shares into H Shares, our Unlisted Shares and H Shares that will be held by each of our
existing Shareholders are set forth as below:
Name of Shareholders
Number of
Shares as at
the date of this
prospectus
Ownership
percentage as
at the date of
this prospectus
Number of H
Shares upon
the Listing
Ownership
percentage in
H Shares upon
the Listing
Number of
Unlisted
Shares upon
the Listing
Ownership
percentage in
Unlisted
Shares upon
the Listing
Total Number
of Shares upon
the Listing
Ownership
percentage in
Total Shares
upon the
Listing
(%) (%) (%) (%)
Controlling Shareholders
Mr. Zhou .......... 513,526 5.96% 41,082,080 5.43% — — 41,082,080 5.31%
Zhongcheng Tianying LP .. 3,301,887 38.33% 264,150,960 34.93% — — 264,150,960 34.12%
Zhongzheng Tianying LP .. 240,000 2.79% 19,200,000 2.54% — — 19,200,000 2.48%
Zhongzhi Tianying LP ... 154,113 1.79% 12,329,040 1.63% — — 12,329,040 1.59%
4,209,526 48.87% 336,762,080 44.53% — — 336,762,080 43.50%
Langke Group
Langke Investment ..... 180,000 2.09% 14,400,000 1.90% — — 14,400,000 1.86%
Kaiying No. 9 ....... 109,032 1.27% 8,722,560 1.15% — — 8,722,560 1.13%
Kaiying No. 8 ....... 109,032 1.27% 8,722,560 1.15% — — 8,722,560 1.13%
Kaiying No. 10 ....... 169,129 1.96% 13,530,320 1.80% — — 13,530,320 1.75%
567,193 6.59% 45,375,440 6.00% — — 45,375,440 5.87%
Zheshang Capital Group
Taolue New Energy .... 654,192 7.60% 52,335,360 6.92% — — 52,335,360 6.76%
Taolue Xinwang ...... 120,806 1.40% 9,664,480 1.28% — — 9,664,480 1.25%
Jinlan Sunshine ....... 504,461 5.86% 40,356,880 5.34% — — 40,356,880 5.21%
1,279,459 14.86% 102,356,720 13.54% — — 102,356,720 13.22%
Shenzhen HTI Group
Gaoxintou ......... 173,679 2.02% 13,894,320 1.84% — — 13,894,320 1.79%
Chengdu Zhongxiaodan .. 147,628 1.71% 11,810,240 1.56% — — 11,810,240 1.53%
Rencai No. 2 ........ 69,471 0.81% 5,557,680 0.74% — — 5,557,680 0.72%
390,778 4.54% 31,262,240 4.14% — — 31,262,240 4.04%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Name of Shareholders
Number of
Shares as at
the date of this
prospectus
Ownership
percentage as
at the date of
this prospectus
Number of H
Shares upon
the Listing
Ownership
percentage in
H Shares upon
the Listing
Number of
Unlisted
Shares upon
the Listing
Ownership
percentage in
Unlisted
Shares upon
the Listing
Total Number
of Shares upon
the Listing
Ownership
percentage in
Total Shares
upon the
Listing
(%) (%) (%) (%)
Others
Beward ........... 859,754 9.98% 68,780,320 9.10% — — 68,780,320 8.88%
Mr. Chen Yonggang .... 297,185 3.45% 23,774,800 3.14% — — 23,774,800 3.07%
Mr. Xia Dong ....... 288,000 3.34% 23,040,000 3.05% — — 23,040,000 2.98%
Mr. Zhu Zhenkui ...... 225,806 2.62% — — 18,064,480 100.00% 18,064,480 2.33%
Shenrong Ruihe ...... 26,051 0.30% 2,084,080 0.28% — — 2,084,080 0.27%
Xiaohe Investment LP ... 17,368 0.20% 1,389,440 0.18% — — 1,389,440 0.18%
Fuquan No. 1 ........ 72,484 0.84% 5,798,720 0.77% — — 5,798,720 0.75%
Panhui Investment ..... 84,077 0.98% 6,726,160 0.89% — — 6,726,160 0.87%
Kezhihua .......... 174,082 2.02% 13,926,560 1.84% — — 13,926,560 1.79%
Zhide No. 9 ........ 121,311 1.41% 9,704,880 1.28% — — 9,704,880 1.25%
Other Public Shareholders . — — 85,162,500 11.26% — — 85,162,500 11.00%
2,166,118 25.14% 240,387,460 31.79% 18,064,480 100.00% 258,451,940 33.37%
Total ............ 8,613,074 100.00% 756,143,940 100.00% 18,064,480 100.00% 774,208,420 100.00%
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CORPORATE AND SHAREHOLDING STRUCTURE
The following chart sets out our corporate and shareholding structure immediately prior to completion of the Share Subdivision and the
Global Offering:
Zhongzhi
Tianying LP Langke Group Beward Mr. Xia DongZheshang
Capital Group
Shenzhen HTI
Group
Mr. Chen
Yonggang
Others pre‐IPO
investors
1.79% 6.59%
Zhongzheng
Tianying LP
2.79%
Zhongcheng
Tianying LP
38.33%
Mr. Zhou
5.96% 14.86% 4.54% 9.98% 3.45% 3.34% 8.37%
Our Company
100% 100% 100% 100% 100%
Haiqing Digital Zhejiang Haiqing
Jiangsu Haiqing Zhiyuan
Technology Co., Ltd.*
Ҧ
ʮ̡
Shenzhen Dehui Intelligent
Software Co., Ltd.*
	ଉέ̹ᅃᅆ౽ঐழ΁
ʮ̡
Dongguan Haiqing Digital
Technology Co., Ltd.*
୷̹ऎ૶ᅰοҦஔ
ʮ̡
100%
Hongkong HQVT
Technology Limited
(Ҧ
ʮ̡)
The following chart sets out our corporate and shareholding structure immediately after completion of the Share Subdivision and the Global
Offering:
Zhongzhi
Tianying LP Langke Group Beward Mr. Xia DongZheshang
Capital Group
Shenzhen HTI
Group
Mr. Chen
Yonggang
Others pre‐IPO
investors
Zhongzheng
Tianying LP
Zhongcheng
Tianying LPMr. Zhou Other Public
Shareholders
Our Company
5.87% 13.22% 4.04% 8.88% 3.07% 2.98% 7.44% 11.00%1.59%2.48%34.12%5.31%
100% 100% 100% 100% 100%
Haiqing Digital Zhejiang Haiqing
Jiangsu Haiqing Zhiyuan
Technology Co., Ltd.*
Ҧ
ʮ̡
Shenzhen Dehui Intelligent
Software Co., Ltd.*
	ଉέ̹ᅃᅆ౽ঐழ΁
ʮ̡
Dongguan Haiqing Digital
Technology Co., Ltd.*
୷̹ऎ૶ᅰοҦஔ
ʮ̡
100%
Hongkong HQVT
Technology Limited
(Ҧ
ʮ̡)
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OVERVIEW
Who We Are
We are a multispectral AI technology enterprise in China, specialising in the acquisition,
processing, and analysis of optical information captured from multiple specific spectrum bands to
provide more detailed information than visible lights imaging. Leveraging our proprietary technology in
multispectral perception and AI algorithms, we offer products and services designed to detect both
visible and invisible spectral information to human eyes, which includes (1) Multispectral AI Modules,
which are embedded hardware components that collect and process multispectral data (including visible
light, infrared, and UV) through AI algorithms for integration into third-party devices; (2) Multispectral
AI Perception Terminals, which are devices that integrate multispectral sensors, enhanced multispectral
AI algorithms, and standard hardware components, to provide real-time perception insights; and (3)
Multispectral AI Large Model Services, which are large model solutions with our proprietary “Zhiyuan
Origin Large Model”. Our solutions deliver enhanced perception and safety monitoring, providing
additional information decisions for multi-scenario safety and intelligent perception purposes for
diverse customers who are mainly engaged in business related to software and information technology
services, electronic products, IDCs, intelligent driving systems, telecommunication operators, IoT,
system integration, and construction. Our technologies have been widely applied across numerous
application scenarios beyond traditional safety solutions, including smart cities, intelligent campus
management, IDC safety optimisation, industrial and commercial safety and IoT-enabled facility
management, showcasing the applicability of our multispectral AI solutions.
According to Frost & Sullivan, multispectral AI modules and multispectral AI large model
services are subsets of the multispectral AI market, which forms a segment of the broader perceptual
intelligence market.
The following diagram illustrates our achievements.
Multispectral AI enterprise1
Rank First in China
Multispectral AI Large
Model Services1
Rank First in China
Multispectral AI Modules1
Rank Fourth in China
Note:
1 According to the Frost & Sullivan Report, in terms of market share as measured by revenue in 2025
We were certified by the Ministry of Industry and Information Technology (ʷ௅ )a sa
National-Level Specialised and Sophisticated “Little Giant” Enterprise (ॴਖ਼ၚतอʃ̶ɛΆ
ุ) in 2022, and as a National-level Specialised and Sophisticated “Little Giant” Enterprise (ॴਖ਼
ၚतอʃ̶ɛΆุ) and National-level Specialised and Sophisticated Key “Little Giant” Enterprise
(ᓃʃ̶ɛΆุ ) in 2025. Our major customers include a leading state-owned
telecommunication operator and a leading listed AI company in China. Since our establishment in 2013,
we have built a full-chain products and services offering encompassing Multispectral AI Modules,
Multispectral AI Perception Terminals and Multispectral AI Large Model Services. Our technological
expertise spans a wide range of fields, including AI, optical electronics, integrated circuits, embedded
systems, safety engineering and cloud computing. As at the Latest Practicable Date, we have actively
contributed to the drafting and formulation of around ten national and association standards in the
multi-scenario safety industry.
BUSINESS
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During the Track Record Period, our revenue for FY2023, FY2024 and FY2025 was
approximately RMB117.1 million, RMB522.6 million and RMB668.5 million, respectively, with a
CAGR of approximately 138.9%. Notably, we recorded a net loss of approximately RMB18.4 million
for FY2023, but achieved a turnaround to a net profit of approximately RMB40.4 million and RMB29.4
million in FY2024 and FY2025, respectively.
Our Core Technologies and Innovations
Our Multispectral AI Technologies
Our multispectral AI technologies focus on multispectral imaging and processing, which are
designed to capture and analyse data from various light wavelengths across the electromagnetic
spectrum. Our multispectral AI technology is an integration of perceptual intelligence and on-device AI,
establishing a unified system that facilitates collection of spectral bands information and reasoning. Our
perceptual intelligence accurately captures multispectral signals (covering ultraviolet, infrared, and
visible spectra) with spectral fusion, while on-device AI enables real-time, low-latency decision-making
through locally optimised performance in offline or low-bandwidth environments, thereby ensuring
uninterrupted safety protection in latency-sensitive or communication-constrained scenarios.
Our multispectral AI technology enables real-time processing, and efficient analysis of
multispectral data across the electromagnetic spectrum via a unified framework. Combined with our
extensive expertise in the multispectral AI sector, our technologies offer applicability across various
scenarios, such as industrial risk prevention, smart city management, power system inspections.
Our multispectral AI technology provides multiple key performance metrics. Specifically:
 Multispectral Sensing Capabilities. We capture and interpret data from light wavelengths
beyond the visible range of the human eye. The perceptual intelligence facilitates the
detection of hidden details, such as heat patterns or environmental dynamics, through
self-adaptive adjustments in challenging conditions and improved anti-interference features,
thereby ensuring efficient and secure processing even in environments with limited power.
 Accuracy in Data Recognition and Analysis. Our machine learning algorithms enable
in-depth perception of material characteristics and dynamic states in anomaly detection. In
safety-oriented applications, drawing on our proprietary datasets and internal evaluations,
our technology identifies early indicators of risks, such as fire ignition or unusual heat
increases, with minimised false alarms.
 Real-Time Processing and Decision-Making. To support uninterrupted operations, our AI
technologies complete the entire process of data capture, spectral fusion to on-device
reasoning and output generation, also known as “optics-sensor-imaging-computing”, on a
low-latency basis. This is achieved through integrated sensing-compute mechanisms that
enable closed-loop processing directly on customer devices, without reliance on cloud
infrastructure while improving performance in poor network connection settings.
 Technologies with Significant Application Potential. Our AI models are trained and
optimised within a hybrid framework blending on-device and cloud-based elements, enabling
stable support for analyses of large datasets. These models find wide application in emerging
domains, such as urban traffic safety, construction safety governance and IDC safety
projects.
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Our multispectral AI technology is built upon our “Optics-Sensor-Imaging-Computing” technology
architecture. The key elements of our architecture are as follows:
 Optics: We design specialised optical components, including lenses and optical films, with
detailed parameters specifying light path configurations, and selective wavelength filtering.
Our components use advanced materials to enhance long-term stability and higher
transmittance for targeted spectral bands with reduced lens distortion. These enhancements
improve backend AI algorithm recognition accuracy in diverse conditions, such as intense
sunlight or low-visibility environments, and are produced by manufacturers to our precise
specifications.
 Sensor: We optimise multispectral sensor chips by designing and modifying the register
parameters, in order to improve the signal-to-noise ratio in complex light environments as
compared to default settings. These modifications, coordinated with backend image signal
processing algorithms, adjust parameters, including target tracking exposure, auto white
balance, strong light suppression, 2D/3D noise reduction, to meet scenario-specific
requirements (e.g., urban traffic or construction safety). In 2024, we initiated the
development of MEMS infrared sensor chips with proprietary features, such as night-vision
capabilities and precise temperature measurement.
 Imaging: Our proprietary algorithms is designed to enable real-time preprocessing of raw
multispectral images at the device level, filtering noise to improve the signal-to-noise ratio,
addressing common imaging limitations in multispectral environments like adverse weather
or low-light conditions, ensuring high-quality spectral data for subsequent analysis.
 Computing: Our lightweight computing units, optimised through proprietary designs,
execute with high efficiency at the on-device level, achieving inference speeds of
approximately 50 milliseconds for real-time analysis in safety-critical applications,
surpassing industry averages of 100−200 milliseconds for comparable edge-computing
models. The model is trained on a comprehensive dataset comprising over 10 million
multispectral perception data points, 100,000 hazardous event records, and 10,000 safety
engineering knowledge graphs, aligning with the dataset scope of industry peers (typically
5−15 million data points) whilst providing a competitive advantage through safety-specific
multispectral data. These units ensure low-latency performance in offline or low-bandwidth
environments, enhancing reliability over generic computing solutions.
The “Optics-Sensor-Imaging-Computing” technology architecture also includes our three core
technologies as follows:
(1) Multispectral perception-computing integration
Multispectral perception is a detection technology that utilises multiple specific spectral bands
(including visible and invisible light) for information collection. Visible light is the part of the
electromagnetic spectrum perceptible to the human eye, comprising the primary colours of light
(including red, green and blue light) and their combinations whose wavelengths typically range from
400 to 700 nm. However, visible light constitutes only a fraction of the entire electromagnetic
spectrum, and a substantial amount of information is hidden in wider spectral bands, such as infrared
and ultraviolet. Our integrated approach extends beyond these limitations to access information
embedded in electromagnetic spectrum ranges.
BUSINESS
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Our multispectral perception-computing integration technology integrates the accurate capture of
multispectral signals (covering ultraviolet, infrared, and visible spectra) with spectral fusion, real-time
processing, and AI-driven analysis capabilities directly at the device level. This technology is mainly
integrated into Multispectral AI Modules and Multispectral AI Perception Terminals, and contributes to
“optics-sensor-imaging-computing” part of our technology architecture, as specified below:
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(2) Lightweight on-device AI computing
Our lightweight on-device AI computing technology enables autonomous on-device AI processing
through optimised small models deployed directly at device level, with optional supplementation from
multispectral AI large model in the backend if needed.
Devices equipped with our lightweight on-device AI computing possess smart processing,
self-supervised learning, and decision-making capabilities. Our lightweight architecture eliminates the
need for hardware equipped with powerful AI chips, allowing deployment on standard computing
devices while still able to accurately execute tasks such as targeted feature analysis, and converts
computational results into standardised alert signals. The small model maintains full functionality
during network instability or interruptions, ensuring reliable performance independent of backend
connectivity. Our lightweight on-device AI computing technology allows us to deliver empowered
modules and terminals with reduced operational costs to our customers. Our lightweight on-device AI
computing technology enables comprehensive monitoring coverage in situations that require compact
designs. These situations include, but are not limited to, automobile transportation racks or cargo
containers. As a result, this technology resolves common problems associated with traditional sensing
devices, including delayed responses and areas that cannot be monitored.
(3) Multispectral AI large model platform
Our Multispectral AI large model platform underpins our Multispectral AI Large Model Services,
enabling customers to process and analyse data from multispectral devices, including our Multispectral
AI Perception Terminals, or conventional vision devices. With autonomous learning capabilities, the
model platform continuously improves its algorithms by leveraging real-time multispectral data during
local operations. Since all data processing and iterations are conducted exclusively on the customer’s
premises, comprehensive data privacy and security are guaranteed. This platform supports a wide range
of industries, delivering scalable and efficient solutions for complex safety scenarios.
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Scenario-specific data for model training: our proprietary “Zhiyuan Origin Large Model” uses
scenario-specific datasets, developed through in-house efforts and collaborations with academic
institutions. In the multi-scenario safety domain, the model is trained on over 10 million multispectral
perception data points, 100,000 real-world hazardous event records, and 10,000 safety engineering
knowledge graphs. For the development process of our “Zhiyuan Origin Large Model”, please refer to
“Research and Development — R&D Models” in this section below. This dataset scope is comparable
to industry peers, who typically train on datasets of similar size, but our focus on multispectral data
tailored for safety scenarios provides a competitive edge. Our model delivers over 95% accuracy in
detecting early fire signatures, matching or exceeding industry-leading models (90−95% average).
Catering to diverse customer needs: This platform powers our Multispectral AI Large Model
Services across diverse industries. It supports rapid deployment to customer servers. The platform
incorporates self-supervised learning, allowing continuous model improvement to address evolving
customer needs. Our hybrid “on-device to cloud” architecture offers flexibility for multi-site
deployments, distinguishing it from models that prioritise cloud-only or on-device-only processing.
Our Market Opportunities
Our product and service portfolio mainly comprises three multispectral AI core products and
services: (1) Multispectral AI Modules; (2) Multispectral AI Perception Terminals; (3) Multispectral AI
Large Model Services. In addition to these, our product and service portfolio also includes Other AI
Vision Modules. According to the Frost & Sullivan Report, the market size of the multispectral AI
industry in China is expected to surge from RMB20.0 billion in 2025 to RMB79.4 billion in 2030, with
a CAGR of 31.8%. We provide customers with the flexibility to either integrate these products into an
all-in-one solution or purchase each product category independently. Our core competitiveness lies in
building AI-driven multi-scenario safety systems.
Our customer base is diversified, and our products and services have been widely applied across
various scenarios, including smart cities, intelligent campus management, IDC safety optimisation,
industrial and commercial safety and IoT-enabled facility management. We serve customers from
various industries, including software and information technology services, electronic products, IDCs,
intelligent driving systems, telecommunication operators, IoT, system integration, and construction.
Currently, multispectral AI technology is gradually transitioning from an early-stage,
module-based segmented product model to solutions characterised by system integration capabilities.
The industry trend is shifting from a focus on algorithmic performance improvement to solving
real-world problems, and addressing the essential needs of various application scenarios. Multispectral
AI-enabled on-device intelligent technologies, through advancements such as computing power
miniaturisation, model compression, and integrated perception-computing, have eliminated reliance on
traditional cloud computing, thereby enabling more localised deployment and real-time responsiveness.
OUR COMPETITIVE STRENGTHS
We believe that the following competitive strengths and advantages are key factors to our success
to date.
Proprietary technology in the multispectral AI industry
Leveraging years of technological accumulation and a technical approach combining optics,
sensors, imaging and computing, we have established a full-chain technical architecture which we
believe provides us with a significant competitive advantage in China’s multispectral AI industry.
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Firstly, in terms of multispectral perception-computing integration technology, our team of experts
in AI algorithms, algorithmic chips, embedded systems, optics and safety engineering R&D enable us to
provide end-to-end capabilities from design to manufacturing. We possess a registered invention patent
related to infrared imaging achieving high conversion efficiency, high resolution, and low noise, and a
registered utility model patent of facial recognition lens employing five precision glass lenses to
effectively correct optical aberrations, thereby enhancing system performance and image quality. By
optimising optical design, material processes, and the underlying technology of sensors, we have
enhanced the transmittance of light in target spectral bands. Additionally, through AI algorithms, we
have significantly improved the signal-to-noise ratio of imaging data in ultraviolet, infrared and visible
light imaging data, increasing environmental perception capability and image computation accuracy.
Secondly, we have a self-developed core operating system and file system being HtOS and HtFS
respectively, for lightweight on-device AI computing technology. By reducing computational
requirements, compressing memory usage, and deploying localised models on the on-device, we enable
direct data processing on low-compute terminals, thereby eliminating reliance on cloud services. We
possess a registered invention patent of flame detection methods and equipment to achieve a more
accurate localisation of the flame’s source direction through the conversion of light signals into
electrical signals.
Thirdly, we have developed an advanced multispectral AI large model specifically engineered for
multi-scenario safety applications, leveraging extensive data from diverse safety scenarios and spectral
perception. This model is designed for general applicability and continuous evolution, enabling scalable
deployment across a range of critical sectors, including industrial safety, intelligent driving systems,
value-added communication services, and construction. The model exhibits a competitive technological
edge, distinguished by its wide spectral range, high modality, and robust generalisation capabilities.
Our proprietary lightweight computing units, optimised through innovative designs, execute this
multispectral AI large model with exceptional efficiency at the on-device level. These units achieve
inference speeds of approximately 50 milliseconds for real-time analysis in safety-critical applications,
outperforming industry averages of 100−200 milliseconds for comparable edge-computing models. The
model is trained on a dataset focused on the multi-scenario safety industry comprising over 10 million
multispectral perception data points, 100,000 hazardous event records, and 10,000 safety engineering
knowledge graphs. This dataset scope is consistent with that of industry peers, who typically utilise
datasets of 5−15 million data points, yet our focus on safety-specific multispectral data provides a
distinct competitive advantage.
These computing units ensure low-latency performance in offline or low-bandwidth environments,
offering enhanced reliability compared to generic computing solutions, thereby reinforcing our
leadership in delivering high-performance, safety AI solutions.
A diversified customer base
During the Track Record Period, we served over 2,500 customers across different regions in China
and overseas. Our customer base covers a wide array of industries, including electronic products,
software and information technology services, IDC, intelligent driving systems, telecommunication
operators, IoT, system integration, and construction. Our major customers include a leading state-owned
telecommunication operator and a leading listed AI company in China.
We have established strategic partnerships with prominent large Chinese companies, and our
solutions are applied beyond traditional safety solutions, including smart cities, intelligent campus
management, IDC safety optimisation, industrial and commercial safety and IoT-enabled facility
management, supporting our continued business growth and market presence.
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The following table sets forth a breakdown of our revenue by geographical locations during the
Track Record Period:
FY2023 FY2024 FY2025
RMB’000
% of Total
Revenue RMB’000
% of Total
Revenue RMB’000
% of Total
Revenue
PRC ...................... 110,186 94.1 517,567 99.0 662,554 99.1
Overseas (1) .................. 6,877 5.9 5,001 1.0 5,965 0.9
Total...................... 117,063 100.0 522,568 100.0 668,519 100.0
Note:
(1) Our overseas markets primarily comprised India, Brazil, the United Arab Emirates, and South Africa. These markets
collectively accounted for approximately 93.0%, 82.5% and 77.1% of our total overseas revenue in FY2023, FY2024 and
FY2025, respectively.
Stable R&D and innovation capabilities
We have an in-house R&D team, comprising 156 members, representing approximately 43.1% of
our total employees as at 31 December 2025, including industry experts, postdoctoral fellows and
employees with master’s degrees. Our R&D team possesses expertise across a wide array of disciplines
including AI algorithms, algorithmic chips, embedded systems, optics and safety engineering R&D. As
at the Latest Practicable Date, we have registered 101 invention patents and 46 software copyrights, and
have been certified by the Ministry of Industry and Information Technology (ʷ௅ )a sa
National-level Specialised and Sophisticated “Little Giant” Enterprise (ॴਖ਼ၚतอʃ̶ɛΆ
ุ) in 2022, and as a National-level Specialised and Sophisticated “Little Giant” Enterprise (ॴਖ਼
ၚतอʃ̶ɛΆุ) and National-level Specialised and Sophisticated Key “Little Giant” Enterprise
(ᓃʃ̶ɛΆุ ) in 2025.
We have also established collaborations with three universities, namely Huazhong University of
Science and Technology, Xi’an University of Science and Technology, and Changchun University of
Science and Technology, to carry out research on cutting-edge multispectral AI, multi-scenario safety
large models, and precision optical films, and have achieved a number of R&D results. For example,
our collaboration with Xi’an University of Science and Technology was honoured with the “Special
Teaching Achievement Award (तഃᆤ )” by the Shaanxi Provincial People’s Government.
Established mass production and quality delivery capabilities
Our production bases in Shenzhen and Zhejiang are equipped to respond promptly to the needs of
new product development and provide support for our R&D activities. Meanwhile, by adopting
automated manufacturing technologies, we have enhanced production efficiency, reduced cycle times,
and maintained consistent quality and output. We have implemented a proprietary digital manufacturing
system covering key processes such as firmware programming and automated testing, which enables
transparent management of production processes and facilitates the traceability of each product and
equipment, thereby supporting reliable product delivery.
To further ensure product quality, we have established an end-to-end quality management system
and obtained the “Quality Management System Certification Certificate ()”
issued by China Quality Certification Centre ( ʕ਷ሯඎႩᗇʕː ). At the same time, we have also
established a supplier qualification and access assessment mechanism and maintained stable
partnerships with high-quality suppliers. We carry out strict incoming material inspections on key
components to ensure a transparent and reliable supply chain.
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Experienced senior management team and strategic investors
Our experienced senior management team has an average of over 15 years of industry experience.
The core members of our senior management team possess professional backgrounds in engineering,
computer science and applied science. Mr. Zhou, our founder and Chairman, is an experienced and
visionary leader with 25 years of experience in computer vision and AI. He has participated in the
drafting and formulation of multiple national technical standards, co-authored or participated in editing
books on machine vision and digital construction. Mr. Miao Rui, our executive Director and deputy
general manager, is primarily responsible for overall R&D, procurement and sales. He has extensive
experience in embedded software product development and AI model optimisation. Mr. Zou Xiaogang,
our executive Director and supply chain director, has over 15 years of experience in technology
development and has a strong technical background in hardware development and process automation.
Mr. Chen Yonggang, our executive Director and technical expert, possesses over 28 years of experience
in technology development. His expertise in electronic systems, video detection technologies, and
digital video solutions significantly strengthens the capabilities of our management team.
We have attracted a number of experienced private equity and strategic investors, many of whom
have a proven track record in China’s technology sectors. The participation of these investors reflects
our recognised capabilities in multispectral AI technology and market competitiveness, and reinforce
our ability to drive the development of our business.
OUR BUSINESS STRATEGIES
With the aim of further developing our business and continuing our growth, we will implement
the following strategies:
Enhancing R&D capabilities and increasing investment in product development
We will continue to invest in the R&D of multispectral AI large model algorithms, and chip
design and development, as well as launch next-generation intelligent perception products on an
ongoing basis, including the purchase of servers for computing power for accelerating the iteration of
large model, and cooperation with chip companies in the co-design of high-performance chips and the
tape-out process. These initiatives will enable us to accelerate the development and commercialisation
of new products and intelligent solutions and drive innovation across multispectral intelligent terminal
products and next-generation safety solutions, in order to meet the specific needs of industries emerged
from time to time. At the same time, we will further expand our R&D facilities and capabilities, and
attract highly educated and qualified professional talents locally and from overseas, thereby supporting
our long-term growth and reinforcing our competitive advantages. Such investment reflects the
transition from establishing core technologies to scaling R&D for global market opportunities, ensuring
our solutions remain competitive and responsive to emerging demands.
We also plan to strengthen our cooperation with universities and collaborate with research
institutions to strengthen our R&D capabilities and ensure our products and services remain responsive
to market changes. In particular, we will invest in the establishment of joint laboratories and collaborate
with technology companies that complement our technology. By leveraging joint laboratories and
shared resources, we aim to stay at the forefront of industry trends and emerging technologies, and to
accelerate the convergence of innovative technologies both internally and externally. To ensure effective
cooperation, we will collaborate with laboratories and partners that satisfy our selection criteria,
including reputable qualifications, strong financial standing, robust infrastructure, experienced talent
pools, aligned research objectives, and mature management structures. As at the Latest Practicable
Date, our Group has identified one potential university partner from the PRC.
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We further plan to establish overseas R&D centres in regions and countries, such as Hong Kong
and Singapore, to further strengthen our global R&D capabilities. These collaborative efforts will
enhance our ability to anticipate and respond to market needs, enrich our innovation ecosystem, and
support the sustainable development of our business. Please refer to the section headed “Future Plans
and Use of Proceeds” in this prospectus for further details.
Expanding production capacity to support business growth and new product development
We anticipate that our ongoing business expansion, overseas market development and strategic
collaborations will increase demand for production capacity. In order to meet these needs, we plan to
increase the number of production staff and expand our production bases as appropriate in the future,
including leasing of new facilities, and upgrading existing production lines. Our further expansion
ensures alignment with the demand growth, supports timely fulfilment of customer orders, and mitigates
risks of supply bottlenecks in a competitive market.
We further plan to procure equipment and core components, and secure raw materials, such as
MEMS infrared sensor chips, optoelectronic components, and microprocessors, for new and existing
production lines. With enhanced production capacity and operational flexibility, we can respond
promptly to new product development needs, support business expansion, and maintain product quality.
Please refer to the section headed “Future Plans and Use of Proceeds” in this prospectus for further
details.
Pursuing strategic investments and M&As to enhance our industrial layout and technological
strengths
Leveraging our strategic vision and industry expertise, we plan to focus on acquiring companies in
downstream application industries to achieve expansion of our industrial chain, enhance synergies, and
broaden our market presence. Downstream application industries, including urban safety, energy,
household applications, and beauty sectors, are characterised by high safety requirements and strong
technological dependency, aligning closely with our multispectral AI products. Distinct from
cooperation with universities to establish joint laboratories, acquisitions entail full ownership and
integration of target companies. This approach internalises proprietary technologies and broadens our
product portfolio, enabling rapid integration into our business to address technology and market gaps.
We will prioritise acquisition targets with established market presence, financial stability, strategic
alignment with our business, and strong management and technical teams. As at the Latest Practicable
Date, no investment target has been identified.
Through these initiatives, we seek to share R&D benefits, create a more stable and predictable
market for our core products and services, and further strengthen our overall technological capabilities
and business development. In addition, we plan to pursue investments and collaborative opportunities in
emerging cross-disciplinary technologies (such as skin diagnostics, optical electronics and food
engineering), including collaborations with several universities and intellectual property holders in large
model training and chip development.
Our M&A initiatives and strategic collaborations will facilitate the integration of our technical
expertise, including multispectral perception, embedded AI, and the Zhiyuan Origin Large Model, with
the resources and technical capabilities of acquired businesses and strategic partners. In doing so, we
expect to accelerate innovation mainly in large model training and chip design, thereby strengthening
our multispectral AI platform technology and overall competitiveness.
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Strengthening business expansion and accelerating global market penetration
According to the Frost & Sullivan Report, the global multispectral perception market, valued at
approximately RMB85.0 billion in 2025, offers significant growth opportunities, particularly in
overseas markets such as North America and Europe, which command 25% and 28% market shares in
2025, respectively. To further accelerate our market expansion and enhance our international
competitiveness, we will continue to implement business development strategies targeting both
domestic and global markets. Our objective is to increase our market share and brand recognition while
expanding our presence in key overseas markets and reinforce our global footprint.
We plan to further optimise and expand our domestic marketing team, and establish dedicated
overseas marketing and sales teams to enhance local responsiveness and customer trust. In line with
these efforts, we will conduct in-depth research into consumer needs and market trends both in China
and abroad, enabling us to respond promptly to evolving customer demands. We intend to increase
investment in marketing and brand-building activities, including both online and offline campaigns, to
enhance our brand visibility and reputation.
Furthermore, we would continuously expand the application scenarios of our core multispectral AI
products and intelligent solution offerings, focusing on sectors such as beauty and skincare, food safety
and home health management. By broadening the reach and impact of our solutions, we aim to address
the diverse needs of our global customer base and support sustainable business growth. Please refer to
the section headed “Future Plans and Use of Proceeds” in this prospectus for further details.
OUR PRODUCTS AND SERVICES
Our three core multispectral products and services consist of: (1) Multispectral AI Modules, which
are embedded hardware components that collect and process multispectral data (including visible light,
infrared, and UV) through AI algorithms for integration into third-party devices; (2) Multispectral AI
Perception Terminals, which are devices that integrate multispectral sensors, enhanced multispectral AI
algorithms, and standard hardware components to provide real-time perception insights; and (3)
Multispectral AI Large Model Services, which are large model solutions with our proprietary “Zhiyuan
Origin Large Model”. Our products also include Other AI Vision Modules.
Together, our core multispectral products and services form a comprehensive, integrated platform
that empowers our customers to deploy intelligent multispectral perception systems across diverse
industries, including software and information technology, electronic products, IDCs, intelligent driving
systems, telecommunication operators, IoT, system integration, and construction.
The following table sets forth a breakdown of our revenues by products, in absolute amounts and
as a percentage of total revenues, for the years indicated:
FY2023 FY2024 FY2025
RMB’000 % of Total RMB’000 % of Total RMB’000 % of Total
Multispectral AI
Multispectral AI Modules .......... 99,121 84.6 299,228 57.3 209,044 31.3
Multispectral AI Perception Terminals .. 12,586 10.8 61,229 11.7 92,638 13.9
Multispectral AI Large Model Services .. — — 113,791 21.8 355,364 53.1
111,707 95.4 474,248 90.8 657,046 98.3
Others
Other AI Vision Modules .......... 5,150 4.4 47,080 9.0 10,258 1.5
Others .................... 206 0.2 1,240 0.2 1,215 0.2
5,356 4.6 48,320 9.2 11,473 1.7
Total...................... 117,063 100.0 522,568 100.0 668,519 100.0
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The following table outlines the key features of our core offerings, namely Multispectral AI
Modules, Multispectral AI Perception Terminals, and Multispectral AI Large Model Services:
Multispectral AI Modules
Multispectral AI Perception
Terminals
Multispectral AI Large Model
Services
Key Characteristics ..... Embedded hardware
components with
multispectral AI
capabilities
Standalone devices installed
with scenario-specific
multispectral AI models,
providing real-time
multispectral perception
insights
Large model solution
leveraging our “Zhiyuan
Origin Large Model” for
advanced analytics and
centralised safety
management, with hybrid
on-device and cloud
deployment
Functionalities ......... For integration into
third-party devices to
collect and process
multispectral data (visible
light, infrared, UV),
enabling real-time
environmental monitoring
within third-party systems
Captures and analyses
multispectral data to
deliver real-time,
actionable safety insights
Processes multispectral data
from Multispectral AI
Perception Terminals or
third-party devices to
provide predictive insights,
real-time alerts, and
centralised dashboards for
safety management
Core Technologies ...... Multispectral
perception-computing
integration
(1)
Multispectral
perception-computing
integration
(1), and
lightweight on-device AI
computing
(2)
Multispectral AI large model
platform trained with
scenario-specific data
catering customers’
needs
(3)
Structural Components ...  Self-developed lenses,
optical films, and
multispectral sensors
 Algorithmic
processing unit
 Other components
 Self-developed lenses,
optical films, and
multispectral sensors
 Algorithmic
processing unit with
pre-installed
scenario-specific AI
models
 Other components
 Cloud-based platform
for large-scale device
management
 “Zhiyuan Origin Large
Model”
 Other components
Common Application
Scenarios ..........
 IoT-enabled facility management system to monitor
equipment status
 Energy sector safety operations by identifying
operational anomalies of facilities
 Enterprise-scale safety
management (e.g.,
manufacturing, energy,
urban infrastructure),
 R&D in
next-generation
autonomous driving
technologies
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Notes:
(1) For details, please refer to “Overview — Our Core Technologies and Innovations — Our Multispectral AI Technologies —
(1) Multispectral perception-computing integration” in this section of this prospectus.
(2) For details, please refer to “Overview — Our Core Technologies and Innovations — Our Multispectral AI Technologies —
(2) Lightweight on-device AI computing” in this section of this prospectus.
(3) For details, please refer to “Overview — Our Core Technologies and Innovations — Our Multispectral AI Technologies —
(3) Multispectral AI large model platform” in this section of this prospectus.
Multispectral AI Modules
Our Multispectral AI Modules are embedded hardware components that collect and process
multispectral data (including visible light, infrared, and UV) through AI algorithms for integration into
third-party devices, designed to serve as the foundational building blocks for our core multispectral
products and services. These modules function as the “eyes and brain” of a system, capturing data
across multiple spectral bands from complex environments and processing it to generate real-time
responses. Unlike off-the-shelf modules, we have optimised our Multispectral AI Modules by
fine-tuning the requisite AI parameters, thereby ensuring adaptive performance across various
environmental scenarios, and achieving higher accuracy in AI detection.
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Our Multispectral AI Modules are sold as fully integrated units, which can be embedded into
third-party devices, with all components pre-assembled to ensure system integrity and performance
consistency. They are highly standardised, which enables sophisticated AI capabilities cost-effectively
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while reducing development time and technical risks. For instance, a customer developing IoT-enabled
facility management system can integrate our modules to monitor the facility environment without
significant in-house R&D investment.
Compared to traditional single-spectrum sensors available in the market, our Multispectral AI
Modules integrate sensors with multispectral perception technology, processing units and AI chips
integrated with multi-signal fusion algorithms, powered by our “Optics-Sensor-Imaging-Computing”
technology architecture.
Serving as the foundational layer of our technological architecture, the Multispectral AI Modules
play a strategic entry role in our product system. They are designed for large-scale deployment and are
widely used in third-party devices as a universal interface for the application of our technologies. This
product line not only expedites the deployment of our AI technology in the market, but also lays an
integrated foundation for the subsequent expansion to higher-value products, such as our Multispectral
AI Perception Terminals. The deployment capability of the Multispectral AI Modules is a critical pillar
in our long-term strategy to build a modular and upgradeable AI infrastructure.
Multispectral AI Perception Terminals
Our Multispectral AI Perception Terminals are devices that integrate Multispectral AI Modules
with multispectral sensors, enhanced multispectral AI algorithms, and standard hardware components
(including audio input and output interfaces), to provide real-time perception insights for precise
detection of environmental conditions. These terminals capture and analyse multispectral data,
delivering real-time, actionable responses. Engineered for rapid deployment across diverse operational
environments, these terminals serve as advanced safety monitoring solutions with different models
tailored to customer needs. Unlike Multispectral AI Modules, which are embedded components for
third-party integration, these terminals are fully assembled products with pre-installed scenario-specific
AI models, offering enhanced functionality for immediate use in safety-critical applications.
Rear cover Multispectral AI Module,
including main control circuitry
Multispectral AI Perception
Terminal
Front cover
Our Multispectral AI Perception Terminals leverage our “Optics-Sensor-Imaging-Computing”
technology architecture, integrating sensors with multispectral perception technology and computing
chips with multi-signal fusion algorithms. This enables detection of complex safety anomalies, such as
ultraviolet signatures of incipient flames or abnormal thermal gradients, that traditional single-spectrum
devices cannot identify.
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During the Track Record Period, our key models of Multispectral AI Perception Terminals
included:
 Multispectral Fire Hazard Computing Terminals: Deployed in industrial safety (such as
the energy sector) to detect thermal anomalies and early fire risks using specialised sensor
combinations, using infrared, UV , and visible light sensors with algorithms trained on over
10 million multispectral data points and 100,000 hazardous event datasets.
 Multispectral Biometric Identification Terminals: Used in security systems (e.g., financial
institutions) for real-time identity verification under challenging lighting conditions, using
infrared and visible light sensors with algorithms trained on facial identification datasets.
 Multispectral Target Identification Terminals: Applied in, for example, traffic
management systems to classify objects or vehicles in low-visibility environments, using
specialised sensor combinations and target detection algorithms.
Customers can select models based on specific needs and opt for value-added system upgrades to
enhance functionality, such as integration with our Multispectral AI Large Model Services for advanced
analytics or remote monitoring.
The terminals are designed for standalone operation or seamless integration with legacy and
modern safety systems, with authoritative certifications ensuring durability in harsh environments (e.g.,
outdoor settings). They are ideal for industries such as IDC safety management, software and
information technology services, and IoT-enabled facility management.
Multispectral AI Large Model Services
Our Multispectral AI Large Model Services deliver a large model solution through a software
platform with our proprietary “Zhiyuan Origin Large Model”, that can be deployed either on a cloud
environment or within the customers’ local data centres, and extracts, processes and analyses
multispectral data collected from our Multispectral AI Perception Terminals or other third-party devices.
Distinct from our Multispectral AI Perception Terminals, which are standalone devices with
pre-installed scenario-specific AI models, our Multispectral AI Large Model Services act as a “central
control hub”, collecting and analysing data with recognition algorithms to provide advanced analytics
and predictive insights for safety management across diverse industries. For instance, detecting risks
such as equipment overheating, fire hazards, or vehicle and pedestrian recognition, and delivering
real-time alerts via app notifications, phone calls, or centralised dashboards.
By way of illustration, equipping a large industrial park with an “intelligent security steward” —
capable of perceiving through “eyes”, reasoning via a “brain”, executing through “hands and feet”, and
interfacing with various existing park devices — would involve the deployment of a complete system in
the following manner:
 “Eyes and Ears” (Data Acquisition Layer): This layer is responsible for connecting two
categories of devices: (i) our proprietary Multispectral AI Perception Terminals, deployed
throughout the park to capture visible light, temperature measurements, and flame detection;
and (ii) the park’s existing standard cameras and fire alarms. The objective is to aggregate
all available on-site perceptible information.
 “Brain” (Large Model Inference and Decision-Making Layer): Typically deployed within
the park’s server room, the “Brain” receives all information and performs in-depth analysis.
For instance, it can not only detect an elevated temperature reading from a piece of
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equipment, but also correlate this with video footage to ascertain whether personnel are
present in the vicinity or whether the area contains flammable materials. This enables the
system to assess whether a genuine fire hazard exists and to determine the appropriate alert
level.
 “Command Centre” (Platform Management and Integration Hub): Co-located with the
“Brain”, the Command Centre serves as the management backend, responsible for managing
all devices, updating the “Brain’s” knowledge base, and disseminating the “Brain’s” early
warnings to the park’s central display screen, duty officers’ mobile applications, or existing
security systems for unified command.
Data Collection and Processing
Data is collected through our proprietary Multispectral AI Perception Terminals, which perform
preliminary analysis to identify events such as temperature anomalies, electrical sparks or suspected
smoke. Alternatively, the park’s existing standard devices provide raw video feeds or alarm signals.
For imminent hazards, our on-site Multispectral AI Perception Terminals may trigger local alarms
immediately. Where more sophisticated analysis is required, all collected information converges at the
“Brain”, which synthesises multiple data types for cross-validation. For instance, should a standard
smoke detector be activated, the “Brain” retrieves the thermal imaging feed from the Multispectral AI
Perception Terminal at that location to verify the presence of a hot spot, and then examines the visible
light feed to determine whether the event may be attributable to dust. This process significantly reduces
false alarms and enables more precise early warnings.
To enable the “steward” to communicate efficiently with different devices, we employ two distinct
protocol types: (i) private protocol for our proprietary smart devices, which functions like a special
code, which enables fast, secure, and advanced communication, allowing features like remote upgrades
and rapid response; and (ii) public protocol for other third-party devices, which functions like a
universal language, which allows easy connection with other branded devices, protecting the customer’s
investment in their existing equipment and enabling quick deployment.
Cloud-Based versus On-Premises Deployment
Deployment within the customer’s on-premises data centre — i.e., the “Brain” located in the
customer’s own server room — represents the most commonly adopted approach among our customers.
In such a configuration, all data (including surveillance video and alarm records) remains within the
park’s network, thereby mitigating data leakage risks and offering the highest level of privacy
protection. The customer provides the servers, and we supply the software installation package for
deployment. During operation, the system is capable of autonomous learning, progressively acquiring
more specific knowledge regarding the particular characteristics of that park.
The hybrid “on-device-cloud” deployment architecture optimises computational efficiency by
distributing tasks between local devices for low-latency responses and cloud infrastructure for advanced
analytics, ensuring reliable performance in offline or low-bandwidth environments. Whilst Multispectral
AI Modules and Multispectral AI Perception Terminals are hardware products delivering fixed,
single-point perception and real-time judgement capabilities, Multispectral AI Large Model Services
constitute a software platform and service offering scalable, centralised capabilities for data value
extraction, system management, and self-training AI algorithm models. Its automatic over-the-air (OTA)
remote download function enables deployment to terminals or modules, optimising scene recognition
performance. They serve as the core “value-added” brain for clients building intelligent security
management systems.
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V alue-Added Services provided by our Multispectral AI Large Model Services
Our service offering extends beyond the software and hardware products themselves, delivering
continuous evolution as a core value proposition to customers. The platform leverages the customer’s
on-site data to continuously optimise and remotely upgrade deployed terminal algorithms without
operational disruption. Consequently, the customer’s entire perception system is no longer static, but
instead becomes a continuously evolving value-creation engine.
Furthermore, the platform functions not merely as a connector but also as a “Brain”. By
employing multispectral fusion and knowledge graph enhancement, it delivers deep scenario
understanding, risk assessment, and predictive insights. The platform generates graded early warnings
and precise recommended actions, thereby elevating the customer’s security management from a
reactive model to one characterised by proactive early warning and intelligent decision-making.
The Multispectral AI Large Model Services are particularly suited for large-scale enterprise
applications, allowing centralised safety management for industries like manufacturing, energy, and
urban infrastructure. By providing real-time alerts for unusual conditions, failure prediction analysis,
and environmental parameter monitoring, these services enhance operational safety and efficiency,
positioning them as a key component of our technological ecosystem. For instance, a customer
developing IoT-enabled facility management system can integrate our modules to monitor equipment
status without significant in-house R&D investment.
Zhiyuan Origin Large Model
Our proprietary “Zhiyuan Origin Large Model”, developed by our R&D team, integrates
multispectral perception and multi-signal fusion algorithms within our
“Optics-Sensor-Imaging-Computing” framework. The “Zhiyuan Origin Large Model” is trained on
extensive datasets, including over 10 million multispectral perception data points, 100,000 hazardous
event records, and 10,000 safety engineering knowledge graphs. For the development process of our
“Zhiyuan Origin Large Model”, please refer to “Research and Development — R&D Models” in this
section below.
We undertook 22 and 41 Multispectral AI Large Model Services projects, with an average price of
approximately RMB5.2 million and RMB8.7 million per project during FY2024 and FY2025,
respectively. Given the customised nature of each engagement, individual project revenue varies. There
were no loss-making Multispectral AI Large Model Services projects during FY2024 and FY2025.
Other AI Vision Modules
Our Other AI Vision Modules are embedded hardware components designed for visible light
perception, providing standardised visual capture and preliminary processing for cost-effective
applications. These modules focus exclusively on visible light data, integrating image sensors,
processing units, and compatible interfaces with basic AI algorithms for on-device analysis. They are
sold as integrated units to ensure system integrity, enabling easy integration into customer devices.
These modules are tailored for less complex scenarios requiring efficient visual processing. For
instance, in a smart city application, a module embedded in a traffic management systems can analyse
visible light data to detect vehicle patterns, delivering real-time alerts.
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Typical Application Scenarios of Our Products and Services
We provide comprehensive and modular intelligent perception solutions designed for diverse
safety-critical scenarios in industrial, and multi-dimensional environments. Below are examples
illustrating the application of our three core products and services across typical scenarios:
1. Application of Multispectral AI Modules in Urban Safety Prevention and Control Projects
With the acceleration of urbanisation in China, urban planning initiatives have consistently
prioritised public safety in recent years, thereby creating substantial demand for urban safety prevention
and control projects. Our Multispectral AI Modules were installed in our customers’ terminals deployed
in urban safety prevention and control projects, demonstrating applicability, which typically include
construction safety governance, urban traffic safety, and hydrological disaster prevention projects.
These scenarios often occur in complex environments where accurate perception and efficient
identification are essential.
According to the Frost & Sullivan Report, traditional visible light vision systems encounter
notable limitations in complex environmental conditions, including: (i) misidentification of safety
helmet reflections due to strong light interference; (ii) inability of night-time infrared imaging to
distinguish protective clothing materials; and (iii) distorted water level monitoring during adverse
weather conditions (such as rain or fog). These limitations have substantially impaired the quality and
operational effectiveness of urban safety prevention and control projects.
Our Multispectral AI Modules are designed to address these challenges. In contrast to traditional
systems, which capture only limited visible bands and are prone to errors caused by lighting variations,
background interference, or similar surface colours, our Multispectral AI Modules acquire multiple
spectral bands — including near-infrared, red-edge, and specific visible narrow bands. These modules
operate effectively under difficult lighting conditions, such as intense light, low light, shadows, or
complex environments, thereby providing more stable spectral data. Furthermore, the Multispectral AI
Modules integrate lightweight on-device AI computing units that facilitate real-time data analysis and
decision-making. These units effectively enhance the signal-to-noise ratio of ultraviolet and
infrared-visible imaging data through our proprietary AI algorithms, thereby improving environmental
perception and computational accuracy.
Our Multispectral AI Modules are installed in relevant terminals deployed in the following safety
projects, customised to meet the specific requirements of each scenario:
 In construction safety governance projects, our Multispectral AI Modules integrated in our
customers’ devices are able to capture the construction sites in real time through visible light
detection and thermal imaging. The system can accurately identify protective clothing with
damaged reflective strips and identify smoking employees at construction sites.
 In urban traffic safety projects, our Multispectral AI Modules, installed in our customers’
safety products deployed at community entrances and exits, instantaneously detect the
helmet-wearing status of e-bike riders. Non-compliant individuals would trigger intelligent
interception accompanied by audio-visual alerts, decreasing the likelihood of traffic
accidents and injuries.
 In hydrological disaster prevention projects, our Multispectral AI Modules, installed in our
customers’ safety products deployed along riverbanks, monitor floating debris accumulation
using visible light, analyse changes in water turbidity with near-infrared, and detect
abnormal undercurrent temperatures through thermal imaging. This enables early warnings
for piping risks, abnormal currents and water levels.
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Our Multispectral AI Modules translate technological strengths into improved efficiency in social
governance, empowering our customers to deliver superior projects and achieve leadership in the urban
safety and prevention construction sector. Key features that support these outcomes include a
multi-dimensional alarm system and visualisation of risk liability tracing. The multi-dimensional alarm
system enables our Multispectral AI Modules to conduct localised intelligent analysis. Upon detection
of a risk, operators are notified through multiple channels, including audio-visual alarms and remote
platform push notifications, facilitating immediate response.
In addition, the visualisation of risk liability tracing allows images, temperature data, and alarm
records generated during operations to be uploaded in real time to the customers’ monitoring platform,
improving the process of insurance claims and liability determination.
The application of our Multispectral AI Modules in urban safety prevention and control projects
generated revenue ranging from 78.6% to 78.8% of the total revenue of our Multispectral AI Modules
during the applicable Track Record Period.
2. Application of Multispectral AI Perception Terminals in Energy Sector Safety Operations
Comprehensive energy organisations in the PRC operate in high-risk industries subject to stringent
regulatory oversight, encompassing activities such as coal mining, clean energy production, and power
supply management. These organisations impose rigorous requirements on underground operational
safety, particularly the reliable functioning of coal mine air compressors, as well as the stability of
power equipment and the efficiency of emergency responses.
Our Multispectral AI Perception Terminals provide monitoring solutions tailored to the unique
challenges of these industries. Coal mine air compressors serve as vital components in underground
operations, powering pneumatic tools, maintaining mine ventilation, driving equipment, and supplying
air to safety systems. Disruptions in their operation can result in severe outcomes, including oxygen
shortages, exhaust system failures, or shutdowns of core equipment, thereby posing substantial safety
hazards and economic losses. Traditional monitoring methods, which rely on manual inspections and
handheld temperature devices, are limited by low detection frequency, incomplete coverage, and high
rates of overlooked issues, rendering them inadequate for the demanding safety standards of integrated
energy enterprises.
Our Multispectral AI Perception Terminals offer a comprehensive solution through real-time
monitoring of operational anomalies. By employing on-device imaging, analysis, recognition, and
inference, the terminals may identify leakage discharges and equipment ageing, mitigating the risks of
shutdowns arising from abnormal equipment behaviour. Furthermore, the terminals’ multispectral
infrared perception capabilities enable continuous temperature monitoring of air compressor vents,
ensuring that temperature fluctuations remain within acceptable limits. This functionality is essential for
preventing abrupt underground temperature changes caused by compressor malfunctions.
In addition to temperature and leakage monitoring, the terminals can autonomously detect other
critical anomalies, such as dust accumulation on air compressor fans and oil leakage from transformers.
Through continuous, automated, and precise oversight, these terminals eliminate blind spots, minimise
missed detections, and substantially improve overall safety and operational efficiency.
The application of our Multispectral AI Perception Terminals in energy sector safety operations
generated revenue ranging from 5.3% to 6.7% of the total revenue of our Multispectral AI Perception
Terminals during the applicable Track Record Period.
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3. Application of Multispectral AI Large Model Services for IDC Safety Scenarios and R&D in
Next Generation Intelligent Driving Systems
IDC Safety Scenarios
Our Multispectral AI Large Model Services are procured by our customers in the big data industry
for enhancing safety management in IDCs. Our customers have established IDCs in multiple cities,
which address information data risks associated with critical infrastructure, including network
equipment, and power systems. The operational security of IDCs directly impacts information assurance
and service continuity.
Our Multispectral AI Large Model Services deliver real-time perception and analysis of
multispectral data. This is accomplished using our Multispectral AI Perception Terminals or third-party
devices that installed our Multispectral AI Modules, which are installed in our customers’ IDCs. Our
Multispectral AI Large Model Services integrate multispectral data (including ultraviolet, infrared, and
visible light) with multi-scenario safety sector knowledge. The large model efficiently processes and
analyses data from multiple devices, delivering constant safety insights by detecting risks, identifying
anomalies, and providing real-time predictive insights specific to IDC operations.
Trained on extensive safety-related datasets and built upon deep learning frameworks, the large
model achieves high accuracy in identifying early-stage fire spectral signatures and abnormal equipment
status. Customers can centrally monitor and manage risks through a unified interface, enabling rapid
response and data-driven decision-making across their IDC operations. The services incorporate
pre-installed scenarios and visual dashboards, facilitating integration with external systems. Designed
for multi-terminal collaboration, the large model enables unified safety management across multiple
IDC sites, providing real-time alerts for unusual conditions.
The application of our Multispectral AI Large Model Services in IDC safety scenarios generated
revenue ranging from 13.8% to 75.4% of the total revenue of Multispectral AI Large Model during the
applicable Track Record Period.
R&D in Next Generation Intelligent Driving Systems
According to Frost & Sullivan, existing intelligent driving systems primarily rely on visual
cameras or radar sensors to acquire and analyse environmental data in real time. During adverse
weather conditions (including dense fog, torrential rain, sandstorms, intense backlighting, or complete
darkness), such systems may face operational limitations: visible-light cameras may experience reduced
light transmission, potentially impairing their ability to detect lane markings, preceding vehicles, and
traffic signage; while radar signals may be scattered or absorbed by dense precipitation, potentially
compromising system reliability. In these circumstances, our Multispectral AI Large Model Services can
be deployed to address the pain points in existing intelligent driving systems.
Our Multispectral AI Large Model Services are procured by our customers in the automotive
industry for R&D in intelligent driving systems. These services address the safety hazards that may
arise from potential failures or degradation of visual cameras and radar technologies under extreme
weather conditions. As a key enabling technology for enhancing autonomous driving safety, our
services can integrate with existing autonomous driving systems, enabling joint fusion and real-time
intelligent analysis of data streams.
The application of our Multispectral AI Large Model Services in R&D for next generation
intelligent driving systems generated revenue ranging from 19.6% to 20.2% of the total revenue of our
Multispectral AI Large Model Services during the applicable Track Record Period.
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OUR BUSINESS MODEL
We adopt a vertically integrated business model which covers full-chain AI perception solutions,
building on modular design, and multi-scenario scalability. Our core capabilities cover upstream
multispectral optics and embedded AI hardware development to downstream application software
development, which enable us to deliver deployable, adaptable and comprehensive perception
intelligent solutions tailored to various multi-scenario safety sector user cases.
Our product system and service portfolio comprised three core multispectral AI products that
underpins our capabilities, covering the full product stack from hardware to application software. We
may offer these three core multispectral AI products as an integrated unit or separate components,
depending on customer needs. Our customers may directly use our three core products to solve their
own production or multi-scenario safety needs. Alternatively, they may incorporate our products into
their AI solutions.
The following diagram illustrates our business model as well as the service flow in relation to our
products and services:
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Specifically, our customers during the Track Record Period included: (i) system integrators that
integrated our products and services into their offerings to enterprise-level users; and (ii)
enterprise-level users that used our products and services directly.
RESEARCH AND DEVELOPMENT
R&D Centres and Teams
Our ability to develop new technologies, design new products and solutions, and continually
optimise existing products and services is central to maintaining our market position. We established
our R&D centre in Shenzhen equipped with specialised laboratories, focusing on sensors, optical
integration and reliability tests. In the future, we will further expand our R&D centres and increase our
site area and staffing to carry out related work such as large-model training and chip design.
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As at 31 December 2025, our R&D team comprised 156 members, representing approximately
43.1% of our total number of employees. The core members of our R&D team include postdoctoral
fellows and master’s degree holders. Our R&D personnel have an average working experience of over
three years, and mainly possess professional backgrounds in communication engineering, automation,
electronic information engineering, computer science and technology, etc..
R&D Models
We have established a R&D framework primarily based on in-house capabilities, supplemented by
strategic outsourcing for non-core tasks. This dual approach optimises resource allocation, safeguards
proprietary intellectual property, and accelerates the commercialisation of our core products and
services. In terms of product development, we adopted an integrated project-based model for our core
products and services, overseen by a cross-functional product decision committee.
(1) In-house R&D
Our Group’s in-house R&D capabilities are demonstrated as follows:
 Lightweight On-Device AI Computing: Our in-house R&D has pioneered lightweight
on-device AI computing technology, which achieved device level autonomous AI processing,
with backend support from our multispectral AI large model. The lightweight architecture
executes precise tasks, such as targeted feature analysis, and generates standardised alert
signals. Notably, the small model sustains full functionality during network disruptions,
ensuring reliable performance without backend dependency. This innovation allows our
Group to deliver cost-effective, empowered modules and terminals, enabling comprehensive
monitoring in compact-design scenarios like automobile transportation racks or cargo
containers. It thereby resolves key drawbacks of traditional sensing devices, including
response delays and blind spots, while boosting operational efficiency and safety.
 Development of Proprietary AI Large Models: The cornerstone of our innovation is the
“Zhiyuan Origin Large Model”, a safety-sector specific AI model built on open-source
frameworks and enriched with proprietary industry data. Our in-house team refines this
model through code modifications, algorithmic adjustments, and self-training modules.
Deployed in real-world applications, it undergoes continuous optimisation to deliver
high-performance, commercially viable solutions for safety-critical scenarios.
 Design and Optimisation of Advanced Hardware Components: Our Group designs and
optimises multispectral components by adjusting parameters such as exposure, dynamic
range, light suppression, and noise reduction to enhance signal-to-noise ratios across diverse
lighting conditions. Third parties manufacture these components based on our specifications,
after which undergo register initialisation to meet the specifications of our products. In the
development of our MEMS infrared sensor chips, we adopt advanced material selection to
enable superior night-vision capability, and precise temperature measurement.
To support these capabilities, we collaborate with leading academic institutions, including but not
limited to Huazhong University of Science and Technology, Xi’an University of Science and
Technology, and Changchun University of Science and Technology. These partnerships facilitate
cooperative research, joint talent development, and access to advanced experimental resources. Such
collaborations enhance our understanding of industry trends and emerging technologies, enabling the
integration of cutting-edge innovations into our proprietary technologies. For scenarios with limited
market scale, our in-house team conducts initial third-party validation before allocating R&D resources
for scalable development.
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(2) Outsourcing to External Parties
To enhance the efficiency of our product commercialisation, we strategically outsource certain
non-core tasks, such as internal product lifecycle management, data annotation and scenario-specific
application logic development, to external software development teams and university laboratories:
 Internal product lifecycle management system: this involves the development of a
full-lifecycle operational platform for our R&D staff to more efficiently manage the process
from initial concept to product operation.
 Scenario-Specific Application Logic: This task involves developing tailored software logic,
customised for specific industry applications. For instance, in a data centre, such application
logic defines operational rules, such as the parameters for triggering alerts in response to
equipment anomalies, including notification formats and response thresholds. Additionally,
the application logic facilitates integration between our products and our customers’ existing
systems, enabling connectivity to mobile applications. These software modules demand
significant customisation to align with individual customer requirements, rendering them
resource-intensive but less technically complex than our core algorithm development.
 Data Annotation: Data annotation entails the systematic labelling and categorisation of
data, such as multispectral images or sensor outputs, to prepare datasets for training our
proprietary “Zhiyuan Origin Large Model”. Such process is critical for enabling the large
model to accurately identify patterns, such as hazardous conditions in safety applications.
Data annotation is labour-intensive and requires adherence to our stringent specifications to
ensure dataset consistency and quality. By outsourcing this task to third-party providers, we
preserve our in-house resources for core development activities, such as algorithm design
and model training, while external teams efficiently deliver the substantial volumes of
standardised data required for effective model performance.
This approach enables our in-house R&D team to concentrate on high-value activities, including
the design of proprietary algorithms and the optimisation of core components integral to our core
products and services. By leveraging external expertise for non-core tasks, we optimise resource
allocation, accelerate development timelines, and maintain control over critical intellectual property,
ensuring our solutions meet the diverse needs of industries. Our outsourcing strategy supports
cost-effective scalability and rapid deployment of our products, ensuring we maintain a competitive
edge while addressing the evolving demands of our customers in safety-critical applications. According
to Frost & Sullivan, it is in line with market practice to outsource such tasks to optimise R&D
performance, resource allocation, enhance efficiency and control over overall project cost-effectiveness.
The key terms of the agreements between our Group and the collaborating partners, such as
academic institution, are set out below:
 Roles and obligations of our Group and the collaborating partners: Our Group
collaborates with academic institution to jointly establish and operate the joint R&D centre.
The counterparty provides scientific theoretical support and expert guidance in new product
development, technologies, processes, and materials, while our Group contributes resources,
facilities, and funding to support the operations.
 Background of the collaborating partner: Our Group collaborates with academic
institution in China, recognised for the expertise in fields such as optics, optoelectronics,
laser technology, and advanced engineering.
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 The ownership of the relevant intellectual property rights: Intellectual property rights,
technical secrets, and achievements originally owned by either party remain with the original
owner. For any research results jointly completed, unless otherwise agreed, the intellectual
property rights are shared equally, with each party holding 50%.
Development and Deployment of Our Multispectral AI Large Model Services
Our R&D team designs and optimises our proprietary large model architecture, integrating
multispectral perception, including ultraviolet, infrared, visible light, with AI algorithms. The model
designed to support both general-purpose and scenario-specific applications, addressing the complex
requirements of multi-scenario safety management, biometric identification, and target detection.
During model training, we perform parameter tuning to optimise the model’s performance for
specific scenarios. The training of our large model leverages extensive real-world datasets collected
from diverse sensing devices in operational environments. For example, in the multi-scenario safety
domain, our model was trained on over 10 million multispectral perception data points, the data of
more than 100,000 real-world hazardous events, and more than 10,000 safety engineering knowledge
graphs. These datasets, including multispectral data derived from both simulated scenarios and
real-world events (such as experimental data and photographs), are primarily made available through
collaborations with academic institution specialising in safety research, as well as through our in-house
development. These datasets are used to train our algorithmic models, enhancing their performance and
reliability. To safeguard privacy and data integrity, data processing, model inference and
scenario-adaptive learning can be conducted within customer’s private domain networks whenever
required.
We deploy and manage our large models using a robust platform that supports large-scale device
management, model versioning, online updates, and dynamic allocation of computing resources across
multiple data centres. Our workflow allows for efficient training, rapid scenario adaptation, and
seamless remote upgrades to deployed devices, eliminating the need for manual intervention or device
disassembly. This integrated approach ensures continuous model improvement and supports our
customers’ operational needs across industries.
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The following illustrates the main steps involved in the development, training, and deployment of
our proprietary multispectral AI large model.
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R&D Investment
We continue to allocate substantial capital to product development and innovation. In FY2023,
FY2024 and FY2025, our research and development expenses (including of R&D expenses capitalised)
were RMB30.8 million, RMB55.3 million, and RMB105.3 million respectively, accounting for 26.3%,
10.6% and 15.7% of the total revenue in the corresponding years, respectively. The increase in R&D
expenses in FY2023 to FY2024 was driven by strategic initiatives aligned with our competitive
strengths. Such increase was primarily due to the accelerated development of our AI large model
services, notably the “Zhiyuan Origin Large Model”.
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The following table sets forth the details of our R&D expenses (including of R&D expenses
capitalised):
FY2023 FY2024 FY2025
RMB million % RMB million % RMB million %
In-house R&D ................ 30.5 99.1 25.5 46.1 45.1 42.8
Outsourcing to external parties ....... 0.3 0.9 29.8 53.9 60.2 57.2
Total ...................... 30.8 100 55.3 100 105.3 100
(1) In-House R&D Expenses
In-house R&D expenses primarily support our core innovation efforts, including algorithm design,
model training, and the enhancement of proprietary components such as the “Zhiyuan Origin Large
Model”. These expenses totalled RMB30.5 million in FY2023, RMB25.5 million in FY2024, and
RMB45.1 million in FY2025, representing 99.1%, 46.1%, and 42.8%, of total R&D expenses for the
respective years.
(2) Outsourcing to External Parties Expenses
Outsourcing expenses facilitate efficient execution of non-core, resource-intensive tasks, allowing
our internal team to focus on high-value activities. These expenses amounted to RMB0.3 million in
FY2023, RMB29.8 million in FY2024, and RMB60.2 million in FY2025, representing 0.9%, 53.9%,
and 57.2%, of total R&D expenses for the respective years.
The increase in outsourcing service fees in FY2024 and FY2025 was a direct and strategic result
of our Company’s focused investment in the accelerated development and commercial deployment of
our Multispectral AI Large Model Services. As the development of AI algorithms for use in our
Multispectral AI Large Model Services commencing from FY2024 relies heavily on labour-intensive
tasks, we outsource such tasks to optimise resource allocation, enhance efficiency, and control overall
project cost-effectiveness, thereby allowing the Company to concentrate its internal resources on core
technological research and development revolving around large model algorithms. This includes making
adjustments to algorithmic frameworks, optimising algorithmic parameters, and improving algorithmic
accuracy. Our clients come from various industries, who often require complete and comprehensive
solutions. As a result, our core technologies alone may not be sufficient to efficiently address the
requirements of specific application scenarios, and therefore certain tasks are outsourced so as to
accelerate our delivery process and overall efficiency.
The increase in outsourcing service fees in FY2024 and FY2025 in particular was primarily driven
by several large-scale R&D projects, which includes the following:
 the development and customisation of internal product lifecycle management system —
a full-lifecycle operational platform for R&D teams for product management purposes,
managing everything from documentation and parts to bills of materials (BOM), 2D and 3D
blueprint management and change control. Its core purpose is to standardise processes and
components, thereby reducing redundancy and improving efficiency from initial concept to
product operation;
 data tagging and annotation services — for internal large model development. This is a
critical internal support function where raw data is tagged and prepared to create
high-quality training datasets, which are essential for training core AI models. The resulting
models are then packaged into tailored solutions for customers; and
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 the research and development of a customised system for our customers — involves
adapting and deploying core large-model technology to meet specific client needs. We focus
on developing the core AI and algorithm components internally, while outsourcing the
development of surrounding application software to third-party partners to create complete,
bespoke systems for customers.
For details, please refer to “Financial Information — Year-to-Year Comparison of Results of
Operations — FY2025 Compared to FY2024 — Research and Development Expenses” and “Financial
Information — Year-to-Year Comparison of Results of Operations — FY2024 Compared to FY2023 —
Research and Development Expenses” in this prospectus.
Key R&D Focus Area
We plan to focus our R&D on below key areas of technologies:
 Perception-computing integration: Continuously improving platform computing, integrating
perception intelligence enhance our storage and communication capabilities to offer differing
needs in elastic computational requirements;
 Machine learning algorithms: Utilising the latest advancement in machine learning
algorithms to upgrade our technologies after successful testing and implementation in
large-scale industry applications; and
 Data-centric training: Optimising our computational framework by improving our algorithms
and processing tools for processing industry data, thereby allocating greater compatibility
with machine learning algorithms and optimisation of targeted large models efficiently.
Intellectual Property
Our Directors believe that our intellectual property rights are of vital importance to our future
business development and operations. As at the Latest Practicable Date, we had 158 registered patents
in China (including 101 inventions, 21 utility models and 36 designs), 36 domestic patent applications
(including 29 inventions which revolve around our core R&D capabilities developed in-house, five
utility models and two designs) and one U.S. invention patent application. We held 64 registered
trademarks in the PRC, three registered trademarks in Hong Kong and had three registered trademarks
in the United States. We also had 46 registered software copyrights in China, and had 2 registered
domain names in China which, in the opinion of our Directors, are material to our business. For further
information, please see the section “Statutory and General Information — Further Information about
Our Business — 2. Intellectual property rights” in Appendix VI to this prospectus.
To protect our trade secrets and other proprietary technologies, we have installed encryption
software on the computers of our selected technical personnel. Decryption and external transmission of
any data require approval from designated personnel. Our employees’ labour contracts contain
confidentiality clauses, pursuant to which any inventions, designs, technologies or other intellectual
property developed or acquired by our employees using our technologies, materials or business
information during their employment shall be owned by us. Meanwhile, certain key technical know-how
is stored under heighten confidential protection and can only be accessed by selective R&D personnel.
In addition, we proactively protect and enforce our intellectual property rights by signing
agreements with confidentiality clause with our suppliers, customers, industry organisations and
academic institutions. We conduct appropriate investigations, reasonable evidence collection, warnings
and lawsuits against infringements to protect our legitimate rights and interests.
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During the Track Record Period and up to the Latest Practicable Date, we are not aware of (i) any
material infringement by us of any intellectual property rights of third parties, or (ii) any material
infringement by any third party of intellectual property rights owned by us. During the Track Record
Period and up to the Latest Practicable Date, we are not aware of any pending or potential legal claims
against our Group in connection with any infringement of intellectual property rights of third parties.
PRODUCTION
We arrange our production by taking into account customer orders and market conditions. By
aggregating production quantity, delivery deadlines and other information relating to customer orders by
the sales department, we will determine production tasks and arrange our production schedule based on
the production capacities of our production facilities bases and prevailing supply chain environment.
Production Process
Our production process is designed to enhance operational efficiency. We maintain full control
over the production workflow, which encompasses order processing and material preparation, SMT
automated assembly, sensor optical calibration and firmware programming, product configuration and
assembly, quality sampling and automated testing, product ageing, packaging and warehousing.
The following flowchart outlines the key steps of our production process for Multispectral AI
Modules, Multispectral AI Perception Terminals and Other AI Vision Modules:
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1. Order processing and material preparation
We process orders and formulate production plans in accordance with the sales contracts entered
into with our customers, and procure raw materials by assessing customer orders and considering
overall demand. We adopt a just-in-time procurement inventory system, whereby raw materials are
purchased and delivered just before they are needed in the production process, thereby minimising our
inventory costs. After inspecting and accepting delivery of such incoming raw materials, the materials
would be arranged for warehousing.
2. SMT automated assembly
Based on order schedules, we issue work orders and distribute materials to the SMT workshop.
After initial inspection, batch assembly is arranged. The PCBs are then assembled through SMT and
soldering processes, forming fully functional printed circuit board assemblies (PCBAs) with specific
functions. Following the SMT process, devices incorporating multispectral perception units (such as
visible light, ultraviolet and infrared) are subject to strict optical axis alignment and sensor fusion
calibration to ensure signal accuracy and consistency. After the calibration process is completed,
PCBAs are arranged for storage. The lead time for this step is usually approximately 10 minutes.
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3. Sensor optical calibration and firmware programming
Our production lines further perform pre-processing on the PCBAs, including multispectral AI
firmware programming, parameter configuration and dispensing. During firmware programming, each
device is assigned a unique identification code, followed by system boot testing. The lead time for this
step is usually within five minutes.
4. Product configuration and assembly
Following the production of the PCBAs, we commence the assembly and production of the final
products. The lead time for this step is usually within 10 minutes. Upon completion, the products are
cured, which usually takes approximately two hours. Afterwards, the cured products are transferred to
the testing phase.
5. Quality sampling and automated testing
Our products shall undergo automated functional testing process, as well as ex-factory tests,
including sensor response performance, wireless communication stability and power regulation
reliability. Upon passing these tests, the products undergo random quality control sampling inspections
to ensure the compliance with quality standards. The lead time for this step is usually within five
minutes.
6. Product ageing
After passing testing and sampling inspection, the products are placed in the ageing chamber. The
ageing process typically takes eight hours to identify and eliminate potential failures that might not be
detected during product configuration and assembly or initial testing.
7. Packaging and warehousing
We conduct customised packaging of the products according to the specifications of customers
stated in the sales contracts, and finally weigh and arrange the finished goods for warehousing.
Our Production Bases
As at the Latest Practicable Date, our production facilities are located in two key regions in
China, namely Shenzhen and the Longyou Economic Development Zone in Zhejiang Province. Our
SMT automated assembly lines were first installed and put into operation at our Shenzhen production
base in mid-2022. In April 2025, we relocated the SMT automated assembly lines to our Zhejiang
production base. This relocation was driven by the objective of utilising the Zhejiang base’s expanded
floor space and facilities to expand production capacity to meet growing customer demand and to
benefit from lower operational costs, including reduced labour and utility expenses. The Zhejiang base
delivers at least a 20% reduction in operating costs, including rent, labour, and water, as compared with
that of the Shenzhen base. Even after accounting for the additional transportation costs associated with
using our Zhejiang base, it remains a more cost-effective option overall. Moreover, the Zhejiang base
supported our expansion in the Yangtze River Delta region. Since the establishment of our Zhejiang
base, the number of our new customers in the Yangtze River Delta region increased by at least 50%
from FY2024 to FY2025.
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As at the Latest Practicable Date, the Zhejiang production base undertakes the full range of
production processes, including SMT automated assembly, sensor optical calibration, firmware
programming, product configuration and assembly, quality sampling, automated testing, product ageing,
packaging, and warehousing. The production department at the Shenzhen production base is also
responsible for developing production plans for implementation at the Zhejiang production base,
facilitating centralised coordination. Meanwhile, the Shenzhen production base focuses on subsequent
production processes post-SMT assembly, including sensor optical calibration, firmware programming,
product configuration, assembly, quality sampling, automated testing, product ageing, packaging, and
warehousing. As a result, the two production bases function as an integrated system, under a unified
production planning model, forming a seamless and orderly chain of operations. From our system
controls, we are able to monitor the rate of production at our Zhejiang production base in real-time
from our Shenzhen production base, and track dispatched goods which are generally due to arrive
within one day, allowing for cross-site visual management. Additionally, the Shenzhen production base
supports R&D activities due to its proximity to our R&D centre, facilitating the rapid integration of
R&D results into mass production and enhancing our innovation efficiency.
This dual-base structure allows us to combine efficient mass delivery capabilities with
technological flexibility and innovation incubation. As our business continues to expand, we plan to
further expand our production capacity in the future for the following reasons: (i) purchase intents for
Multispectral AI Modules, Multispectral AI Perception Terminals and Other AI Vision Modules for
FY2026 received from several of our customers; (ii) an increase in production volume of Multispectral
AI Modules, Multispectral AI Perception Terminals and Other AI Vision Modules for the four months
ended 30 April 2026 as compared to that for the same period in 2025; (iii) favourable industry growth
projections from Frost & Sullivan in the multispectral AI modules and multispectral AI perception
terminals markets, with expected CAGR of 29.7% and 31.5%, from 2025 to 2030, respectively; (iv)
trend of our organic customer base expansion from FY2023 to FY2025, which is expected to continue
in the coming years; and (v) anticipated growth in demand from new application scenarios such as
optoelectronics, food safety and skin diagnostics, at a CAGR of 43.7%, 86.1% and 44.0%, respectively,
from 2025 to 2030 according to Frost & Sullivan.
Shenzhen Production Base
We established our Shenzhen production base since September 2021. The SMT automated
assembly lines were installed and became operational at the Shenzhen production base in mid-2022, and
took over the original mass production tasks from Dongguan production base (see details of our
Dongguan production base below), supporting the mass production of Multispectral AI Modules,
Multispectral AI Perception Terminals, and Other AI Vision Modules. As part of our ongoing
production optimisation and capacity expansion, in April 2025, the SMT automated assembly lines were
relocated to our Zhejiang production base. After the relocation and as at the Latest Practicable Date, the
Shenzhen production base mainly undertakes the subsequent production processes after SMT automated
assembly, including sensor optical calibration and firmware programming, product configuration and
assembly, quality sampling and automated testing, product ageing and packaging and warehousing. In
addition, the Shenzhen production base also undertakes R&D activities as required, as it is located in
close proximity to our Company’s R&D centre. These functions accelerate the introduction of new
products into mass production processes, which allows us to swiftly transit cutting-edge R&D results
into actual products and enhances our innovation efficiency.
As advised by our PRC Legal Advisers, during the Track Record Period and up to the Latest
Practicable Date, the Shenzhen production base has not been subject to any material regulatory or
compliance issues, including litigation, arbitration, or significant penalties, that could, individually or in
the aggregate, have a material adverse effect on our business, financial condition, or results of
operations.
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Zhejiang Production Base
We established a production base in Longyou Economic Development Zone, Zhejiang since
September 2024. Since April 2025, the SMT automated assembly lines have relocated to the Zhejiang
production base from the Shenzhen production base. As at the Latest Practicable Date, the Zhejiang
production base performs the full range of production processes, including SMT automated assembly,
sensor optical calibration and firmware programming, product configuration and assembly, quality
sampling and automated testing, product ageing and packaging and warehousing. Since the transfer, this
production base was officially put into production, undertaking the production of Multispectral AI
Modules, Multispectral AI Perception Terminals and/or Other AI Vision Modules. Together with our
Shenzhen production base, the Zhejiang production base supports our coordinated production operations
and is capable of fulfilling the monthly delivery demands of our customers.
Production Capacity and Utilisation
The following table sets forth the details of our leased Shenzhen and Zhejiang production bases
(in aggregate), and their designed production capacity, actual production volume and utilisation rates in
FY2023 and FY2024 and FY2025:
FY2023 FY2024 FY2025
Products
Designed
Production
Capacity (1)
Actual
Production
Volume(2)
Utilisation
Rate (3)
Designed
Production
Capacity (1)
Actual
Production
Volume(2)
Utilisation
Rate (3)
Designed
Production
Capacity (1)
Actual
Production
Volume(2)
Utilisation
Rate (3)
Multispectral AI Modules ........ — 184,400 — — 591,100 — — 360,276 —
Multispectral AI Perception Terminals .. — 15,437 — — 97,886 — — 45,782 —
Other AI Vision Modules ......... — 11,100 — — 80,700 — — 29,518 —
Total ................... 880,000 210,937 24% 880,000 769,686 87% 880,000 435,576 49%
Notes:
(1) Designed production capacity is calculated based on the hourly production rate of our SMT automated assembly lines
operating 12 hours a day for 300 working days a year for FY2023, FY2024 and FY2025. Starting from April 2025, the
SMT automated assembly process was shifted from the Shenzhen production base to Zhejiang production base,
commencing operations on 8 April 2025. As at the Latest Practicable Date, while the Zhejiang production base handles the
SMT automated assembly process, both the Zhejiang and Shenzhen production bases are responsible for firmware
programming, sensor optical calibration, product configuration and assembly, quality sampling and automated testing,
product ageing, and packaging processes.
(2) Actual production volume refers to actual output for the relevant year.
(3) The utilisation rate is calculated by dividing actual production volume by the designed production capacity in the same
year. In 2024, the utilisation rate of the Shenzhen production base increased significantly to 87%, driven by increased
orders and production demands.
(4) The relatively low utilisation rate for the FY2025 was primarily attributable to a reduction in the production quantity of
our Multispectral AI Modules, Multispectral AI Perception Terminals and Other AI Vision Modules as represented by the
decrease in the sales volume from 587,183 to 364,350, 62,969 to 53,045, and 146,902 to 30,661, respectively, from
FY2024 to FY2025. Such reduction in production quantity was primarily attributable to our strategic reallocation of sales
and operational resources and personnel toward our Multispectral AI Large Model Services. As a result, we did not
prioritise the production of Multispectral AI Modules, Multispectral AI Perception Terminals and Other AI Vision Modules;
whereas our Multispectral AI Large Model Services were principally delivered as pure software solutions or were
integrated with third-party hardware (such as high-performance computing (HPC) servers), and thus have not placed
significant demands on the capacity of our production facilities.
(5) All of our product types (i.e. Multispectral AI Modules, Multispectral AI Perception Terminals and other AI Vision
Modules) are manufactured utilising the same SMT automated assembly lines. As a result, the designed production
capacity is measured by the aggregate output of these lines irrespective of product type, as it is not practicable to calculate
the theoretical production capacity or utilisation rate for each individual product category.
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Principal stages of our Multispectral AI Large Model Services
Our Multispectral AI Large Model Services are project-based services delivering a large model
solution with our proprietary “Zhiyuan Origin Large Model” to our customers. In general, a project
begins with the initiation and contract signing stage. It then moves into the execution and delivery
stage, which involves development, deployment and trial operation. Our customers are then asked to
sign off an acceptance report, and we will also issue our final bill to our customers. A project is closed
upon receipt of the final payment from our customers.
The period from project initiation and contract signing to project acceptance varies for each
project due to the complexity or availability of data or range of hardware equipment specifications. In
general, these stages take approximately one month to seven months. The payment collection stage may
require an additional one to three months. The approximate timeframe for each of the principal stages
of rendering our services is set out below.
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* Based on the credit period normally granted to our customers specified in contracts
MARKETING, SALES AND CUSTOMERS
Sales and Marketing
During the Track Record Period, our products and services were sold through direct sales. As at
the Latest Practicable Date, we have a sales team based in the PRC, dedicated to managing our sales to
different customers pursuant to geographical locations of these customers.
Our Customers
During the Track Record Period, our customers for our products and services primarily comprise
the following categories, each leveraging our Multispectral AI Modules, Multispectral AI Perception
Terminals, and Multispectral AI Large Model Services to enhance safety and operational efficiency:
 System integrators : These customers integrated our products and services into their
offerings to enterprise-level users. They focus on hardware-centric operations and the
development of customised, scenario-specific safety solutions, integrating our Multispectral
AI Modules to manufacture complete devices, or utilising our Multispectral AI Modules,
Multispectral AI Perception Terminals, and Multispectral AI Large Model Services to
enhance the development of their hardware and software, delivering tailored systems for
targeted sectors such as education, manufacturing, or smart cities. Their expertise lies in
hardware engineering, system integration, and project-specific enhancements, with minimal
reliance on significant software customisation for hardware-focused integrations or emphasis
on software-driven designs for solution-oriented projects. The downstream customers of
system integrators are enterprise-level users, including large enterprises or government
entities; and
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 Enterprise-level users : These customers used our products and services directly. They are
the ultimate end-users who deploy our products and services directly within their operations.
Spanning industries such as energy, infrastructure, and government services, many of these
customers undertake high-impact projects requiring advanced safety and efficiency solutions.
They leverage our Multispectral AI Perception Terminals and Multispectral AI Large Model
Services for applications including internal safety monitoring, risk prevention, and predictive
analytics.
Our Group employs a systematic and multi-faceted approach to acquire potential customers
(including system integrators and enterprise-level users).
 Industry Exhibitions and Professional Conferences: Our Group actively participates in
key domestic and international industry exhibitions and technical forums, where we can
showcase product capabilities, share technological insights and present case studies. Such a
platform serves as a primary channel for direct engagement with high-potential prospects,
enabling us to gather industry intelligence while generating qualified leads. Our approach
involves targeted pre-event invitations and post-event follow-ups to maximise the conversion
of business opportunities.
 Digital Marketing and Content Dissemination: We utilise a combination of content
marketing, and targeted social media engagement to attract potential customers. By
consistently publishing expert knowledge and representative application cases of
multispectral AI technology on our corporate website, professional platforms, and within
industry communities, we establish thought leadership and build trust with our target
customers, thereby cultivating a pipeline of sales leads.
 Industry Client Development: We establish strategic partnerships with system integrator
clients specialising in specific vertical industries such as energy, power, IDC and emergency
management. Through joint bidding, we provide core AI technologies and product solutions,
whilst such system integrators leverage their industry expertise, project experience and
resources to expand into niche markets for the benefit of both sides.
To the best knowledge of our Directors, contingent upon the essence of our customers’ needs and
the scenario-specific deliverables, certain enterprise-level users would engage system integrators when
selecting suppliers or service providers. Such system integrators would then procure hardware and/or
software solutions from companies like us, and implement software plus hardware solutions for end
users with uniform standards. System integrators usually provide various types of assistance in project
implementation, such as selecting suppliers, integrating the products of different suppliers and
managing the implementation. According to Frost & Sullivan, it is an industry norm for enterprise-level
users to engage system integrators to implement their projects.
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The following table sets forth a breakdown of our revenues by customer type to the best
knowledge of our Directors:
FY2023 FY2024 FY2025
RMB’000 % RMB’000 % RMB’000 %
System Integrators
Multispectral AI Modules ........ 98,158 83.9 298,074 57.0 208,232 31.2
Multispectral AI Perception Terminals . 12,521 10.6 60,459 11.6 92,002 13.8
Multispectral AI Large Model Services . — — 101,471 19.5 310,258 46.4
Other AI Vision Modules ......... 5,141 4.4 47,064 9.0 10,230 1.5
Others ................... 201 0.2 1,235 0.2 1,208 0.2
116,021 99.1 508,303 97.3 621,930 93.1
Enterprise-level Users
Multispectral AI Modules ........ 963 0.8 1,154 0.2 812 0.1
Multispectral AI Perception Terminals . 65 0.1 770 0.1 636 0.1
Multispectral AI Large Model Services . — — 12,320 2.4 45,106 6.7
Other AI Vision Modules ......... 9 0.0 16 0.0 28 0.0
Others ................... 5 0.0 5 0.0 7 0.0
1,042 0.9 14,265 2.7 46,589 6.9
Total ..................... 117,063 100.0 522,568 100.0 668,519 100.0
The following table sets forth a breakdown of our revenues by product and customer sector:
FY2023 FY2024 FY2025
RMB’000 % RMB’000 % RMB’000 %
Multispectral AI
Multispectral AI Modules
— Private sector ............. 98,979 84.6 262,162 50.2 193,991 29.0
— Public sector .............. 142 0.1 37,066 7.1 15,053 2.3
99,121 84.7 299,228 57.3 209,044 31.3
Multispectral AI Perception Terminals
— Private sector ............. 12,094 10.3 53,544 10.2 92,201 13.8
— Public sector .............. 491 0.4 7,685 1.5 437 0.1
12,585 10.7 61,229 11.7 92,638 13.9
Multispectral AI Large Model Services
— Private sector ............. — — 71,575 13.7 306,352 45.8
— Public sector .............. — — 42,216 8.1 49,012 7.3
— — 113,791 21.8 355,364 53.1
Others
Other AI Vision Modules
— Private sector ............. 5,149 4.3 47,012 8.9 10,252 1.4
— Public sector .............. 1 0.1 68 0.1 6 0.1
5,150 4.4 47,080 9.0 10,258 1.5
Others
— Private sector ............. 207 0.2 1,240 0.2 1,215 0.2
117,063 100.0 522,568 100.0 668,519 100.0
During the Track Record Period, our revenue from the five largest customers in each year
accounted for 38.3%, 59.0% and 46.8% of our total revenue during the same years, respectively. We
maintained stable business relationships with our five largest customers in each year.
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The table below sets forth the details of our five largest customers for each year during the Track
Record Period:
Customer Customer type (3) Background Registered capitals (4) Revenue
% of total
revenue
Principal
place of
business (4) Credit terms
Y ear of
commencement
of business
relationship
Main products and services
purchased from us
(RMB’000) (%)
FY2023
Customer A (1) . System
integrators
A private company established in 2010,
primarily engaged in the development
and sale of electronic products and
other domestic trade.
RMB500,000 23,002 19.6 Shenzhen,
PRC
payment in
advance
2017 Multispectral AI Modules,
Multispectral AI
Perception Terminals,
Other AI Vision Modules
Customer B
(2) . System
integrators
A private company established in 2012,
primarily engaged in the software and
information technology services
industry, with business scope including
computer-related technology
development, computer and
accessories.
RMB10.1 million 9,535 8.1 Shanghai,
PRC
payment in
advance or
120 days
2016 Multispectral AI Modules,
Multispectral AI
Perception Terminals
Customer C .. System
integrators
A private company established in 2016,
primarily engaged in the development
and sale of computer software and
hardware, and the provision of
technical services, computer system
integration, data processing and storage
services.
RMB1.0 million 4,348 3.7 Chengdu,
PRC
120 days 2020 Multispectral AI Modules,
Multispectral AI
Perception Terminals,
Other AI Vision Modules
Customer D .. System
integrators
A company established in 2008, serving
as a subsidiary of a company listed on
the Hong Kong Stock Exchange and
the New York Stock Exchange,
primarily engaged in the sale of
intelligent robots and industrial
automatic control system equipment, as
well as in the software and information
technology services sector.
RMB1.0 billion 4,064 3.5 Hangzhou,
PRC
10 working
days
2021 Multispectral AI Modules,
Other AI Vision Modules
Customer E .. System
integrators
A private company established in 2011,
primarily engaged in the development
and sale of software, internet data
services, big data services, information
system integration services, and
information system operation and
maintenance services.
RMB10 million 3,939 3.4 Hefei, PRC payment in
advance
2022 Multispectral AI Modules
Total .... 44,888 38.3
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Customer Customer type (3) Background Registered capitals (4) Revenue
% of total
revenue
Principal
place of
business (4) Credit terms
Y ear of
commencement
of business
relationship
Main products and services
purchased from us
(RMB’000) (%)
FY2024
Customer F .. System
integrators
A group of companies, primarily engaged
in the research and development,
production, and sale of communication
electronics and related products.
RMB50.0 million 185,659 35.5 Shiyan,
PRC
90 working
days
2024 Multispectral AI Modules,
Multispectral AI
Perception Terminals,
Other AI Vision Modules
Customer G .. System
integrators
A group of companies, being subsidiaries
of a company listed on the Hong Kong
Stock Exchange, primarily engaged in
the provision of telecommunications
services.
RMB254.1 billion 42,004 8.0 Beijing,
PRC
14 days to 35
working
days
2022 Multispectral AI Modules,
Multispectral AI
Perception Terminals,
Multispectral AI Large
Model Services, Other AI
Vision Modules
Customer H .. System
integrators
A public company listed on the Shenzhen
Stock Exchange, established in 1999,
primarily engaged in optical
communication, 5G infrastructure and
related integrated services.
RMB900.3 million 29,896 5.7 Hong Kong 15 days 2023 Multispectral AI Large
Model Services
Customer I .. System
integrators
A public company listed on the Shanghai
Stock Exchange, established in 2014,
primarily engaged in the business of
algorithms, chips and big data in the
field of artificial intelligence.
RMB355.1 million 27,989 5.4 Shenzhen,
PRC
15 working
days
2022 Multispectral AI Modules
Customer J .. System
integrators
A group of companies, primarily engaged
in the provision of software-focused
intelligent driving solutions.
RMB20.4 million 23,009 4.4 Suzhou,
PRC
30 working
days
2024 Multispectral AI Large
Model Services
Total .... 308,557 59.0
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Customer Customer type (3) Background Registered capitals (4) Revenue
% of total
revenue
Principal
place of
business (4) Credit terms
Y ear of
commencement
of business
relationship
Main products and services
purchased from us
(RMB’000) (%)
FY2025
Customer K .. System
integrators
A private company established in 2015,
primarily engaged in AIoT (Artificial
Intelligence of Things) solutions for
industrial, urban, and living
applications.
RMB3.7 billion 94,000 14.1 Beijing,
PRC
payment in
advance or
7 working
days
2025 Multispectral AI Large
Model Services
Customer F .. System
integrators
A group of companies, primarily engaged
in the research and development,
production, and sale of communication
electronics and related products.
RMB50.0 million 71,777 10.7 Shiyan,
PRC
90 working
days
2024 Multispectral AI Modules
Customer J .. System
integrators,
A group of companies, primarily engaged
in the provision of software-focused
intelligent driving solutions.
RMB20.4 million 65,765 9.8 Suzhou,
PRC
180 working
days
2024 Multispectral AI Large
Model Services
Customer L .. System
integrators,
A group of companies, primarily engaged
in internet-related services, software
development, data processing, and the
manufacturing of electronic and
communication equipment.
RMB132.8 million 44,005 6.6 Xiamen,
PRC
30 days 2024 Multispectral AI Large
Model Services
Customer M .. System
integrators
A private company established in 2017,
primarily engaged in smart
manufacturing and industrial big data
solutions.
RMB22.4 million 37,403 5.6 Shenzhen,
PRC
payment in
advance or
180
working
days
2025 Multispectral AI Perception
Terminals
Total .... 312,950 46.8
Notes:
(1) Customer A is a subsidiary wholly and directly held by Beward (one of our Shareholders during the Track Record Period).
(2) Based on our Directors’ knowledge, Ms. Tan Qiongli ( ሔᖘ஁), the executive director and legal representative of Customer
B, was a former limited partner of Zhongcheng Tianying LP, one of the Controlling Shareholders. As at the Latest
Practicable Date, Ms. Tan Qiongli no longer holds any interest in Zhongcheng Tianying LP.
(3) To the best knowledge of our Directors, system integrators would procure our Multispectral AI Modules, Multispectral AI
Perception Terminals, Multispectral AI Large Model Services, and Other AI Vision Modules from us and integrate into its
services and/or products offerings to its downstream customers. For details, please refer to “Marketing, Sales and
Customers — Our Customers” in this section of this prospectus.
(4) Based on publicly available information and/or to the best knowledge of our Directors.
During the Track Record Period, our top five customers contributed 38.3%, 59.0%, and 46.8% of
our total revenue in FY2023, FY2024 and FY2025, respectively. Among these, Customer F was a key
revenue contributor, accounting for 35.5% of total revenue in FY2024 and 10.7% in FY2025, as well as
Customer K, accounting for 14.1% of total revenue in FY2025. While Customer F and Customer K
represent a relatively significant portion of our revenue in FY2024 and FY2025, respectively, our
Directors believe the concentration risk associated with these customers is mitigated by our active
diversification of our customer portfolio. This includes pursuing direct relationships with
enterprise-level users in industries such as smart city infrastructure and industrial automation, and
expanding engagements with system integrators and enterprise-level users, thereby reducing reliance on
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any single customer. As at the Latest Practicable Date, there have been no disputes or indications of
material changes in our relationship with Customer F or Customer K, and our Directors expect these
relationships to remain stable, supported by our tailored offerings and consistent delivery performance.
Customer A, as one of our five largest customers in FY2023, was established in the PRC on 29
October 2010 and was directly wholly-owned by Beward (one of our shareholders during the Track
Record Period) since 11 January 2021. Transactions between our Group and Customer A during the
Track Record Period were conducted on an arm’s length basis, with terms consistent with those offered
to our independent third-party customers, as confirmed by our Directors.
Except for Customer A, to the best of our Director’s knowledge, all of our five largest customers
in each year during the Track Record Period are independent third parties, and none of our Directors,
related persons of our Directors, or Shareholders holding more than 5% of the issued shares of our
Company had any interest in any of the top five customers of our Company. Additionally, there were no
material disputes between us and our customers during the aforementioned period.
Terms of Sales Contracts
We generally enter into individual sales contracts with our customers. The terms of our sales
contracts are generally consistent, save for variations in product specifications and order quantities to
address particular customer needs. The salient terms and conditions of our sales contracts are set out
below:
Product specification Product types or the requested technical solutions are specified
depending on the products or services to be sold.
Order quantity The quantity of products to be ordered is specified.
Pricing For more details of pricing, see “— Marketing, Sales and
Customers — Pricing Policy” in this section.
Payment settlement and shipment Payment terms and shipment arrangements are determined
based on the specific requirements of each contract. Customers
generally make payments in advance or within 10 to 120 days
from the invoice date by way of wire transfer, depending on
the agreed credit terms.
Logistics We are generally responsible for arranging the delivery of our
products to locations mutually agreed upon with our direct
sales customers.
Acceptance Customers may raise objections regarding the quantity or
quality of the products within the specified acceptance period.
Failure to raise objections within this period shall be deemed
acceptance of the products as satisfactory.
Pricing Policy
Our Group employs a cost-based pricing approach tailored to the specific requirements of
customers and the characteristics of our products and services. This approach ensures competitiveness,
alignment with market trends, and sustainable profitability. Pricing is determined, among others, by the
following key factors:
 Multispectral AI Modules : pricing is based on the quantity and type of modules ordered;
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 Multispectral AI Perception Terminals : pricing reflects the complexity of terminal types,
accounting for tailored configurations or integration efforts; and
 Multispectral AI Large Model Services : pricing depends on the complexity of application
scenarios and the extent of customisation or model tuning required.
Pricing incorporates costs for raw materials, components, and equipment, as well as expenses
related to integration into customer-specific environments. For customised solutions, pricing accounts
for the estimated effort required by our Group’s research and development team. To ensure
competitiveness, our Group conducts market research to benchmark pricing against comparable
products and services, reflecting the technological sophistication of its offerings.
During the Track Record Period, pricing policies were applied consistently across customer
categories and product types, with variations driven by product specifications, order quantities, and
customisation requirements. Pricing is negotiated case-by-case, using historical profit margins as a
benchmark. In order to explore new opportunities and to achieve economies of scale, from time to time
we offer new customer discount and volume-based discount to our new customers and customers with
sizeable orders, respectively. These customers are generally considered our strategic partners with
whom we aim to build long-term relationships. Our Directors are of the view that our competitors adopt
similar policies. This is in line with our strategy to ensure our competitiveness and will promote
business and profit sustainability by gaining new customers. To mitigate raw material cost fluctuations,
our Group monitors market trends and includes price adjustment clauses in certain supply agreements,
ensuring stable profit margins while maintaining fairness and consistency in pricing practices.
Marketing
We seek to identify and expand the applications of our core multispectral AI products and services
by maintaining and strengthening relationships with our existing and potential customers. To this end,
we implement a range of marketing initiatives including, among others, industry exhibitions, digital
marketing and content dissemination. We engage with our community through a diverse array of
content, with the aim of fostering interactive discussions with our customers. As at 31 December 2025,
our sales and marketing team consisted of around 54 members with relevant industry expertise, who are
primarily responsible for marketing and research, brand promotion, and marketing campaign execution.
Our customer strategy extends beyond initial acquisition and also focuses on maintaining and
strengthening long-term relationships with existing customers. Our sales and marketing team engages in
regular online and offline communication to cultivate customer loyalty and encourage satisfied
customers to provide referrals, leveraging our established client network to generate new business
opportunities. This positive feedback loop facilitates the ongoing expansion of our customer base.
Customer Services
We have a dedicated customer service team responsible for responding promptly to customer
inquiries, which underscores our commitment to stringent product quality control and helps build
greater customer recognition of and trust in our products. Our customer services include:
 Installation guidance and technical delivery support: we provide deployment manuals,
technical training and on-site or remote debugging support to facilitate the smooth delivery
and implementation of our hardware and platform systems.
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 Warranty services: all of our hardware products are covered by a standard warranty policy,
which generally lasts for one year from the date of delivery. We offer parts replacement and
repair services in accordance with the relevant contract terms and technical service
specifications.
During the Track Record Period and up to the Latest Practicable Date, we did not encounter any
material incidents related to product recalls, exchanges or liability claims that had a significant adverse
impact on our business, financial condition or results of operations.
RA W MATERIALS, COMPONENTS AND SUPPLIERS
Raw Materials and Components
During FY2023, FY2024 and FY2025, our direct material costs were RMB72.0 million,
RMB382.2 million and RMB477.2 million, respectively, amounted to 69.9%, 90.1% and 91.9% of the
cost of sales during the same periods.
The key raw materials and components for our products and services include microprocessors,
CMOS image sensors, printed circuit boards (PCBs), power management modules, optical elements,
precision mechanical parts, and software services and carriers. These components enable advanced
image processing and AI-driven analytics for applications in urban safety and energy.
We procure software services and carriers to support our products and services which require
advanced AI analytics and cloud-based processing. Software services and carriers refer to platform
software licences that support the operation and integration of our Multispectral AI Modules,
Multispectral AI Perception Terminals, and Multispectral AI Large Model Services. Software services
include proprietary algorithms, cloud-based computing platforms, and data processing tools essential for
enabling AI-driven analytics in our products. The carriers procured by our Group are hardware
components, such as servers, that serve as foundational platforms for embedding our AI vision modules
and ensuring their functionality across diverse applications, including urban safety and energy.
Our Suppliers
We have established stable relationships with suppliers including but not limited to domestic
semiconductor component manufacturers, optical and sensor manufacturers, printed circuit board
manufacturers, and outsourced assembly and testing service providers. We became acquainted with our
suppliers through a combination of industry referrals, participation in trade exhibitions and conferences
focused on optoelectronics, and targeted outreach based on market research into suppliers capable of
meeting our technical specifications. This process ensures alignment with our operational needs and
supply chain requirements. These relationships ensure product quality, supply chain continuity and
delivery efficiency, covering all types of our hardware product lines.
Our supplier selection process includes technical review, price negotiation, delivery capability
assessment and ongoing quality control mechanisms. We have established a supplier admission and
evaluation mechanism, involving the review of business licences, ISO certifications, and compliance
documents. Prior to formal collaboration, all suppliers are required to sign a quality assurance
agreement, clarifying the intellectual property ownership, data security and confidentiality clauses.
During the Track Record Period and up to the Latest Practicable Date, we have not experienced any
significant supply chain disruptions.
During the Track Record Period, our purchases from the top five suppliers in each year accounted
for 54.2%, 66.4% and 62.2% of our total purchases during the same years, respectively. We maintained
stable business relationships with our top five suppliers in each year. For details related thereto, see
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“Risk Factors — Risks Relating to Our Industry and Business — Our operations may be affected by
concentrating on a few key suppliers. Should there be any loss of key suppliers or disruption in their
supply, our business and results of operations could be materially and adversely affected” in this
prospectus.
The table below sets forth the details of our five largest suppliers for each year during the Track
Record Period:
Supplier Background (1) Registered capitals (1)
Procurement
amount
% of total
purchases
Principal place of
business (1) Credit period
Y ear of
commencement of
business
relationship Types of our procurement
(RMB’000) (%)
FY2023
Supplier A .. A private company established in 2022,
primarily engaged in the sales of
electronic products, retail of computer
hardware and software and auxiliary
equipment, and sale of communication
devices.
RMB4.0 million 18,799 18.6 Xinyi, PRC 15 working days 2023 Software services and carriers
Supplier B .. A private company established in 2017,
primarily engaged in the development
of computers, software and auxiliary
equipment, communication devices,
and software, and the production of
electronic components.
RMB1.0 million 15,582 15.4 Shenzhen, PRC 15 working days 2023 Software services and carriers
Supplier C .. A private company established in 2016,
primarily engaged in the technical
development and sales of electronic
components, integrated circuits,
photoelectric products.
RMB10.0 million 8,120 8.1 Shenzhen, PRC payment in
advance
2021 Lease payment and utility fees
for production base
Supplier D .. A private company established in 2008,
primarily engaged in the wholesale of
computer hardware and software and
auxiliary equipment, and sales of
artificial intelligence hardware.
RMB5.0 million 7,954 7.9 Shenzhen, PRC payment in
advance or 60
days
2017 Sensors and processing units,
electronic components,
structural parts, packaging
materials and ancillary
materials, software services
and carriers
Supplier E .. A private company established in 2000,
which is a comprehensive IT solutions
provider and financial intelligent
equipment R&D and manufacturing
enterprise, specialising in high-tech
research and development, application
and services in the field of
information technology.
RMB26.8 million 4,197 4.2 Shenzhen, PRC 30 days 2023 Structural parts, packaging
materials and ancillary
materials
Total ..... 54,652 54.2
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Supplier Background (1) Registered capitals (1)
Procurement
amount
% of total
purchases
Principal place of
business (1) Credit period
Y ear of
commencement of
business
relationship Types of our procurement
(RMB’000) (%)
FY2024
Supplier F .. A company established in 2003, serving
as a subsidiary of a company listed on
the Hong Kong Stock Exchange,
primarily engaged in the technical
development of communication
electronic products.
RMB100.0 million 152,386 39.9 Shenzhen, PRC 90 working days 2024 Sensors and processing units
Supplier G .. A private company established in 2023,
primarily engaged in the design,
tape-out, packaging, testing and
chip-mounting of domestic storage
control chips.
RMB5.0 million 37,486 9.8 Shenzhen, PRC 180 working days 2024 Electronic components
Supplier H .. A group of companies, primarily
engaged in the four major
informatisation sectors and industries,
namely financial special printing
equipment, internet of things, medical
informatisation and IT outsourcing
services.
RMB92.0 million 28,496 7.5 Shenzhen, PRC payment in
advance or 30 to
60 working days
2024 Software services and carriers
Supplier I ... A private company established in 2019,
primarily engaged in the software and
information technology services.
RMB1.0 million 18,172 4.8 Shenzhen, PRC 15 days 2024 Software services and carriers
Supplier J ... A private company established in 2012,
primarily engaged in the integrated
communication network optimisation,
communication equipment and line
construction and maintenance.
RMB20.0 million 16,966 4.4 Shenzhen, PRC 15 days 2024 Software services and carriers
Total ..... 253,506 66.4
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Supplier Background (1) Registered capitals (1)
Procurement
amount
% of total
purchases
Principal place of
business (1) Credit period
Y ear of
commencement of
business
relationship Types of our procurement
(RMB’000) (%)
FY2025
Supplier K .. A private company established in 2014,
primarily engaged in the technical
development, sales, and import/export
of software and electronic products.
RMB10.0 million 100,457 18.5 Shenzhen, PRC 7 to 30 days 2025 Software services and carriers,
and GPU servers
Supplier L .. A company established in 2018, serving
as a subsidiary of a company listed on
the Shenzhen Stock Exchange,
primarily engaged in data services,
software development, and the sales of
construction materials and electronic
products.
RMB50.0 million 76,779 14.2 Shenzhen, PRC 7 days 2025 Software services and carriers
Supplier F .. A company established in 2003, serving
as a subsidiary of a company listed on
the Hong Kong Stock Exchange,
primarily engaged in the technical
development of communication
electronic products.
RMB100.0 million 68,094 12.6 Shenzhen, PRC 90 working days 2024 Sensors and processing units
Supplier D ... A private company established in 2008,
primarily engaged in the wholesale of
computer hardware and software and
auxiliary equipment, and sales of
artificial intelligence hardware.
RMB5.0 million 47,129 8.7 Shenzhen, PRC payment in
advance or 60
days
2017 Sensors and processing units,
electronic components,
structural parts, packaging
materials and ancillary
materials, software services
and carriers
Supplier M .. A company established in 2022,
primarily engaged in the
manufacturing and sales of display
devices, electronic components, and
smart wearable equipment.
RMB125.5 million 44,211 8.2 Zhejiang, PRC 90 working days 2025 Integrated circuits
Total ..... 336,670 62.2
Note:
(1) Based on publicly available information and/or to the best knowledge of our Directors.
The significant change in the composition of our top suppliers during the Track Record Period,
was primarily attributable to a shift in the composition of our customer base, particularly a surge in
demand from our clients, including Customer F, for our Multispectral AI Modules and Multispectral AI
Perception Terminals. This necessitated the procurement of additional components, prompting our
Group to engage new suppliers to better align with these evolving requirements. Prior to initiating these
new business relationships with the suppliers, our Group conducted comprehensive due diligence on
each prospective supplier, including thorough background investigations to assess their operational
integrity, financial stability, and compliance with relevant industry standards. Additionally, we
evaluated prototype samples to verify their quality, reliability, and compatibility with our production
processes. These measures ensured that the subsequent significant purchases from each of the top five
suppliers meet our stringent specifications and delivery timelines. Payment terms and shipment
arrangements are determined based on the specific requirements of each contract. We generally make
payments by way of wire transfer, depending on the agreed credit terms.
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During the Track Record Period and as of the Latest Practicable Date, none of our Directors, their
respective associates, or any shareholder who, to the knowledge of our Directors, owns more than 5%
of the issued shares of our Company had any interests in the top five suppliers of our Company. Our
Directors confirm that, there is no past or present relationship between our suppliers and our Company
or our subsidiaries, our respective shareholders, directors, senior management or any of their respective
associates, other than being a supplier of our Group. As at the Latest Practicable Date, we had not been
involved in any material disputes with any suppliers.
Impact of U.S. Export Restrictions and Sanctions
In relation to the export restrictions, tariffs and tax policies imposed by the U.S. government
against U.S. technology, software, equipment and origin commodities, and US-based chip manufacturers
for the chip sales to China, our Directors confirm that, to their knowledge, there is no material actual or
potential impact, including any second-order effects, on our Group’s operations, financial performance,
sales order volume, sales pricing, consumer demand, order cancellations and renegotiations, or access to
products and procurement costs for the following reasons: (i) our supply chain predominantly relies on
suppliers based in the PRC, which are not subject to U.S. tax policies, thereby ensuring stable access to
critical components and consistent procurement costs; (ii) during the Track Record Period, we provided
Multispectral AI Modules to a limited number of customers in the United States for testing, which were
not intended for commercial sale; and (iii) the chips required for our Multispectral AI Modules and
related products are specialised components tailored for image processing and AI analytics, which are
mainly sourced from PRC suppliers that meet our technical and cost requirements, insulating us from
disruptions caused by U.S.-based chip manufacturers.
U.S. Export Restrictions
The United States has expanded export control restrictions on China through the EAR, which is
administered by the BIS, including the U.S. imposed controls and restrictions on limiting the PRC from
accessing U.S. technology in advanced computing, semiconductors and related items used in the
manufacturing of semiconductors. We purchase certain U.S.-origin chips that are incorporated into our
Multispectral AI Perception Terminals and Other AI Vision Modules. The unit cost of such chips
accounts for approximately 1% to 24% of the sales value of our products. As advised by our U.S. Legal
Advisers, and based on confirmations from our suppliers, we understand that the aforementioned chips
are classified as EAR99, which generally consist of low-level technology, consumer goods and other
items that are not subject to licence requirements in most export, re-export, or in-country transfer
scenarios. Accordingly, our procurement and use of such EAR99-classified chips are generally not
subject to restrictions under the EAR. The training of our Multispectral AI Large Model Services is
supported by computing services provided by two universities located within the PRC. The servers
operated by such universities are understood to incorporate certain U.S.-origin integrated circuits.
However, as advised by our U.S. Legal Advisers, our engagement is limited to the procurement of cloud
computing services, which are not generally subject to the EAR. Furthermore, our products (i) are not
of U.S. origin; (ii) are not in the U.S. or moving in transit through the U.S; and (iii) are subject to
neither the de minimis rule nor any foreign direct product rules under the EAR.
In addition to country-based restrictions, BIS maintains lists of persons that are subject to
enhanced export control restrictions, one such list, being the Entity List (set forth in Supplement No.4
to Part 744 of the EAR). The restrictions applicable to Entity List parties include licensing
requirements for exports, reexports, or transfers of items on lists of controlled items maintained by the
U.S. government, which in most cases prevents these named entities from receiving essentially any item
subject to U.S. export controls. Five of our customers have been designated on the U.S. Entity List.
Among such five customers, three customers are identified within the Entity List Footnote 4 under 15
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C.F.R. §734.9(e)(2) (the Entity List Foreign Direct Product Rule). One of these five customers is
Customer I, which was ranked among our top five customers for FY2024. However, the items that we
sold to these customers do not involve the transfer, export or reexport of items subject to the EAR.
Therefore, as advised by our U.S. Legal Advisers, (i) we have not engaged in any unauthorised
procurement of items subject to the EAR; and (ii) our products are generally not subject to the EAR.
Furthermore, our business activities, including the sale of our products and the provision of related
services, have not been subject to U.S. export control laws and regulations during the Track Record
Period.
U.S. Sanctions
In addition to the United States export control restrictions, the United States have, through
executive orders, legislation or other governmental means, implemented measures that impose economic
sanctions against certain countries or regions, targeted industry sectors, companies and persons. Most
notably, these include U.S. economic sanctions as implemented by the OFAC. During the Track Record
Period, our Group has had no business operations in a country sanctioned by the United States and was
not included in any U.S. economics sanction list. Furthermore, two of our customers are included on
the U.S. Department of the Treasury’s Non-SDN Chinese Military-Industrial Complex Companies List
(“NS-CMIC List ”), which imposes restrictions on U.S. persons with respect to transactions involving
publicly traded securities of such designated entities. However, as advised by our U.S. Legal Advisers,
such restrictions are not applicable to our Group because our transactions with such designated entities
do not involve any trading in publicly traded securities and our Company is not a U.S. person. In
addition, four of our customers are included on the Chinese military companies (“ CMC”) List
maintained by the U.S. Department of War pursuant to Section 1260H of the National Defence
Authorisation Act. CMC-listed entities are subject to limitations on contracting with the U.S.
Department of War. As advised by our U.S. Legal Advisers, our Group has no nexus with the U.S.
Department of War. Accordingly, the restrictions associated with the CMC List are not applicable to our
transactions with such customers. Save for as mentioned above, no other customers of our Group were
subject to any U.S. trade restriction lists. In view of the foregoing, U.S. sanctions are not reasonably
expected to have a material adverse impact on the Group’s operations. Moreover, as advised by our
U.S. Legal Advisers, our expansion of customers into North America does not give rise to any risks
under the U.S. economic sanctions regulations.
Having considered the view of our U.S. Legal Advisers, our Directors are of the view, and the
Joint Sponsors concur, that our Group’s business activities had complied with U.S. laws and regulations
on export control. For further details of the EAR, please see the section headed “Regulatory overview
— U.S. Law and Regulations” of this prospectus. As a result of these factors, the U.S. export
restrictions and tariffs have had no material actual or potential adverse impact on our operations,
financial performance, and procurement processes.
U.S. Outbound Investment Regulations
In relation to the Outbound Investment Rule addressing U.S. investments in certain national
security technologies and products in countries of concern, as set out in the section headed “Regulatory
overview — U.S. Law and Regulations” of this prospectus, our Group was not engaged in any “covered
activities” falling within the definition of “prohibited transaction”. However, the application of our AI
systems in urban fire monitoring scenarios may potentially fall within the scope of a “covered activity”
that falls within the definition of a “notifiable transaction” under the Outbound Investment Rule as the
U.S. Department of the Treasury emphasises that a U.S. person’s acquisition of equity that is not yet
publicly traded for the purposes of facilitating an initial public offering would not fall under the
publicly traded securities exception and could be a “covered transaction”. Therefore, as advised by our
U.S. Legal Advisers, U.S. persons who have acquired our Offer Shares that are not yet publicly traded
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for the purposes of facilitating the Global Offering are obligated to conduct a “reasonable and diligent
inquiry” in assessing whether it is subject to any compliance and/or notification obligations in
connection with the Outbound Investment Rule. Following the completion of the Global Offering, it is
expected that U.S. persons will be able to invest in our H Shares traded on a public securities exchange
without the notification obligations based on the publicly traded securities exception under the
Outbound Investment Rule as long as the investment made does not afford a U.S. person certain rights
that are not standard minority shareholder protections. Furthermore, an investment by a U.S. person in
publicly traded securities is excepted by the Outbound Investment Rule (such as subscribing for our H
Shares in the Global Offering and the trading of our H Shares on the Stock Exchange following the
completion of the Global Offering), regardless of whether it is an investment in a person of a country
of concern, or whether the underlying activities undertaken are covered activities. Accordingly, U.S.
persons are permitted to subscribe for our H Shares in the Global Offering and to trade our H Shares on
the Stock Exchange following the completion of the Global Offering. As such, our U.S. Legal Advisers
and, having considered the advice of our U.S. Legal Advisers, our Directors are of the view that the
Outbound Investment Rule will not have material adverse actual or potential impact on our operations,
financial performance, the Global Offering, our listing plan or our investment prospects.
Overlapping of Customers and Suppliers
During the Track Record Period, certain entities acted as both customers and suppliers to our
Group. These relationships, driven by strategic partnerships with technically capable entities and the
need for complementary products like software and network services, streamline our supply chain and
foster stable cooperation.
Customer B was one of our five largest customers in FY2023. During the Track Record Period,
revenue generated from Customer B in each year amounted to approximately RMB9.5 million, RMB6.5
million and RMB5.6 million, respectively, representing 8.1%, 1.2% and 0.8% of our total revenue for
the same years, respectively; procurement amount from Customer B in each year amounted to nil,
approximately RMB28,000 and RMB2,000, respectively, representing nil, less than 0.1% and less than
0.1% of our total purchases for the same years, respectively. During the Track Record Period, our sales
to Customer B were primarily in relation to the Multispectral AI Modules, Multispectral AI Perception
Terminals and Other AI Vision Modules that we provided for it. During the Track Record Period, we
primarily purchased software services and carriers from Customer B to support our multispectral AI
technology development and production processes. In addition, in each year during the Track Record
Period, our gross profit of this supplier-customer amounted to approximately RMB133,000,
RMB535,000 and RMB887,000 in FY2023, FY2024 and FY2025, respectively.
Customer C was one of our five largest customers in FY2023. During the Track Record Period,
revenue generated from Customer C in each year amounted to approximately RMB4.3 million, RMB2.9
million and RMB6.2 million, respectively, representing 3.7%, 0.6% and 0.9% of our total revenue for
the same years, respectively; procurement amount from Customer C in each year amounted to
approximately RMB181,000, RMB88,000 and RMB80,000, respectively, representing approximately
0.2%, less than 0.1% and less than 0.1% of our total purchases for the same years, respectively. During
the Track Record Period, our sales to Customer C were primarily in relation to the Multispectral AI
Modules, Multispectral AI Perception Terminals and Other AI Vision Modules that we provided for it.
During the Track Record Period, we primarily purchased software services and carriers from Customer
C to support our multispectral AI technology development and production processes. In addition, in
each year during the Track Record Period, our gross profit of this supplier-customer amounted to
approximately RMB390,000, RMB460,000 and RMB1,108,000 in FY2023, FY2024 and FY2025,
respectively.
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Customer G was one of our five largest customers in the FY2024. During the Track Record
Period, revenue generated from Customer G in each year amounted to approximately RMB14,000,
RMB42.0 million and RMB32.0 million, respectively, representing less than approximately 0.1%, 8.0%
and 4.8% of our total revenue for the same years, respectively; purchases from Customer G in each
year amounted to approximately RMB13,000, nil and nil, respectively, representing less than 0.1%, nil
and nil of our total purchases for the same years, respectively. During the Track Record Period, our
sales to Customer G were primarily in relation to the Multispectral AI Modules, Multispectral AI
Perception Terminals and Multispectral AI Large Model Services that we provided for it. During the
Track Record Period, we primarily purchased software services and carriers from Customer G to
support our multispectral AI technology development and production processes. In addition, in each
year during the Track Record Period, our gross profit of this supplier-customer amounted to
approximately RMB3.8 million in FY2024, and RMB29.6 million in FY2025, respectively, while gross
loss amounted to RMB0.1 million in FY2023.
Supplier D was one of our five largest suppliers in FY2023, and was also our customer in
FY2023. During the Track Record Period, procurement amount from Supplier D in each year amounted
to approximately RMB8.0 million, RMB13.0 million and RMB47.1 million, respectively, representing
7.9%, 3.4% and 8.7% of our total purchases for the same years, respectively; revenue generated from
Supplier D in each year amounted to approximately RMB33,000, nil and nil, respectively, representing
less than 0.1%, nil and nil of our total revenue for the same years, respectively. During the Track
Record Period, our sales to Supplier D were primarily in relation to the Multispectral AI Modules that
we provided for it. During the Track Record Period, we primarily purchased sensors, processing units,
electronic components, software services, carriers, structural parts, packaging materials, and ancillary
materials from Supplier D for integration into our AI vision modules. In addition, our gross loss of this
supplier-customer amounted to RMB21,000 in FY2023.
Our Directors confirm that the terms of sales to and purchases from the above overlapping
customer-suppliers were negotiated independently and on normal commercial terms, and that the
respective transactions were conducted separately and were consistent with those entered into with
other independent third parties. We purchased products from Customers B, C and G primarily due to
their technical capabilities and product compatibility that complement our own offerings. Frost &
Sullivan advised that it is not uncommon in the industry for market participants to collaborate in
various roles across the supply chain, such that a party may act as both a supplier and a customer in
different transactions, as they allow companies to streamline supply chains, foster stronger business
relationships, and promote mutual long-term cooperation.
INVENTORY CONTROL
Our inventories mainly include raw materials, work in progress, finished goods, outsourced
processing materials, and goods in transit. We procure the majority of our raw materials from local
suppliers in China. As at 31 December 2023, 2024 and 2025, our inventories amounted to RMB56.0
million, RMB31.6 million and RMB80.2 million, respectively.
We manage our inventory tracking and production scheduling by utilising the enterprise resource
planning system for managing procurement, inventory control, and internal resource allocation. We
adopt a just-in-time procurement inventory system, whereby materials are purchased and delivered just
before they are needed in the production process, which minimises our inventory costs. We also
periodically review the level of inventories for slow-moving inventories and minimise risks of
obsolescence or declines in market value. Impairment is made against when the net realisable value of
inventories falls below the costs.
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QUALITY CONTROL
We are devoted to maintaining high product quality and implementing enhanced quality
management procedures throughout our production process. Our production quality team is responsible
for implementing testing strategies, conducting sampling inspections, identifying and managing defects,
and ensuring compliance with applicable laws and regulations. We perform quality control throughout
our production process. In particular, our finished products are tested and are inspected to ensure that
they have met our product specifications and quality standards. We have been accredited with ISO
9001: 2015 which is a globally recognised standard for quality management that specifies requirements
for our Group to improve performance and meet our customer expectations and demonstrate our
continuing commitment to quality.
PROPERTIES
As at the Latest Practicable Date, we did not hold any land use rights nor own any properties in
the PRC and leased 22 properties in the PRC, including but not limited to Shenzhen and Zhejiang with
a total gross floor area of 18,897.99 sq.m. which were used as our office premises, warehouses and staff
dormitories for R&D, production and accommodation purposes. These leased properties are used for
non-property activities as defined under Rule 5.01(2) of the Listing Rules. We do not own single
property interest that has a carrying amount of 15% or more of total assets pursuant to Rule 5.01B(2) of
the Listing Rules.
As at the Latest Practicable Date, we have not filed 13 of these leases for registration at the
relevant PRC governmental authorities. As advised by our PRC Legal Advisers, while there is a risk
that the relevant PRC governmental authorities may make an order for rectification and impose a fine
for failure to complete the registration procedure, the same shall not affect validity of the leases. As
advised by our PRC Legal Advisers, if we fail to register such leases as required by the relevant PRC
governmental authorities, we may be subject to a fine of RMB1,000 to RMB10,000 for each of the
unregistered leases. During the Track Record Period and up to the Latest Practicable Date, we had not
been subject to any administrative penalties by the relevant PRC governmental authorities.
As advised by our PRC Legal Advisers, there is no material legal risk associated with the
continued use of such leased properties, the defects of such leased properties would not materially and
adversely affect our business or the validity of the relevant lease agreement.
COMPLIANCE AND CERTIFICATIONS
Our production bases in Shenzhen and Zhejiang have formulated product inspection protocols in
accordance with national (GB) and international certification standards (e.g., CE, RoHS, IP66),
applicable to our Multispectral AI Perception Terminals and safety sensing equipment.
Our AI algorithms and large model platforms also undergo regular model validation and retraining
to ensure their performance stability, fairness control, and continuous compliance with the cybersecurity
and data protection laws and regulations of China. Relevant models have undergone security
assessments in accordance with relevant national regulations, completed the filing procedures through
the Internet Information Service Algorithm Filing System, and we commit to actively completing the
required filing work for generative artificial intelligence services (large models) in accordance with
regulatory requirements.
We have also established a comprehensive product recall management mechanism and formulated
internal institutional norms for product recalls. During the Track Record Period and up to the Latest
Practicable Date, we have not received any significant product-related complaints nor faced regulatory
penalties due to product quality issues. During the Track Record Period, our product return rate
remained below industry averages, with product returns amounting to approximately RMB855,900,
RMB422,500 and RMB4.5 million, representing 0.73%, 0.08% and 0.67% of total sales, respectively;
with no recalls or widespread after-sales service disruptions.
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A W ARDS AND RECOGNITIONS
As at the Latest Practicable Date, we had been granted various awards and recognitions including
the following:
Y ear Award/Recognition Issuing entity
2023 .... Top 100 IoT Companies
(ᑌΆุ100੶)
China IoT Application Industry Alliance
(ᑌၣᏐ͜ପุᑌຑ )
2023 .... Top 50 Investment-worthy Specialised and
Sophisticated “Little Giant” Enterprises
(ਖ਼ၚतอʃ̶ɛΆุ
࿮ TOP 50 )
China Electronic Industry Science and
Technology Exchange Centre ( ʕ਷ཥɿ
ʕː )
2024 .... Specialised, Sophisticated and Innovative
Small and Medium Enterprises ( ਖ਼ၚत
อʕʃΆุ )
Shenzhen Municipal Service Bureau of
Small and Medium Enterprises* ( ଉέ̹
ਕ҅ )
2024 .... Typical Innovation Case for Enterprises in
Guangdong Province in 2024 (2024ܓ
Է )
Guangdong Association for Science and
Technology (ኪҦஔ՘ึ )
2024 .... Pioneer Enterprise on China’s Emergency
Industry Leaderboard for 2024 (2024 ϋ
ପุ΋ቜ࿮΋ቜΆุ )
Organising Committee of Shenzhen
Emergency Industry Expo (ପ
ุ௹ᚎึଡ଼։ึ )
2025 .... Zhiyuan Origin Large Model Selected for
Guangdong Province’s First Batch of AI
Industry Models (ɝ፯ᄿ
Τఊ (ୋɓҭ))
Department of Industry and Information
Technology of Guangdong Province ( ᄿ
ʷᝂ )
2025 .... List of Typical Application Scenarios and
Cases of Robot + (First Batch) in
Guangdong Province (ዚኜɛ
+ԷΤఊ (ୋɓҭ))
Department of Industry and Information
Technology of Guangdong Province ( ᄿ
ʷᝂ )
2025 .... National-level Specialised and
Sophisticated Key “Little Giant”
Enterprise (ᓃʃ̶
ɛΆุ)
Ministry of Industry and Information
Technology (ʷ௅ )
2025 .... National-level Specialised and
Sophisticated “Little Giant” Enterprise
(ॴਖ਼ၚतอʃ̶ɛΆุ )
Ministry of Industry and Information
Technology (ʷ௅ )
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Our operations are subject to the Environmental Protection Law of the PRC ( ʕശɛ͏΍ձ਷ᐑ
) and other PRC environmental requirements (for further details and other material
environmental laws, please see the section headed “Regulatory overview — Laws and regulations in
relation to environmental protection and fire control” of this prospectus).
As confirmed by our Directors and our PRC Legal Advisers after conducting relevant public
searches and/or having obtained relevant compliance certificate issued by the competent PRC
government authority, during the Track Record Period and up to the Latest Practicable Date, we had not
received any material administrative penalties from any environmental protection departments of the
PRC due to any failure to comply with any environmental laws and regulations.
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Our Group’s governance regarding ESG-related matters
We have adopted as our long-term strategic goal to promote environmental sustainability, support
and participate in socially responsible projects, and adhere to a high standard of corporate governance.
To effectively manage ESG issues, we have established a ESG committee, comprising of our Board and
our management team.
Our Directors are the major personnel in charge of ESG-related matters, taking the overall
responsibility for our ESG strategy. The members of ESG committee possess expertise and knowledge
in the management of ESG matters related to safety, environmental protection, occupational health and
other areas. They are directly involved in setting up our overall ESG governance management policies,
strategies, priorities and targets, reviewing our ESG policies on an annual basis to ensure its
effectiveness, and fostering a culture of acting in accordance with our core ESG values. The ESG
Committee will also prepare ESG report of our Group on an annual basis for the approval of the Board.
This will allow our Board to analyse and disclose material ESG issues, risk management and
performance of our group. Our Group will comply with ESG reporting requirements upon Listing
pursuant to Rule 13.91 of the Listing Rules, and disclose qualitative and quantitative information and
data pursuant to ESG Reporting Code of Appendix C2 to the Listing Rules.
Our Group has adopted a board diversity policy that aims to achieve a balanced composition of
directors in terms of gender, age, cultural background, educational qualifications, and professional
experience. The policy sets out specific targets for gender diversity, requiring at least one female
director on the Board. The Board will regularly review its composition to ensure diversity and
alignment with our Company’s strategic objectives.
Identification, assessment and management of environmental, social and climate-related risks
To better identify, assess and manage our ESG risks, we have established a systematic analysis
pathway to form a materiality matrix, comprising four sequential steps: (1) identification: Based on the
consideration of our business nature, assessments conducted by our ESG Taskforce, as well as
materiality maps provided by well-known external institutions including the ESG Industry Materiality
Map by MSCI and SASB Standards by Sustainability Accounting Standards Board, we have identified
the material ESG issues highly related to our business, and monitored on related performances. In
addition, our Group will conduct an enterprise risk assessment at least once a year, upon Listing and
where appropriate, to cover the current and potential risks that arose in our business including, but not
limited to, the risks arising from the ESG aspects and strategic risk around disruptive forces such as
climate change. When overseeing strategic decisions and material transactions, the Board evaluates
potential ESG risks and opportunities, such as environmental impact assessments for new projects and
social considerations in supply chain management. The ESG Taskforce provides recommendations to
the Board on integrating ESG factors into decision-making processes; (2) research: we collected
responses from internal and external stakeholders through interviews and questionnaires; (3) ranking:
we analysed the research results and then ranked the issues by their materiality to both us and external
stakeholders; (4) confirmation: taking into account guidance from our management and external experts,
we formulated our ESG materiality matrix that demonstrates the importance of each issue to our
stakeholders as well as to the business. Through stakeholder surveys and industry analysis, we
determine our Group’s material issues and focus on them during our business development process. The
most important ESG topics we have identified include adaptation to climate change, ecological
protection, labour management, occupational health and safety, business ethics and anti-corruption.
Our Board will also assess or engage qualified independent third parties to evaluate the risks and
review our Group’s existing strategy and internal control, and necessary improvement will be
implemented to manage and mitigate such risks.
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Impact of environmental, social and climate-related issues and opportunities
We acknowledge that climate-related issues pose a certain level of threat to us. Climate-related
risks identified by us can be classified into two major categories: physical risk and transition risk.
Potential physical risks can arise from extreme weather events such as flooding and typhoons and
extreme heat. If such disasters were to occur in the regions where we operate, our assets as well as
delivery of products and solutions could be adversely affected and disrupted. Furthermore, extreme
weather conditions may also cause power shortage and our suppliers may fail to deliver components as
required in terms of time, cost, quality and quantity, which may in turn adversely impact our ability to
produce and deliver products and solutions to our customers and end-users. Striving to reduce the
unforeseen impacts of emergency situations on our operations, we have business continuity measures
stipulated in our ESG policy, which outlines the mitigation measures of enabling our key operation to
be resumed under such extreme weather events. For the extreme heat circumstances, we have stipulated
our occupational health and safety guidelines, work arrangement plan and respective protection
measures for our operational employees in our ESG policy. Regular training is also provided to
operational employees to ensure their occupational safety.
Potential transition risks may also result from the change in our customers’ preference in terms of
increasing demand of environmental and social risk assessment on their suppliers and more stringent
requirements on environmentally friendly products and solutions. If we fail to attain new customers
and/or retain existing customers, our business, financial conditions and results of operation may be
materially and adversely affected. Our Group continues to monitor the regulatory environment to ensure
that our products and solutions meet the demands and expectations of our customers and regulators.
Regulators may impose more stringent environmental requirements and standards on us. During
FY2023 and FY2024 and FY2025, we incurred compliance costs in connection with applicable
environmental rules and regulations of RMB22,000, RMB10,000 and RMB21,000, respectively,
representing environmental certification expenses.
ENVIRONMENTAL MATTERS
We have established ESG policy and put in place various measures to govern, manage and
mitigate environmental, social and climate-related issues, which includes greenhouse gas (“ GHG”)
emissions and resource consumption. The ESG policy has been established with reference to the
standards of Appendix C2 to the Listing Rules.
To achieve efficient resource utilisation and GHG emission management targets, our ESG policy
includes the following measures: (i) monitoring and evaluating environmental performance indicators
such as fuel, electricity, and water consumption; (ii) encouraging employees to minimise unnecessary
lighting usage and power down idle machinery and equipment to conserve energy and reduce costs; and
(iii) implementing a machinery and equipment management programme involving regular inspections,
repairs, and maintenance to ensure optimal operational condition and reliability.
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GHG Emission
Our GHG emissions consist of (i) direct GHG emissions (scope 1), including the GHG emissions
mainly from fuel consumption of our Group’s vehicles; and (ii) energy indirect GHG emissions (scope
2), including the GHG emissions mainly from the usage of purchased electricity. The GHG emissions
data is presented in terms of tonnes carbon dioxide equivalent (“ tCO
2e”). The following table sets out a
breakdown of our GHG emissions by scope and intensity for the years ended 31 December 2023, 2024
and 2025:
FY2023 FY2024 FY2025
Direct GHG emissions (Scope 1) (tCO 2e).... 5.11 8.80 7.36
Energy indirect GHG emissions (Scope 2)
(tCO 2e) ........................... 451.38 436.22 492.87
Total GHG emissions (tCO 2e) ........... 456.49 445.02 500.23
Total GHG emissions intensity
(tCO 2e/million RMB revenue) ........... 3.90 0.85 0.75
For scope 2 emissions, the emissions in 2024 were relatively stable compared to that of 2023,
while the increase in 2025 as compared to that in 2024 is due to the rise in our purchased electricity
consumption resulting from the extra leasing area at our Shenzhen office for the increase in staff
number attributable to continuing growth of our operating scale. Considering our Group’s business
development and the latest available full-year data, we have set an emission target of limiting the
increase in our total GHG emissions intensity to be not more than 20% in the next three years, using
the intensity level in the year ended 31 December 2025 as the baseline. We expect to reduce electricity
consumption by more efficient use of electricity in our business operations. In the long term, we are
committed to reducing our carbon intensity in order to achieve full carbon neutrality by 2030 and
net-zero emissions by 2050.
With respect to Scope 3 greenhouse gas emissions, as the nature of our business mainly comes
from employee business travel, we are in the process of establishing more detailed metrics and targets
after consulting with relevant professional ESG consultants and taking reference to the results of our
carbon mapping and relevant data of industry peers.
Resource Consumption
Our resource consumption principally comprises energy consumption and water consumption so as
to support our business operations.
Energy Consumption
The major types of energy consumed were direct energy consumption and indirect energy
consumption. Direct energy consumption represents fuel consumption of our Group’s vehicles and
indirect energy consumption represents purchased electricity. The following table sets out a breakdown
of our energy consumption by type and intensity for the years ended 31 December 2023, 2024 and
2025:
FY2023 FY2024 FY2025
Direct energy consumption (MWh) ......... 20.96 36.14 30.23
Indirect energy consumption (MWh) ........ 1,023.85 989.95 1,067.08
Total energy consumption (MWh) ........ 1,044.81 1,026.09 1,097.31
Total energy consumption intensity
(MWh/million RMB revenue) ........... 8.93 1.96 1.64
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For indirect energy consumption, it was maintained at a relatively stable level for the years ended
31 December 2023, 2024 and 2025. Considering our Group’s business development and the latest
available full-year data, we have set an emission target of limiting the increase in our total energy
consumption intensity to be not more than 10% in the next three years, using the intensity level in the
year ended 31 December 2025 as the baseline. We will design a highly efficient and flexible lighting
control system in our office. We will instal intelligent sensor LED lights in non-working areas, which
have an automatic shut-off control function to reduce the energy consumption of lighting and air
conditioning.
Water Consumption
Due to the nature of our business, all of our wastewater discharges in the course of our operations
are domestic sewage. The following table sets out a breakdown of our water consumption by type and
intensity for the years ended 31 December 2023, 2024 and 2025:
FY2023 FY2024 FY2025
Water Consumption (Cubic metres) ........ 3,959.54 4,119.85 4,265.70
Total water consumption intensity (Cubic
metres/million RMB revenue) .......... 33.82 7.88 6.38
For water consumption, it was maintained at a relatively stable level for the years ended 31
December 2023, 2024 and 2025. We will encourage employees to not leave the tap running for long
periods and to remind them to turn off the faucet to reduce wastewater. The Company will implement
water-saving measures, such as replacing an old, inefficient faucet in office, with the aim of limiting
the increase in our total water consumption intensity to be not more than 20% in the next three years,
using the intensity level in the year ended 31 December 2025 as the baseline.
SOCIAL MATTERS
We plan to actively engage in philanthropic initiatives, such as public welfare donations and
volunteer services, to contribute to the community and social well-being. While we have not previously
participated in social charity donations, we are now committed to integrating charitable practices into
our ESG strategy, striving to create sustainable social value alongside our environmental efforts.
Recruitment policy and training
We normally recruit employees through online recruitment platforms and posting recruitment
notices. We use our best endeavours to attract and retain appropriate and suitable workers to serve our
Group. Our policy also aims to provide equal opportunities for employees regardless of gender, age,
race or any other social or personal characteristics. We prohibit all forms of discrimination based on
gender, age, disability and race. After recruitment, we provide or arrange various types of training to
our employees, including environmental protection, quality and occupational safety and health training,
emergency response and rescue training, specialised skills training and management skills training. We
will provide them with our training manual which we update from time to time.
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As at 31 December 2025, we had 362 employees, all of whom are based in the PRC. The
following table sets out a breakdown of the number of our employees by gender and age group:
Gender
As at
31 December 2025
Male .......................................................... 216
Female ......................................................... 146
Total .......................................................... 362
Age Group
As at
31 December 2025
40 years old or below .............................................. 315
41 to 60 years old ................................................ 46
61 years old or above .............................................. 1
Total .......................................................... 362
Labour union and employee relationship
Our employees have set up internal labour unions to maintain routine communication with our
Company. Our Directors believe that we had maintained good relationships with our employees and
during the Track Record Period and up to the Latest Practicable Date, there had been no complaint or
claims from employees or labour dispute which materially and adversely affected, or was likely to have
a material adverse effect on our operations.
Remuneration policy
Remuneration for our employees includes basic wages, discretionary bonuses and other staff
benefits. We participate in social insurance schemes and provide housing provident funds for our
employees in accordance with applicable regulations. Save as disclosed in the paragraph headed
“Compliance” in this section, we have made payments to social insurance and housing provident funds
for our qualified employees.
Occupational health and safety
We have adopted a set of Occupational Health and Safety Policies (“ഄ”)
as managed by our management department which continuously seek to improve our system to reduce
the risk of such accidents. To the best of our Directors’ knowledge and belief, during the Track Record
Period and up to the Latest Practicable Date, our Group experienced no work-related injuries in relation
to accidents and no case of fatality.
Supply Chain Management
We have strengthened our safety measures and provided safety training to our employees
particularly relating to operational safety to demonstrate our commitment on protecting our employees’
health and safety. We also require the appointment of safety officer and on-site safety responsible
officer for every factory to monitor safety levels and to check and keep records before and after work.
In order to ensure the production and safety of factory workers, our Group implements
environmental, health, safety, and industrial risk identification, assessment, analysis and control
management of operating conditions, etc. To prevent and control accidents and occupational diseases
from occurring, Occupational Health and Safety Policies (“ഄ”) was established
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to be responsible for protecting legal rights of workers, providing guidance on occupational safety
awareness and capabilities, as well as providing training on labour protection items for employees.
During the Track Record Period and up to the Latest Practicable Date, there was no material claims or
legal proceedings against us with respect to accident.
Our suppliers are evaluated on their ESG practices through a comprehensive rating system, which
includes criteria such as environmental compliance, labour standards, and ethical business conduct.
Suppliers failing to meet minimum standards are required to implement improvement plans. We have
implemented the Supply Chain ESG Policy (“ ԶᏐᗡESG”) to integrate environmental,
social, and governance criteria into supplier management.
Anti-Corruption
We have provided anti-corruption training to all employees, covering bribery prevention and
ethical business behaviour. We will continue to provide relevant training to all employees as and when
required. Furthermore, we have established a confidential whistleblowing hotline for the purpose of
reporting suspected violations and investigating and addressing all complaints.
LICENCES, APPROV ALS AND PERMITS
We have business operations in the PRC. We have obtained all material requisite licences,
approvals and permits for our business operations during the Track Record Period and as at the Latest
Practicable Date. We have obtained the following certifications which are material to our business
operations:
Certification Issuing authority Holding entity Validity period
Quality Management
System Certificate ..
China Quality
Certification Centre
(ʕ਷ሯඎႩᗇʕː )
Our Company 3 August 2025 to 11
June 2026 (Note)
Environmental
Management System
Certificate ........
China Quality
Certification Centre
(ʕ਷ሯඎႩᗇʕː )
Our Company 11 July 2025 to 18
June 2026 (Note)
Information Security
Management System
Certificate ........
China Quality
Certification Centre
(ʕ਷ሯඎႩᗇʕː )
Our Company 7 January 2025 to 21
December 2027
“Zhiyuan Origin Large
Model” Registration .
Cyberspace
Administration of
China ( ʕശɛ͏΍ձ
፬
܃)
Our Company From 20 April 2026
Note:
As of the Latest Practicable Date, two of our certificates held by our Company are currently under renewal. As advised by our
PRC Legal Advisers, there are no legal impediments to the renewal of these certificates.
Data Compliance
We attach paramount importance to the protection of user data and are committed to compliance
with relevant data protection regulations, including the Data Security Law, the Personal Information
Protection Law, and the Cybersecurity Law of the People’s Republic of China. Our business primarily
provides enterprise users with smart perception solutions, multispectral AI intelligent perception
terminals, and cloud services. Our products and services are typically delivered through hardware
deployment, software implementation, and software-as-a-service models. Except for collecting
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necessary account and device data from app users to enable software functionality, and retaining
essential permissions (such as for operational maintenance) to provide enterprise users with software
platform services, we do not collect or utilise additional enterprise user data.
The training data for our Company’s AI large model is derived from two legitimate primary
sources: internally generated synthetic data and real-world simulated security incident data provided by
academic institution. The external data is obtained under scientific research collaboration agreements.
Accordingly, our data sourcing practices are established on a lawful basis and are not in violation of
applicable regulations or third-party rights to our knowledge. Our Group’s AI large model has
undergone a security assessment in compliance with current laws and regulations, including the Internet
Information Service Algorithm Recommendation Management Provisions and the Interim Measures for
Generative Artificial Intelligence Services. According to our legal advisers as to PRC data compliance
law, our “Zhiyuan Origin Large Model” has been registered with the CAC.
Upon delivery of the Multispectral AI Modules and Multispectral AI Perception Terminals, our
Group explicitly states in the product manual that all visual and sensor data are stored solely locally on
the device using hardware-encrypted and permission isolation, ensuring that no third party — including
our Group — can remotely access any data without physical access and user authorisation, and that all
device access permissions are configured and managed entirely by the user without our Group’s
involvement. In addition, when providing AI multispectral fire warning solutions, SaaS, application
services, integrated hardware and software terminals, algorithm modules, or related technical support,
our Group explicitly characterises its AI products as “auxiliary security management tools” and
provides clear risk warnings to users regarding the accuracy and reliability of model outputs, advising
that decisions should be made based on comprehensive field verification and professional judgement.
Therefore, our legal adviser as to PRC data compliance is of the view that, during the Track Record
Period and up to the Latest Practicable Date, we had complied with the applicable laws and regulations
in relation to data privacy, cybersecurity and data security protection and algorithm compliance in all
material respects. Our operations and financial condition are not adversely impacted by these laws and
regulations.
Our current data compliance framework encompasses the following measures:
 Established internal management systems and organisational structures for cybersecurity,
data security, personal information protection, and scientific data management in compliance
with legal requirements;
 Implemented user authorisation mechanisms for data collection, protocol-controlled
safeguards for external data interactions, and permission-based data processing workflows;
 Deployed technical measures including regular security inspections, protection against
computer viruses and cyberattacks, safeguards against cybersecurity vulnerabilities,
malicious programmes, security flaws, access controls, and real-time monitoring/recording of
network operations and security incidents;
 Adopted data backup and encryption protocols, alongside a classified data protection system
based on data categorisation;
 Obtained ISO 27001 Information Security Management System certification and established
an information security risk management framework aligned with international and domestic
standards;
 Conducted regular internal audits and commissioned third-party assessments when deemed
necessary;
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 Allocated appropriate resources to provide training and awareness programmes for all
employees on cybersecurity, data security, and personal information protection;
 Instituted mechanisms for periodic personal information protection compliance audits and
personal information impact assessments;
 Developed incident response plans, emergency management protocols, and reporting
procedures for cybersecurity incidents, data breaches, and personal information security
events, with defined roles and responsibilities, supplemented by regular drills.
For potential overseas expansion plans, we have established cross-border data compliance
management systems to ensure data transfers align with privacy protection and regulatory requirements
in both China and destination countries/regions.
During the Track Record Period and up to the Latest Practicable Date, we have not experienced
any material data security incidents (such as significant data breaches or losses) nor have we been
subject to litigation, arbitration, or material regulatory penalties in relation to data security. During the
Track Record Period and up to the Latest Practicable Date, we have taken all reasonable measures to
maintain compliance with all applicable data security and privacy laws and regulations. Please see the
section headed “Regulatory Overview — PRC Laws and Regulations — Laws and Regulations in
Relation to Data, Network and Information Security” in this prospectus. As advised by our legal
advisers as to PRC data compliance law, there are no material violations to the relevant data laws and
regulations that would prevent the business from operating and being rectified. Our Group will continue
to carry out compliance work to meet the evolving laws, regulations, and regulatory requirements in
this field within PRC.
COMPETITION
We operate in a highly competitive multispectral AI industry in the PRC, characterised by rapid
technological advancements and growing demand for innovative sensing, imaging, and AI-driven
solutions. We compete with both foreign and domestic companies engaged in the development and
provision of multispectral AI technologies, modules, and large model services. Our competition
primarily revolves around technological innovation, product performance, market share, cost-efficiency,
and the ability to address sector-specific requirements. According to the Frost & Sullivan Report, in
2025, the top five players in the overall multispectral AI enterprises segment in the PRC accounted for
an aggregate market share of approximately 8.0% by revenue, with our Company ranking first and
holding approximately 3.3%. This positions us as a market leader. We remain committed to leveraging
our technological expertise, leadership in key segments, customer-oriented solutions, and operational
efficiencies to sustain and strengthen our competitive position in the market.
INSURANCE
We maintain insurance policies in accordance with relevant laws and regulations and based on our
assessment of the needs of our operations and industry practices. We believe that our insurance
coverage is adequate for our business and in line with general market practice. We will continue to
review and assess our risk portfolio and make necessary and appropriate adjustment to our insurance
plans to align with our needs and with industry practice. During the Track Record Period and up to the
Latest Practicable Date, we have maintained social insurance for our employees in the PRC to provide
protection against employees’ risks of work-related injuries and occupational diseases. In line with
general market practice, we do not maintain certain policies that are not generally required by laws. See
“Risk Factors — Risks Relating to Our Industry and Business — Our insurance coverage may not be
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sufficient to cover all losses, which may increase our costs of operation.” During the Track Record
Period and up to the Latest Practicable Date, we had not made and had not been subject to any material
claim of insurance.
EMPLOYEES
As at 31 December 2025, we had 362 full-time employees based in the PRC. The following table
sets out our full-time employees by function as at 31 December 2025.
Function Number
Percentage of total
number (%)
R&D ............................................ 156 43.1
Production ........................................ 122 33.7
Sales and marketing ................................. 54 14.9
Finance and administration ............................ 30 8.3
Total ............................................ 362 100.0
During the Track Record Period and as at the Latest Practicable Date, we did not make full social
insurance contributions and housing provident fund contributions for employees. We estimated that the
shortfall of our social insurance contributions for FY2023, FY2024 and FY2025 amounted to
approximately RMB3.5 million, RMB2.7 million and RMB3.2 million respectively, whereas the
shortfall of our housing provident funds for FY2023, FY2024 and FY2025 were approximately RMB1.1
million, RMB1.3 million and RMB1.8 million, respectively.
As advised by our PRC Legal Advisers, pursuant to Law on Social Insurance of the PRC ( ʕശ
) employers who fail to pay social insurance contributions in full and on time
may be ordered to pay the outstanding amounts within a prescribed time limit by the relevant social
insurance authorities, with an additional late fee being 0.05% of the outstanding amounts calculated on
a daily basis from the date on which such amounts are payable. Employers who fail to settle the
overdue payment(s) within the stipulated period will be subject to a fine from one to three times the
total amount of overdue payment(s). Our PRC Legal Advisers further advised that, pursuant to
Regulations on Administration of House Provident Fund (၍ଣૢԷ )), employers who fail
to make payment in full and on time shall be ordered by the Housing Provident Fund Management
Centre to settle overdue payment(s) within a prescribed time limit. If the payment is not made within
such time limit, an application may be made to the PRC courts for compulsory enforcement of the
outstanding payment amounts.
Our PRC Legal Advisers confirmed that, during the Track Record Period and up to the Latest
Practicable Date (i) neither our Company nor our subsidiaries were subject to any enforcement actions
or pending actions by the relevant social insurance authorities or housing provident fund authorities,
and (ii) , no record of administrative penalties or rectification order was found against us upon public
inquiry. Given that (a) credit reports of our Company and our subsidiaries issued by the relevant local
authorities are obtained and we were not subject to any administrative penalties due to any other
breaches of PRC laws and regulations relating to labour and social security or housing provident fund
during the Track Record Period and up to the Latest Practicable Date; (b) no administrative penalties
had been imposed on us in connection with the shortfalls for the social insurance and housing provident
funds; (c) we will pay any shortfall within a prescribed time period if demanded so by relevant
competent authorities, our PRC Legal Advisers are of the view that, given no material changes to the
current policies and no employee’s complaints had been filed against us, the risk of us being ordered to
pay and imposed administrative penalties by the relevant competent authorities for not paying social
insurance and housing provident fund contributions for our employees in full is remote.
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Our Directors believe such non-compliance would not have a material adverse effect on our
business and results of operations, considering that: (i) to the best knowledge of our Directors, we had
not been subject to any administrative penalties due to failure to fully contributing to social insurance
during the Track Record Period and up to the Latest Practicable Date; (ii) we were neither aware of any
material employee complaints filed against us nor involved in any material labour disputes with our
employees with respect to social insurance during the Track Record Period and up to the Latest
Practicable Date; and (iii) as stated above, our PRC Legal Advisers are of the view that the risk that we
will be subject to material administrative penalties for failure to make full social insurance
contributions is relatively low. As a result, we did not make any provisions in connection with these
non-compliances during the Track Record Period and up to the Latest Practicable Date, and our
Reporting Accountants concur with the above.
Mr. Zhou has irrevocably undertaken to make up for any outstanding contributions as well as fines
or penalties incurred in connection with the shortfalls in social insurance and housing provident fund
contributions, in accordance with the amount approved by the competent authorities, and to compensate
our Group in full for any economic losses caused by such matters.
RISK MANAGEMENT AND INTERNAL CONTROL
We are exposed to various risks in our operations. Please refer to the section headed “Risk
Factors” in this prospectus for a discussion of various operational risks and uncertainties we face. It is
the responsibility of our Board to ensure that our Group maintains sound and effective internal controls
to safeguard the Shareholders’ investments and our Group’s assets at all times. We have adopted a
series of internal control policies and procedures designed to achieve effective and efficient operations,
reliable financial reporting and compliance with applicable laws and regulations. Highlights of our
internal control system include the following:
Financial reporting risk management
We have in place accounting policies in connection with our financial reporting risk management.
We have also implemented our financial reporting management system to safeguard the implementation
of our accounting policies. In addition, we provide regular training to our finance department
employees to ensure that they understand our financial management and accounting policies and
implement them in our operations.
Regulatory compliance and legal risk management
We have established and implemented strict internal procedures to ensure our compliance with
relevant laws and regulations, in particular, on anti-fraud, anti-corruption, anti-money laundering and
conflict of interest. We require our employees, especially those involved in procurement, sales and
marketing to abide by our compliance requirements, and make necessary representations and warranties
to our Company. We have provided and will provide regular anti-corruption and anti-bribery
compliance training for our Directors, senior management and employees in order to enhance their
knowledge and compliance of applicable laws and regulations. We also communicate our anti-bribery
and anti-corruption principles to our customers and suppliers.
Going forward, we will continually improve our internal policies according to changes in laws,
regulations and industry standards, and update internal templates for legal documents. After Listing, our
compliance adviser will advise us on compliance matters in relation to the Listing Rules. All Directors
and employees will be required to attend training to refresh their understanding of relevant regulatory
requirements and our policies at least annually. We will also retain legal advisers to advise us on
compliance with applicable laws and regulations.
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Internal control risk management
In preparation for Listing, our Group engaged an independent internal control adviser (“ IC
Consultant ”) to conduct a review of our internal control system and assist our Board and management
of our Group in reviewing the internal control systems associated with the major business processes of
our Group.
Our IC Consultant reviewed our internal control policies and procedures including but not limited
to entity-level controls, compliance management cycle, financial reporting cycle, sales and receipts
cycle, cash management cycle, purchases and payments cycle, inventory management cycle, information
system general control cycle, human resources and payroll management cycle, capital expenditure,
intangible assets and intellectual property management cycle and tax management cycle. Our IC
Consultant performed the work and put forward recommendations based on the review of our internal
control policies.
Having considered the findings and recommendations of the IC Consultant, we have taken actions
to improve our risk management and internal control system. The IC Consultant has performed
follow-up reviews on the status of our actions to address the findings in the abovementioned evaluation,
and reported that the deficiencies identified have been remedied. Based on the above, our Directors are
of the view that our Group has taken reasonable steps to establish internal control systems and
procedures to manage the risks to which we are exposed and enhance the control environment at both
the daily operation and management levels. Accordingly, our Directors are of the view that the internal
control systems currently implemented by our Group are adequate and effective as far as our operation
is concerned. We will carry out periodic reviews at both the management and the Board levels to ensure
effective implementation of our risk management and internal control policies, procedures and measures
and timely rectification of the issues identified.
COMPLIANCE
We are subject to a wide range of PRC laws and regulations in the ordinary course of our business
and operations. For details, see “Regulatory Overview”. We have been advised by our PRC Legal
Adviser that during the Track Record Period and up to the Latest Practicable Date, save as disclosed
under “Properties”, and “Employees” in this section, and “Risk Factors — Risks Relating to Conducting
Business in the PRC — We are subject to various laws, regulations and regulatory standards and any
inability to comply with such requirements and standards may subject us to liabilities.” in this
prospectus, we had complied with the relevant laws and regulations in all material respects that are
material to our business and operations in China, and there were no material breaches or violations of
the laws or regulations applicable to us that would have a material adverse effect on our business,
financial condition or results of operations.
LEGAL PROCEEDINGS
During the Track Record Period and as at the Latest Practicable Date, there was no material
litigation, arbitration or administrative proceedings pending or threatened against our Company or any
of our Directors which could have a material and adverse effect on our financial condition or results of
operations. Our Directors are of the view that, we had complied, in all material respects, with all
relevant laws and regulations during the Track Record Period and up to the Latest Practicable Date.
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OVERVIEW
As at the date of this prospectus, Mr. Zhou controls 48.87% of the voting power at the general
meetings of our Company, comprising (1) 5.96% beneficially owned by him directly; (2) 38.34%
beneficially owned by Zhongcheng Tianying LP, which is controlled by Mr. Zhou as its general partner;
and (3) 2.79% beneficially owned by Zhongzheng Tianying LP, which is controlled by Mr. Zhou as its
general partner; and (4) 1.79% beneficially owned by Zhongzhi Tianying LP, which is controlled by Mr.
Zhou as its general partner.
Immediately following completion of the Share Subdivision and the Global Offering, our
Controlling Shareholders will be, in aggregate, entitled to control the exercise of approximately 43.50%
of the voting rights and thus remain as our Controlling Shareholders.
NO COMPETITION AND CLEAR DELINEATION OF BUSINESS
As at the Latest Practicable Date, none of our Controlling Shareholders, their respective close
associates, and our Directors had any interest in a business that competes or was likely to compete,
either directly or indirectly, with our business, which would be subject to disclosure pursuant to Rule
8.10 of the Listing Rules.
INDEPENDENCE FROM CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors believe that our Group is capable of
carrying on our business independently from our group of Controlling Shareholders and their respective
close associates after Listing.
Management independence
Our management and operational decisions are made by our Board and senior management. Our
Board comprises five executive Directors, one non-executive Director and three independent
non-executive Directors. We consider that our Board and senior management will function
independently from our Controlling Shareholders because:
(a) each Director is aware of his/her fiduciary duties as a Director which require, among other
things, that he/she acts for the benefit and in the best interest of our Company and does not
allow any conflict between his/her duties as a Director and his/her personal interests;
(b) in the event that there is a potential conflict of interest arising out of any transaction to be
entered into between our Group and our Directors or their respective associates, the
interested Director(s) shall abstain from voting at the relevant board meetings of our
Company in respect of such transactions, and shall not be counted in forming quorum
subject to the provision of the Articles of Association;
(c) our Company has established internal control mechanisms to identify connected transactions
to ensure that our Shareholders or Directors with conflicting interests in a proposed
transaction will abstain from voting on the relevant resolutions pursuant to the relevant
requirements under the Articles of Association and/or the Listing Rules; and
(d) our Group has established our own finance, human resources, supply chain centre and
marketing centre departments which are responsible for daily operations of our Group.
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Based on the above, our Directors are of the view that our Board and senior management as a
whole are capable to perform their roles in our Company independently and manage our business
independently from members of our Controlling Shareholders Group and their respective close
associates after the Listing.
Operational independence
We have established our own organisational structure comprised of individual departments, each
with specific areas of responsibilities. We have also established various internal controls procedures to
facilitate the effective operation of our business. Our Group is not operationally dependent on our
Controlling Shareholders. Our Company (through our subsidiaries) holds or enjoys the benefit of all
relevant licences and owns all relevant intellectual property and R&D facilities necessary to carry on
our business. We have sufficient capital, facilities, equipment and employees to operate our business
independently from our Controlling Shareholders. We also have independent access to our customers
and suppliers.
Based on the above, our Directors believe that we are capable of carrying on our business
independently of our group of Controlling Shareholders and their respective close associates.
Financial independence
We have an independent financial system. Our Group’s accounting and finance functions are
independent of our Controlling Shareholders and their close associates. Our Group makes financial
decisions according to our own business needs. Our Group’s major finance operations are handled by
our financial management department, which operates independently from our Controlling Shareholders
and their close associates. We do not share any other functions or resources with any of our Controlling
Shareholders or their close associates.
During the Track Record Period, Mr. Zhou had been providing guarantees (the “ Connected
Guarantees ”) as security for certain of our Group’s banks loans (collectively, the “ Guaranteed
Loans ”). To the best knowledge of our Directors, it is a common market practice in the PRC for banks
to require personal guarantees from the de facto controllers of private enterprises before extending
loans or facilities. As at the Latest Practicable Date, the total Guaranteed Loans amounted to
approximately RMB181.7 million and all Connected Guarantees are expected to be released upon
Listing.
Based on the above, our Directors believe that our Group is able to operate with financial
independence from our Controlling Shareholders and their respective close associates.
NON-COMPETITION UNDERTAKING
Each of our Controlling Shareholders (the “ Covenantors ”) has entered into a Deed of
Non-competition in favour of our Company (for itself and as trustee for our subsidiaries) on 2 June
2026. Subject to the terms and conditions of the Deed of Non-competition, the Covenantors irrevocably
and unconditionally undertake to and covenant with our Company (for itself and as trustee for our
subsidiaries) that, during the period in which the Covenantors are subject to the provisions of the Deed
of Non-competition:
(i) it will not, and will procure its close associates and/or the companies controlled by it (other
than members of our Group) not to, directly or indirectly, either on its own account or in
conjunction with or on behalf of any person, firm or company, among other things, carry on,
participate or be engaged in, invest in, acquire, hold or provide any form of assistance to any
person, firm or company (except members of our Group) to conduct (in each case whether as
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a shareholder, director, partner, agent, employee or otherwise and whether for interest, return
or otherwise) any business which is or may be similar to or in competition with the business
carried on or contemplated to be carried on by any member of our Group from time to time,
including but not limited to the sales and provision of our multispectral AI modules,
multispectral AI perception terminals, multispectral AI large model services or AI vision
modules (the “ Restricted Business ”);
(ii) if it and/or any of its close associates has received, is offered or has identified any business
investment or other business opportunity that competes or may compete, directly or
indirectly, with the Restricted Business (the “ New Business Opportunity ”), it and/or any of
its close associates shall (i) immediately give a notice in writing to our Company in respect
of such New Business Opportunity, setting out all reasonably necessary information for our
Group to make an informed assessment; and (ii) use its best efforts to assist our Company in
acquiring such New Business Opportunity at terms and conditions no less favourable than
those available to it and/or its close associates;
(iii) neither it nor any of its close associates, directly or indirectly, carries out, participates or is
engaged in, invests in, acquires or holds (in each case whether as a shareholder, director,
partner, agent, employee or otherwise and whether for interest, return or otherwise) or is
otherwise involved (other than through our Group) in the Restricted Business;
(iv) it will provide all necessary information for our Directors (including our independent
non-executive Directors) to review its compliance with and implementation of the Deed of
Non-competition on an annual basis and, if necessary, make annual statements in respect of
its compliance with and implementation of the Deed of Non-competition in the annual
reports of our Company;
(v) it will allow our Directors, their respective representatives and auditors to have full access to
its records and/or will procure its close associates to use their best efforts to allow our
Directors, their respective representatives and auditors to have full access to their records, in
order for him/her/it to meet the terms and conditions of the Deed of Non-competition; and
(vi) for so long as it or any of its close associates, either alone or as a whole, remains the
Controlling Shareholders of our Company (within the meaning of the Listing Rules) or a
Director: (1) it will not participate in, carry on or invest in any project or business
opportunity that competes or may compete, directly or indirectly, with the business
conducted by our Group from time to time; (2) it will, in accordance with the Articles of
Association and the Listing Rules, declare its interests and, where required, abstain from
voting at any board meeting and/or general meeting of our Company and not be counted as
quorum where required, if there is any actual or potential conflict of interests; (3) it and its
close associates (other than our Group) will not solicit any existing or then existing
employee of our Group; (4) without the consent of our Company, it will not use any
information pertaining to the business of our Group which may have come to its knowledge
in its capacity as the Controlling Shareholders of our Company and/or a Director for any
purposes; and (5) it will procure its close associates (other than our Group) not to participate
in, carry on or invest in any project or New Business Opportunity mentioned above (except
pursuant to paragraph (a) below).
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The non-competition undertakings made by each of the Covenantors do not apply in the following
circumstances:
(a) if the information on the principal terms of the Restricted Business, project or New Business
Opportunity has been made available to our Group and our Directors, the principal terms in
accordance with which the relevant Covenantor(s) or its/their close associates participate in,
carry on or invest in such Restricted Business, project or New Business Opportunity are
approximately the same or are no more favourable than these offered to our Company, and
our Company has confirmed that it, after review by our Directors (including our independent
non-executive Directors, provided that the resolution shall be approved by the majority of
our independent non-executive Directors at a meeting in the absence of Directors who have
beneficial interest in the project or business relating to such project or business), will refuse
to operate, participate in or carry on such Restricted Business relating to such New Business
Opportunity, then any close associate of the Covenantors (other than our Group) has the
right to participate in, carry on or invest in any Restricted Business relating to such New
Business Opportunity that has previously been offered to our Group, irrespective of the
value of such business. Subject to the foregoing, if the Covenantors or any of its close
associates has decided to directly or indirectly participate in, carry on or invest in any
Restricted Business relating to such New Business Opportunity, it/they shall be subject to
any conditions imposed by our independent non-executive Directors and shall disclose to our
Company the terms under which it/they operate, participate or carry on such Restricted
Business as soon as practicable; and
(b) without prejudice to the principle of (a) above, the undertakings made by the Covenantors do
not apply to any of the following: (i) holding of shares or other securities issued by our
Company or our subsidiaries; and (ii) where a company is a company listed on any stock
exchange recognised by national laws and holds the shares or securities in any company
participating in any Restricted Business, the total interest (within the meaning of Part XV of
SFO) held by each of the Covenantors and its close associates is less than 5% of the share
capital of such company.
The non-competition undertakings given by each of our Controlling Shareholders of our Company
will take effect from the date on which dealings in our H Shares first commence on the Stock Exchange
and will cease to have any effect upon the earlier of the date on which:
(a) any of our Controlling Shareholders and its/their close associates and/or successor,
individually and/or collectively, cease to own 30% (or such percentage as may from time to
time be specified in the Takeovers Code as being the level for triggering a mandatory
general offer) or more of the then issued share capital of our Company directly or indirectly
or cease to be deemed as Controlling Shareholders of our Company; or
(b) our H Shares cease to be listed on the Stock Exchange (except for temporary suspension of
our H Shares due to any reason).
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CORPORATE GOVERNANCE MEASURES
We have put in place sufficient corporate governance measures to manage the conflict of interest
and potential competition from our Controlling Shareholders and safeguard the interest of our
Shareholders, including:
(i) where a Shareholders’ meeting is to be held for considering proposed transactions in which
our Controlling Shareholders or any of their close associates has a material interest, our
Controlling Shareholders will not vote on the resolutions and shall not be counted in the
quorum in the voting;
(ii) our Company has established internal control mechanism to identify connected transactions.
After the Listing, our Company will comply with the requirements in connection with
connected transactions under the Listing Rules;
(iii) where our Directors reasonably request the advice of independent professionals, such as
independent financial advisers, the appointment of such independent professional will be
made at our Company’s expense;
(iv) we have appointed China Harbour International Capital Limited as our compliance adviser to
provide advice and guidance to us in respect of compliance with the applicable laws and
regulations, as well as the Listing Rules, including various requirements relating to corporate
governance;
(v) we have established the Strategy and Sustainable Development Committee, the Audit
Committee, the Remuneration and Appraisal Committee and the Nomination Committee with
written terms of reference in compliance with the Listing Rules and the Corporate
Governance Code;
(vi) our Controlling Shareholders will confirm the status of their non-competing interest on an
annual basis and to provide all information necessary, including all relevant financial,
operational and market information and any other necessary information as required by our
Company; and
(vii) our Company will disclose decisions (with basis), if any, on matters reviewed by the
independent non-executive Directors either in its annual report or by way of announcements.
Our Directors consider that the above corporate governance measures are sufficient to manage any
potential conflict of interests between our Controlling Shareholders and their respective close associates
and our Group and to protect the interests of our Shareholders.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
– 180 –


--- page 189 ---
So far as our Directors are aware, immediately following completion of the Share Subdivision, the
Global Offering and the conversion of Unlisted Shares into H Shares, the following persons will have
interests or short positions in our 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 SFO, or who
will be directly or indirectly, interested in 10% or more of the issued voting shares of any other
member of our Group:
Name Capacity/Nature of Interest
Number of Shares
held at the date of
this prospectus (1)
Percentage of
shareholding as at
the date of this
prospectus
Number of Shares
held/interested in
after completion of
Share Subdivision
and Global
Offering (1)
Percentage of
Shareholding after
completion of
Share Subdivision
and Global
Offering
Mr. Zhou ......... Beneficial owner 513,526
Unlisted Shares
(L)
5.96% 41,082,080
H Shares (L)
5.31%
Interest in controlled
corporation (2)
3,696,000
Unlisted Shares
(L)
42.91% 295,680,000
H Shares (L)
38.19%
Zhongcheng Tianying
LP(2) ..........
Beneficial owner 3,301,887
Unlisted Shares
(L)
38.33% 264,150,960
H Shares (L)
34.12%
Zhongzheng Tianying
LP(2) ..........
Beneficial owner 240,000
Unlisted Shares
(L)
2.79% 19,200,000
H Shares (L)
2.48%
Zhongzhi Tianying
LP(2) ..........
Beneficial owner 154,113
Unlisted Shares
(L)
1.79% 12,329,040
H Shares (L)
1.59%
Zhejiang Business
Venture ........
Interest in controlled
corporation (3)
1,279,459
Unlisted Shares
(L)
14.86% 102,356,720
H Shares (L)
13.22%
Zheshang Capital .... Interest in controlled
corporation (3)
1,279,459
Unlisted Shares
(L)
14.86% 102,356,720
H Shares (L)
13.22%
Notes:
(1) The letter “L” denotes the person’s long positions in the Shares.
(2) As at the date of this prospectus, Zhongcheng Tianying LP held 3,301,887 Unlisted Shares, Zhongzheng Tianying LP held
240,000 Unlisted Shares of our Company and Zhongzhi Tianying LP held 154,113 Unlisted Shares of our Company,
accounting for 38.33%, 2.79% and 1.79% of the equity interests in our Company. The general partner of Zhongcheng
Tianying LP, Zhongzheng Tianying LP and Zhongzhi Tianying LP is Mr. Zhou, respectively. Under the SFO, Mr. Zhou is
deemed to be interested in the entire Shares held by each of Zhongcheng Tianying LP, Zhongzheng Tianying LP and
Zhongzhi Tianying LP.
(3) As at the date of this prospectus, Taolue New Energy held 654,192 Unlisted Shares of our Company, Taolue Xinwang held
120,806 Unlisted Shares of our Company and Jinlan Sunshine held 504,461 Unlisted Shares of our Company. The general
partner of Taolue New Energy, Taolue Xinwang and Jinlan Sunshine is Zhejiang Business Venture, respectively. Under the
SFO, Zhejiang Business Venture is deemed to be interested in the entire Shares held by each of Taolue New Energy, Taolue
Xinwang and Jinlan Sunshine. The controlling shareholder of Zhejiang Business Venture is Zheshang Capital. Accordingly,
Zheshang Capital is therefore be deemed or taken to be interested in the Shares in which Zhejiang Business Venture is
interested pursuant to the SFO.
Save as disclosed above and the paragraph headed “Statutory and General Information — C.
Further information about Directors and Shareholders — 1. Disclosure of interests” in this prospectus,
our Directors are not aware of any other person who will, immediately following completion of the
Share Subdivision, the Global Offering and the conversion of Unlisted Shares into H Shares, have an
interest or short position in the Shares or underlying Shares, which would be required to be disclosed to
our Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of SFO, or,
directly or indirectly, be interested in 10% or more of any class of share capital carrying rights to vote
in all circumstances at the general meetings of any other member of our Group.
SUBSTANTIAL SHAREHOLDERS
– 181 –


--- page 190 ---
BOARD OF DIRECTORS
Our Board currently consists of nine Directors, including five executive Directors, one
non-executive Director and three independent non-executive Directors. The functions and duties of our
Board include but not limited to convening shareholders’ meetings, reporting on our Board’s work at
these meetings, implementing the resolutions passed at these meetings, determining business and
investment plans and formulating our annual budget and final accounts. In addition, our Board is
responsible for exercising other powers, functions and duties in accordance with the Articles of
Association.
The table below sets out the key information in respect of the members of our Board as at the
Latest Practicable Date:
Name Age Present position Role and responsibility
Date of joining
our Group
Date of
appointment as
Director
Relationship with
the other
Directors and
senior
management
Executive Directors
Zhou Bo
(ت).....
50 Chairman of our Board,
executive Director, and
general manager
Overall strategic planning, and
operation of our Group
April 2013 May 2020 None
Miao Rui
(๿)......
40 Executive Director and
deputy general manager
Overall R&D, procurement and
sales of our Group
April 2013 December 2020 None
Chai Jian (ᄏ).. 37 Executive Director and
Board secretary
Overseeing and managing the
operation of our Group
November
2024
July 2025 None
Zou Xiaogang
(࡝)....
43 Executive Director, and
supply chain director
Management of the supply chain
centre of our Group
April 2013 October
2021
None
Chen Yonggang
(࡝)....
54 Executive Director and
technical expert
Overall technology development of
our Group
April 2013 December 2020 None
Non-executive Directors
Yu Lijie
(؏)....
55 Non-executive Director Guiding our Group’s strategy and
business development
December 2020 December 2020 None
Independent non-executive Directors
Chen Haiping
(௓ऎ̻) ....
43 Independent non-executive
Director
Supervising and
providing independent
opinion and judgement
to the Board
July 2025 July 2025 None
Zhong Luhuan
(ᒤ௔ᛇ) ....
37 Independent non-executive
Director
Supervising and
providing independent
opinion and judgement
to the Board
July 2025 July 2025 None
Ho Ka Cin Verona
(࠺)....
45 Independent non-executive
Director
Supervising and
providing independent
opinion and judgement
to the Board
July 2025 July 2025 None
DIRECTORS AND SENIOR MANAGEMENT
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--- page 191 ---
Executive Directors
Mr. Zhou Bo (ت)aged 50, is the chairman of our Board, executive Director, general manager,
and one of our Controlling Shareholders. He is also the chairperson of our Strategy and Sustainable
Development Committee. Mr. Zhou founded our Company in April 2013, and has served as the
chairman of our Board and general manager since our inception. Mr. Zhou has been primarily
responsible for our Group’s overall management, in particular formulating strategic planning, and
operation.
Mr. Zhou has approximately 26 years of experience in the computer vision and thermal imaging
industry. Prior to founding our Company, from 1999 to 2000, he served as a video R&D engineer at
Chengdu Keli Electronic Research Institute* (הresponsible for the research and
development of video technology. From 2001 to 2005, Mr. Zhou was the product manager at Shenzhen
TMVIDEO Technology Co., Ltd. (ʮ̡ ), a company listed on the
National Equities Exchange and Quotations Co., Ltd. (Stock Code: 833318), responsible for leading the
development and management of video products. From 2005 to 2012, Mr. Zhou worked at Shenzhen
Huanghe Digital Technology Co., Ltd.* (ʮ̡ ), with his last position as the
director and general manager of the company.
Mr. Zhou obtained a bachelor’s degree of engineering in automatic control from Xi’an Mining
College (now known as Xi’an University of Science and Technology) in the PRC, in July 1999.
Mr. Zhou was previously a director, general manager, and/or legal representative of the companies
shown in the table below at the time of, or within 12 months prior to, their respective deregistration:
Name of company
Place of
establishment Status
Date of
deregistration Reason for deregistration
Nature of business at the
commencement of
deregistration
Shenzhen Zhongcheng
Chuangzhan Investment
Co., Ltd.* ( ଉέ̹଺༐
ʮ̡ )
PRC Deregistered 7 July 2021 Discontinuance of
business
Financial services
Shenzhen Tianhui Heqing
Technology Co., Ltd.*
(Ҧ
ʮ̡)
PRC Deregistered 13 August
2021
Discontinuance of
business
Information transmission,
software, and
information technology
services
Shenzhen Haiqing Visual
Intelligence Co., Ltd.*
(ଉέ̹ऎ૶ൖᙂ౽ঐ
ʮ̡)
PRC Deregistered 24 June 2024 Discontinuance of
business
Information transmission,
software, and
information technology
services
Shenzhen Haiqing Video
Technology Co., Ltd.
Bao’an Branch* ( ଉέ
ʮ
̡ᘒτʱʮ̡ )
PRC Deregistered 5 March
2025
Discontinuance of
business
Wholesale of computer
hardware and software
equipment
Mr. Zhou confirmed that, to his best knowledge, none of the above companies had been involved
in any outstanding dispute or litigations prior to their deregistration and that the above companies were
solvent at the time of deregistration, and he did not incur any debt and/or liabilities because of such
deregistration, and no misconduct or misfeasance on his part had been involved in the deregistration,
and that the deregistration did not have any negative effect on our Group.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 192 ---
Mr. Miao Rui (๿), aged 40, is our executive Director and deputy general manager. He joined
our Group in April 2013 as the director of research and development and was appointed to our Board as
a Director in December 2020, was appointed as the deputy general manager in August 2022, and was
redesignated as an executive Director in July 2025. He is primarily responsible for the overall R&D,
procurement and sales of our Group.
Prior to joining our Group, Mr. Miao Rui served as a software engineer in the R&D department of
Shenzhen Huanghe Digital Technology Co., Ltd.* (ʮ̡ ) from March 2010 to
March 2012, responsible for the development of embedded software product.
Mr. Miao Rui obtained a bachelor’s degree of engineering in computer science and technology
from Xi’an University of Science and Technology in the PRC, in July 2010.
Mr. Miao was previously a supervisor of the company shown in the table below at the time of, or
within 12 months prior to, its deregistration:
Name of company
Place of
establishment Status
Date of
deregistration Reason for deregistration
Nature of business at the
commencement of
deregistration
Shenzhen Tianhui Heqing
Technology Co., Ltd.*
(Ҧ
ʮ̡)
PRC Deregistered 13 August
2021
Discontinuance of
business
Information transmission,
software, and
information technology
services
Mr. Miao confirmed that, to his best knowledge, the above company had not been involved in any
outstanding dispute or litigations prior to its deregistration and that the above company was solvent at
the time of deregistration, and he did not incur any debt and/or liabilities because of such
deregistration, and no misconduct or misfeasance on his part had been involved in the deregistration,
and that the deregistration did not have any negative effect on our Group.
Dr. Chai Jian (ᄏ), aged 37, is our executive Director. He joined our Company in November
2024 and was appointed as an executive Director and board secretary in July 2025.
Prior to joining our Group, Dr. Chai Jian as an investment manager for separately managed
accounts department of Western Leadbank Fund Management Company Limited (၍ଣϞ
ʮ̡) from October 2014 to August 2015. Between August 2015 and August 2017, he worked for the
asset management department of Kaiyuan Securities Co., Ltd. (ʮ̡ )a sa n
investment manager, responsible for overseeing securities management and evaluating investment
opportunities. Subsequently, from October 2017 to March 2019, he served as a quantitative investment
manager in the asset management department of Guorong Securities Co., Ltd.* (ʮ
̡). From November 2019 to November 2024, he served as a manager of the smart city platform
department at China Mobile Xiong’an Communications Technology Co., Ltd.* (Ҧ
ʮ̡), responsible for overseeing the development and implementation of smart city technology
solutions, managing project teams and coordinating strategic partnerships.
Dr. Chai Jian obtained an undergraduate degree of measurement and control technology and
instrumentation and a master’s degree of testing, measurement, and instrumentation from Xidian
University (Ҧɽኪ ) in Xi’an, PRC, in July 2011, and in March 2014, respectively. He also
obtained a doctorate’s degree in business administration from the Université de Montpellier in France,
in February 2024.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 193 ---
Mr. Zou Xiaogang (࡝)aged 43, is our executive Director and supply chain director. He
joined our Group in April 2013 as the director of supply chain and was appointed to our Board as a
Director in October 2021 and was redesignated as an executive Director in July 2025. He is primarily
responsible for the management of the supply chain centre of our Group.
Prior to joining our Group, Mr. Zou Xiaogang had over 8 years of experience in technology
development. Between July 2004 and March 2007, he served as a R&D engineer for Wuhan Z&Y
Railway Electric Co., Ltd. (ʮ̡ , previously known asʮ̡ ),
responsible for hardware development of microcomputer control system for railway locomotives. From
June 2007 to December 2012, Mr. Zou Xiaogang served as a hardware engineer in the R&D department
of Shenzhen Huanghe Digital Technology Co., Ltd.* (ʮ̡ ), responsible for
hardware design and process optimisation of the products.
Mr. Zou Xiaogang obtained a bachelor’s degree of engineering in electrical engineering and
automation from Sichuan University in the PRC in July 2004.
Mr. Zou Xiaogang was previously a general manager and/or supervisor of the companies shown in
the table below at the time of, or within 12 months prior to, their respective deregistration:
Name of company
Place of
establishment Status
Date of
deregistration Reason for deregistration
Nature of business at the
commencement of
deregistration
Shenzhen Zhongcheng
Chuangzhan Investment
Co., Ltd.* ( ଉέ̹଺༐
ʮ̡ )
PRC Deregistered 7 July 2021 Discontinuance of
business
Financial services
Shenzhen Haiqing Visual
Intelligence Co., Ltd.*
(ଉέ̹ऎ૶ൖᙂ౽ঐ
ʮ̡)
PRC Deregistered 24 June 2024 Discontinuance of
business
Information transmission,
software, and
information technology
services
Mr. Zou Xiaogang confirmed that, to his best knowledge, none of the above companies had been
involved in any outstanding dispute or litigations prior to their deregistration and that the above
companies were solvent at the time of deregistration, and he did not incur any debt and/or liabilities
because of such deregistration, and no misconduct or misfeasance on his part had been involved in the
deregistration, and that the deregistration did not have any negative effect on our Group.
Mr. Chen Y onggang (࡝)aged 54, is our executive Director and technical expert. He joined
our Group in April 2013 as a technical expert and was appointed to our Board as a Director in
December 2020 and was redesignated as an executive Director in July 2025. He is primarily responsible
for the overall technology development of our Group.
Prior to joining our Group, Mr. Chen Yonggang has over 17 years of experience in technology
development. He served as the manager of the R&D department of Chengdu Keli Electron Institute* ( ϓ
הfrom June 1997 to June 2000, responsible for the R&D of electronic systems.
Subsequently, between June 2000 and July 2005, he served as the manager of the R&D department of
Shenzhen TMVIDEO Technology Co., Ltd. (ʮ̡ ), a company listed on
the National Equities Exchange and Quotations Co., Ltd. (Stock Code: 833318), responsible for the
R&D of video surveillance systems. From July 2005 to October 2012, he served as the chief engineer
of Shenzhen Huanghe Digital Technology Co., Ltd.* (ʮ̡ ), responsible for
the R&D of digital video technology.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 194 ---
Mr. Chen Yonggang obtained a bachelor’s degree of science from Dalian University of
Technology ( ɽஹଣʈɽኪ ) in Dalian, PRC, in July 1995.
Non-executive Directors
Mr. Yu Lijie (؏)aged 55, is our non-executive Director. He was appointed to our Board as
a Director on 30 December 2020 and was redesignated as a non-executive Director in July 2025. He is
primarily responsible for corporate governance and management.
Prior to joining our Group, Mr. Yu Lijie had over 15 years of experience in corporate management
and investment. From May 2008 to March 2010, he served as a senior consulting manager in the
Business Department of Shanghai Qiyuan Technology Co., Ltd.* (ʮ̡ ).
Between March 2010 and February 2013, he worked for Shenzhen Guoqiao Investment Management
Co., Ltd.* (ʮ̡ ) as an investment director in the investment department.
From March 2013, Mr. Yu Lijie worked as a deputy general manager and was promoted as a general
manager in August 2017, at Zheshang Business Venture Capital Management (Shenzhen) Co., Ltd. ( ए
ਠ௴ุҳ༟၍ଣ (ଉέ)ʮ̡), responsible for leading venture capital operations and managing
investment projects.
Mr. Yu Lijie obtained a master degree of business administration from Southwest Jiaotong
University in the PRC, in January 2008.
Mr. Yu Lijie was previously supervisor of the company shown in the table below at the time of, or
within 12 months prior to, its deregistration:
Name of company Place of establishment Status Date of deregistration Reason for deregistration
Nature of business at the
commencement of
deregistration
Shenzhen Yuanqiao
Network
Technology Co.,
Ltd.* ( ଉέᇝ዗ၣ
ʮ̡ )
PRC Deregistered 27 May 2025 Discontinuance of
business
Wholesale and retail
trade
Mr. Yu Lijie confirmed that, to his best knowledge, the above company had not been involved in
any outstanding dispute or litigations prior to its deregistration and that the above company was solvent
at the time of deregistration, and he did not incur any debt and/or liabilities because of such
deregistration, and no misconduct or misfeasance on his part had been involved in the deregistration,
and that the deregistration did not have any negative effect on our Group.
Independent Non-executive Directors
Mr. Chen Haiping ( ௓ऎ̻), aged 43, was appointed as our independent non-executive Director
in July 2025. He is also the chairperson of our Audit Committee, Remuneration and Appraisal
Committee and Nomination Committee. Mr. Chen Haiping is primarily responsible for participating in
the decision making for our Company’s significant events, and advising on issues relating to corporate
governance, audit and remuneration and assessment of our Directors and senior management.
Mr. Chen Haiping has been working at the Xi’an University of Science and Technology (Ҧ
ɽኪ) since July 2010. From July 2010 to December 2013, he served as an accountant in the accounting
section of the finance office at Xi’an University of Science and Technology. From January 2014 to
December 2018, he served as the deputy section chief of the planning and management section of the
DIRECTORS AND SENIOR MANAGEMENT
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--- page 195 ---
finance office at Xi’an University of Science and Technology. From January 2019 until the present, he
serves as the section chief of the planning and management section of the finance office at Xi’an
University of Science and Technology.
Mr. Chen Haiping obtained a bachelor degree of management from Zhengzhou University of
Aeronautics in the PRC, in July 2006 and a master degree of economics from Xi’an University of
Science and Technology in the PRC, in June 2010.
Mr. Zhong Luhuan ( ᒤ௔ᛇ), aged 37, was appointed as our independent non-executive Director
in July 2025. Mr. Zhong Luhuan is primarily responsible for participating in the decision making for
our Company’s significant events, and advising on issues relating to corporate governance, and
assessment of our Directors and senior management.
Prior to joining our Group, Mr. Zhong Luhuan has over 10 years of experience in finance,
auditing, and investment management. From October 2013 to September 2015, he worked at Deloitte
Hua Yong CPA (ה( ౷ஷΥྫ )) as a senior auditor, responsible for leading
audit teams, managing project schedules, and preparing audit reports for clients in manufacturing, retail,
and communications industries. From September 2015 to October 2018, Mr. Zhong Luhuan served as
the deputy head of audit department at Haitong Securities Co., Ltd. (ʮ̡ ), where
Mr. Zhong Luhuan conducted audits for internal departments, subsidiaries, and branches, evaluated
investment projects, and ensured regulatory compliance.
From October 2018 to January 2021, Mr. Zhong Luhuan was an investment vice president at
Shanghai Moshi Enterprise Management Consulting Co., Ltd. (ʮ̡ ),
during which Mr. Zhong Luhuan coordinated IPO processes, conducted due diligence, designed
transaction structures, and facilitated NASDAQ listings. From February 2022 to July 2022, he served as
the team leader at China CICC Wealth Management Securities Company Limited Shanghai Branch ( ʕ
ʮ̡ɪऎʱʮ̡ ), responsible for sourcing and screening IPO projects and
providing financial advisory services. From August 2022 to January 2025, Mr. Zhong Luhuan was AI
fund manager at Hony Private Equity Management (Shanghai) Co., Ltd. (၍ଣ (ɪऎ)ࠢ
ʮ̡), where Mr. Zhong Luhuan led the company’s special purpose acquisition company (SPAC) in
Hong Kong, and managed IPO investments in Hong Kong and the US, and oversaw fundraising,
investment, and management, and exit strategies for AI-focused funds. From March 2025 until the
present, Mr. Zhong Luhuan has been a partner at Zhonghong Jin Kong Investment Management Co.,
Ltd. (ʮ̡ ), focusing on investment management and strategic oversight.
Mr. Zhong Luhuan obtained a bachelor degree in commerce from Macquarie University, Australia,
in April 2011, and a master degree in finance from University of Technology Sydney, Australia, in
August 2012.
Ms. Ho Ka Cin Verona (࠺)aged 45, was appointed as our independent non-executive
Director in July 2025. Ms. Ho Ka Cin Verona is primarily responsible for participating in the decision
making for our Company’s significant events, and advising on issues relating to corporate governance
and assessment of our Directors and senior management.
Between September 2003 and August 2005, she worked for Ernst & Young ( τ͑) as a staff
accountant, responsible for audit and assurance. Subsequently, she served as a senior associate in
PricewaterhouseCoopers, S.C. (Hong Kong) ( ౷ശ͑༸) from November 2005 to August 2006,
responsible for audit and assurance. Subsequently, she joined Robertsons as a trainee solicitor in
September 2008 and was later promoted as a Partner and worked until February 2025. Between June
2025 to October 2025, she was a consultant at Chow Justin & De Bedin Solicitors LLP.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 196 ---
She is the founder of I One Consultancy Co., engaging in the business of consultancy services
from February 2025 to present. She has served as a counsel at Jia Yuan Law Office in Hong Kong from
November 2025 to December 2025 and from January 2026 to the present, specialising in securities,
corporate finance, and commercial matters.
Ms. Ho Ka Cin Verona obtained a bachelor degree in accounting and finance from the London
School of Economics and Political Science in UK, in 2003. She was further admitted as a certified
public accountant by the State Board of Accountancy of the State of Delaware in the US, in April 2006.
Ms. Ho Ka Cin Verona obtained a graduate diploma in law from BPP Law School, and a postgraduate
certificate in laws from the University of Hong Kong in 2007 and 2008, respectively.
SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management of our business. The
following table sets forth the key information about our senior management as of the Latest Practicable
Date.
Name Age Present position Role and responsibility
Date of joining our
Group
Date of appointment
as senior management
Zhou Bo (ت).... 50 Chairman of our Board,
executive Director, and
general manager
Overall strategic planning and
development of our Group
April 2013 April 2013
Miao Rui (๿) .... 40 Executive Director and
deputy general manager
Overall management of our Group April 2013 December 2020
Chai Jian (ᄏ) .... 37 Executive Director and
Board secretary
Board-related matters, capital
market matters and corporate
governance of our Group
November 2024 July 2025
Zou Xiaogang
(࡝)......
43 Executive Director, and
supply chain director
Management of the supply chain
centre of our Group
April 2013 October 2021
Chen Yonggang
(࡝)......
54 Executive Director and
technical expert
Overall technology development of
our Group
April 2013 December 2020
Huang Yu ( රຄ) .... 46 Chief financial officer Overall financial matters
of our Group
May 2020 July 2025
Mr. Zhou Bo (ت)aged 50, is our general manager. For his biography, see “— Board of
Directors — Executive Directors.”
Mr. Miao Rui (๿), aged 40, is our deputy general manager. For his biography, see “— Board
of Directors — Executive Directors.”
Dr. Chai Jian (ᄏ), aged 37, is our Board secretary. For his biography, see “— Board of
Directors — Executive Directors.”
Mr. Zou Xiaogang (࡝)aged 43 is our supply chain director. For his biography, see “—
Board of Directors — Executive Directors.”
Mr. Chen Y onggang (࡝)aged 54, is our technical expert. For his biography, see “— Board
of Directors — Executive Directors.”
DIRECTORS AND SENIOR MANAGEMENT
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--- page 197 ---
Mr. Huang Yu ( රຄ), aged 46, is our chief financial officer. He joined our Group in 2020 as a
financial manager and was promoted to the chief financial officer in July 2025, responsible for overall
financial matters of our Group.
Mr. Huang Yu’s work experience prior to joining our Group is set out in the table below:
Name
Place of
establishment Principal business Role Responsibility Employment period
New Leaf (s.z.) precision MFG.
Co., Ltd.*
(ۜ
ʮ̡) ...........
PRC Manufacturing of
high-quality stamping
and mould products
Accounting
staff
Accounting From July 2004 to
November 2006
Shenzhen Bao’an Shanghe Ruide
Electronics Plastic Factory*
(ଉέ̹ᘒτਜɪΥ๿ᅃཥɿ
෧ᇭᅀ)
(Note) ..........
PRC Manufacturing of
computer and
electronic devices
Accountant Accounting and
financial statements
From March 2007 to
February 2008
Shenzhen Honghong Agricultural
Products Distribution Co.,
Ltd.*
(ৣ৔
ʮ̡) ...........
PRC Agricultural product
distribution
Accounting
supervisor
Accounting financial
statements, and
financial analysis
From December 2009
to December 2011
Longzhou Nanhua Sugar Co.,
Ltd.*
(ப΂
ʮ̡) .............
PRC Manufacturing and
distribution of sugar
products
Accounting
supervisor
Accounting, financial
analysis, annual
budget and control
functions
From December 2011
to December 2013
Shenzhen Antoshan Investment
& Development Co., Ltd.*
(࢝
ʮ̡) ...........
PRC Building materials,
electromechanical
products and catering
services
Accountant Accounting, annual
budget management,
and internal control
systems
From May 2014 to May
2017
Shenzhen Antoshan Investment
& Development Co., Ltd.*
(࢝
ʮ̡) ...........
PRC Building materials,
electromechanical
products and catering
services
Overall
management
staff
Compliance
management
From May 2017 to
September 2017
Shenzhen City Zhen Kon
Technology Co., Ltd.*
(ʮ̡ ) ..
PRC Manufacturing of
computer,
communications and
electronic equipment
Accounting
Manager
Establishing the
company’s financial
framework,
conducting financial
budgeting and
operational data
analysis and
overseeing internal
control and
compliance
management
From September 2017
to May 2020
Note:
Shenzhen Bao’an Shanghe Ruide Electronics Plastic Factory* ( ଉέ̹ᘒτਜɪΥ๿ᅃཥɿ෧ᇭᅀ ) was deregistered on 29
October 2011.
DIRECTORS AND SENIOR MANAGEMENT
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In September 2008, he passed the Intermediate Examination for Accounting Professional Technical
Qualification in the Guangdong Province* (ʕॴϽ༊ ) organised by the
Guangdong Provincial Department of Human Resources and Social Security in the PRC.
In April 2021, Mr. Huang Yu attended a training programme for financial controllers organised by
the Shenzhen Stock Exchange. Mr. Huang Yu, through attending long distance learning courses,
obtained a bachelor’s degree of financial management from Jinan University (ɽኪ) in Guangdong,
PRC, in December 2023. In view of his aforementioned experience and academic qualifications, Mr.
Huang Yu possesses the appropriate financial expertise, knowledge, and experience to discharge his
duties as the chief financial officer of our Group effectively.
OTHER INFORMATION IN RELATION TO OUR DIRECTORS AND SENIOR MANAGEMENT
Save as disclosed, none of our Directors and senior management:
(i) held any other positions in our Company or other members of our Group as at the Latest
Practicable Date;
(ii) had any other relationship with any Directors, senior management or substantial
Shareholders or Controlling Shareholders of our Company as at the Latest Practicable Date;
(iii) held any directorship in any other public companies the securities of which are listed on any
securities market in Hong Kong or overseas in the three years prior to the Latest Practicable
Date; and
(iv) have any interest in the Shares within the meaning of Part XV of SFO or is a director or an
employee of a company which has an interest or short position in the Shares and underlying
Shares of our Company.
Save as disclosed above, to the best of the knowledge, information and belief of our Directors
after having made all reasonable enquiries, there were no other matters with respect to the appointment
of our Directors that needs to be brought to the attention of our Shareholders and there was no
information relating to our Directors that was required to be disclosed pursuant to Rule 13.51(2) of the
Listing Rules as at the Latest Practicable Date.
None of our Directors and senior management is related to other Directors and senior
management.
CONFIRMATIONS FROM OUR DIRECTORS
Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred to under
Rule 3.09D of the Listing Rules in July 2025, and (ii) understands his or her obligations as a director of
a listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors has confirmed (i) his or her independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) he or she had no
past or present financial or other interest in the business of our Company or its subsidiaries or any
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connection with any core connected person of our Company under the Listing Rules as of the Latest
Practicable Date, and (iii) that there are no other factors that may affect his or her independence at the
time of his or her appointments.
Rule 8.10 of the Listing Rules
Each of our Directors (excluding our independent non-executive Directors) confirms that as of the
Latest Practicable Date, he or she did not have any interest in a business which competes or is likely to
compete, directly or indirectly, with our business and requires disclosure under Rule 8.10 of the Listing
Rules.
JOINT COMPANY SECRETARIES
Ms. Lui Mei Ka (ྗ), aged 41, joined our Group on 16 May 2025. She will be one of our
joint company secretaries with effect from the Listing Date, responsible for the company secretarial
matters of our Company.
Ms. Lui Mei Ka is currently a member of the Hong Kong Institute of Certified Public Accountants
and the managing director of Merit Corporate Services Company Limited. Ms. Lui Mei Ka has also
been an independent non-executive director of China Tangshang Holdings Ltd. (ʮ
̡), a company listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 674), and
GoFintech Quantum Innovation Limited (formerly known as GoFintech Innovation Limited) ( ਷బඎɿ
ʮ̡ ), a company listed on the Main Board of the Hong Kong Stock Exchange (Stock Code:
290), and China Tontine Wines Group Limited (ʮ̡ ), a company listed on the
Main Board of the Hong Kong Stock Exchange (Stock Code: 389), and Ab&B Bio-Tech CO., LTD. JS
(ʮ̡ ), a company listed on the Main Board of the Hong Kong Stock
Exchange (Stock Code: 2627) since 21 April 2017, 19 September 2023, 30 September 2024 and 27 May
2026 respectively.
Ms. Lui Mei Ka has over 17 years of experience in financial management and corporate finance.
From March 2014 to May 2016, she was the company secretary and financial controller of LT
Commercial Real Estate Limited, a company previously listed on the Main Board of the Hong Kong
Stock Exchange (Stock Code: 112), which was engaged in property development and investment. From
October 2016 to July 2018, she was the chief financial officer and company secretary of GR Life Style
Company Limited (formerly known as GR Properties Limited) (ʮ̡ ), a company listed
on the Main Board of the Hong Kong Stock Exchange (Stock Code: 108), which is engaged in property
development and investment. Ms. Lui Mei Ka obtained a bachelor’s degree in business administration
from The Chinese University of Hong Kong in Hong Kong, PRC, in May 2006.
Dr. Chai Jian (ᄏ), aged 37, will be one of our joint company secretaries with effect from the
Listing Date. For his biography, see “— Board of Directors — Executive Directors.”
AUTHORISED REPRESENTATIVES
Mr. Zhou Bo and Dr. Chai Jian are the authorised representatives of our Company for the purpose
of the Listing Rules.
BOARD COMMITTEES
Our Company has established four committees under the Board in accordance with the relevant
laws and regulations in mainland China, the Articles of Association and the Corporate Governance
Code under the Listing Rules, including the Strategy and Sustainable Development Committee, the
Audit Committee, the Nomination Committee and the Remuneration and Appraisal Committee.
DIRECTORS AND SENIOR MANAGEMENT
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Strategy and Sustainable Development Committee
Our Company established the Strategy and Sustainable Development Committee in compliance
with the Articles of Association. The primary duties of the Strategy and Sustainable Development
Committee are to review our Company’s long-term development strategies and major investment
decisions, and to make recommendations to our Board. The Strategy and Sustainable Development
Committee comprises two executive Directors, namely Mr. Zhou, and Mr. Miao Rui, and one
independent non-executive Director, namely Ms. Ho Ka Cin Verona. Mr. Zhou is the chairperson of the
Strategy and Sustainable Development Committee.
Audit Committee
Our Company established the Audit Committee with written terms of reference in compliance with
Rule 3.21 of the Listing Rules and the Corporate Governance Code and Corporate Governance Report
as set out in Appendix C1 to the Listing Rules. The Audit Committee has three members, namely Mr.
Chen Haiping, Ms. Ho Ka Cin Verona and Mr. Yu Lijie. Mr. Chen Haiping, our independent
non-executive Director, has been appointed as the chairperson of the Audit Committee, and has the
appropriate professional qualifications required under the Listing Rules. The primary duties of the Audit
Committee are to review our Company’s financial information and its disclosure, supervise and evaluate
internal and external audit work and internal control, and to provide our Board with professional
advice.
Remuneration and Appraisal Committee
Our Company established the Remuneration and Appraisal Committee with written terms of
reference in compliance with Rule 3.25 of the Listing Rules and the Corporate Governance Code and
Corporate Governance Report as set out in Appendix C1 to the Listing Rules. The Remuneration and
Appraisal Committee has three members, namely Mr. Chen Haiping, Ms. Ho Ka Cin Verona and Mr.
Miao Rui. Mr. Chen Haiping, our independent non-executive Director, has been appointed as the
chairperson of the Remuneration and Appraisal Committee. The primary duties of the Remuneration and
Appraisal Committee are to formulate the appraisal standards for Directors and senior management,
conduct appraisal, and formulate and review the remuneration policies and proposals for Directors and
senior management.
Nomination Committee
Our Company established the Nomination Committee with written terms of reference in
compliance with the Corporate Governance Code and Corporate Governance Report as set out in
Appendix C1 to the Listing Rules. The Nomination Committee has three members, namely Ms. Ho Ka
Cin Verona, Mr. Chen Haiping and Mr. Miao Rui. Mr. Chen Haiping, our independent non-executive
Director, has been appointed as the chairperson of the Nomination Committee. The primary duties of
the Nomination Committee are to assess the candidates and review selection criteria and procedures for
Directors and senior management, and to make recommendations to the Board.
CORPORATE GOVERNANCE
Our Directors recognise the importance of incorporating elements of good corporate governance in
the management structures and internal control procedures of our Group so as to achieve effective
accountability. Our Company has adopted the code provisions stated in the Corporate Governance Code.
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Our Company is committed to the view that our Board should include a balanced composition of
executive Directors, non-executive Directors and independent non-executive Directors so that there is a
strong independent element on our Board, which can effectively exercise independent judgement. It is
expected that our Group will be able to continue to comply with the code provisions in the Corporate
Governance Code upon the Listing.
Except for the deviation from paragraph C.2.1 of Part 2 of the Corporate Governance Code, our
Company’s corporate governance practices have complied with the Corporate Governance Code as at
the Latest Practicable Date. Paragraph C.2.1 of Part 2 of the Corporate Governance Code stipulates that
the roles of chairman of the board and chief executive should be separate and should not be performed
by the same individual. We do not have a separate chairman and chief executive and Mr. Zhou currently
performs these two roles. In view that Mr. Zhou has been assuming day-to-day responsibilities in
operating and managing our Group since its incorporation and the steady development of our Group,
our Board believes that with the support of Mr. Zhou’s extensive experience and knowledge in the
business of our Group, vesting the roles of both chairman and chief executive of our Company in Mr.
Zhou strengthens the consistent and solid leadership of our Group, and thereby allows for efficient
business planning and decision which is in the best interest to our Group as a whole. Our Board will
continue to review and consider splitting the roles of chairman of our Board and chief executive of our
Company at a time when it is appropriate by taking into account the circumstances of our Group as a
whole.
Our Directors consider that the deviation from paragraph C.2.1 of Part 2 of the Corporate
Governance Code is appropriate in such circumstances. Notwithstanding the above, our Board is also of
the view that the current management structure is effective for our Group’s operations, and sufficient
checks and balances are in place. Our Board will continue to review the effectiveness of the corporate
governance structure of our Company in order to assess whether separation of the roles of chairman of
our Board and chief executive is necessary.
BOARD DIVERSITY POLICY
Our Company has adopted a board diversity policy (the “ Board Diversity Policy ”), which sets
out its approach to achieve and maintain diversity on the Board in order to enhance the effectiveness of
the Board. Our Company recognises and embraces the benefits of the Board diversity to enhance the
quality of its performance and endeavours to ensure that the Board has appropriate balance and level of
skills, experience and perspectives required to support the execution of its business strategies. Our
Company seeks to achieve Board diversity by selection of candidates for the Board through the
consideration of a number of factors, including but not limited to gender, age, cultural and education
background, professional experience, skills, knowledge and length of service. Our Company has also
taken, and will continue to take into consideration factors based on its own business model and specific
needs from time to time in determining the optimum composition of the Board. All Board appointments
will continue to be based on meritocracy having due regard for the benefits of diversity on the Board.
The ultimate decision will continue to be based on merit and contribution that the selected candidates
will bring to the Board.
Our Board comprises nine members, including one female Director. Our Directors also have a mix
of knowledge and experience in the areas of accounting, legal and engineering. None of the Directors
are related to one another. We have three independent non-executive Directors with different industry
backgrounds, representing around two-third of the members of our Board. Furthermore, the ages of our
Directors range from 37 years old to 55 years old.
We will review the objectives of the Board Diversity Policy from time to time to ensure their
appropriateness and ascertain the progress made towards achieving those objectives. After Listing, the
Nomination Committee will review the Board Diversity Policy and monitor its implementation. The
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Nomination Committee will report annually to shareholders in the corporate governance section of the
annual report of our Company on the process adopted in relation to the Board appointments and the
consideration given to the diversity on the Board.
REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT
The Directors and senior management who receive remuneration are paid in forms of fees,
salaries, allowances, discretionary bonuses, benefits in kind, retirement scheme contributions and
share-based compensation.
For FY2023, FY2024 and FY2025 the aggregate amount of emoluments paid or payable to our
Directors amounted to approximately RMB3.0 million, RMB3.2 million and RMB8.7 million,
respectively.
Under the arrangement currently in force, the aggregate amount of emoluments before taxation to
be accrued to our Directors for the year ending 31 December 2025 was approximately RMB8.7 million.
2, 2 and 2 of the five individuals with the highest emoluments in our Group, respectively were
Directors for the Track Record Period. The total emolument for the remaining individuals among the
five highest paid individuals for FY2023, FY2024 and FY2025 were approximately RMB2.4 million,
RMB2.5 million and RMB4.0 million, respectively.
We confirmed that during the Track Record Period, no remuneration was paid by our Company to,
or receivable by, our Directors, or the five highest paid individuals as an inducement to join or upon
joining our Company or as compensation for loss of office in connection with the management
positions of any subsidiary of our Company.
During the Track Record Period, none of our Directors waived any remuneration. Save as
disclosed above, no other payments have been paid, or are payable, by our Company or any of our
subsidiary to our Directors, Supervisors or the five highest paid individuals during the Track Record
Period.
For more details on remuneration paid to our Directors and senior management and, on an
aggregate basis, the five highest paid individuals of our Group during the Track Record Period, see
Notes 10(a) and 10(c) to the Accountants’ Report as set out in Appendix I to this prospectus; and for
details regarding the Share Incentives granted to our Directors and senior management, see Note 29 to
the Accountants’ Report as set out in Appendix I to this prospectus.
COMPLIANCE ADVISER
Compliance Adviser
We have appointed China Harbour International Capital Limited as our compliance adviser
(“Compliance Adviser ”) pursuant to Rule 3A.19 of the Listing Rules. Our Compliance Adviser will
provide us with guidance and advice as to compliance with the Listing Rules and applicable Hong Kong
laws. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance Adviser will advise us in the
following circumstances:
 before the publication of any regulatory announcement, circular or financial report;
 where a transaction, which might be a notifiable or connected transaction, is contemplated
including share issues and share repurchases;
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 where we propose to use the proceeds of the Global Offering in a manner different from that
detailed in this prospectus or where its business activities, developments or results deviate
from any forecast, estimate, or other information in this prospectus; and
 where the Stock Exchange makes an inquiry of our Company regarding unusual movements
in the price or trading volume of its listed securities or any other matters in accordance with
Rule 13.10 of the Listing Rules.
The term of appointment of our Compliance Adviser shall commence on the Listing Date and
continue until the longer of (i) the date on which our Company complies with the requirements under
Rule 13.46 of the Listing Rules in respect of our financial results for the first full financial year
immediately following the Listing Date, or (ii) the appointment of an independent non-executive
Director who will be ordinarily resident in Hong Kong has been confirmed and approved.
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This section presents certain information regarding our share capital prior to and following the
completion of the Share Subdivision and the Global Offering.
PRIOR TO THE GLOBAL OFFERING
As at the date of this prospectus, the registered share capital of our Company was RMB8,613,074
comprising 8,613,074 Unlisted Shares with a nominal value of RMB1.00 each.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately following completion of the Share Subdivision, the Global Offering and the
conversion of Unlisted Shares into H Shares, our Company’s share capital will be as follows:
Description of Shares Number of Shares
Approximate
percentage of total
share capital
Unlisted Shares .................................... 18,064,480 2.33%
H Shares to be converted from Unlisted Shares ............. 670,981,440 86.67%
H Shares to be issued under the Global Offering ............ 85,162,500 11.00%
Total ............................................ 774,208,420 100.00%
RANKING
Upon completion of the Share Subdivision, the Global Offering and the conversion of Unlisted
Shares into H Shares, the Shares will consist of H Shares and Unlisted Shares. H Shares and Unlisted
Shares are all ordinary Shares in the share capital of our Company. However, apart from certain
qualified domestic institutional investors in the PRC, the qualified PRC investors under the
Shanghai-Hong Kong Stock Connect or the Shenzhen-Hong Kong Stock Connect and other persons who
are entitled to hold our H Shares pursuant to relevant PRC laws and regulations or upon approvals of
any competent authorities, H Shares generally cannot be subscribed for by or traded between legal or
natural persons of the PRC.
Unlisted Shares and H Shares will rank pari passu with each other in all respects and, in
particular, will rank equally for all dividends or distributions declared, paid or made after the date of
this prospectus. All dividends in respect of the H Shares are to be paid by us in Hong Kong dollars or
in the form of H Shares.
MINIMUM PUBLIC FLOAT AND FREE FLOAT
Pursuant to Rule 19A.13A(1) of the Listing Rules, at the time of Listing and at all times
thereafter, our Company must maintain the minimum prescribed percentage of 25% of the issued share
capital of our Company in the hands of the public (as defined in the Listing Rules).
Pursuant to Rule 19A.13C(1), at the time of Listing, our Company must ensure that not less than
10% of the total number of issued shares in the class to which our H shares belong (excluding treasury
shares) are held by the public and are freely tradable (as defined in the Listing Rules), with such shares
having an expected market value of not less than HK$50 million, or an expected market value of not
less than HK$600 million.
SHARE CAPITAL
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CONVERSION OF OUR UNLISTED SHARES INTO H SHARES
Conversion of Unlisted Shares
According to the regulations issued by the CSRC, the holders of our Unlisted Shares may, at their
own option, authorise our Company to apply to the CSRC for conversion of their respective Unlisted
Shares to H Shares, and such converted Shares may be listed and traded on an overseas stock exchange
provided that the required filings with the securities regulatory authorities of the State Council for the
conversion, listing and trading of such converted Shares have been completed. 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 regulatory authorities of the State
Council and the regulations, requirements and procedures prescribed by the relevant overseas stock
exchange.
If any of the Unlisted Shares are to be converted, listed and traded as H Shares on the Stock
Exchange, the filings with the relevant PRC regulatory authorities, including the CSRC, and the
approval of the Stock Exchange are necessary for such conversion. Based on the procedures 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 Shares 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 and 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 class Shareholder voting is required for the
conversion of such 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.
Mechanism and procedures for conversion
After all the requisite filings have been completed and approvals have been obtained, the relevant
Unlisted Shares will be withdrawn from the Unlisted Share register, and our Company 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 register of our Company will be on the
conditions that (i) the H Share Registrar lodges with the Stock Exchange a letter confirming the 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.
Filing with the CSRC for full circulation
According to the Trial Measures promulgated by the CSRC, for a H-share listed company,
shareholders of its Unlisted Shares applying to convert such shares into shares listed and traded on an
overseas trading venue shall conform to relevant regulations promulgated by the CSRC, and authorise
the domestic company to file with the CSRC on their behalf.
In accordance with the Guidance of H-share Companies Applying for “Full Circulation” Business
of Unlisted Shares in China ( H΅͡ሗ “ஷ”ˏ) announced by the
CSRC, an unlisted domestic joint stock company may file with the CSRC for “full circulation”
simultaneously when applying for an overseas initial public offering.
SHARE CAPITAL
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We have filed with the CSRC for, and the CSRC has registered, the conversion of 670,981,440
Unlisted Shares into H Shares on a one-for-one basis upon completion of Listing.
RESTRICTIONS OF SHARE TRANSFER
Pursuant to the PRC Company Law, our Shares issued prior to the Listing shall not be transferred
within one year from the Listing Date. Accordingly, Shares issued by our Company prior to the Listing
Date shall be subject to this statutory restriction and not be transferred within a period of one year from
the Listing Date.
Shares transferred by our Directors and members of the senior management each year during their
term of office shall not exceed 25% of their total respective shareholdings in our Company unless
otherwise permitted by applicable laws and regulations. The Shares that the aforementioned persons
hold in our Company cannot be transferred within half a year after they leave their positions as
Directors and members of the senior management in our Company.
SHAREHOLDERS’ GENERAL MEETINGS
For details of circumstance under which our Shareholders’ general meeting is required, see the
section headed “Summary of the Articles of Association” in Appendix V to this prospectus.
SHARE CAPITAL
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You should read the following discussion and analysis in conjunction with our consolidated
financial statements included in the Accountants’ Report in Appendix I to this prospectus, together
with the accompanying notes. Our consolidated financial information has been prepared in
accordance with IFRS, which may differ in material aspects from generally accepted accounting
principles in other jurisdictions. You should read the entire Accountants’ Report and Unaudited
Interim Condensed Consolidated Financial Information and not merely rely on the information
contained in this section.
The following discussion and analysis, and other parts of this prospectus contain
forward-looking statements that reflect our current views with respect to future events and financial
performance. These statements are based on assumptions and analysis made by us in light of our
experience and perception of historical trends, current conditions and expected future developments,
as well as other factors that we believe are appropriate under the circumstances. However , whether
the actual outcome and developments will meet our expectations and predictions depends on a
number of risks and uncertainties over which we do not have control. In evaluating our business,
you should carefully consider the information provided into “Forward-looking Statements”, “Risk
Factors” and elsewhere in this prospectus.
OVERVIEW
We are a multispectral AI technology enterprise in China. For an introduction of the products and
services offered by our Group, please refer to section headed “Business — Overview” in this
prospectus.
During the Track Record Period, our revenue has increased from RMB117.1 million in FY2023 to
RMB522.6 million in FY2024 and increased to RMB668.5 million in FY2025, with a CAGR of
138.9%.
BASIS OF PREPARATION
Our historical financial information has been prepared in accordance with all applicable IFRS
issued by the International Accounting Standards Board. The Historical Financial Information has been
prepared under the historical cost convention, as modified by the revaluation of financial assets at fair
value through other comprehensive income.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been, and are expected to continue to be, affected by a number of
factors, some of which are outside of our control, including the following:
Our ability to expand and successfully commercialise our innovative products and services
portfolio
Our performance is significantly influenced by our capacity to broaden our market reach,
successfully bring new products to market, and continuously enhance our existing offering portfolio.
We have continuously made technical breakthroughs and launched innovative product and service
offerings in the past with launch of multispectral AI perception-computing integration technology in
2020, release of prototype fire prediction computing product in 2021, launch of miniaturised AI
algorithms modules solution in 2022, and the launch of the fire prediction multispectral AI products,
and commercialisation of our Multispectral AI Large Model Services in 2024.
FINANCIAL INFORMATION
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Our Multispectral AI Large Model Services command higher gross profit margins and have made
significant contributions to our revenue. The commercial success of our Multispectral AI Modules and
Multispectral AI Perception Terminals in FY2024 has led to the acquisition of a number of new
customers and thereby a substantial increase in our sales performance in FY2024.
Our versatile products and solutions covering a wide range of industries
The application of our diverse product and service offerings cover various industries, including
software and information technology services, development and sales of electronic products, data
services, automobile-related manufacturing, valued-added communication, IoT, system integration, and
construction, and cater various clients with differing user application needs. Such use cases include
Multispectral AI Modules and Multispectral AI Perception Terminals for clients including system
integrators with R&D capabilities, and Multispectral AI Large Model Services for clients including
enterprise-level users. See the section headed “Business — Our products and services” in this
prospectus. Typically, these products differ in pricing, raw materials and cost structure, resulting in
varying gross profit margins. Each offering is uniquely positioned with distinct marketing strategies.
Consequently, our revenue and profitability are significantly influenced by our product portfolio.
We believe that our increasingly diverse product and service portfolio allows us to swiftly adapt
to changing market conditions and customer preferences. We have been optimising our portfolio to
enhance our revenue and profitability.
Investment in R&D and innovation capabilities
Our ability to develop new technologies, design new products and services and enhance existing
products and solutions is critical to our business operations and for maintaining our competitive edge.
Our financial performance is dependent on our ability to maintain our R&D and innovation capabilities
and position in the multispectral AI industry, which in turn depends on the investments we make in
R&D. In particular, we have a consistent track record of R&D achievements, including our HtFS file
system, HtOS operating system, miniaturise AI algorithms modules solution and “Zhiyuan Origin Large
Model”, to solidify our multispectral sensing capabilities. It is essential that we continuously identify
and respond to rapidly evolving customer requirements, develop and introduce innovative products and
solutions, enhance existing offerings and features, and generate active market demand for our
multispectral AI products and solutions.
To maintain our leadership in technological innovation, we have built a highly experienced talent
pool with strong expertise and capabilities in relevant fields. Our skilled and talented R&D team plays
a pivotal role in keeping us at the forefront of the multispectral AI industry, making them essential to
our success. During the Track Record Period, we made substantial investments in R&D, as we believe
these capabilities are the cornerstone of our long-term competitiveness and growth prospects. Our total
R&D expenses (including capitalisation of R&D) during the Track Record Period amounted to
RMB191.4 million. As at 31 December 2025, our R&D team comprised 156 members, accounting for
43.1% of our total workforce. Given the limited availability of experienced and specialised R&D
talents, which is in high demand, we remain committed to offering competitive compensation and
benefits packages to attract top talents. Additionally, we focus on nurturing our in-house talent by
providing them with meaningful professional development opportunities to support their growth and
enhance their expertise.
Our ability to manage our costs and expenses and achieve operational efficiency
Our future profitability relies heavily on our ability to manage costs and operating expenses,
which are influenced by several factors, including the costs of components, raw materials, and other
supplies, as well as our operational efficiency.
FINANCIAL INFORMATION
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Our cost of sales primarily consists of raw materials and consumables used. During the Track
Record Period, raw materials and consumables used accounted for 69.9%, 90.1% and 91.9% of the cost
of sales in FY2023, FY2024 and FY2025, respectively.
We strive to enhance operational efficiency and reduce production costs through technological
innovation and optimised supply chain management. In addition, our operating expenses include
research and development expenses, general and administrative expenses, and selling and marketing
expenses, among others. Effective cost control measures remain critical to sustaining our operational
performance. Furthermore, we are actively exploring ways to enhance our manufacturing capabilities to
meet mass production demands while maintaining control over capital expenditures.
Seasonality
Our operating results are subject to seasonal fluctuations. During the Track Record Period, we
typically recorded higher revenue and cost of sales in the second half, primarily due to the impact of
our customers’ annual budgeting and procurement cycles, as well as holidays in the first quarter. Such
fluctuations are seasonal in nature and are not necessarily indicative of our results of operations for the
full year.
Our ability to attract new customers and deepen relationships with existing customers
We provide multispectral product and service offerings, supporting a wide range of application
scenarios. Our management and sales team have extensive industry experience and profound
knowledge, allowing us to build our brand and acquire customers effectively. We endeavour to maintain
stable and long-term business relationships with our customers by delivering comprehensive,
customer-centric services.
Our profitability is directly contingent upon the progress achieved in the development, large-scale
production, and delivery of multispectral AI and other products to our consumers. By forging long-term
partnerships through our go-to-market approach, we enable close collaboration at early project stages.
This allows us to iterate our products and services timely to meet evolving market trends and
end-consumer needs. By attracting new customers and deepening relationships with existing customers,
we plan to further strengthen our presence in the multispectral AI industry.
General factors
Our business and operating results are also affected by general factors affecting the multispectral
AI industry, which include:
 the impact of macroeconomic conditions in China and overseas;
 technological changes affecting the multispectral and AI technology service sectors;
 market demand for multispectral AI product and solution offerings;
 the competitive landscape; and
 relevant laws and regulations, and governmental policies and initiatives.
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MATERIAL ACCOUNTING POLICY INFORMATION AND ESTIMATES
We have identified certain accounting policy information that are significant to the preparation of
our consolidated financial statements. A summary of our material accounting policy information
(including the subjective assumptions and estimates involved) is set forth in Note 4 to the Accountants’
Report in Appendix I to this prospectus. A summary of our revenue recognition policy information is
set forth in Note 6 to the Accountants’ Report in Appendix I to this prospectus.
We continually evaluate the critical accounting estimates and key judgements applied based on
historical experience and other factors, including expectations of future events that are believed to be
reasonable. Nevertheless, actual results may differ from these estimates. We have not changed our
assumptions or estimates in the past and have not noticed any material errors regarding our assumptions
or estimates.
DESCRIPTION OF SELECTED COMPONENTS OF STATEMENTS OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
The following table sets forth our consolidated statements of profit or loss and other
comprehensive income for the years indicated:
FY2023 FY2024 FY2025
RMB’000 RMB’000 RMB’000
Revenue ........................... 117,063 522,568 668,519
Cost of sales ........................ (102,756) (424,399) (519,127)
Gross profit ........................ 14,307 98,169 149,392
Other income ....................... 6,863 5,051 7,430
Other (losses)/gains — net .............. (958) 56 (3,897)
General and administrative expenses ....... (11,874) (13,040) (46,802)
Selling and marketing expenses .......... (16,035) (16,470) (17,700)
Research and development expenses ....... (11,084) (25,151) (50,793)
Net impairment losses on financial assets ... (1,631) (5,413) (6,484)
Operating (loss)/profit ................ (20,412) 43,202 31,146
Finance income ...................... 613 273 207
Finance costs ....................... (3,055) (1,016) (3,862)
(Loss)/Profit before income tax ......... (22,854) 42,459 27,491
Income tax credit/(expense) ............. 4,441 (2,047) 1,863
(Loss)/Profit and total comprehensive
(loss)/income for the year ............ (18,413) 40,412 29,354
Non-IFRS Measure
We define adjusted net (loss)/profit (non-IFRS measure) as net (loss)/profit for the years adjusted
by adding back share-based payment expenses, which is a non-cash item, and listing expenses.
To supplement our consolidated financial statements, we also use adjust net (loss)/profit
(non-IFRS measure) as an additional financial measure, which is not required by, or presented in
accordance with IFRS. We believe this non-IFRS measure facilitates comparisons of operating
performance from year to year and company to company by eliminating potential impacts of certain
items. We believe this measure provides useful information to investors and others in understanding and
evaluating our consolidated results of operations in the same manner as they help our management.
However, our presentation of adjusted net (loss)/profit (non-IFRS measure) may not be comparable to
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similarly titled measures presented by other companies. The use of this non-IFRS measure as an
analytical tool has limitations, and you should not consider it in isolation from, or as a substitute for an
analysis of, our results of operations or financial condition as reported under IFRS.
The following table reconciles our adjusted net (loss)/profit (non-IFRS measure) for the years
presented in accordance with IFRS, which is net loss for the years indicated:
FY2023 FY2024 FY2025
RMB’000 RMB’000 RMB’000
Reconciliation of net (loss)/profit to
adjusted net loss (non-IFRS measure)
(Loss)/profit for the year ................ (18,413) 40,412 29,354
Add:
Listing expenses ..................... — — 17,426
Share-based payment expenses
(1) .......... 242 2,532 8,465
Adjusted net (loss)/
profit (non-IFRS measure) ............ (18,171) 42,944 55,245
Note:
(1) Share-based payment expenses is a non-cash item.
Revenue
In FY2023, FY2024 and FY2025, our revenue was RMB117.1 million, RMB522.6 million and
RMB668.5 million, respectively. During the Track Record Period, we generated our revenue primarily
from the sales of Multispectral AI Modules, Multispectral AI Perception Terminals, Multispectral AI
Large Model Services and Other AI Vision Modules.
The following table sets forth a breakdown of our revenue by products and services for the years
indicated:
FY2023 FY2024 FY2025
RMB’000 % of Total RMB’000 % of Total RMB’000 % of Total
Multispectral AI
Multispectral AI Modules .......... 99,121 84.6 299,228 57.3 209,044 31.3
Multispectral AI Perception Terminals .. 12,586 10.8 61,229 11.7 92,638 13.9
Multispectral AI Large Model Services .. — — 113,791 21.8 355,364 53.1
111,707 95.4 474,248 90.8 657,046 98.3
Others
Other AI Vision Modules .......... 5,150 4.4 47,080 9.0 10,258 1.5
Others ..................... 206 0.2 1,240 0.2 1,215 0.2
5,356 4.6 48,320 9.2 11,473 1.7
Total...................... 117,063 100.0 522,568 100.0 668,519 100.0
Multispectral AI Modules
In FY2023, FY2024 and FY2025, revenue generated from sales of Multispectral AI Modules
amounted to RMB99.1 million, RMB299.2 million and RMB209.0 million, representing 84.6%, 57.3%
and 31.3% of our total revenue for the respective years.
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The following table sets forth the sales volume and average selling price of Multispectral AI
Modules for the years indicated:
FY2023 FY2024 FY2025
Multispectral AI Modules
Sales volume (unit) .................... 160,803 587,183 364,350
Average Selling Price ( RMB/unit) ......... 616.4 509.6 573.7
The average selling price per unit decreased from RMB616.4 in FY2023 to RMB509.6 in FY2024,
mainly reflecting our strategic shift to boost product competitiveness by offering competitive pricing in
order to facilitate customer intake, which enabled us to secure high-volume orders. In particular, we
acquired a major new customer, Customer F, which contributed significant revenue during the year.
In FY2025, the average selling price per unit increased to RMB573.7 from RMB509.6 in FY2024,
represented an increase of 12.6%. The increase was primarily due to our integration of more advanced
algorithms and application scenarios into our products in FY2025. Additionally, our customers were
more willing to pay a higher price for these products in FY2025 because such products with advanced
algorithms and application scenarios integrated created a greater marginal value for our customers.
These products with more advanced algorithms and application scenarios improve the functions and
applicability of such products, and therefore contributed to the increase in gross profit margin of such
products in FY2025. During FY2024, we offered a more competitive price to several large customers in
order to secure more orders, and therefore our average selling price in FY2024 was relatively lower.
Multispectral AI Perception Terminals
In FY2023, FY2024 and FY2025, revenue generated from sales of Multispectral AI Perception
Terminals amounted to RMB12.6 million, RMB61.2 million and RMB92.6 million, representing 10.8%,
11.7% and 13.9% of our total revenue for the respective years.
The following table sets forth the sales volume and average selling price of Multispectral AI
Perception Terminals for the years indicated:
FY2023 FY2024 FY2025
Multispectral AI Perception Terminals
Sales volume (unit) .................... 10,726 62,969 53,045
Average Selling Price (RMB/unit) ......... 1,173.4 972.4 1,746.4
The average selling price per unit decreased from RMB1,173.4 in FY2023 to RMB972.4 in
FY2024, mainly reflecting our strategic shift to boost product competitiveness by offering competitive
pricing in order to facilitate customer intake, which enabled us to secure high-volume orders. In
particular, we acquired a major new customer, Customer F, which contributed significant revenue
during the year.
In FY2025, the average selling price per unit increased significantly to RMB1,746.4, which was
primarily attributable to the sale of our Multispectral Target Identification Terminals to a customer (i.e.
Customer M). These specialised terminals have a substantially higher unit price as compared to that of
our other Multispectral AI Perception Terminals products, because these products are equipped with
high-speed sensitive sensing modules and advanced processing units for high-throughput industrial
sorting and identification operations.
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Apart from the sales of our Multispectral Target Identification Terminals to Customer M, there
was a general increase in the average selling price of the sales of our Multispectral AI Perception
Terminals to other customers, which was mainly attributable to the launch of new products in FY2025
with new features such as upgraded facial recognition models and integrated GPS capabilities. The
upgraded products featured multispectral AI technology with new features, enhancing their overall
capability and scheme adaptation. These developments enabled us to command higher selling prices by
delivering greater value to our customers in specialised application settings.
Multispectral AI Large Model Services
We began generating revenue from Multispectral AI Large Model Services in FY2024. The launch
and commercial adoption of our Multispectral AI Large Model Services contributed RMB113.8 million
in FY2024 and RMB355.4 million in FY2025, representing 21.8% and 53.1% of our total revenue for
the respective years.
Since our Multispectral AI Large Model Services are project-based, the concept of the sales
volume and average selling price are not applicable hereto. For details on the development and
deployment of our Multispectral AI Large Model Services, please refer to the section headed “Business
— Research and Development — Development and Deployment of Our Multispectral AI Large Model
Services” in this prospectus. The recognition of revenue from our Multispectral AI Large Model
Services is made at a single point in time, upon customer acceptance of the project, at which point
control over the customised deliverables is transferred to the customer.
The table below sets forth, to the best of our Directors’ knowledge, the identity, background and
revenue contribution of our Multispectral AI Large Model Services for the years indicated:
FY2024 FY2025
Number of
orders Revenue % of revenue
Number of
orders Revenue % of revenue
RMB’000 % RMB’000 %
Private sector
— Listed companies ............ 4 16,981 14.9 4 12,404 3.5
— Non-listed ................. 10 54,594 48.0 26 293,948 82.7
Sub-total ................... 14 71,575 62.9 30 306,352 86.2
Public sector
— Listed companies ............ 7 42,137 37.0 11 49,012 13.8
— Non-listed ................. 1 79 0.1 — — —
Sub-total ................... 8 42,216 37.1 11 49,012 13.8
Total ..................... 22 113,791 100.0 41 355,364 100.0
Notes:
(1) Private sector refers to civilian-run enterprise which are non-state-owned enterprises.
(2) Public sector refers to state-owned enterprises or government agencies.
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Other AI Vision Modules
In FY2023, FY2024 and FY2025, revenue generated from sales of Other AI Vision Modules
amounted to RMB5.2 million, RMB47.1 million and RMB10.3 million respectively, representing 4.4%,
9.0% and 1.5% of our total revenue for the respective years.
The following table sets forth the sales volume and average selling price of Other AI Vision
Modules for the years indicated:
FY2023 FY2024 FY2025
Other AI Vision Modules
Sales volume (unit) .................... 11,937 146,902 30,661
Average Selling Price (RMB/unit) ......... 431.4 320.5 334.6
The average selling price per unit decreased from RMB431.4 in FY2023 to RMB320.5 in FY2024,
mainly reflecting our strategic shift to boost product competitiveness by offering competitive pricing in
order to facilitate customer intake, which enabled us to secure high-volume orders. In particular, we
acquired a major new customer, Customer F, which contributed significant revenue during the year.
In FY2025, the average selling price per unit was relatively stable at RMB334.6 as compared to
RMB320.5 in FY2024.
Cost of Sales
During the Track Record Period, our cost of sales primarily consisted of (i) raw materials and
consumables used; (ii) staff costs; (iii) depreciation and amortisation; (iv) outsourcing service fees; and
(v) provision for impairment of inventories.
In FY2023, FY2024 and FY2025, our cost of sales was RMB102.8 million, RMB424.4 million
and RMB519.1 million, respectively.
The following table sets forth a breakdown of our cost of sales for the years indicated.
FY2023 FY2024 FY2025
RMB’000 (%) RMB’000 (%) RMB’000 (%)
Raw materials and consumables used ... 71,996 69.9 382,225 90.1 477,164 91.9
Staff costs ................... 9,665 9.4 10,664 2.5 12,519 2.4
Depreciation and amortisation ....... 10,641 10.4 13,536 3.2 16,931 3.3
Software licencing fees ........... 1,392 1.4 972 0.2 2,729 0.5
Outsourcing service fees .......... 1,826 1.8 11,481 2.7 1,072 0.2
Provision for impairment of inventories . 5,742 5.6 4,317 1.0 6,894 1.3
Others ..................... 1,494 1.5 1,204 0.3 1,818 0.4
Total...................... 102,756 100.0 424,399 100.0 519,127 100.0
Gross Profit and Gross Profit Margin
Our gross profit amounted to RMB14.3 million, RMB98.2 million, and RMB149.4 million in
FY2023, FY2024 and FY2025, respectively. Our gross profit margin was 12.2%, 18.8% and 22.3% in
FY2023, FY2024 and FY2025, respectively.
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The following table sets forth a breakdown of our gross profit and gross profit margin by products
and services for the years indicated:
FY2023 FY2024 FY2025
Gross profit
Gross profit
margin Gross profit
Gross profit
margin Gross profit
Gross profit
margin
RMB’000 (%) RMB’000 (%) RMB’000 (%)
Multispectral AI Modules ......... 10,832 10.9 22,753 7.6 23,414 11.2
Multispectral AI Perception Terminals .. 2,481 19.7 15,347 25.1 16,408 17.7
Multispectral AI Large Model Services . — — 56,282 49.5 107,901 30.4
Other AI Vision
Modules .................. 996 19.3 2,976 6.3 802 7.8
Others ..................... (2) (1.0) 811 65.4 867 71.3
Total...................... 14,307 12.2 98,169 18.8 149,392 22.3
The key raw materials and consumables used for our multispectral AI products include
microprocessors and CMOS image sensors, both of which are cost-sensitive components that have
experienced notable price fluctuations in recent years. According to Frost & Sullivan, the average unit
costs of microprocessors and CMOS image sensors were relatively stable during the Track Record
Period. During FY2023, FY2024 and FY2025, the aggregate cost of microprocessors and CMOS image
sensors recognised in our costs of sales amounted to RMB4.2 million, RMB4.0 million and RMB4.1
million, which accounted for approximately 4.0%, 0.9% and 0.8% of our total cost of sales during the
corresponding years, respectively. As the prices of the microprocessors and CMOS image sensors we
purchased during the Track Record Period remained relatively stable, the effect of price fluctuation of
the costs of microprocessor and CMOS image sensors over our gross profit and gross profit margin was
not significant. However, our gross profit margin fluctuated during the Track Record Period as affected
by a combination of other factors, including product mix, customer composition, scale of production,
and pricing strategies.
Our income from others in FY2023 primarily comprise our fee income from maintenance services.
Our income, gross profit and gross profit margin from others increased in FY2024 primarily because we
also received income from subscription services. Our income from others was relatively stable in
FY2025.
Please see the sub-section headed “Year-to-year Comparison of Results of Operations” in this
section below for details relating to the year-to-year comparison of gross profit and gross profit
margins.
Other Income
During the Track Record Period, our other income primarily consisted of (i) government grants;
(ii) value-added tax refund; and (iii) interest income on our term deposits. In FY2023, FY2024 and
FY2025, our other income amounted to RMB6.9 million, RMB5.1 million and RMB7.4 million,
respectively.
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The following table sets forth a breakdown of our other income for the years indicated:
FY2023 FY2024 FY2025
RMB’000 (%) RMB’000 (%) RMB’000 (%)
Government grants (i) ............. 1,986 28.9 2,877 57.0 2,957 39.8
V AT refund(ii) ................. 2,467 36.0 613 12.1 291 3.9
Interest income (iii) .............. 2,410 35.1 1,100 21.8 1,913 25.7
Additional deduction for V AT (iv) ..... — — 458 9.0 2,266 30.6
Others ..................... — — 3 0.1 3 0.0
Total...................... 6,863 100.0 5,051 100.0 7,430 100.0
(i) Government grants represent various subsidies received from the PRC local government authorities as incentives mainly
for our Group’s research and development activities and financing activities.
(ii) In accordance with the Notice of Ministry of Finance and State Administration of Taxation on Value-added Tax (“ VAT”)
Policies for Software Products which was promulgated by the Ministry of Finance and the State Administration of Taxation
on 13 October 2011 and came into effect on 1 January 2011, enterprises engaged in the sales of self-developed software in
the PRC are entitled to the value added tax refund to the portion of value-added tax actually paid which exceeds 3% of the
related sale amounts.
(iii) Interest income comprises interest income on our Group’s term deposits classified as financial assets at amortised cost
calculated using the effective interest method.
(iv) Pursuant to the Announcement [2023] No. 43 “Notice on the Additional Value-Added Tax Deduction Policy for Advanced
Manufacturing Enterprises (ʮѓ )” issued in 2023 by the Ministry of
Finance and the State Taxation Administration, advanced manufacturing enterprises are eligible for a 5% additional V AT
deduction based on deductible input V AT from 1 January 2023 to 31 December 2027.
Other (Losses)/Gains, Net
During the Track Record Period, our other losses and gains, net primarily consisted of (i) net
losses on disposal of financial instruments; (ii) net foreign exchange differences; (iii) net losses on
disposal of property, plant and equipment; and (iv) net gains/(losses) on termination of right-of-use
assets.
The following table sets forth a breakdown of our other losses and gains, net for the years
indicated:
FY2023 FY2024 FY2025
RMB’000 RMB’000 RMB’000
Other (Losses)/ Gains, net
Net losses on disposal of financial
instruments ....................... (940) — (1,762)
Net foreign exchange differences ......... 20 13 29
Net losses on disposal of property, plant and
equipment ........................ (165) (16) (3,792)
Net gains/(losses) on termination of
right-of-use assets ................... 267 (9) 803
Others ............................. (140) 68 825
Total ............................. (958) 56 (3,897)
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General and Administrative Expenses
During the Track Record Period, our general and administrative expenses primarily consisted of
(i) staff costs; (ii) depreciation amortisation; (iii) taxes and surcharges; (iv) consulting and professional
fees; (v) listing expenses and (iv) office expenses.
In FY2023, FY2024 and FY2025, our general and administrative expenses amounted to RMB11.9
million, RMB13.0 million and RMB46.8 million, respectively, representing 10.1%, 2.5% and 7.0% of
our revenue, during the corresponding years.
The following table sets out a breakdown of our general and administrative expenses for the years
indicated:
FY2023 FY2024 FY2025
RMB’000 (%) RMB’000 (%) RMB’000 (%)
Staff costs ................... 6,988 58.9 6,907 52.9 16,249 34.7
Depreciation and amortisation ....... 1,793 15.1 1,966 15.1 2,410 5.1
Taxes and surcharges ............ 647 5.4 1,704 13.1 2,063 4.5
Consulting and professional fees ...... 1,200 10.1 1,150 8.8 5,281 11.3
Office expenses ............... 529 4.5 740 5.7 1,197 2.6
Listing expenses ............... — 0.0 — 0.0 17,426 37.2
Others ..................... 717 6.0 573 4.4 2,176 4.6
Total ..................... 11,874 100.0 13,040 100.0 46,802 100.0
Selling and Marketing Expenses
During the Track Record Period, our selling and marketing expenses primarily consisted of (i)
staff costs; (ii) entertainment; (iii) marketing and promotion expenses; (iv) depreciation and
amortisation; and (v) travelling expenses. In FY2023, FY2024 and FY2025, our selling and marketing
expenses amounted to RMB16.0 million, RMB16.5 million and RMB17.7 million, respectively,
representing 13.7%, 3.2% and 2.6% of our revenue during the corresponding years.
The following table sets out a breakdown of our selling and marketing expenses for the years
indicated:
FY2023 FY2024 FY2025
RMB’000 (%) RMB’000 (%) RMB’000 (%)
Staff costs ................... 8,948 55.8 9,032 54.8 10,980 62.0
Entertainment expenses ........... 1,894 11.8 1,976 12.0 1,272 7.3
Marketing and promotion expenses .... 2,025 12.6 3,158 19.2 2,704 15.3
Depreciation and amortisation ....... 1,380 8.6 871 5.3 981 5.5
Travelling expenses ............. 1,042 6.5 821 5.0 1,245 7.0
Others ..................... 746 4.7 612 3.7 518 2.9
Total ..................... 16,035 100.0 16,470 100.0 17,700 100.0
Research and Development Expenses
During the Track Record Period, our research and development expenses primarily consisted of (i)
staff costs; (ii) depreciation and amortisation; (iii) raw materials and consumables used; (iv)
professional services and other consulting fees; and (v) outsourcing service fees.
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In FY2023, FY2024 and FY2025, our R&D expenses amounted to RMB11.1 million, RMB25.2
million and RMB50.8 million, respectively, representing 9.5%, 4.8% and 7.6% of our revenue,
respectively.
The following table sets out a breakdown of our research and development expenses for the years
indicated:
FY2023 FY2024 FY2025
RMB’000 (%) RMB’000 (%) RMB’000 (%)
Staff costs ................... 9,141 82.5 9,146 36.3 17,533 34.5
Depreciation and amortisation ....... 802 7.2 875 3.5 1,344 2.7
Raw materials and consumables used ... 39 0.4 93 0.4 178 0.4
Professional services and other
consulting fees ............... 711 6.4 630 2.5 655 1.3
Outsourcing service fees .......... 216 1.9 14,203 56.5 30,500 60.0
Others ..................... 175 1.6 204 0.8 583 1.1
Total...................... 11,084 100.0 25,151 100.0 50,793 100.0
Net Impairment Losses on Financial Assets
Net impairment losses on financial assets primarily represent provision of trade and notes
receivable and other receivables. We recorded net impairment loss on financial assets of RMB1.6
million, RMB5.4 million and RMB6.5 million in FY2023, FY2024 and FY2025.
Finance Income
Our finance income comprised interest income from financial assets held for cash management
purposes.
In FY2023, FY2024 and FY2025, our finance income amounted to approximately RMB613,000,
RMB273,000 and RMB207,000, respectively.
Finance Costs
During the Track Record Period, our finance costs mainly consisted of interest expenses on lease
liabilities and on borrowings.
The following table sets forth a breakdown of our finance costs for the years indicated:
FY2023 FY2024 FY2025
RMB’000 (%) RMB’000 (%) RMB’000 (%)
Interest expenses on lease liabilities ... 988 32.3 835 82.2 564 14.6
Interest expenses on borrowings ..... 1,955 64.0 66 6.5 3,002 77.7
Others ..................... 112 3.7 115 11.3 296 7.7
Total...................... 3,055 100.0 1,016 100.0 3,862 100.0
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Income Tax Credit/(Expenses)
During the Track Record Period, our income tax expenses comprised (i) adjustments for current
tax of prior years; and (ii) deferred income tax. In FY2023 and FY2025, our income tax credit were
RMB4.4 million and RMB1.9 million, respectively, whereas our income tax expense was RMB2.0
million in FY2024.
The following table sets forth a breakdown of our income tax (credit)/expenses for the years
indicated:
FY2023 FY2024 FY2025
RMB’000 RMB’000 RMB’000
Adjustments for current tax of prior years ... 19 8 —
Deferred income tax ................... (4,460) 2,039 (1,863)
Total ............................. (4,441) 2,047 (1,863)
During the Track Record Period, our Company has obtained High and New Technology
Enterprises certification and hence is entitled to a preferential corporate income tax rate of 15% for a
valid period of three years. The current High and New Technology Enterprises certificate was issued in
December 2024 and is valid for a period of three years until December 2027. Our subsidiaries were
generally subject to the PRC enterprise income tax at the standard rate of 25% during FY2023, FY2024
and FY2025, except for certain subsidiaries which were eligible for a reduced rate of 20% under the
preferential tax treatments for Small Low-profit Enterprises. The preferential tax treatments for Small
Low-profit Enterprises will be valid until 31 December 2027.
According to the relevant laws and regulations promulgated by the State Taxation Administration
of the PRC, enterprises engaging in research and development activities are entitled to claim 175%
from 2018 onwards (subsequently raised to 200% from 2023 onwards) of their qualifying research and
development expenses incurred as tax deductible expenses when determining their assessable profits for
that year (“ R&D super-deduction ”). During the Track Record Period, we qualify for this preferential
policy and have consistently applied it to reduce its tax liabilities.
Pursuant to the relevant laws and regulations, our Group satisfies all the criteria to be qualified
for the R&D super-deduction. These criteria include being a resident technology-based enterprise
engaged in research and development activities, with clear objective that are carried out continuously to
acquire new scientific and technological knowledge, creatively apply new scientific and technological
knowledge, or substantially improve technologies, products (or services) and services (but not within
the tobacco manufacturing, accommodation and catering, wholesale and retail trade, real estate, leasing
and business services, entertainment and other industries stipulated by the Ministry of Finance and the
State Administration of Taxation). Qualifying research and development expenses directly incurred for
that purpose include, particularly, personnel costs, direct input costs, depreciation, amortisation
expenses, and other expenses (not exceeding 10% of the total deductible R&D expenses). Since the
relevant laws and regulations do not specify a time limit for this preferential policy, our Group can
continue to qualify for this preferential policy provided there are no significant changes to the relevant
laws and regulations.
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YEAR-TO-YEAR COMPARISON OF RESULTS OF OPERATIONS
FY2025 Compared to FY2024
Revenue
Our revenue increased by 27.9% from RMB522.6 million in FY2024 to RMB668.5 million in
FY2025, primarily attributable to (i) the significant increase in the sales of our Multispectral AI Large
Model Services as a result of our services gaining market recognition; (ii) the strong sales performance
from Multispectral AI Perception Terminals; (iii) the implementation of supportive industry policy
boosted market demand; and (iv) the expansion of our customer base.
Multispectral AI Modules
Revenue generated from our Multispectral AI Modules decreased by 30.1% from RMB299.2
million in FY2024 to RMB209.0 million in FY2025, primarily attributable to a 37.9% decrease in sales
volume from 587,183 units in FY2024 to 364,350 units in FY2025, because we focused on customers
with higher gross profit margin; which was partially off-set by a 12.6% increase in average selling price
from RMB509.6 in FY2024 to RMB573.7 in FY2025. The increase in average selling price was
attributable to the launch of our upgraded products in FY2025, such as those tailored for campus
scenarios and more complex outdoor facial recognition environments, as well as upgrades to our
existing product lines. These upgrades incorporated advanced AI models with enhanced functionalities,
such as integrated GPS capabilities, which allowed us to command higher selling prices by better
addressing the evolving needs of our customers. These modules are integrated with advanced algorithms
capable of handling complex scenarios. For example, certain module products are able to (i) operate
with facial recognition at construction sites under challenging lighting conditions, including at night;
(ii) identify unauthorised persons through facial detection; and (iii) detect whether safety helmets are
worn by relevant personnel. In addition, some module products are capable of conducting health checks
within campus environments and can detect chefs who have foreign objects, such as band-aids or rings,
on their hands.
Alongside the decrease of our sales volume from 587,183 in FY2024 to 364,350 in FY2025, the
number of customers and sales orders for our Multispectral AI Modules also decreased from 910
customers and 6,701 orders in FY2024 to 862 customers and 6,336 orders in FY2025, respectively.
These also contributed to the decrease in revenue of our Multispectral AI Modules in FY2025.
Multispectral AI Perception Terminals
Revenue generated from our Multispectral AI Perception Terminals increased by 51.3% from
RMB61.2 million in FY2024 to RMB92.6 million in FY2025, primarily attributable to (i) the fact that
we managed to secure orders for specialised Multispectral Target Identification Terminals with a
substantially higher unit price from Customer M, which accounted for 40.4% of the revenue from
Multispectral AI Perception Terminal products in FY2025; and (ii) that some other existing customers
also increased their orders for our products.
Customer M is a private company based in Shenzhen, primarily engaged in smart manufacturing
and industrial big data solutions. To the best knowledge of the Directors of the Company, Customer M
(i) is a National High-tech Enterprise (৷อҦஔΆุ ) and a Specialised and Innovative Enterprise
(ਖ਼ၚतอΆุ ); (ii) focus on the integration of “data + AI + industrial control” technology to deliver
comprehensive intelligent solutions and services for the industrial manufacturing sector; and (iii) is
committed to building a complete intelligent ecosystem that combines software and hardware for
industrial manufacturing enterprises.
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Initial contact between Customer M and our Group was established in 2024 through an industry
exhibition, at a time when Customer M was seeking a supplier that can meet their technical and
delivery requirements. After exchange of information between Customer M and our Group, we entered
into our first contract in December 2024. Customer M became one of our five largest customers in
FY2025 as a result of the significant orders placed with us during FY2025.
These specialised terminals sold to Customer M have a substantially higher unit price as compared
to that of our other Multispectral AI Perception Terminals products, because these products are
equipped with high-speed sensitive sensing modules and advanced processing units for high-throughput
industrial sorting and identification operations.
Apart from the sales of our Multispectral Target Identification Terminals to Customer M, there
was a general increase in the average selling price of the sales of our Multispectral AI Perception
Terminals to other customers, which was attributable to the launch of new products in FY2025 with
new features such as upgraded facial recognition models and integrated GPS capabilities. The upgraded
products featured Multispectral AI technology with new features such as intelligent environmental
perception and scenario-based anomaly detection, enhancing their overall capability and commercial
value. These developments enabled us to command higher selling prices by delivering greater value to
our customers in specialised application settings.
Although the sales volume decreased by 15.8% from 62,969 units in FY2024 to 53,045 units in
FY2025, the number of customers, sales order received and average selling prices of our Multispectral
AI Perception Terminals increased from 437 customers, 1,483 sales orders and RMB972.4 per unit in
FY2024 to 579 customers, 2,069 sales orders and RMB1,746.4 per unit in FY2025, respectively. These
also contributed to the increase in our revenue from Multispectral AI Perception Terminals in FY2025.
Multispectral AI Large Model Services
Revenue generated from our Multispectral AI Large Model Services increased by 212.3% from
RMB113.8 million in FY2024 to RMB355.4 million in FY2025. This significant growth was primarily
attributable to the securing of several large service contracts in FY2025 as our customer base expanded
and our services gained increasing market recognition. During FY2025, we secured five service
contracts from two of our customers, namely Customers J and K, both of whom were among our five
largest customers for FY2025. In aggregate, these five contracts contributed revenue of RMB159.8
million in FY2025, representing approximately 45.0% of our total revenue from our Multispectral AI
Large Model Services during FY2025. The services to be provided under the service contract with
Customer K were intended for use in information data centres (IDCs), while the services to be provided
under the remaining four service contracts with Customer J were intended for use in intelligent driving
systems and information data centres (IDCs). For detailed background of these two customers, please
refer to the section headed “Business — Marketing, Sales and Customers — Our Customers” in this
prospectus. In addition, since these services were newly launched in FY2024, the low-base effect also
contributed to the substantial increase in revenue from our Multispectral AI Large Model Services in
FY2025.
Alongside the increase in revenue from RMB113.8 million in FY2024 to RMB355.4 million in
FY2025, the number of customers and sales order received of our Multispectral AI Large Model
Services increased from 16 customers and 22 sales orders in FY2024 to 23 customers and 41 sales
orders in FY2025, respectively. The increase in number of customers and sales orders also contributed
to the increase in revenue from Multispectral AI Large Model Services in FY2025.
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Other AI Vision Modules
Revenue generated from our Other AI Vision Modules decreased from RMB47.1 million in
FY2024 to RMB10.3 million in FY2025 primarily because of our adjustment of product mix, focusing
on our other core products and services.
Gross Profit and Margin
Our gross profit increased by 52.2% from RMB98.2 million in FY2024 to RMB149.4 million in
FY2025. This significant growth was primarily driven by the strong performance of our Multispectral
AI Large Model Services, which accounted for 53.1% of total revenue in FY2025, increased from
21.8% in FY2024.
Our gross profit margin rose from 18.8% in FY2024 to 22.3% in FY2025, primarily attributable to
a change in our revenue composition and product mix in FY2025, where our Multispectral AI Large
Model Services products with relatively higher gross profit margin accounted for a larger portion of our
revenue in FY2025.
Multispectral AI Modules
The gross profit of Multispectral AI Modules increased by 2.6% from RMB22.8 million in
FY2024 to RMB23.4 million in FY2025.
Our gross profit margin increased from 7.6% in FY2024 to 11.2% in FY2025. The increase in
gross profit margin was mainly attributable to our strategic shift to prioritise customers with higher
profitability. In particular, the Group proactively ceased accepting orders from customers where the
expected gross profit margin fell below certain level. The increase was also attributable to our
integration of more advanced algorithms and application scenarios into our products in FY2025, which
means that the functions and applicability of such products have been improved. Our customers, such as
customers in the education sector who are required to conduct health checks within campus
environments and safety checks in their kitchen facilities (i.e. detecting chefs who have foreign objects,
such as band-aids or rings, on their hands), were more willing to pay a higher price for these products
because such products created a greater marginal value for our customers. These modules, which
incorporate more advanced algorithms and are capable of handling complex scenarios, contributed to
the increase in the gross profit margin of our Multispectral AI Modules. For example, certain modules
that can identify strangers even under challenging lighting conditions recorded gross profit margins
ranging from 10.0% to 48.8% in FY2025, while other modules that can detect foreign objects on chefs’
hands within a campus environment achieved gross profit margins ranging from approximately 13.7%
to 44.7% in FY2025. These gross profit margins were relatively higher than the overall gross profit
margin of our Multispectral AI Modules, which was approximately 11.2%.
Multispectral AI Perception Terminals
The gross profit of Multispectral AI Perception Terminals showed a growth of 7.2%, increasing
from RMB15.3 million in FY2024 to RMB16.4 million in FY2025, which was in line with the increase
in our corresponding revenue. The gross profit margin slightly decreased from 25.1% in FY2024 to
17.7% in FY2025, primarily attributable to the lower gross profit margin of our Multispectral AI
Perception Terminal products we provided to Customer M, which accounted for 40.4% of our sales of
Multispectral AI Perception Terminals in FY2025. Although the average selling price of Multispectral
AI Perception Terminals we sold to Customer M was substantially higher than that we sold to other
customers during FY2025, the gross profit margin of our Multispectral AI Perception Terminals we sold
to Customer M was relatively lower. The products we sold to Customer M have a lower gross profit
margin because such products are specialised terminals that we need to procure components from third
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parties and the cost of such specialised terminal components is relatively higher than those we used in
other Multispectral AI Perception Terminals we produced for other customers. We cannot pass on all
such costs to Customer M, primarily because these specialised terminal components were sourced
mainly from third parties. This limits our flexibility to apply a higher margin on these components
while maintaining the overall price competitiveness of our products. The increase in costs associated
with the Multispectral AI Perception Terminals produced for Customer M outweighed the increase in
the average selling price resulting from the sales of such terminals to Customer M.
Multispectral AI Large Model Services
Gross profit of Multispectral AI Large Model Services increased from RMB56.3 million in
FY2024 to RMB107.9 million in FY2025 driven by the growth in revenue in FY2025. Gross profit
margin of our Multispectral AI Large Model Services decreased from 49.5% in FY2024 to 30.4% in
FY2025, primarily due to an increase in number of our projects of Multispectral AI Large Model
Services with software and hardware.
The Multispectral AI Large Model Services projects we delivered in FY2024 were primarily
projects without hardware. During FY2025, a larger portion of our projects involved tailored solutions,
customised software and specialised equipment that were specifically designed to meet the needs of
particular customers as compared to that for FY2024. The solutions and software involved include
process design, integration with customers’ existing systems, and software modifications with
customised features, interfaces, or algorithms. In addition, the specialised equipment mainly consists of
electronic hardware, such as computer servers. The complexity of such requirements, together with the
cost of electronic hardware, resulted in a compression of overall gross profit margin for the year.
Moreover, we delivered a higher proportion of projects with hardware in FY2025, and these
projects carried lower gross profit margins. During FY2024, we delivered 4 projects with hardware
components, generating revenue of RMB57.6 million and representing 50.6% of total revenue of
Multispectral AI Large Model Services. In contrast, during FY2025, we delivered 9 projects with
hardware components, generating revenue of RMB257.6 million and representing 72.5% of total
revenue of Multispectral AI Large Model Services. As the hardware components are sourced from
third-party vendors at prevailing market prices, the mark-up on the hardware portion is limited. This is
necessary to maintain the price competitiveness of our services and therefore, such projects carry lower
gross profit margins. Accordingly, the decrease in gross profit margin of Multispectral AI Large Model
Services from FY2024 to FY2025 was primarily attributable to the higher revenue contribution from
hardware-software integrated projects.
Other AI Vision Modules
The gross profit of Other AI Vision Modules decreased from RMB3.0 million in FY2024 to
RMB0.8 million in FY2025, and our gross profit margin slightly increased from 6.3% in FY2024 to
7.8% in FY2025.
Other Income
Our other income increased from RMB5.1 million in FY2024 to RMB7.4 million in FY2025,
primarily a result of (i) the increase in the recognition of 5% additional deduction for V AT by
approximately RMB1.8 million which is calculated based on the deductible input V AT of corresponding
year; and (ii) the increase in interest income by approximately RMB0.8 million.
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Other Losses, Net
Our net other gains decreased from a gain of approximately RMB56,000 in FY2024 to a loss of
approximately RMB3.9 million in FY2025 which was largely due to (i) our losses of approximately
RMB3.8 million recognised on disposal of property, plant and equipment during FY2025 as a result of
the disposal of our machinery and leasehold improvements during the year; and (ii) our losses of
approximately RMB1.8 million arising from discounting letters of credit and banker’s acceptances
issued to us which was partly offset by the partial termination of the lease in our Shenzhen production
base.
General and Administrative Expenses
Our general and administrative expenses increased from RMB13.0 million in FY2024 to RMB46.8
million in FY2025. The increase was mainly attributable to the incurrence of listing expenses of
approximately RMB17.4 million in FY2025 as compared to (i) nil in FY2024; and (ii) an increase in
employee compensation (including both salaries and share-based compensation expenses) by
approximately RMB9.3 million from RMB6.9 million in FY2024 to RMB16.2 million in FY2025
arising from the hiring of additional management and administrative staff in FY2025 to support our
business growth. The number of our management and administrative staff increased from 31 as at 31
December 2024 to 48 as at 31 December 2025, representing an increase of 54.8%.
Selling and Marketing Expenses
Our selling and marketing expenses remained relatively stable at RMB16.5 million and RMB17.7
million in FY2024 and FY2025, respectively.
Research and Development Expenses
Our R&D expenses increased from RMB25.2 million in FY2024 to RMB50.8 million in FY2025,
primarily due to (i) a significant increase in outsourcing R&D service fees from approximately
RMB14.2 million in FY2024 to RMB30.5 million in FY2025, mainly for our development and
customisation of an internal product lifecycle management system for the purpose of improving internal
efficiency from initial concept to product operation, which accounted for RMB2.9 million, and for our
Multispectral AI Large Model Services, including development of surrounding application software
(e.g. user interface) and labour-intensive tasks (such as data tagging). In order to optimise R&D
performance, resource allocation, enhance efficiency, and control overall project cost-effectiveness, we
outsourced such tasks to external professional parties. This enabled us to focus our internal resources
on core technological research revolving around large model algorithms. This includes making
adjustments to algorithmic frameworks, optimising algorithmic parameters, and improving algorithmic
accuracy. Collaboration with external parties also accelerated our delivery process and further improves
our overall efficiency; and (ii) an increase in our staff costs from RMB9.1 million in FY2024 to
RMB17.5 million in FY2025, mainly because of the increase in the number of our research and
development staff from 107 as at 31 December 2024 to 156 as at 31 December 2025.
Net Impairment Losses on Financial Assets
Our net impairment losses on financial assets remained relatively stable at RMB5.4 million and
RMB6.5 million in FY2024 and FY2025, respectively.
Finance Costs
Our finance costs increased from RMB1.0 million in FY2024 to RMB3.9 million in FY2025,
mainly due to an increase in interest expenses on borrowings. This was a result of additional financing
loans that our Group obtained during FY2025 to support our business activities.
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Income Tax Expense and Credit
Our income tax decreased from an expense of RMB2.0 million in FY2024 to a credit of RMB1.9
million in FY2025, primarily because there was a decrease in profit before income tax from RMB42.5
million in FY2024 to RMB27.5 million in FY2025. Despite recording a profit before income tax in
FY2025, we still recorded an income tax credit in FY2025 mainly because we were eligible for R&D
super deduction of RMB7.8 million on the R&D expenses in FY2025.
Profit/Loss for the Y ear
As a result of foregoing, our profit for the year decreased from RMB40.4 million in FY2024 to
RMB29.4 million in FY2025.
FY2024 Compared to FY2023
Revenue
Our revenue significantly increased by 346.4% from RMB117.1 million in FY2023 to RMB522.6
million in FY2024. This growth was primarily attributable to (i) the relatively strong market demand
for our products targeting safety-related applications; (ii) the acquisition of new customers that
contributed significant orders for our Multispectral AI Modules and Multispectral AI Perception
Terminals; and (iii) the launch of our Multispectral AI Large Model Services. The relatively significant
revenue growth in FY2024 was primarily attributable to the relatively low revenue level in FY2023, as
a result of the slow down of the economy.
Multispectral AI Modules
Revenue from Multispectral AI Modules surged from RMB99.1 million in FY2023 to RMB299.2
million in FY2024. The growth was driven by a 265.2% increase in sales volume from 160,803 units in
2023 to 587,183 units in 2024, attributable to the acquisition of new customers that brought in
significant orders; the increase was partially offset by a 17.3% decrease in average selling price per unit
from RMB616.4 to RMB509.6, which was primarily attributable to a volume-based pricing discount
offered to Customer F, a newly acquired customer with large purchase orders as part of customised
safety and monitoring solutions, for use in smart city projects with application scenarios such as smart
city infrastructure. We became acquainted with Customer F through participation in a trade fair and
exhibition. To the best knowledge of the Directors, Customer F is primarily engaged in the research,
development, production and sale of communication and IoT-related products. Customer F supplies its
products to customers in, among others, smart city, public services, banking and industrial park sectors,
which place a strong emphasis on product quality and reliability. The profile and performance
requirements of Customer F’s end customers are aligned with the features and quality standards of our
products. As a result, our products have been adopted by Customer F for use in its products,
contributing to a significant increase in our sales volume to Customer F during FY2024.
At the same time, our prior investments in research and development successfully led into product
upgrades and technological advancements for more complex outdoor facial recognition environments in
2024, which were well received by the market and aligned with customer needs. We offered a
volume-based pricing discount to our existing major customer, Customer G, who placed new and
sizeable orders for our Multispectral AI Modules in FY2024 for use in multispectral warning
technological systems by small, medium and micro enterprises. Moreover, our existing Customer I also
placed new and sizeable orders for Multispectral AI Modules with specification requirements for use in
conference room upgrade projects by downstream customers.
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Customer F, Customer G and Customer I contributed revenue of RMB118.1 million, RMB36.1
million and RMB28.0 million, respectively, in FY2024, representing newly added revenue and
constituting approximately a combined 60.9% of our total revenue from our Multispectral AI Modules
for FY2024.
During FY2024, the Multispectral AI Modules we sold to Customer F and G had average selling
prices of approximately RMB420.1 and RMB469.9 per unit, respectively. According to Frost &
Sullivan, our industry consultant, these average selling prices represent discounts of 26.8% and 18.1%,
respectively, compared to the market average selling price of RMB574.0 per unit. Our Directors are of
the view that these substantial discounts not only reflected the large purchase orders placed by
Customers F and G, which accounted for 47.9% and 13.1%, respectively, of our total sales volume of
our Multispectral AI Modules during FY2024, but is also in line with our strategy to ensure our
competitiveness and will promote business and profit sustainability by gaining new customers and
customers with sizeable orders.
Multispectral AI Perception Terminals
Revenue from Multispectral AI Perception Terminals surged from RMB12.6 million in FY2023 to
RMB61.2 million in FY2024. The substantial growth in product revenue was driven by a significant
487.1% surge in sales volume from 10,726 units in FY2023 to 62,969 units in FY2024 due to
successful acquisition of Customer F and other certain new customers, and the launch of new products
with new features such as upgraded facial recognition models and occlusion detection; the increase was
partially offset by a 17.1% decrease in average selling price per unit from RMB1,173.4 to RMB972.4.
The decrease in average selling price was primarily attributable to strategic volume-based pricing
discounts to secure large orders from major customers amid market competition, which in turn
generated economies of scale. For instance, Customer F primarily purchased our Multispectral AI
Perception Terminals for biometric identification and safety and emergency response management for
use in smart city projects. For reasons for the increase of purchase from Customer F with us, please
refer to paragraphs headed “Year-to-year Comparison of Results of Operations — FY2024 Compared to
FY2023 — Revenue — Multispectral AI Modules” in this section.
Multispectral AI Large Model Services
Multispectral AI Large Model Services first recorded revenue of RMB113.8 million in FY2024 as
a result of the market introduction of this new service offering.
Other AI Vision Modules
Revenue from Other AI Vision Modules increased significantly from RMB5.2 million in FY2023
to RMB47.1 million in FY2024, mainly due to our lower pricing in light of economies of scale,
enabling us to offer more competitive value propositions to our customers. Such strategy in turn
allowed us to successfully secure major new clients. In particular, we secured a major new customer,
Customer F, which contributed revenue of RMB39.4 million and represented 83.7% of our total revenue
from our Other AI Vision Modules in FY2024.
Gross Profit and Gross Profit Margin
Our gross profit significantly increased by 586.2% from RMB14.3 million in FY2023 to RMB98.2
million in FY2024, primarily as a result of our revenue growth.
Our gross profit margin rose from 12.2% in FY2023 to 18.8% in FY2024, mainly due to launch of
our Multispectral AI Large Model services which enjoyed a higher gross profit margin than those of the
other products.
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Multispectral AI Modules
The gross profit of Multispectral AI Modules increased from RMB10.8 million in FY2023 to
RMB22.8 million in FY2024, mainly due to the increase in our corresponding revenue.
Our gross profit margin decreased from 10.9% in FY2023 to 7.6% in FY2024, primarily due to
our competitive pricing for acquisition of a major new customer and high-volume orders; the decrease
in gross profit margin was partially offset by the lower production costs driven by our increase in sales
volume, which was reflected by the decrease in unit costs from approximately RMB549.0 in FY2023 to
RMB470.8 in FY2024, resulting in reduced average fixed costs per unit and improved operational
efficiency. Furthermore, due to economies of scale, we were able to offer strategic volume-based
pricing discounts whilst maintaining approximately 5.0% and 6.4% gross profit margins to Customer F
and Customer G, respectively. Moreover, due to higher hardware costs as a result of additional
specification requirements, our gross profit margin to Customer I was approximately 2.9%, compared to
our average gross profit margin of 7.6%.
Our Directors are of the view that the offering of new customer and volume-based discounts to
our new customers and customers with sizeable orders, respectively, are in line with our business
strategy to ensure our competitiveness and to promote business and profit sustainability. These
customers are generally considered our strategic partners with whom we aim to build long-term
relationships. For details of our pricing policy, please refer to the section headed “Business —
Marketing, Sales and Customers — Pricing Policy”. In fact, the gross profit margin of our Multispectral
AI Modules increased from 7.6% for FY2024 to 11.2% for FY2025, which is primarily a result of our
strategic focus on customers with higher gross profit margin. For details of our gross profit margin
during FY2025, please refer to the paragraphs headed “FY2025 Compared to FY2024 — Gross Profit
and Margin — Multispectral AI Modules” in this section.
Multispectral AI Perception Terminals
Our gross profit of Multispectral AI Perception Terminals increased by 518.6% from RMB2.5
million in FY2023 to RMB15.3 million in FY2024, which was generally in line with the increase in our
corresponding revenue.
Our gross profit margin increased from 19.7% in FY2023 to 25.1% in FY2024. Our gross profit
margin increased despite a reduction in average selling price, primarily due to the lower production
costs driven by our increase in sales volume, which was reflected by the decrease in unit costs from
approximately RMB942.1 in FY2023 to RMB728.7 in FY2024. Furthermore, due to economies of scale,
we were able to offer strategic volume-based pricing discounts whilst maintaining an approximately
5.4% gross profit margin to Customer F, compared to our average gross profit margin of 25.1%.
Similarly, our Directors are of the view that the offering of strategic volume-based discounts to
customers with sizeable orders is in line with our business strategy to ensure our competitiveness and to
promote business and profit sustainability. For details of our pricing policy, please refer to the section
headed “Business — Marketing, Sales and Customers — Pricing Policy”.
Multispectral AI Large Model Services
Our Multispectral AI Large Model Services first recorded gross profit of RMB56.3 million in
FY2024, with a gross profit margin of 49.5%.
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Other AI Vision Modules
The gross profit of Other AI Vision Modules increased by 198.8% from RMB1.0 million in
FY2023 to RMB3.0 million in FY2024, and our gross profit margin decreased from 19.3% in FY2023
to 6.3% in FY2024. The decrease in gross profit margin was mainly due to strategic volume-based
pricing discounts given to secure large orders from a major customer amid market competition, which
in turn generated economies of scale, resulting in reduced average fixed costs per unit and improved
operational efficiency. In particular, we secured a major new customer, Customer F, which contributed
revenue of RMB39.4 million from our Other AI Vision Modules in FY2024.
Other Income
Our other income decreased from RMB6.9 million in FY2023 to RMB5.1 million in FY2024. The
decrease was mainly due to a decrease in V AT refunds and interest income.
Other Gains/Losses, Net
We incurred a net other losses of RMB1.0 million in FY2023 and a net other gains of RMB56,000
in FY2024, primarily as a result of the net losses on disposal of financial instruments incurred in
FY2023.
General and Administrative Expenses
Our general and administrative expenses remained relatively stable at RMB11.9 million in
FY2023 and RMB13.0 million in FY2024.
Selling and Marketing Expenses
Our selling and marketing expenses remained relatively stable at RMB16.0 million in FY2023 and
RMB16.5 million in FY2024, respectively.
Research and Development Expenses
Our R&D expenses increased from RMB11.1 million in FY2023 to RMB25.2 million in FY2024,
primarily due to a significant increase in outsourcing service fees from RMB0.2 million to RMB14.2
million. The increase in outsourcing service fees in FY2024 was primarily driven by several large-scale
R&D projects. Among these, the development and customisation of our internal product lifecycle
management system accounted for RMB8.0 million. In addition, the research and development of a
customised system for our customers constituted RMB4.4 million of the total outsourcing service fees,
while data tagging and annotation services accounted for RMB1.5 million. Other research and
development activities constituted the remaining RMB0.3 million of the total outsourcing service fees.
The increase in our outsourcing service fees in FY2024 was a direct and strategic result of our
Company’s development and customisation of an internal product lifecycle management system for the
purpose of improving internal efficiency from initial concept to product operation. It also represented
our focused investment in the accelerated development and commercial deployment of our Multispectral
AI Large Model Services. As the development of AI algorithms for use in our Multispectral AI Large
Model Services commencing from FY2024 relies heavily on labour-intensive tasks, we need to
outsource such tasks to optimise resource allocation, enhance efficiency, and control overall project
cost-effectiveness, thereby allowing the Company to concentrate its internal resources on core
technological research and development revolving around large model algorithms. This includes making
adjustments to algorithmic frameworks, optimising algorithmic parameters, and improving algorithmic
accuracy. Our clients come from various industries, which often require complete and comprehensive
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solutions. As a result, our core technologies alone may not be sufficient to efficiently address the
requirements of specific application scenarios, and therefore certain tasks are outsourced so as to
accelerate our delivery process and overall efficiency.
Net Impairment Losses on Financial Assets
Our net impairment losses on financial assets increased from RMB1.6 million in FY2023 to
RMB5.4 million in FY2024, mainly due to the increase in trade and notes receivables and other
receivables, which is in line with the growth of our revenue.
Finance Income
Our finance income remained relatively stable at RMB0.6 million in FY2023 and RMB0.3 million
in FY2024.
Finance Costs
Our finance costs decreased from RMB3.1 million in FY2023 to RMB1.0 million in FY2024,
mainly caused by the decrease in interest expenses on borrowings in FY2024.
Income Tax (Credit)/Expense
We incurred income tax credit of RMB4.4 million in FY2023 and income tax expense of RMB2.0
million in FY2024, respectively, primarily as a result of us being loss making before tax in FY2023,
while enjoying profit before tax in FY2024. The effective tax rate was 4.8% in FY2024, falling below
the preferential income tax rate of 15%, primarily as a result of our application of the R&D
super-deduction policy.
Profit/Loss for the Y ear
As a result of the foregoing, our profit for the year is RMB40.4 million in FY2024, a significant
turnaround from a loss for the year of RMB18.4 million in FY2023.
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DISCUSSION OF CERTAIN SELECTED ITEMS FROM THE CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION
The table below sets forth selected information from our consolidated statements of financial
position as at the dates indicated:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment ............ 22,959 20,555 25,493
Right-of-use assets .................... 21,062 15,283 11,251
Intangible assets ...................... 37,407 62,734 110,973
Deferred tax assets .................... 5,625 3,586 5,449
Other non-current assets ................ — 859 —
87,053 103,017 153,166
Current assets
Inventories .......................... 55,967 31,577 80,194
Trade and notes receivables .............. 19,817 145,676 184,423
Prepayments and other receivables ......... 8,085 27,066 158,345
Other current assets (1) .................. 15,759 13,824 20,654
Notes receivables at fair value through other
comprehensive income ................ 663 479 —
Term deposits and restricted cash ......... 36,502 26,898 61,554
Cash and cash equivalents ............... 37,115 56,705 65,556
173,908 302,225 570,726
Current liabilities
Trade and notes payables ............... 45,060 79,557 45,882
Accruals and other payables ............. 10,044 23,516 25,192
Other current liabilities ................. — 862 998
Current income tax liabilities ............ 1 9——
Contract liabilities .................... 21,280 20,280 75,942
Lease liabilities ...................... 8,613 10,159 5,672
Borrowings ......................... — 28,584 152,272
85,016 162,958 305,958
Net current assets ..................... 88,892 139,267 264,768
Total assets less current liabilities ........ 175,945 242,284 417,934
Non-current liabilities
Lease liabilities ...................... 14,512 6,943 6,730
Borrowings ......................... — 964 49,008
14,512 7,907 55,738
Net assets .......................... 161,433 234,377 362,196
Capital and reserves
Share capital ....................... 7,903 8,155 8,613
Reserves .......................... 153,530 226,222 353,583
Total equity ......................... 161,433 234,377 362,196
Note:
(1) Other current assets mainly comprise deductible input V AT, which refers to input V AT held but not yet offset against
output V AT for tax purposes.
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Property, Plant and Equipment
During the Track Record Period, our property, plant and equipment primarily consisted of (i)
machinery and equipment; (ii) motor vehicles; (iii) office equipment and others; (iv) electronic
equipment; and (v) leasehold improvement. The following table sets forth a breakdown of our property,
plant and equipment as at the dates indicated:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Machinery and equipment ............... 9,483 8,462 11,272
Motor vehicles ....................... 1,163 719 275
Office equipment and others ............. 2,017 1,492 2,309
Electronic equipment .................. 220 147 1,459
Leasehold improvement ................ 10,076 9,735 10,178
Total .............................. 22,959 20,555 25,493
Our property, plant and equipment decreased from RMB23.0 million as at 31 December 2023 to
RMB20.6 million as at 31 December 2024, mainly due to the depreciation in FY2024.
Our property, plant and equipment slightly increased from RMB20.6 million as at 31 December
2024 to RMB25.5 million as at 31 December 2025, mainly due to the capital expenditure on electronic
equipment, machinery and equipment and leasehold improvement for our new Zhejiang production
base, which was partially offset by the depreciation in FY2025.
Right-of-Use Assets
Our right-of-use assets are primarily related to our leased lands for our production bases and
offices used in our operations during the Track Record Period. Our right-of-use assets decreased from
RMB21.1 million as at 31 December 2023 to RMB15.3 million as at 31 December 2024 and further
decreased to RMB11.3 million as at 31 December 2025, mainly due to the partial termination of our
lease for our Shenzhen production base and amortisation incurred during the years.
Intangible Assets
During the Track Record Period, our intangible assets consisted of software and system and
development costs. Our intangible assets increased from RMB37.4 million as at 31 December 2023 to
RMB62.7 million as at 31 December 2024 and further to RMB111.0 million as at 31 December 2025,
mainly due to the additions of intangible assets relating to development costs incurred during the
relevant years. All our development costs are intangible assets, primarily cost of R&D projects under
development, which are not yet available for use.
The impairment review for our intangible assets as at 31 December 2023, 2024 and 2025 have
been conducted annually by the management. For details, please refer to Note 18 to the Accountants’
Report set forth in Appendix I to this prospectus.
For the purposes of impairment testing, our development costs with indefinite useful lives have
been allocated to individual cash-generating units (“ CGU”), comprising holding company and most of
the operating subsidiaries. The CGU is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other assets or groups of assets.
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The recoverable amount of the CGU has been determined based on a value-in-use calculation. The
calculation uses cash flow projections based on the financial budgets approved by the management of
our Group covering a five-year period.
Key assumptions and inputs used for the business valuation as at 31 December 2023, 2024 and
2025 are as follows:
31 December
2023 2024 2025
Pre-tax discount rates ................. 15.58% 15.21% 15.14%
Revenue growth rates .................. 1%−346% 1%−37% 2%−25%
Budgeted gross margins ................ 24%−29% 24%−29% 23%−24%
The following describes each of the key assumptions and parameters on which our management
has based its cash flow projections to undertake impairment testing of CGUs:
1. Discount rates
The discount rates used are pre-tax and reflect market assessments of the time value and the
specific risks relating to the industry.
2. Revenue growth rates
The bases used to determine the revenue growth rates in the five-year forecast period are the
historical data of the CGU, management’s expectation of the future market and the average growth rate
achieved by comparable companies. Growth rates beyond the first five years are based on the relevant
industry growth forecasts and did not exceed the average long-term growth rate for the relevant
industry.
3. Budgeted gross margins
The basis used to determine the budgeted gross margins is the average gross margins achieved in
the year immediately before the budget year, adjusted for expected efficiency improvements, and
expected market development.
For details of the values used in the key assumptions for our business valuation as at relevant
balance sheet dates, please refer to Note 18 to the Accountants’ Report set forth in Appendix I to this
prospectus. The values assigned to the key assumptions on market development of the above CGU and
discount rate are consistent with external information sources.
If the recoverable amount of the CGU is estimated to be less than its carrying amount, the
carrying amount of the CGU is reduced to its recoverable amount. The impairment loss will be
recognised in profit or loss. Any change in the assumptions selected by management could materially
affect the value in use calculations used in the impairment testing and therefore may result in an
impairment charge to profit or loss.
As the recoverable amount of CGU as at 31 December 2023, 2024 and 2025 exceeded its carrying
amount, no impairment loss was recognised against the development costs of intangible assets with
indefinite useful lives associated with the CGU for the year then ended.
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For sensitivity analysis conducted during the impairment review as at 31 December 2023, had
there been a reduction in the total forecasted revenue by 7.04% or an increase in the discount rate of
27.76 percentage point each in isolation, the recoverable amount of our Group’s intangible assets would
be close to the breakeven point. As at 31 December 2023, had there been a reduction in the total
forecasted revenue by 5% or an increase in the discount rate of 5 percentage point each in isolation, the
headroom would be decreased by approximately RMB216,524,000 and RMB83,584,000, respectively.
For sensitivity analysis conducted during the impairment review as at 31 December 2024, had
there been a reduction in the total forecasted revenue by 9.36% or an increase in the discount rate of
36.20 percentage point each in isolation, the recoverable amount of our Group’s intangible assets would
be close to the breakeven point. As at 31 December 2024, had there been a reduction in the total
forecasted revenue by 5% or an increase in the discount rate of 5 percentage point each in isolation, the
headroom would be decreased by approximately RMB287,464,000 and RMB183,709,000, respectively.
For sensitivity analysis conducted during the impairment review as at 31 December 2025, had
there been a reduction in the total forecasted revenue by 3.71% or an increase in the discount rate of
21.38 percentage point each in isolation, the recoverable amount of our Group’s intangible assets would
be close to the breakeven point. As at 31 December 2025, had there been a reduction in the total
forecasted revenue by 5% or an increase in the discount rate of 5 percentage point each in isolation, the
headroom would be decreased by approximately RMB445,830,000 and RMB227,530,000, respectively.
Inventory
Our inventories primarily consist of (i) raw materials; (ii) work in progress; (iii) finished goods;
(iv) outsourced processing materials; and (v) goods in transit.
We adopt different strategies to manage our inventory in order to deal with non-seasonal and
seasonal demands. We make forecast of the necessary inventory level based on orders received from our
customers. We normally classify our raw materials into three categories: (i) strategic materials, such as
sensors and chips; (ii) project-specific materials; and (iii) general materials. For strategic materials
which are normally high-value versatile core components, we maintain a cooperative relationship with
our suppliers to ensure a stable and sufficient supply. For project-specific materials, purchases are made
based on project order requirements to avoid stockpiling. For general materials which are of low value,
we conduct periodic reviews of inventory levels and replenish as needed.
We have implemented a comprehensive inventory management system covering raw materials,
work-in-progress and finished goods, with a view to enhancing operational efficiency, minimising stock
obsolescence risks and maintaining optimal inventory levels. According to our internal policies, our
sales forecasts are submitted by the sales department to the production department by the 15th day of
each month. Based on these forecasts, the production department formulates production plans, detailing
the raw materials involved. The procurement department then prepares the procurement plan for the
following month by the 28th day of each month based on the production plan, safety stock requirements
and existing inventory levels, which is subject to departmental approval before execution. Upon receipt
of the inventory, the warehouse department shall complete a goods inspection within 2 working days,
and items requiring quality inspection are tested by the quality control department within 3 working
days. Accepted inventory is entered into the inventory management system within 24 hours. We also
conduct monthly cycle counts on at least 30% of all inventory, and perform a full inventory count on an
annual basis prior to financial closing.
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The following table sets forth our inventories as at the dates indicated:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials ....................... 18,766 16,312 18,863
Work in progress ..................... 8,297 7,593 13,487
Finished goods ....................... 4,537 6,090 6,529
Outsourced processing materials .......... 1,017 778 42
Goods in transit ...................... 30,419 8,192 48,895
63,036 38,965 87,816
Less: provision for impairment ........... (7,069) (7,388) (7,622)
Total .............................. 55,967 31,577 80,194
Our inventory decreased from RMB56.0 million as at 31 December 2023 to RMB31.6 million as
at 31 December 2024, primarily due to the decrease of goods in transit as at 31 December 2023, which
was delivered to our customers during FY2024.
Our inventory increased significantly from RMB31.6 million as at 31 December 2024 to RMB80.2
million as at 31 December 2025, primarily due to the increase in our goods in transit by approximately
RMB40.7 million from approximately RMB8.2 million as at 31 December 2024 to approximately
RMB48.9 million as at 31 December 2025. The increase in our goods in transit was because, as of 31
December 2025, we were delivering our Multispectral AI Large Model Services of approximately
RMB48.8 million to one of our customers. The customer has already made a prepayment of an
equivalent amount, which has been recorded in our books as one of our contract liabilities. As our
Multispectral AI Large Model Services being delivered are just one of the components within the bigger
projects of relevant companies, the check before acceptance procedure for our Multispectral AI Large
Model Services takes a longer period of time. Therefore, the customer was still carrying out its check
before acceptance procedure as of 31 December 2025.
The following is an ageing analysis of our inventories by inventory type (before provision for
impairment) as at the dates indicated.
Raw
materials
Work in
progress
Finished
goods
Outsourced
processing
materials
Goods in
transit Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2023
Within 1 year ........... 7,643 4,435 3,264 1,017 30,419 46,778
1−2 years ............... 5,069 1,318 447 — — 6,834
2−3 years ............... 5,640 2,389 814 — — 8,843
Over 3 years ............ 414 155 12 — — 581
Total .................. 18,766 8,297 4,537 1,017 30,419 63,036
As at 31 December 2024
Within 1 year ............ 8,483 4,624 5,516 778 8,192 27,593
1−2 years .............. 2,014 422 411 — — 2,847
2−3 years .............. 2,607 531 82 — — 3,220
Over 3 years ............ 3,208 2,016 81 — — 5,305
Total ................. 16,312 7,593 6,090 778 8,192 38,965
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Raw
materials
Work in
progress
Finished
goods
Outsourced
processing
materials
Goods in
transit Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2025
Within 1 year ........... 13,679 10,590 4,859 42 48,895 78,065
1−2 years ............... 758 484 1,401 — — 2,643
2−3 years ............... 997 261 206 — — 1,464
Over 3 years ............ 3,429 2,152 63 — — 5,644
Total .................. 18,863 13,487 6,529 42 48,895 87,816
The following table sets forth our inventory turnover days for the years indicated.
FY2023 FY2024 FY2025
Inventory turnover days (1) ............... 201 44 45
Note: Inventory days is calculated using the average of the opening and closing inventory balance divided by cost of sales for the
relevant years and multiplied by the number of days during such years.
Our inventory turnover days decreased from 201 days in FY2023 to 44 days in FY2024, driven by
the decrease of our inventory decreased from RMB56.0 million as at 31 December 2023 to RMB31.6
million as at 31 December 2024, primarily due to the decrease of goods in transit as at 31 December
2023, which was delivered to our customers during FY2024; and the increased sales execution and
enhanced sales management, with major customer orders largely completed within the year, thereby
leading to an increase in revenue from RMB117.1 million in FY2023 to RMB522.6 million in FY2024
and lower ending inventory balance.
In FY2025, our inventory turnover days remained relatively stable at 45 days.
As at 30 April 2026, RMB36.7 million, or 41.8% of our inventory balance as at 31 December
2025, had been consumed. Our directors are of the view that there is no impairment issue for the
balance of our inventories as at 31 December 2025, because approximately RMB48.9 million, or 61.0%
of our inventory as at 31 December 2025 were goods in transit. These goods in transit primarily
comprise our Multispectral AI Large Model Services being delivered to a customer and pending
completion of the acceptance procedure. As disclosed in this subsection, our Multispectral AI Large
Model Services being delivered are only one component within the larger projects of the relevant
customers. The acceptance check for our Multispectral AI Large Model Services may take a longer
period of time.
Trade and Notes Receivables
Our trade and notes receivables primarily represent receivables in relation to our products or
services. The following table sets forth our trade and notes receivables as at the dates indicated.
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables ..................... 21,243 151,560 195,572
Less: credit loss allowance .............. (2,200) (6,746) (12,147)
19,043 144,814 183,425
Notes receivables ..................... 774 862 998
Total .............................. 19,817 145,676 184,423
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Our trade and notes receivables increased significantly from RMB19.8 million as at 31 December
2023 to RMB145.7 million as at 31 December 2024, primarily due to the improvement in our sales
performance during the relevant year.
Our trade and notes receivables further increased to RMB184.4 million as at 31 December 2025,
which was generally in line with the increase in our revenue from RMB522.6 million in FY2024 to
RMB668.5 million in FY2025 as a result of the increase in demand of our Multispectral AI Large
Model Services.
During the Track Record Period, the credit loss allowance also increased from RMB2.2 million as
at 31 December 2023 to RMB6.7 million as at 31 December 2024, which was generally in line with the
significant growth in trade receivables. It further increased to RMB12.1 million as at 31 December
2025, as a result of increase in our trade receivables aged between one to two years as at 31 December
2025.
The table below sets out a summary of the ageing analysis of our trade receivables as at the dates
indicated based on the invoice date and net of loss allowance:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 6 months ...................... 14,654 137,257 144,195
6 months to 1 year .................... 4,514 13,091 43,074
1 to 2 years ......................... 1,600 477 8,102
2 to 3 years ......................... 93 535 182
Over 3 years ........................ 382 200 19
Total .............................. 21,243 151,560 195,572
Our trade receivables aged within six months increased from RMB14.7 million as at 31 December
2023 to RMB137.3 million as at 31 December 2024 and remained relatively stable at RMB144.2
million as at 31 December 2025, respectively. The increases in our trade receivables aged within six
months as at 31 December 2023, 2024 and 2025 are generally in line with the change in our revenue in
the corresponding years. The increase in trade receivables aged from six months to one year from
RMB4.5 million as at 31 December 2023 to RMB13.1 million as at 31 December 2024, and further to
RMB43.1 million as at 31 December 2025 was primarily due to (i) the rapid expansion of our business
scale, which led to higher overall trade receivables; and (ii) the shift in customer mix, with a higher
proportion of large-scale clients who generally have longer payment cycles.
The following table sets forth our trade receivables turnover days for the years indicated.
FY2023 FY2024 FY2025
Trade receivables turnover days (1) ......... 68 60 95
Note: Trade receivables turnover days is calculated using the average of the opening and closing trade receivables balance
divided by revenue for the relevant year and multiplied by the number of days during such year.
Our trade receivables turnover days were relatively stable at 68 days and 60 days in FY2023 and
FY2024, respectively.
The increase in trade receivables turnover days from 60 days in FY2024 to 95 days in FY2025
was mainly due to some customers with an aggregate amount of approximately RMB67.9 million,
which accounted for 34.7% of our trade and notes receivables as at 31 December 2025, were late
FINANCIAL INFORMATION
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settling our invoices. These customers who were late settling our invoices were primarily state-owned
enterprises, listed companies and companies with registered capital of RMB5.0 million or more. The
increase in our trade receivables turnover days was also a result of our shift in customer mix, with a
higher proportion of large-scale clients who generally have longer payment cycles. As at 31 December
2025, approximately RMB179.0 million, or 97.6% of our trade receivable of RMB183.4 million was
attributable to large-scale clients which placed relatively higher-volume orders with us.
As at 30 April 2026, RMB41.8 million, or 61.5% of our overdue trade and notes receivables of
RMB67.9 million as at 31 December 2025, had been settled.
Having considered that (i) a substantial portion of our trade receivables as at 31 December 2025
was aged within one year; (ii) the balances were primarily due from customers with whom we maintain
well-established commercial relationships or who are reputable and financially sound corporations. As
at 31 December 2025, among the total trade and notes receivables of RMB183.4 million, RMB25.4
million, RMB12.7 million and RMB130.6 million were due from state-owned enterprises, listed
companies and companies with registered capital of RMB5.0 million or more, which accounted for
13.9%, 6.9% and 71.2% of our total trade and notes receivables, respectively; and (iii) there were no
material ongoing or potential disputes with these customers, we are of the view that adequate
provisions have been made for our trade receivables.
As at 30 April 2026, RMB97.4 million, or 49.8% of our trade and notes receivables as at 31
December 2025, had been settled.
Prepayments and Other Receivables
Our prepayments and other receivables under current assets mainly consisted of (i) prepayment to
suppliers; and (ii) deposit and warranties. The following table sets forth a breakdown of our
prepayments as at the dates indicated:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments:
Prepayment to suppliers ................ 2,727 25,089 156,297
Prepaid listing expenses ................ — — 305
Other receivables:
Deposits and warranties ................ 3,262 3,209 3,527
Due from related parties ............... 2,696 63 —
Others ............................ 558 240 332
9,243 28,601 160,461
Less: credit loss allowance .............. (1,158) (1,535) (2,116)
Total ............................. 8,085 27,066 158,345
Our prepayments and other receivables under current assets amounted to RMB8.1 million, RMB27.1
million and RMB158.3 million as at 31 December 2023, 2024 and 2025, respectively. The increase in
prepayments and other receivables as at 31 December 2024 was primarily due to a significant rise in
prepayments, driven by the substantial increase in orders for our products and services and our strategic
initiatives to secure stable supply arrangements. The increase in prepayments and other receivables as at 31
December 2025 was primarily due to the increase in prepayments to suppliers. The high level of
prepayments as at 31 December 2025 was attributable to prepayments of an aggregated amount of
approximately RMB146.9 million to four of our suppliers as at 31 December 2025. Such prepayments were
FINANCIAL INFORMATION
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one-off in nature. Despite we were given a credit period by these suppliers, we made prepayments to these
suppliers in order to secure a stable and timely supply of equipment, including primarily high-performance
computing (HPC) servers, which have recently been in high demand for the use in the provision of our
Multispectral AI Large Model Services and Multispectral AI Perception Terminals. Two of these four
suppliers were actually five largest suppliers during our Track Record Period, namely, Supplier K and
Supplier D. As of 31 December 2025, we prepaid approximately RMB66.9 million and RMB21.6 million
to Supplier K and Supplier D, respectively, which accounted for approximately 42.8% and 13.8% of our
total prepayments to suppliers as of 31 December 2025.
As at 30 April 2026, RMB89.5 million, or 55.8% of our prepayments and other receivables as at
31 December 2025, had been utilised or settled.
Trade and Notes Payables
Our trade and notes payables comprised trade payables and notes payables, mainly representing
our obligation to pay for goods or services that have been purchased from suppliers in the ordinary
course of business. The following table sets forth a breakdown of the trade and notes payables as at the
dates indicated:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade payables ....................... 45,060 73,550 45,882
Notes payables ....................... — 6,007 —
Total .............................. 45,060 79,557 45,882
During the Track Record Period, our trade and notes payables amounted to RMB45.1 million,
RMB79.6 million and RMB45.9 million as at 31 December 2023, 2024 and 2025, respectively, which
was generally in line with our business growth, which resulted in increasing procurement amount and
hence higher balance of payables to our suppliers. The increase in our trade and notes payables from
RMB45.1 million as at 31 December 2023 to RMB79.6 million as at 31 December 2024 was also
because we made more purchases during the fourth quarter of 2024 to meet our expected production
needs due to increased customer orders. The decrease of trade payables to RMB45.9 million as at 31
December 2025 was because we accelerated the settlement of our trade and notes payables during 2025.
The table below sets out a summary of the ageing analysis of the trade payables based on the
invoice date as at the dates indicated below:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 6 months ..................... 44,393 43,818 36,978
6 months to 1 year .................... 80 20,092 452
1 to 2 years ......................... 587 9,609 5,473
2 to 3 years ......................... — 31 2,951
Over 3 years ........................ ——2 8
Total ............................. 45,060 73,550 45,882
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The following table sets forth our trade and notes payables turnover days for the years indicated.
FY2023 FY2024 FY2025
Trade and notes payables turnover days (1) ... 99 51 42
Note: Trade and notes payables turnover days is calculated using the average of the opening and closing trade and notes
payables balance divided by cost of sales for the relevant year and multiplied by the number of days during such year.
Our trade and notes payables turnover days decreased during the Track Record Period, being 99
days, 51 days and 42 days in FY2023, FY2024 and FY2025, respectively, primarily because the balance
of our trade and notes payables generally changes along with the growth of our business and we
accelerated settlement of our trade and notes payables.
As at 30 April 2026, RMB36.5 million, or 79.5% of our trade and notes payables as at 31
December 2025 had been subsequently settled.
Accruals and Other Payables
Our accruals and other payables primarily consisted of (i) salaries, wages and benefits; (ii) taxes
other than income tax payables; (iii) outsourcing service fees; and (iv) accruals.
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, wages and benefits ............. 5,294 6,348 9,893
Taxes other than income tax payables ...... 2,092 2,444 4,239
Deposits ............................ 429 483 850
Outsourcing service fees ................ — 10,791 312
Accruals ........................... 2,017 2,498 1,727
Listing expenses ...................... — — 7,799
Others ............................. 212 952 372
Total .............................. 10,044 23,516 25,192
During the Track Record Period, our accruals and other payables in current liabilities amounted to
RMB10.0 million, RMB23.5 million and RMB25.2 million as at 31 December 2023, 2024 and 2025,
respectively. The increase of accruals and other payables from approximately RMB10.0 million as at 31
December 2023 to RMB23.5 million as at 31 December 2024 was primarily due to the increase in
outsourcing service fees in support of the launch of our Multispectral AI Large Model Services in
FY2024. The increase of accruals and other payables as at 31 December 2025 when compared to 31
December 2024 was primarily due to the incurrence of listing expenses during FY2025 that are yet to
be paid.
As at 30 April 2026, RMB15.9 million, or 63.3% of our accruals and other payables as at 31
December 2025, had been settled.
Contract Liabilities
A contract liability is recognised when our customers pay us consideration or that our Group has a
right to receive such consideration before our Group recognises the related revenue. Our contract
liabilities remained relatively stable at RMB21.3 million and RMB20.3 million as at 31 December 2023
FINANCIAL INFORMATION
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and 2024, respectively. It increased significantly to RMB75.9 million as at 31 December 2025 which
was because one of our clients has prepaid us for about RMB56.4 million as at 31 December 2025. The
prepayment was relevant to a goods in transit being delivered to the same client as at 31 December
2025.
As at 30 April 2026, RMB1.3 million, or 1.7% of our contract liabilities as at 31 December 2025,
had been settled.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital
During the Track Record Period and up to the Latest Practicable Date, we did not experience any
undue difficulty in obtaining banking facilities or withdrawal of banking facilities from banks or any
default in payment of bank loans or other borrowings or breach of any covenants.
Taking into consideration our internal financial resources, the estimated amount of net proceeds
from the Global Offering, the available banking facilities, cash inflows generated from our operating
activities, our Directors are of the opinion that we have sufficient working capital for our present
requirement and for the next 12 months from the date of this prospectus.
Current Assets and Liabilities
The table below sets forth our current assets and current liabilities as at the dates indicated:
As at 31 December
As at
30 April
2023 2024 2025 2026
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current assets
Inventories ...................... 55,967 31,577 80,194 270,822
Trade and notes receivables ............ 19,817 145,676 184,423 257,571
Prepayments and other receivables ....... 8,085 27,066 158,345 150,682
Other current assets ................ 15,759 13,824 20,654 3,922
Notes receivables at fair value through other
comprehensive income ............. 663 479 — 425
Term deposits and restricted cash ....... 36,502 26,898 61,554 50,943
Cash and cash equivalents ............. 37,115 56,705 65,556 136,085
173,908 302,225 570,726 870,450
Current liabilities
Trade payables and notes payable ........ 45,060 79,557 45,882 49,726
Accrual and other payables ............ 10,044 23,516 25,192 27,281
Other current liabilities ............... — 862 998 13,591
Current income tax liabilities ........... 1 9———
Contract liabilities .................. 21,280 20,280 75,942 262,079
Lease liabilities .................... 8,613 10,159 5,672 5,882
Borrowings ...................... — 28,584 152,272 245,699
Total current liabilities .............. 85,016 162,958 305,958 604,258
Net current assets ................. 88,892 139,267 264,768 266,192
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Our net current assets increased from RMB88.9 million as at 31 December 2023 to RMB139.3
million as at 31 December 2024, primarily due to (i) the increase of trade and notes receivables of
RMB125.9 million; and (ii) the increase of trade payables and notes payable of RMB34.5 million.
Our net current assets increased from RMB139.3 million as at 31 December 2024 to RMB264.8
million as at 31 December 2025, primarily due to (i) the increase in our prepayments and other
receivables by approximately RMB131.3 million which was primarily a result of increased prepayments
to our suppliers in order to secure procurement needs for fulfilling large orders; (ii) the increase in term
deposits and restricted cash by approximately RMB34.7 million; (iii) the increase in cash and cash
equivalents by approximately RMB8.9 million; and (iv) the decrease in trade payables and note payable
by approximately RMB33.7 million because the trade payables and note payable was higher as at 31
December 2024; which was partially offset by (i) the increase in borrowings by approximately
RMB123.7 million; and (ii) the increase in our contract liabilities by RMB55.7 million.
Our net current assets remained relatively stable at RMB264.8 million as at 31 December 2025
and RMB266.2 million as at 30 April 2026, respectively.
Cash Flows
The following table sets out selected cash flow data from the consolidated statements of cash
flows. This information should be read together with the consolidated financial information contained
in the Accountants’ Report in Appendix I to this prospectus.
FY2023 FY2024 FY2025
RMB’000 RMB’000 RMB’000
Cash generated from/(used in) operations ... 68,958 (6,736) (129,362)
Interest received ...................... 613 273 207
Income tax paid ...................... — (28) (760)
Net cash generated from/(used in) operating
activities .......................... 69,571 (6,491) (129,915)
Net cash generated from/(used in) investing
activities ......................... 34,084 (22,678) (110,478)
Net cash (used in)/generated from financing
activities ......................... (152,758) 48,759 249,244
Net (decrease)/increase in cash and cash
equivalents ....................... (49,103) 19,590 8,851
Cash and cash equivalents at beginning of the
year ............................. 86,218 37,115 56,705
Cash and cash equivalents at the end of
the year ......................... 37,115 56,705 65,556
Net Cash Generated from/(Used in) Operating Activities
In FY2025, our net cash used in operating activities was RMB129.9 million, primarily consisting
of our profit before income tax of RMB27.5 million, adjusted for items mainly including (i) non-cash
and non-operating items, primarily comprising depreciation and amortisation of non-current assets of
RMB21.7 million, and (ii) changes in working capital, primarily comprising (a) an increase in
receivables of RMB172.6 million, which was mainly attributable to the increase in our prepayments of
approximately RMB146.9 million to certain suppliers in order to secure a stable supply of
high-performance computing (HPC) servers which have recently been in high demand; (b) an increase
in inventories of RMB55.5 million, primarily due to the increase in our goods in transit by
approximately RMB40.7 million from approximately RMB8.2 million as at 31 December 2024 to
FINANCIAL INFORMATION
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approximately RMB48.9 million as at 31 December 2025. The increase in our goods in transit was
because, as of 31 December 2025, we were delivering our Multispectral AI Large Model Services of
approximately RMB48.8 million to one of our customers.
In light of the net operating cash outflows for 2025, we have implemented a number of initiatives
to enhance our working capital management efficiency. For instance, we have implemented relevant
measures to control the ageing of our trade receivables, such as by proactively following up with our
customers on their payments schedule, and continually monitoring the credit profiles and operating
results and financial conditions of our customers. We are also continuously refining our production
processes to lower our work-in-progress inventory levels and improve overall cash conversion
efficiency.
In FY2024, our net cash used in operating activities was RMB6.5 million, primarily consisting of
our profit before income tax of RMB42.5 million, adjusted for items mainly including (i) non-cash and
non-operating items, primarily comprising depreciation and amortisation of non-current assets of
RMB17.2 million, and (ii) changes in working capital, primarily comprising (a) an increase in
receivables of RMB152.3 million, (b) an increase in payables of RMB53.9 million and (c) a decrease in
inventories of RMB20.1 million.
In FY2023, our net cash generated from operating activities was RMB69.6 million, primarily
consisting of our loss before income tax of RMB22.9 million, adjusted for items mainly including (i)
non-cash and non-operating items, primarily comprising depreciation and amortisation of non-current
assets of RMB14.6 million, and (ii) changes in working capital, primarily comprising (a) a decrease in
receivables of RMB29.7 million, (b) an increase in payables of RMB54.8 million and (c) an increase in
inventories of RMB15.8 million.
Net Cash Generated from/(Used in) Investing Activities
In FY2025, our net cash used in investing activities was RMB110.5 million, primarily consisting
of placement of term deposits of RMB145.8 million in order to enjoy a higher interest rate as compared
to interest rate given by general saving account, payments for purchase of property, plant and
equipment, intangible assets and other non-current assets of RMB77.8 million mainly due to the capital
expenditure on electronic equipment, machinery and equipment and leasehold improvement for our new
Zhejiang production base, partially offset by withdrawal of term deposits of RMB113.1 million.
In FY2024, our net cash used in investing activities was RMB22.7 million, primarily consisting of
payments for purchase of property, plant and equipment, intangible assets and other non-current assets
of RMB34.0 million, partially offset by withdrawal of term deposits of RMB11.3 million.
In FY2023, our net cash generated from investing activities was RMB34.1 million, primarily
consisting of withdrawal of term deposits of RMB56.8 million, partially offset by payments for
purchase of property, plant and equipment, intangible assets and other non-current assets of RMB22.8
million.
Net Cash (Used in)/Generated from Financing Activities
In FY2025, our net cash generated from financing activities was RMB249.2 million, primarily
consisting of proceeds from borrowings of RMB297.0 million and capital contributions from our
shareholders of RMB90.0 million, partially offset by repayments of borrowings of RMB125.6 million.
FINANCIAL INFORMATION
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In FY2024, our net cash generated from financing activities was RMB48.8 million, primarily
consisting of capital contributions from our shareholders of RMB30.0 million and proceeds from
borrowings of RMB29.5 million, partially offset by principal elements of lease payments of RMB9.7
million.
In FY2023, we had net cash used in financing activities of RMB152.8 million, primarily
consisting of repayment of borrowings of RMB141.7 million and principal elements of lease payments
of RMB9.3 million.
INDEBTEDNESS
As at 30 April 2026, being the latest practicable date for the purpose of the indebtedness
statement below, we had RMB324.1 million in indebtedness, which was comprised borrowings and
lease liabilities. As at 30 April 2026, we had unutilised banking facilities of RMB259.0 million.
The following table sets forth the components of our indebtedness as at the dates indicated:
As at 31 December
As at
30 April
2023 2024 2025 2026
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current
Borrowings ...................... — 28,584 152,272 245,699
Lease liabilities ................... 8,613 10,159 5,672 5,882
Subtotal ........................ 8,613 38,743 157,944 251,581
Non-current
Borrowings ...................... — 964 49,008 64,516
Lease liabilities ................... 14,512 6,943 6,730 7,959
Subtotal ........................ 14,512 7,907 55,738 72,475
Total .......................... 23,125 46,650 213,682 324,056
Our borrowings increased from nil as at 31 December 2023 to RMB29.5 million as at 31
December 2024, and further increased to RMB201.3 million as at 31 December 2025, mainly due to our
needs to fund our operations in view of increase in our revenue in the relevant years. Our borrowings
increased from approximately RMB201.3 million as at 31 December 2025 to RMB310.2 million as at
30 April 2026 because we obtained additional loans for general working capital purposes. Our bank
borrowings agreements contain standard terms, conditions and covenants that are customary for
commercial bank loans.
Subsequent to 30 April 2026, we obtained additional banking facilities and bank loan of
approximately RMB15.0 million. Apart from this, there were no material changes to our indebtedness
up to the Latest Practicable Date.
We recognised lease liabilities with respect to all leases, except for short-term leases and leases of
low value assets. Our lease liabilities decreased from RMB23.1 million as at 31 December 2023 to
RMB17.1 million as at 31 December 2024, primarily due to the payment of lease liabilities. Our lease
liabilities further decreased from RMB17.1 million as at 31 December 2024 to RMB12.4 million as at
31 December 2025 primarily due to the payment of lease liabilities and termination of part of our lease
relating to our Shenzhen production base during such year. Our lease liabilities remained relatively
stable at RMB13.8 million as at 30 April 2026.
FINANCIAL INFORMATION
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During the Track Record Period and up to the Latest Practicable Date, our borrowings were
mainly secured by pledging of our trade receivables, term deposits and Connected Guarantees provided
by Mr. Zhou. As at the Latest Practicable Date, the total Guaranteed Loans amounted to approximately
RMB181.7 million and all Connected Guarantees are expected to be released upon Listing. For details,
please refer to (i) section headed “Relationship with Controlling Shareholder — Independence from
Controlling Shareholders — Financial Independence” in this prospectus; (ii) “Note 21. Trade and Notes
Receivables” in Appendix I to this prospectus; (iii) “Note 24. Cash and Cash Equivalents, Term
Deposits and restricted Cash” in Appendix I to this prospectus; and (iv) “Note 25. Borrowings” in
Appendix I to this prospectus.
Our Directors confirm that there have been no material defaults in our payment of trade or
non-trade payables and bank borrowings, or breaches of covenants of our indebtedness during the Track
Record Period and up to the date of this prospectus.
CAPITAL EXPENDITURE
During the Track Record Period, our capital expenditures primarily consisted of expenditures on
property, plant and equipment for manufacturing and office refurbishment, right-of-use assets for our
production bases and other premises, as well as intangible assets arise from capitalisation of our R&D
expenses.
The following table sets forth our capital expenditures for the years indicated:
FY2023 FY2024 FY2025
RMB’000 RMB’000 RMB’000
Additions of property, plant and equipment .. 1,824 3,377 15,251
Additions of right-of-use assets ........... 7,880 2,990 7,753
Additions of intangible assets ............ 19,815 30,126 58,472
Total .............................. 29,519 36,493 81,476
Following the Listing, we will continue to incur capital expenditures to grow our business. We
plan to fund our planned capital expenditures primarily with cash flows generated from our operations,
bank borrowings, and the net proceeds received from the Listing. Please see the section headed “Future
Plans and Use of Proceeds.” in this prospectus. We may adjust our capital expenditures for any given
year according to our development plans or in light of market conditions and other factors we believe
to be appropriate.
Capital commitments
Our capital commitments are related to our property, plant and equipment. Our capital expenditure
contracted but not provided for as at 31 December 2023, 2024, and 2025 was nil, RMB12.0 million and
nil, respectively.
CONTINGENT LIABILITIES
As at the Latest Practicable Date, we did not have significant contingent liabilities.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As at the Latest Practicable Date, we had not entered into any off-balance sheet transactions.
FINANCIAL INFORMATION
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KEY FINANCIAL RATIOS
The table below sets forth our key financial ratio as at the dates indicated:
For the year ended/As at 31 December
2023 2024 2025
Gross profit margin (1) .................. 12.2% 18.8% 22.3%
Net profit margin (2).................... (15.7)% 7.7% 4.4%
Gearing ratio (3) ....................... 0.14 0.20 0.59
Current ratio (4) ....................... 2.0 1.9 1.9
Quick ratio (5) ........................ 1.4 1.7 1.6
Notes:
(1) Gross profit margin equals gross profit divided by total revenue during the year, multiplied by 100%.
(2) Net profit margin equals net profit divided by total revenue during the year, multiplied by 100%.
(3) Gearing ratio equals total borrowings and lease liabilities divided by total equity as at the relevant dates.
(4) Current ratio represents current assets divided by current liabilities as at the relevant dates.
(5) Quick ratio represents current assets minus inventories, divided by current liabilities as at the relevant date.
Gross Profit Margin
For details, please refer to the subsections headed “Description of Selected Components of
Statements of Profit or Loss and Other Comprehensive Income — Gross Profit and Gross Profit
Margin” in this section above.
Net Profit Margin
Our net profit margin improved significantly from a net loss margin of (15.7)% in FY2023 to
7.7% in FY2024. The turnaround was primarily driven by the significant increase in our gross profit
margin from 12.2% in FY2023 to 18.8% in FY2024, alongside an increase in our gross profit by
586.7% from RMB14.3 million in FY2023 to RMB98.2 million in FY2024. For details of relevant
changes, please refer to paragraphs headed “Year-to-year Comparisons of Results of Operations -
FY2024 Compared to FY2023” in this section.
Our net profit margin decreased from 7.7% in FY2024 to 4.4% in FY2025. The decrease was
mainly attributable to the significant increase in our general and administrative expenses by 260.0%
from RMB13.0 million in FY2024 to RMB46.8 million in FY2025 and the increase in research and
development expenses by 101.6% from RMB25.2 million in FY2024 to RMB50.8 million in FY2025.
For details of relevant changes, please refer to paragraphs headed “Year-to-year Comparisons of Results
of Operations — FY2025 Compared to FY2024” in this section.
Gearing Ratio
As at 31 December 2023, 2024 and 2025, our gearing ratio was 0.14, 0.20 and 0.59, respectively.
The general decrease in our gearing ratio as at 31 December 2023 and 2024 was mainly due to changes
in working capital fluctuations. The increase of our gearing ratios from 0.20 as at 31 December 2024 to
0.59 as at 31 December 2025 was primarily due to the increase in our borrowings to RMB201.3 million
as at 31 December 2025.
FINANCIAL INFORMATION
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Current Ratio
Our current ratio remained relatively stable at 2.0, 1.9 and 1.9 as at 31 December 2023, 2024 and
2025, respectively.
Quick Ratio
Our quick ratio increased from 1.4 as at 31 December 2023 to 1.7 as at 31 December 2024,
mainly due to an increase in trade and notes receivables, coupled with the reduction of inventory levels
during that year. Our quick ratio dropped to 1.6 as at 31 December 2025, primarily attributable to the
increase in our prepayments and other receivables, term deposits and restricted cash and cash and cash
equivalents overshadowed by increase in short term borrowings and contract liabilities.
RELATED PARTY TRANSACTIONS
For details about our related party transactions during the Track Record Period, see Note 33 to the
Accountants’ Report in Appendix I to this prospectus. Our Directors are of the view that each of the
related party transactions 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
related party transactions during the Track Record Period would not distort our track record results or
make our historical results not reflective of our future performance.
RISK DISCLOSURE
For details of our risks in relation to interest, price, credit and liquidity, please see Notes 3.1−3.3
to the Accountants’ Report set forth in Appendix I of this prospectus.
DIVIDEND
No dividend has been declared or paid by us during FY2023, FY2024 and FY2025. The earnings
per share for FY2024 and FY2025 are approximately RMB5.09 and RMB3.49, respectively. The losses
per share for FY2023, was approximately RMB2.33.
After the completion of the Global Offering, we may distribute dividends in the form of cash or
by other means permitted by our Articles of Association. As at the Latest Practicable Date, we did not
have any specific dividend policy nor any pre-determined dividend payout ratio. In principle, we
prioritise cash dividends as the profit distribution method if the conditions for cash dividends are met.
When we have major investment plans or significant cash expenditures, we may distribute dividends in
the form of share equity. A decision to declare or to pay dividends in the future and the amount of
dividends will be at the discretion of our Board and will depend on a number of factors, including our
results of operations, cash flows, financial condition, payments by our subsidiaries of cash dividends to
us, business prospects, statutory and regulatory restrictions on our declaration and payment of dividends
and other factors that our Board may consider important. Any declaration and payment as well as the
amount of dividends will be subject to our constitutional documents and the relevant laws. As advised
by our PRC legal advisers, a PRC company can pay dividends after covering all accumulated losses
from prior years with its current profits after tax and statutory reserve allocations. Our Shareholders
may approve any declaration of dividends.
FINANCIAL INFORMATION
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DISTRIBUTABLE RESERVES
Our Company was established as a limited liability company in the PRC on 3 April 2013 and was
converted into a joint stock limited company on 8 November 2022 under the laws of the PRC. Pursuant
to the Articles, profit after taxation of our Company, after (i) offsetting losses carried forward from
previous years, (ii) transferring 10% of its profit after taxation as contribution to its statutory reserve
fund under the relevant PRC rules and regulations, and (iii) deducting other contributions to the reserve
fund as determined by our Company, shall be distributable to our Shareholders as dividends. As at 31
December 2025, our Company had retained earnings of RMB40.4 million under IFRS.
LISTING EXPENSES
The total listing expenses payable by our Company are estimated to be RMB66.4 million and
based on an Offer Price of HK$7.2, accounting for 12.5% of gross IPO proceeds. Among such
estimated total listing expenses, (i) underwriting-related expenses, including underwriting commission,
are expected to be RMB32.0 million, and (ii) non-underwriting-related expenses of RMB34.4 million,
comprising (a) fees and expenses of the Joint Sponsors, legal advisers and reporting accountants of
RMB20.3 million; and (b) other fees and expenses of RMB14.1 million.
Among the total listing expenses of RMB66.4 million, (i) approximately RMB17.4 million was
charged to the statement of profit or loss during FY2025, (ii) approximately RMB13.6 million is
expected to be expensed through the statement of profit or loss after the Track Record Period, and (iii)
the remaining amount of RMB35.4 million is directly attributable to the issue of shares and would be
deducted from equity upon the Listing.
The professional fees and/or other expenses related to the preparation of the Listing are currently
in estimates for reference only and the actual amount to be recognised is subject to adjustment based on
audit and the then changes in variables and assumptions.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE
ASSETS
See Appendix II to this prospectus for the unaudited pro forma statement of adjusted net tangible
assets of our Group.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, up to the date of this Prospectus, other than as disclosed under
“Recent Developments Subsequent to the Track Record Period and No Material Adverse Change” in the
“Summary and Highlights” section in this Prospectus, there had been no material adverse change in our
business, financial condition and results of operations since 31 December 2025, being the latest balance
sheet date of our consolidated financial statements in the “Appendix I — Accountants’ Report” 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, as at the Latest Practicable Date, there was no circumstance that
would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.
FINANCIAL INFORMATION
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FUTURE PLANS
See the section headed “Business — Our Business Strategies” in this prospectus for a detailed
description of our future plans.
USE OF PROCEEDS
We estimate the aggregate net proceeds from the Global Offering, after deducting underwriting
fees and other estimated expenses in connection with the Global Offering assuming an Offer Price of
HK$7.2 per Share, will be approximately HK$536.8 million.
The table below sets out the expected implementation timetable for the planned use of our
proceeds:
FY2026 FY2027 FY2028 Total
(HK$ million)
Enhancing R&D Capabilities 87.9 121.9 58.6 268.4
— Large Model Solutions ........... 37.9 64.4 33.4 135.7
— Chip Business Sector ............ 23.0 14.9 6.0 43.9
— New Generation Intelligent Perception . 8.0 16.1 7.8 31.9
— Joint Laboratories and Overseas R&D
Centres ..................... 5.7 11.5 5.7 22.9
— R&D Centre Leased Area Expansion .. 1.7 3.4 1.8 6.9
— Other R&D Expenses ............ 11.6 11.6 3.9 27.1
Expanding Production Capacity 34.5 57.6 42.1 134.2
— Production Line Staff ............ 5.7 11.5 9.0 26.2
— Production Base Leased Area
Expansion ................... 5.7 11.5 9.0 26.2
— Production Line Upgrades and
Equipment ................... 11.5 23.0 18.0 52.5
— Raw Materials and Operating Costs .. 11.6 11.6 6.1 29.3
Global Market Penetration 17.2 28.8 34.5 80.5
— Sales and Marketing Personnel ...... 5.7 11.5 14.7 31.9
— Marketing Campaigns and Brand
Building .................... 5.7 11.5 14.7 31.9
— Other Marketing and Selling Expenses . 5.8 5.8 5.1 16.7
General Working Capital and Corporate
Uses ......................... 17.9 17.9 17.9 53.7
Total .......................... 157.5 226.2 153.1 536.8
The implementation timeline allocates approximately 29.3% (HK$157.5 million) in FY2026,
42.1% (HK$226.2 million) in FY2027, and 28.5% (HK$153.1 million) in FY2028, with the remaining
balance to be covered by alternative funding sources if needed. In the event of a shortfall in net
proceeds, we will prioritise critical expenditures (e.g., server procurement, key R&D hires, production
equipment) and fund the shortfall through internal cash reserves, bank borrowings, strategic
partnerships, or government R&D grants, as specified for each allocation.
FUTURE PLANS AND USE OF PROCEEDS
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In accordance with our strategy, we intend to use the net proceeds from the Global Offering for
the following purposes in the following amounts:
 approximately 50.0% of the net proceeds (approximately HK$268.4 million) is expected to
be used to enhance our R&D capabilities and increase investment in product development, of
which:
— approximately 25.3% of the net proceeds (approximately HK$135.7 million) will be
used to strengthen our R&D capabilities in large model solutions, which includes the
purchase of servers for computing power for accelerating the iteration of large model,
enhancing the accuracy and efficiency of our algorithms; the recruitment of
approximately 20 additional R&D personnel with expertise in large and small model
development and training; as well as outsourced data annotation services to allow our
in-house team to focus on higher value-added R&D activities. Such investment arises
from the need to scale our computational infrastructure and expertise to develop
advanced large model solutions that enhance algorithm accuracy for multispectral AI
applications, addressing the growing demand for high-precision AI in safety and
industrial scenarios;
— approximately 8.2% of the net proceeds (approximately HK$43.9 million) will be used
to strengthen our R&D capability in the chip business sector, which encompasses the
design, development, and production of specialised semiconductor chips, including
Micro-Electro-Mechanical Systems (MEMS) chips, for multispectral AI applications in
safety-critical industries. MEMS chips are integrated micro-devices combining
mechanical and electrical components on a single chip, enabling advanced sensing and
processing for applications such as infrared imaging and environmental perception.
This includes the purchase of MEMS packaging and testing equipment, optoelectronic
materials and devices; the recruitment of approximately 10 additional R&D personnel
with expertise in the design and development of MEMS chips; in addition, we will also
cooperate with chip companies in the flow-through process, and co-design and
co-production of high-performance chips, thereby leveraging technological synergies to
drive innovation. Such investment allows us to develop proprietary MEMS chip
technology to reduce reliance on external suppliers and enhance product
competitiveness;
— approximately 5.9% of the net proceeds (approximately HK$31.9 million) will be
utilised to enhance the R&D capability of new generation intelligent perception
products and intelligent solutions by significantly increasing the recruitment of
approximately 60 additional R&D personnel in relevant fields, to explore new business
areas of products and solutions, modules (especially in the field of embodied
intelligence), multispectral intelligent terminal products and multi-scenario safety
solutions. New generation intelligent perception refers to multispectral perception
technologies applied to emerging business scenarios such as food safety and skin care,
delivering terminal products and industry solutions to clients. Such investment allows
us to expand into high-growth, high-safety-demand industries like food safety,
requiring specialised R&D to adapt multispectral technologies, unlike the more focused
historical R&D expenditure;
— approximately 4.3% of the net proceeds (approximately HK$22.9 million) will be used
to invest in the establishment of joint laboratories, with one potential university partner
from the PRC already identified as at the Latest Practicable Date, and to collaborate
with technology companies that complement our technology enabling us to bring in
new technologies and resources and to accelerate the development of the underlying
FUTURE PLANS AND USE OF PROCEEDS
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technologies and foster innovation through industry-academic convergence, and to
establish overseas R&D centres in certain regions and countries, such as Hong Kong
and Singapore, to further strengthen our global R&D capabilities. Selection criteria for
laboratories and partners include reputable qualifications, prior collaboration history,
strong financial standing, robust infrastructure, experienced talent pools, aligned
research objectives, and mature management structures. According to Frost & Sullivan,
such targets are readily available in China and globally, given the proliferation of
AI-focused academic and industry partnerships. Such investment allows us to access
cutting-edge technologies and global talent to enhance our multispectral AI solutions,
unlike the limited scope of historical R&D. As of the Latest Practicable Date, no
overseas partners have been identified for the purposes of establishing joint
laboratories and overseas R&D centres in certain regions and countries such as Hong
Kong or Singapore, and based on our preliminary assessment we are in compliance
with the key legal, regulatory and licensing requirements for setting up overseas
laboratories and R&D centres in relevant jurisdictions. However, in the process of
establishing such joint laboratories and research centres in such locations we will
conduct an in-depth assessment with local counsel of the applicable requirements;
— approximately 1.3% of the net proceeds (approximately HK$6.9 million) will be used
to expand the leased area of our R&D centre. The expansion is justified by the need to
support the increased R&D team size and advanced equipment for large model and chip
development, which exceeds the capacity of our current facilities;
— approximately 5.0% of the net proceeds (approximately HK$27.1 million) will be
utilised for other R&D expenses, allowing us flexibility to adjust our R&D approach in
response to market trends. These expenses will cover software licences, testing
materials, and industry conference participation to stay abreast of AI trends. The
investment is justified by the need to maintain flexibility in a rapidly evolving AI
market, unlike the fixed scope of historical R&D.
 approximately 25.0% of the net proceeds (approximately HK$134.2 million) will be used to
expand our production capacity to meet the growing production demands, of which:
— approximately 4.9% of the net proceeds (approximately HK$26.2 million) will be
utilised to increase the number of production line staff. This allocation is planned for
hiring approximately 230 additional staff, including operators, technicians, and quality
control personnel to support increased production of multispectral AI products,
particularly fire detection and intelligent perception devices;
— approximately 4.9% of the net proceeds (approximately HK$26.2 million) will be
utilised to further expand the leased area of the production bases by approximately
15,000 square metres or to lease new factories;
— approximately 9.8% of the net proceeds (approximately HK$52.5 million) will be
utilised for the upgrading of the existing production lines, the acquisition of equipment
required for the new production line. Although our production base has not reached its
maximum utilisation rate during the Track Record Period, our Group’s planned
investment in R&D, establishment of joint laboratories, and potential strategic
investments or acquisitions are expected to expand our product offerings. This
expansion will necessitate further expansion to ensure alignment with the demand
growth, support timely fulfilment of customer orders, and mitigate risks of supply
bottlenecks in a competitive market. As such, this allocation is planned to acquire
FUTURE PLANS AND USE OF PROCEEDS
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additional assembly machines, including 6 chip placement machines for the expansion
of our SMT automated assembly lines, and testing units, with an expected addition of 6
new production lines;
— approximately 5.4% of the net proceeds (approximately HK$29.3 million) will be
utilised for raw materials and other operating costs associated with production. This
allocation is planned to procure raw materials such as MEMS infrared sensor chips,
optoelectronic components, and microprocessors, and to cover operating costs
including utilities and maintenance for the expanded production facilities.
Our Company expects to experience growth in the sales volume of our Multispectral AI
Modules and Multispectral AI Perception Terminals as we expand into new downstream
sectors, including optoelectronics, food safety and skin diagnostics. According to Frost &
Sullivan, the global markets for these sectors are forecasted to grow at a CAGR of 43.7%,
86.1% and 44.0%, respectively, from 2025 to 2030, and the resulting increase in demand for
advanced detection and diagnostic solutions is expected to drive corresponding growth in our
sales volumes across these new application scenarios.
 approximately 15.0% of the net proceeds (approximately HK$80.5 million) will be used for
strengthening our business expansion and accelerating global market penetration. According
to the Frost & Sullivan Report, the global multispectral perception market, valued at
approximately RMB85.0 billion in 2025, offers significant growth opportunities, particularly
in overseas markets such as North America and Europe, which command 25% and 28%
market shares in 2025, respectively. As such, we intend to use the net proceeds, of which:
— approximately 5.9% of the net proceeds (approximately HK$31.9 million) will be used
to increase the recruitment of approximately 100 additional sales and marketing
personnel with industry insights. These personnel, with expertise in downstream
application industries such as urban safety, medical diagnostics, and food engineering,
will be deployed across key overseas markets (North America, Europe, Southeast Asia,
and the Middle East) to drive customer acquisition, manage local partnerships, and
support brand-building initiatives;
— approximately 5.9% of the net proceeds (approximately HK$31.9 million) will be used
to invest in comprehensive online and offline marketing campaigns and brand building
initiatives, such as digital advertisements, trade shows and overseas seminars, to
increase brand awareness and attract new customers. This allocation is planned to fund
digital advertising campaigns targeting industry-specific platforms, participation in
global trade shows, and overseas seminars to promote our multispectral AI products in
key markets;
— approximately 3.2% of the net proceeds (approximately HK$16.7 million) will be used
for other marketing and selling expenses responsive to market developments. This
allocation is planned to support initiatives such as obtaining regulatory certifications
(e.g., UL certifications in North America, CE certifications in Europe) for market
access, and participating in industry events to enhance brand visibility. These expenses
are designed to address market-specific requirements in key overseas markets;
 approximately 10.0% of the net proceeds (approximately HK$53.7 million) will be used to
provide funding for our general working capital and for general corporate uses.
FUTURE PLANS AND USE OF PROCEEDS
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To the extent that the net proceeds are not immediately applied to the above purposes and to the
extent permitted by applicable law and regulations, we will apply the net proceeds as deposits at
licensed commercial banks and/ or other authorised financial institutions (as defined under the
Securities and Futures Ordinance or applicable laws and regulations in other jurisdictions). We will
make an appropriate announcement if there is any change to the above proposed use of proceeds or if
any amount of the proceeds will be used for general corporate purpose.
We will monitor the utilisation of the use of proceeds during FY2026 and FY2027. If the proceeds
allocated to the above purposes are fully or substantially utilised, we may consider additional sources
of equity and/or debt financing to fund them further. Such sources may include, without limitation,
bank borrowings and/or equity financing through the placing of new shares. We may also utilise
internally generated funds from our operations to finance these purposes.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
CMBC Securities Company Limited
SPDB International Capital Limited
Livermore Holdings Limited
CCB International Capital Limited
CEB International Capital Corporation Limited
CMB International Capital Limited
China Harbour International Securities Limited
DL Securities (HK) Limited
Huafu International Securities Limited
Skyvast Securities Limited
Somerley Capital Limited
Yuen Meta (International) Securities Limited
Yunfeng Securities Limited
Zheshang International Financial Holdings Co., Limited
Zhongtai International Securities Limited
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is initially offering for
subscription of 8,516,500 Hong Kong Offer Shares at the Offer Price under the Hong Kong Public
Offering, on and subject to the terms and conditions set forth in this prospectus. The Hong Kong
Underwriters have agreed on and subject to the terms and conditions in the Hong Kong Underwriting
Agreement, to procure subscribers for, or failing which they shall subscribe for, the Hong Kong Offer
Shares.
The Hong Kong Underwriting Agreement is subject to various conditions, which include, but
without limitation, the Listing Committee granting listing of, and permission to deal in, our H Shares in
issue and to be issued as mentioned in this prospectus. In addition, the Hong Kong Underwriting
Agreement is conditional on and subject to the International Underwriting Agreement having been
executed, becoming unconditional and not having been terminated.
Grounds for termination
The Overall Coordinators, in their sole and absolute discretion, may, for themselves and on behalf
of the Hong Kong Underwriters, upon giving notice in writing to the Company, terminate the Hong
Kong Underwriting Agreement with immediate effect if any of the following events occurs at or prior
to 8:00 a.m. on the Listing Date:
(i) there has been a breach of any of the representations, warranties, undertakings or provisions
of either the Hong Kong Underwriting Agreement or the International Underwriting
Agreement by any of our Company, our executive Directors and our Controlling
Shareholders or any such representations, warranties or undertakings is (or would when
repeated be) untrue, incorrect or misleading in any respect; or
(ii) any statement (save and except those statement of the Joint Sponsors, Sponsor-Overall
Coordinators, Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers and any of the Hong Kong Underwriters contained in this
UNDERWRITING
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prospectus or the formal notice of our Company or any announcements in the agreed form
issued by our Company in connection with the Hong Kong Public Offering (including any
supplement or amendment thereto) was, has or may become untrue, incorrect or misleading
in any material respect, or any forecasts, expressions of opinion, intention or expectation
expressed in this prospectus, or the formal notice of our Company are not, in all respects,
fair and honest and made on reasonable grounds or, where appropriate, based on reasonable
assumptions, when taken as a whole; or
(iii) any event, act or omission which gives or is likely to give rise to any liability of any of our
Company, our executive Directors and our Controlling Shareholders pursuant to the
indemnities given by them under the Hong Kong Underwriting Agreement or the
International Underwriting Agreement, as applicable; or
(iv) any material breach of any of the obligations of any of our Company, our executive
Directors and our Controlling Shareholders under the Hong Kong Underwriting Agreement
or the International Underwriting Agreement, as applicable; or
(v) any of the reporting accountants of our Company, or any of the legal counsels or consultants
of our Company has withdrawn its respective consent to the issue of this prospectus with the
inclusion of its reports, letters, summaries of valuations 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
(vi) approval in principle from the Stock Exchange granting the listing of, and permission to deal
in, the Offer Shares, the H Shares in issue, is refused or not granted, on or before the listing
approval date, or if granted, the approval is subsequently withdrawn, qualified (other than
customary conditions) or withheld; or
(vii) our Company withdraws any of this prospectus or the listing application in respect of the
Global Offering; or
(viii) save as disclosed in this prospectus, any potential litigation, legal proceeding, legal reaction,
claim or disputes being threatened or instigated against any member of our Group, which
gives rise to a material adverse effect; or
(ix) any person (other than any of the Joint Sponsors, the Sponsor-Overall Coordinators, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers and/or the Hong Kong Underwriters) has withdrawn or sought to withdraw its
consent to being named in any of this prospectus and the formal notice of the Company or to
the issue of any of this prospectus and the formal notice of the Company; or
(x) there will have developed, occurred, happened or come into effect any change or
development involving a prospective change or development, or any event or series of
events, matters or circumstances likely to result in or representing a change or development,
or prospective change or development, concerning or relating to:
(a) any local, national, regional or international financial, political, economic, legal,
military, industrial, fiscal, regulatory, currency or market conditions (including, without
limitation, conditions in stock and bond markets, money and foreign exchange markets
and interbank markets, a change in the system under which the value of the Hong Kong
currency is linked to that of the currency of the United States) in or affecting Hong
Kong, the PRC, or any other jurisdiction relevant to any member of our Group (each a
“Relevant Jurisdiction ”); or
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(b) any new law or regulation or any change in any existing law or regulation, or any
change in the interpretation or application thereof by any court or other competent
authority in or affecting any Relevant Jurisdiction; or
(c) any deterioration of the condition of the financial markets in any Relevant Jurisdiction
or generally in the international equity securities or other financial markets; or
(d) (A) any event or series of events in the nature of force majeure (including, without
limitation, acts of government, economic sanctions, strikes or lockouts (whether or not
covered by insurance), riots, fire, explosion, flooding, civil commotion, acts of war,
acts of terrorism (whether or not responsibility has been claimed), acts of God,
epidemic, outbreak of infectious disease or epidemics, including, but not limited to,
Severe Acute Respiratory Syndrome and H1N1 or swine or avian influenza or
COVID-19 or such related/mutated forms of accident or interruption or delay in
transportation), or (B) any local, national, regional or international outbreak or
escalation of hostilities (whether or not war is or has been declared) or other
declaration of a national or international state of emergency or calamity or crisis, in the
case of either (A) or (B), in or affecting any Relevant Jurisdiction; or
(e) (A) any suspension or limitation on trading in shares or securities generally on the
Stock Exchange, the New York Stock Exchange, the NASDAQ Global Market, the
Tokyo Stock Exchange, the London Stock Exchange or any PRC stock markets or (B) a
general moratorium on commercial banking activities in any Relevant Jurisdiction,
declared by the relevant authorities, or a material disruption in commercial banking
activities or foreign exchange trading or securities settlement or clearance services, in
the case of either (A) or (B), in or affecting any Relevant Jurisdiction; or
(f) any taxation or exchange controls, currency exchange rates or foreign investment
regulations in any Relevant Jurisdiction adversely affecting an investment in the H
Shares; or
(g) any litigation or claim being threatened or instigated against any member of our Group,
or any Director, any of the chairman or chief executive officer of the Company
vacating his office, any executive Director being charged with an indictable offence or
prohibited by operation of Law or otherwise disqualified from taking part in the
management of a company or the commencement by any governmental, political,
regulatory body of any action against any executive Director in his or her capacity as
such or an announcement by any governmental, political, regulatory body that it
intends to take any such action; or
(h) any contravention by any member of our Group of the Companies Ordinance, the
Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Companies
Law, any of the Listing Rules or any applicable law or regulation; or
(i) a prohibition on our Company for whatever reason from allotting or selling the Offer
Shares pursuant to the terms of the Global Offering; or
(j) non-compliance of this prospectus (or any other documents used in connection with the
contemplated subscription and sale of the Offer Shares) or any aspect of the Global
Offering with the Listing Rules or any other applicable law or regulation; or
UNDERWRITING
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(k) the issue or requirement to issue by our Company of a supplementary prospectus,
pursuant to the Companies Ordinance or the Listing Rules in circumstances where the
matter to be disclosed is, in the reasonable opinion of the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters), materially adverse to the
marketing for or implementation of the Global Offering; or
(l) any change or prospective change, or a materialisation of, any of the risks set out in
the section headed “Risk factors” in this prospectus; or
(m) any demand by creditor for repayment of indebtedness of an amount not less than
HK$20 million prior to its stated maturity or a petition is presented for the winding-up
or liquidation of any member of our Group which is material to the business to the
Group or any such member of our Group makes any composition or arrangement with
its creditors or enters into a scheme of arrangement or any resolution is passed for the
winding-up of any member of our Group which is material to the business to our
Group or a provisional liquidator, receiver or manager is appointed over all or part of
the material assets or undertaking of any member of our Group or anything analogous
thereto occurs in respect of any member of our Group which is material to the business
to our Group; or
(n) any change in respect of the business, assets, liabilities, conditions, business affairs,
prospects, profits, losses or the financial or trading position or performance or
management of our Company or any member of our Group; or
(o) any matter that has arisen or has been discovered which would, had it arisen
immediately before the date of this prospectus, not having been disclosed in this
prospectus, constitute an omission therefrom;
and which, with respect to any of sub-paragraphs (a) through (n) above, in the sole and
absolute opinion of the Overall Coordinators (for themselves and on behalf of the Hong
Kong Public Offering Underwriters):
(A) is, will be or may have any material adverse effect whether or not arising in the
ordinary course of business or be materially adverse to any present or prospective
shareholder of the Company in its capacity as such; or
(B) has, will have or may have a material adverse effect on the success of the Global
Offering or the level of Offer Shares being applied for or accepted or subscribed for or
purchased or the distribution of Offer Shares and/or make it impracticable, inadvisable
or inexpedient for any material part of the Hong Kong Underwriting Agreement, the
International Underwriting Agreement, the Hong Kong Public Offering or the Global
Offering to be performed or implemented as envisaged; or
(C) makes or may make it impracticable, inadvisable or inexpedient to proceed with or to
market the Hong Kong Public Offering and/or the Global Offering or the delivery of
the Offer Shares on the terms and in the manner contemplated by this prospectus, the
formal notice of our Company; or
(D) would have the effect of making any part of the Hong Kong Underwriting Agreement
(including underwriting) incapable of performance in accordance with its terms or
which prevents the processing of applications and/or payments pursuant to the Global
Offering or pursuant to the underwriting thereof,
UNDERWRITING
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UNDERTAKINGS GIVEN TO THE STOCK EXCHANGE PURSUANT TO THE LISTING
RULES
Undertaking by our Company
Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange that, save
as pursuant to the Global Offering, no further H Shares or securities convertible into our equity
securities (whether or not of a class already listed) may be issued by us or form the subject of any
agreement to such an issue by us within six months from the Listing Date (whether or not such issue of
H Shares or our securities will be completed within six months from the commencement of dealing),
except in certain circumstances prescribed by Rule 10.08 of the Listing Rules.
Undertaking by our Controlling Shareholders
Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders undertakes to
the Stock Exchange and to our Company that except pursuant to the Global Offering, they will not at
any time:
(a) during the period commencing on the date by reference to which disclosure of his/its
interests in our Company is made in this prospectus and ending on the date falling six
months from the Listing Date (the “ First Six-month Period ”), he/it shall not dispose of, or
enter into any agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of, any of the securities of our Company in respect of which he/it is
shown by this prospectus to be the beneficial owners; or
(b) in the six-month period commencing on the expiry of the First Six-month Period set out in
paragraph (a) above, dispose of, or enter into any agreement to dispose of or otherwise
create any options, rights, interests or encumbrances in respect of, any of the securities
mentioned in paragraph (a) if, immediately following such disposal or upon the exercise or
enforcement of such options, rights, interests or encumbrances, he/it would cease to be a
controlling shareholder of our Company for the purposes of the Listing Rules.
Pursuant to Note (3) to Rule 10.07(2) of the Listing Rules, each of our Controlling Shareholders
has further undertaken to the Stock Exchange and to our Company that within the period commencing
on the date by reference to which disclosure of his/its shareholdings is made in this prospectus and to
the date which is 12 months from the Listing Date, he/it will:
(a) when he/it pledges or charges any securities of our Company or interests therein beneficially
owned by him/it in favour of any authorised institution pursuant to Note (2) to Rule 10.07(2)
of the Listing Rules, immediately inform our Company of such pledge or charge together
with the number of securities so pledged or charged; and
(b) when he/it receives indications, either verbal or written, from the pledgee or chargee that
any of the securities of our Company pledged or charged will be disposed of, immediately
inform our Company of such indications.
Under Note 3 to Rule 10.07(2) of the Listing Rules, our Company is required to inform the Stock
Exchange as soon as practicable after we have been informed of the matters referred to in (a) or (b)
above by any of our Controlling Shareholders and disclose such matters by way of an announcement in
compliance with the Listing Rules.
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UNDERTAKINGS PURSUANT TO THE HONG KONG UNDERWRITING AGREEMENT
Undertaking by our Company
Except pursuant to the Global Offering, during the period commencing on the date of this
prospectus and ending on, and including, the date that is six months after the Listing Date (the “ First
Six-Month Period ”), our Company has undertaken to each of the Joint Sponsors, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Capital Market Intermediaries and the Hong Kong Underwriters not to, without the
prior written consent of the Joint Sponsors and the Overall Coordinators (for themselves and on behalf
of the Hong Kong Underwriters) (such consent not to be unreasonably withheld or delayed) and unless
in compliance with the requirements of the Listing Rules:
(i) offer, allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or sell any option,
warrant, contract or right to subscribe for or purchase, grant or purchase any option, warrant,
contract or right to allot, issue or sell, or otherwise transfer or dispose of or create an
encumbrance over, or agree to transfer or dispose of or create an encumbrance over, either
directly or indirectly, conditionally or unconditionally, or repurchase, any legal or beneficial
interest in any H Shares or other securities of our Company, as applicable, or any interest in
any of the foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any other warrants
or other rights to purchase, any H Shares or other equity securities of our Company, as
applicable), or deposit any H Shares or any other securities of our Company, as applicable,
with a depositary in connection with the issue of depositary receipts; or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership (legal or beneficial) of any H Shares or other
securities of our Company, as applicable, or any interest in any of the foregoing (including,
without limitation, any securities convertible into or exchangeable or exercisable for or that
represent the right to receive, or any warrants or other rights to purchase, any H Shares or
other securities of our Company, as applicable); or
(iii) enter into any transaction with the same economic effect as any transaction specified in (i)
or (ii) above; or
(iv) offer to or agree to or announce any intention to effect any transaction specified in (i), (ii) or
(iii) above.
In the event of our Company doing any of the foregoing by virtue of the aforesaid exceptions or
during the six-month period commencing from the expiry of the First Six-Month Period (the “ Second
Six-Month Period ”), it will take all reasonable steps to ensure that such action will not create a
disorderly or false market in any of the Shares or other securities of our Company.
UNDERWRITING
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Undertaking by our Controlling Shareholders
Each of our Controlling Shareholders has also jointly and severally undertaken to each of our
Company, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, and the Hong Kong Underwriters that, (i) save as pursuant to the Global Offering; or
(ii) permitted under the Listing Rules, without the prior written consent of the Joint Sponsors and the
Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) (such consent not
to be unreasonably withheld or delayed):
(i) at any time during the First Six-Month Period, he/ it shall not, and shall procure that the
relevant registered holder(s), any nominee or trustee holding on trust for him/it and the
companies controlled by him/it (together, the “ Controlled Entities ”) shall not, (a) sell, offer
to sell, contract or agree to sell, mortgage, charge, pledge, hypothecate, lend, grant or sell
any option, warrant, contract or right to sell, or otherwise transfer or dispose of or create an
encumbrance over, either directly or indirectly, conditionally or unconditionally, any Shares
or other securities of our Company or any interest therein (including, without limitation, any
securities convertible into or exchangeable or exercisable for or that represent the right to
receive, or any warrants or other rights to purchase, any Shares) beneficially owned by
him/it directly or indirectly through its Controlled Entities (the “ Relevant Securities ”); 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 the Relevant Securities; (c) enter into or
effect any transaction with the same economic effect as any of the transactions referred to in
sub-paragraphs (a) or (b) above; or (d) offer to or agree to or announce any intention to
enter into or effect any of the transactions referred to in sub-paragraphs (a), (b) or (c) above,
which any of the foregoing transactions referred to in sub-paragraphs (a), (b), or (c) is to be
settled by delivery of Shares or such other securities of our Company or in cash or otherwise
(whether or not the issue of such Shares or other securities will be completed within the
First Six-Month Period);
(ii) at any time during the Second Six-Month Period, he/it shall not, and shall procure that the
Controlled Entities shall not, enter into any of the transactions referred to in (i)(a), (b) or (c)
above or offer to or agree to or announce any intention to enter into any such transaction if,
immediately following any sale, transfer or disposal or upon the exercise or enforcement of
any option, right, interest or Encumbrance pursuant to such transaction, he/it would cease to
be a “controlling shareholder” (as defined in the Listing Rules) of our Company or would
together with the other Controlling Shareholders cease to be “controlling shareholders” (as
defined in the Listing Rules) of our Company;
(iii) in the event that he/it enters into any of the transactions specified in (i)(a), (b) or (c) above
or offers to or agrees to or announce any intention to effect any such transaction within the
Second Six-Month Period, he/it shall take all steps to ensure that he/it will not create a
disorderly or false market for any Shares or other securities of our Company;
(iv) he/it shall, and shall procure that the relevant registered holder(s) and other Controlled
Entities shall, comply with all the restrictions and requirements under the Listing Rules on
the sale, transfer or disposal by him/it or by the registered holder(s) and/or other Controlled
Entities of any Shares or other securities of our Company; and
UNDERWRITING
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(v) notwithstanding anything contained herein, nothing in this Agreement shall prevent a
Controlling Shareholder from using the Shares and the securities of the Company
beneficially owned by it/him as security (including a charge or a pledge) in favour of an
authorised institution (as defined in the Banking Ordinance (Chapter 155 of the Laws of
Hong Kong) for a bona fide commercial loan.
Each of the Controlling Shareholders further undertakes to each of our Company, the Joint
Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital Market
Intermediaries that, within the period from the date by reference to which disclosure of their
shareholding in the Company is made in this prospectus and ending on the date which is twelve months
from the Listing Date, it/he/she will:
(a) when he/it pledges or charges any securities or interests in the Relevant Securities in favour
of an authorised institution (as defined in the Banking Ordinance (Chapter 155 of the Laws
of Hong Kong)) pursuant to Note (2) to Rule 10.07(2) of the Listing Rules, immediately
inform our Company, the Joint Sponsors and the Overall Coordinators in writing of such
pledges or charges together with the number of securities and nature of interest so pledged
or charged; and
(b) when he/it receives indications, either verbal or written, from any pledgee or chargee that
any of the pledged or charged securities or interests in the securities of our Company will be
sold, transferred or disposed of, immediately inform our Company, the Joint Sponsors and
the Overall Coordinators in writing of such indications.
INTERNATIONAL PLACING
International Underwriting Agreement
In connection with the International Placing, it is expected that our Company and Controlling
Shareholders will enter into the International Underwriting Agreement with, among others, the
International Underwriters, on terms and conditions that are substantially similar to the Hong Kong
Underwriting Agreement as described above and on the additional terms described below.
Under the International Underwriting Agreement, subject to the conditions set forth therein, the
International Underwriters are expected to procure subscribers and purchasers to subscribe for or
purchase, or failing which they shall subscribe for or purchase, the 76,646,000 International Placing
Shares initially being offered pursuant to the International Placing. It is expected that the International
Underwriting Agreement may be terminated on similar grounds as the Hong Kong Underwriting
Agreement. Potential investors shall be reminded that in the event that the International Underwriting
Agreement is not entered into, the Global Offering will not proceed. The International Underwriting
Agreement is conditional on and subject to the Hong Kong Underwriting Agreement having been
executed, becoming unconditional and not having been terminated. It is expected that pursuant to the
International Underwriting Agreement, our Company and Controlling Shareholders will make similar
undertakings as those given pursuant to the Hong Kong Underwriting Agreement as described in the
paragraphs headed “Undertakings pursuant to the Hong Kong Underwriting Agreement” in this section.
COMMISSION AND EXPENSES
The Underwriters and the Capital Market Intermediaries will receive an underwriting commission
of 4% of the aggregate Offer Price of all the Offer Shares, if any, (the “ Fixed Fees ”) out of which they
will pay any sub-underwriting commissions and other fees.
UNDERWRITING
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The Underwriters and the Capital Market Intermediaries may receive a discretionary incentive fee
of up to 2% of the aggregate Offer Price of all the Offer Shares, if any (the “ Discretionary Fees ”).
For any unsubscribed Hong Kong Offer Shares reallocated to the International Placing, the
underwriting commission will not be paid to the Hong Kong Underwriters but will instead be paid, at
the rate applicable to the International Placing, to the relevant International Underwriters.
The amount and respective entitlement among the Underwriters and the Capital Market
Intermediaries of which is expected to be determined before the Listing Date in compliance with the
Listing Rules. Assuming the Discretionary Fees are paid in full, the ratio of the Fixed Fees and the
Discretionary Fees paid or payable to all Underwriters and all Capital Market Intermediaries is 67:33.
The aggregate underwriting commissions and fees together with the Stock Exchange listing fees,
the SFC transaction levy, AFRC transaction levy and the Stock Exchange trading fee, legal and other
professional fees and printing and all other expenses relating to the Global Offering are estimated to be
approximately HK$76.3 million (assuming an Offer Price of HK$7.20 per Offer Share, and the full
payment of the discretionary incentive fee), which will be made by our Company.
INDEMNITY
Each of our Company and our Controlling Shareholders has agreed to indemnify the Hong Kong
Underwriters for certain losses which they may suffer or incur, including losses arising from the
performance of their obligations under the Hong Kong Underwriting Agreement and any breach by any
of our Company and our Controlling Shareholders of the Hong Kong Underwriting Agreement.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Placing (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 stabilising process.
The Syndicate Members and their affiliates are diversified financial institutions with relationships
in countries around the world. These entities engage in a wide range of commercial and investment
banking, brokerage, funds management, trading, hedging, investing and other activities for their own
account and for the account of others. In the ordinary course of their various business activities, the
Syndicate Members and their respective affiliates may purchase, sell or hold an array of investments
and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other
financial instruments for their own account and for the accounts of their customers. Such investment
and trading activities may involve or relate to assets, securities and/or instruments 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 H Shares, the activities of the Syndicate Members and their affiliates could
include acting as agent for buyers and sellers of the H Shares, entering into transactions with those
buyers and sellers in a principal capacity, including as a lender to initial purchasers of the H Shares
(which financing may be secured by the H Shares) in the Global Offering, proprietary trading in the H
Shares, and entering into over the counter or listed derivative transactions or listed or unlisted securities
transactions (including issuing securities such as derivative warrants listed on a stock exchange) which
have as their underlying assets, assets including the H Shares. Such transactions may be carried out as
bilateral agreements or trades with selected counterparties. Those activities may require hedging
activity by those entities involving, directly or indirectly, the buying and selling of the H Shares, which
may have a negative impact on the trading price of the H Shares. All such activities could occur in
UNDERWRITING
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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 H Shares, in baskets of securities or indices including the H
Shares, in units of funds that may purchase the H Shares, or in derivatives related to any of the
foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities having the H
Shares as their underlying securities, whether on the Stock Exchange or on any other stock exchange,
the rules of the stock exchange may require the issuer of those securities (or one of its affiliates or
agents) to act as a market maker or liquidity provider in the security, and this will also result in
hedging activity in the H Shares in most cases. Such activities may affect the market price or value of
the H Shares, the liquidity or trading volume in the H Shares and the volatility of the price of the H
Shares, and the extent to which this occurs from day to day cannot be estimated. It should be noted that
when engaging in any of these activities, the Syndicate Members will be subject to certain restrictions,
including the following:
(a) the Syndicate Members must not, in connection with the distribution of the Offer Shares,
effect any transactions (including issuing or entering into any option or other derivative
transactions relating to the Offer Shares), whether in the open market or otherwise, with a
view to stabilising or maintaining the market price of any of the Offer Shares at levels other
than those which might otherwise prevail in the open market; and
(b) the Syndicate Members must comply with all applicable laws and regulations, including the
market misconduct provisions of SFO, including the provisions prohibiting insider dealing,
false trading, price rigging and stock market manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time to time,
and expect to provide in the future, investment banking and other services to our Company and each of
its affiliates for which such Syndicate Members or their respective affiliates have received or will
receive customary fees and commissions.
In addition, the Syndicate Members or their respective affiliates may provide financing to
investors to finance their subscriptions of Offer Shares in the Global Offering.
UNDERWRITING
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--- page 263 ---
PRICING OF THE GLOBAL OFFERING
The Offer Price will be HK$7.20 per Offer Share.
PRICE PAYABLE ON APPLICATION
Applicants under the Hong Kong Public Offering might be required to pay, on application (subject
to application channels), the Offer Price of HK$7.20 per H Share plus 1.0% brokerage fee, 0.00565%
Stock Exchange trading fee, 0.0027% SFC transaction levy and 0.00015% AFRC transaction levy,
amounting to a total of HK$3,636.31 per board lot of 500 Offer Shares.
Further details are set out in the section headed “How to apply for Hong Kong Offer Shares” in
this prospectus.
REDUCTION OF THE NUMBER OF OFFER SHARES AND/OR THE OFFER PRICE
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where it
considers appropriate, based on the level of interest expressed by prospective professional, institutional
and private investors during a book-building process, and with the consent of our Company, reduce the
number of the Offer Shares and/or the Offer Price, 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 there to be posted on the website of the Stock Exchange ( www.hkexnews.hk
) and on
the website of our Company ( www.hqvt.com ) notices of the reduction of the Offer Shares and/or the
Offer Price.
Our Company will also, as soon as practicable following the decision to make such change, issue
a supplemental or new prospectus updating investors of the change in the number of Offer Shares and/
or the Offer Price, and giving investors at least three business days to consider the new information.
The supplemental or new prospectus should include at least the following: updated (i) Offer Price and
market capitalisation; (ii) listing timetable and underwriting obligations; (iii) unaudited pro forma and
adjusted net tangible assets; and (iv) use of proceeds and confirmation of the working capital adequacy
based on the revised estimated proceeds. The Global Offering must first be cancelled and subsequently
relaunched on FINI pursuant to the supplemental prospectus.
Applicants should have regard to the possibility that any notice 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.
In the absence of any such notice so announced and any such supplemental or new prospectus so
published, the number of Offer Shares and the Offer Price will not be reduced. If there is any change to
the offer size due to change in the number of Offer Shares initially offered in the Global Offering
(other than pursuant to the reallocation mechanism as disclosed in this prospectus), or change to the
Offer Price, or if the Company becomes aware that there has been a significant change affecting any
matter contained in this prospectus or a significant new matter has arisen, the inclusion of information
in respect of which would have been required to be in this prospectus if it had arisen before this
prospectus was issued, after the issue of this prospectus and before the commencement of dealings in
our H Shares as prescribed under Rule 11.13 of the Listing Rules, we are required to cancel the Global
Offering and relaunch the offer on FINI and issue a supplemental prospectus or a new prospectus (as
appropriate). Upon issue of such announcement or supplemental prospectus (as appropriate), the number
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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of Offer Shares offered in the Global Offering and/or the revised Offer Price, if agreed upon by the
Overall Coordinators (for themselves and on behalf of the Underwriters) and the Company, will be final
and conclusive.
In the event of a reduction in the number of Offer Shares being offered under the Global Offering,
the Overall Coordinators may at their discretion reallocate the number of Offer Shares to be offered
under the Hong Kong Public Offering and the International Placing, provided that the number of H
Shares comprised in the Hong Kong Public Offering shall not be less than 10.0% of the total number of
Offer Shares in the Global Offering. The Offer Shares to be offered in the International Placing 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.
The level of indications of interest in the International Placing, the level of applications in the
Hong Kong Public Offering, the basis of allocations of the Hong Kong Offer Shares and the results of
allocation in the Hong Kong Public Offering are expected to be announced on Thursday, 18 June 2026
through a variety of channels in the manner described in “How to Apply for the Hong Kong Offer
Shares — Publication of Results” in this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for the Offer Shares is conditional upon, among others, the
satisfaction of all of the following conditions:
1. Listing
The Listing Committee granting the approval of the listing of, and permission to deal in, the H
Shares in issue and the H Shares to be issued pursuant to the Global Offering and the Share Subdivision
(and such listing and permission not subsequently being revoked prior to the commencement of
dealings in the Shares on the Stock Exchange).
2. Underwriting Agreements
The obligations of the Underwriters under the Underwriting Agreements becoming and remaining
unconditional (including, if relevant, as a result of a waiver of any condition(s)) and such obligations
not being terminated in accordance with the terms of the Underwriting Agreements.
THE GLOBAL OFFERING
The Global Offering comprises the International Placing and the Hong Kong Public Offering. A
total of initially 85,162,500 Offer Shares will be made available under the Global Offering, of which
76,646,000 International Placing Shares (subject to reallocation), representing approximately 90% of
the total number of Offer Shares, will initially be conditionally placed with selected professional,
institutional and private investors under the International Placing. The remaining 8,516,500 Hong Kong
Offer Shares (subject to reallocation), representing approximately 10% of the total number of Offer
Shares, will initially be offered to members of the public in Hong Kong under the Hong Kong Public
Offering. The Hong Kong Public Offering is open to all members of the public in Hong Kong as well
as to institutional and professional investors. The Hong Kong Underwriters have agreed to underwrite
the Hong Kong Offer Shares under the terms of the Hong Kong Underwriting Agreement. The
International Underwriters will underwrite the International Placing Shares pursuant to the terms of the
International Underwriting Agreement. Further details of the underwriting are set out in the section
headed “Underwriting” in this prospectus. Investors may apply for Offer Shares under the Hong Kong
Public Offering or indicate an interest for Offer Shares under the International Placing, but may not do
both.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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The International Placing
Our Company is expected to offer initially 76,646,000 International Placing Shares (subject to
reallocation) at the Offer Price under the International Placing. The number of International Placing
Shares expected to be initially available for application under the International Placing represents
approximately 90% of the total number of Offer Shares being initially offered under the Global
Offering. The International Placing is expected to be fully underwritten by the International
Underwriters.
It is expected that the International Underwriters or selling agents nominated by them, on behalf
of our Company, will conditionally place the International Placing Shares at the Offer Price with
selected professional, institutional and private investors. Professional and institutional investors
generally include brokers, dealers, companies (including fund managers) whose ordinary business
involves dealing in shares and other securities and corporate entities which regularly invest in shares
and other securities. Private investors applying through banks or other institutions who sought the
International Placing Shares in the International Placing may also be allocated the International Placing
Shares.
Allocation of the International Placing Shares will be based on a number of factors, including the
level and timing of demand and whether or not it is expected that the relevant investor is likely to
acquire further H Shares and/or hold or sell its H Shares after the Listing. Such allocation is intended to
result in a distribution of the International Placing Shares on a basis which would lead to the
establishment of a solid shareholder base to the benefit of our Company and the Shareholders as a
whole. Investors to whom International Placing Shares are offered will be required to undertake not to
apply for Offer Shares under the Hong Kong Public Offering.
Our Company, our Directors, the Joint Sponsors and the Overall Coordinators (for themselves and
on behalf of the Underwriters) are required to take reasonable steps to identify and reject applications
under the Hong Kong Public Offering from investors who receive H Shares under the International
Placing, and to identify and reject indications of interest in the International Placing from investors who
receive H Shares under the Hong Kong Public Offering. The International Placing is expected to be
subject to the conditions as stated in the paragraphs headed “Conditions of the Global Offering” in this
section.
The Hong Kong Public Offering
Our Company is initially offering 8,516,500 Hong Kong Offer Shares for subscription (subject to
reallocation) by members of the public in Hong Kong under the Hong Kong Public Offering,
representing approximately 10% of the total number of Offer Shares offered under the Global Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters. Applicants for
the Hong Kong Offer Shares may be required on application (subject to application channels), to pay
the Offer Price of HK$7.20 per Offer Share plus 1.0% brokerage fee, 0.00565% Stock Exchange trading
fee, 0.0027% SFC transaction levy, and 0.00015% AFRC transaction levy.
The Hong Kong Public Offering is open to all members of the public in Hong Kong as well as to
institutional and professional investor. An applicant for H Shares under the Hong Kong Public Offering
will be required to give an undertaking and confirmation in the application submitted by him/her/it that
he/she/it has not applied for nor taken up any Offer Shares under the International Placing nor
otherwise participated in the International Placing. Applicants should note that if such undertaking
and/or confirmation given by an applicant is breached and/or is untrue (as the case may be), such
applicant’s application under the International Placing is liable to be rejected.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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The total number of Offer Shares available under the Hong Kong Public Offering (after taking
into account of any reallocation) is to be divided into two pools for allocation purposes: Pool A and
Pool B (with any odd lots being allocated to Pool A). Accordingly, the maximum number of Hong Kong
Offer Shares initially in Pool A and Pool B will be 4,258,500 and 4,258,000, respectively. The Offer
Shares in Pool A will be allocated on an equitable basis to valid applicants who have applied for Offer
Shares with an aggregate subscription price of HK$5.0 million (excluding the brokerage, SFC
transaction levy, Stock Exchange trading fee and AFRC transaction levy payable) or less. The Offer
Shares in Pool B will be allocated on an equitable basis to valid applicants who have applied for Offer
Shares with an aggregate subscription price of more than HK$5.0 million and up to the total value of
Pool B (excluding the brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC
transaction levy payable).
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 under-subscribed, the
surplus Offer Shares will be transferred to the other pool to satisfy demand in that other pool and be
allocated accordingly. For the purpose of this paragraph only, the “price” for Offer Shares means the
price payable on application therefor (without regard to the Offer Price as finally determined).
Applicants can only receive an allocation of Offer Shares from either Pool A or Pool B but not from
both pools.
Multiple applications or suspected multiple applications and any application made for more than
50% of the 8,516,500 Hong Kong Offer Shares initially comprised in the Hong Kong Public Offering
(i.e. 4,258,000 Hong Kong Offer Shares) are liable to be rejected.
Allocation of the Hong Kong Offer Shares to investors under the Hong Kong Public Offering will
be based solely on the level of valid applications received under the Hong Kong Public Offering. When
there is over-subscription under the Hong Kong Public Offering, allocation of the Hong Kong Offer
Shares may involve balloting, which would mean that some applicants may be allotted more Hong
Kong Offer Shares than others who have applied for the same number of the Hong Kong Offer Shares,
and those applicants who are not successful in the ballot may not receive any Hong Kong Offer Shares.
REALLOCATION OF THE OFFER SHARES BETWEEN INTERNATIONAL PLACING AND
HONG KONG PUBLIC OFFERING
The Offer Shares to be offered in the Hong Kong Public Offering and the International Placing
may, in certain circumstances, be reallocated as between these offerings at the discretion of the Overall
Coordinators. Subject to the allocation cap described in the subsequent paragraph, the Overall
Coordinators may in their discretion reallocate Offer Shares from the International Placing to the Hong
Kong Public Offering to satisfy valid applications under the Hong Kong Public Offering. In addition, if
the Hong Kong Public Offering is not fully subscribed, the Overall Coordinators will have the
discretion (but shall not be under any obligation) to reallocate to the International Placing all or any
unsubscribed Hong Kong Offer Shares in such amounts as they deem appropriate.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering will be
allocated between Pool A and Pool B and the number of Offer Shares allocated to the International
Placing will be correspondingly reduced in such manner as the Overall Coordinators deem appropriate.
In the event of reallocation of Offer Shares between the International Placing and the Hong Kong
Public Offering in the circumstances where (a) the International Placing Shares are fully subscribed or
oversubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed irrespective of
the number of times; or (b) the International Placing Shares are undersubscribed and the Hong Kong
Offer Shares are fully subscribed or oversubscribed irrespective of the number of times, then up to
4,257,500 Offer Shares may be reallocated from the International Placing to the Hong Kong Public
Offering, so that the total number of Offer Shares available for subscription under the Hong Kong
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 267 ---
Public Offering will increase up to 12,774,000 Offer Shares, representing approximately 15% of the
number of Offer Shares initially available under the Global Offering stated in this prospectus in
accordance with Chapter 4.14 of the Guide for New Listing Applicants. In the circumstance where the
International Placing Shares are fully subscribed or oversubscribed and the Hong Kong Offer Shares are
undersubscribed, there will be no reallocation from the International Placing to the Hong Kong Public
Offering.
Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Placing follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the Guide and
the provision of Paragraph 4.2(b) of Practice Note 18 of the Listing Rules, no mandatory clawback or
reallocation mechanism is required to increase the number of Offer Shares under the Hong Kong Public
Offering to a certain percentage of the total number of Offer Shares offered under the Global Offering.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and the
International Placing will be disclosed in the results announcement of the Global Offering, which is
expected to be published on Thursday, 18 June 2026.
Where the International Placing Shares are undersubscribed, if the Hong Kong Offer Shares are
also undersubscribed, the Global Offering will not proceed unless the Underwriters would subscribe or
procure subscribers for their respective applicable proportions of the Offer Shares being offered which
are not taken up under the Global Offering on the terms and conditions of this prospectus and the
Underwriting Agreements.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 268 ---
IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering. We
will not provide printed copies of this prospectus to the public in relation to the Hong Kong Public
Offering.
This prospectus is available at the website of the Hong Kong Stock Exchange at
www.hkexnews.hk
under the “HKEXnews > New Listings > New Listing Information” section, and
our website at www.hqvt.com . If you require a printed copy of this prospectus, you may download
and print from the website addresses above.
The contents of the electronic version of this prospectus are identical to the printed prospectus
as registered with the Registrar of Companies in Hong Kong pursuant to Section 342C of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance.
Set out below are procedures through which you can apply for the Hong Kong Offer Shares
electronically. We will not provide any physical channels to accept any application for the Hong
Kong Offer Shares by the public.
If you are an intermediary, broker or agent, please remind your customers, clients or principals,
as applicable, that this prospectus is available online at the website addresses 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:
 are 18 years of age or older;
 have a Hong Kong address (for the HK eIPO White Form service only);
Unless permitted by the Hong Kong Listing Rules or a waiver and/or consent has been granted by
the Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the person(s) for
whose benefit you are applying for:
 are an existing shareholder in our Company and/or any of its subsidiaries;
 are a Director or chief executive of our Company and/or any of its subsidiaries;
 are a close associate (as defined in the Listing Rules) of any of the above; or
 have been allocated or have applied for any International Placing Shares or otherwise
participate in the International Placing.
If you apply for Hong Kong Offer Shares online through the HK eIPO White Form service, in
addition to the above, you must also:
 have a Hong Kong address;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 269 ---
 have a valid Hong Kong identity card number/passport number (for individual applicant) or
Hong Kong business registration number/certificate of incorporation number (for body
corporate applicant); and
 provide a valid e-mail address and a contact telephone number.
If you are applying for the Hong Kong Offer Shares online by instructing your broker or
custodian who is a Clearing Participant or a CCASS Custodian Participant to give electronic
application instructions via CCASS terminals, please contact them for the items required for the
application.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Thursday, 11 June 2026
and end at 12:00 noon on Tuesday, 16 June 2026 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application channels:
Application Channel Platform Target Investors Application Time
HK eIPO White Form
service .............
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 Thursday, 11
June 2026 to 11:30 a.m. on
Tuesday, 16 June 2026, Hong
Kong time.
The latest time for completing
full payment of application
monies will be 12:00 noon on
Tuesday, 16 June 2026, 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 in
the name of HKSCC
Nominees, deposited directly
into CCASS and credited to
your designated HKSCC
Participant’s stock account
Contact your broker or custodian
for the earliest and latest time
for giving such instructions, as
this may vary by broker or
custodian
The HK eIPO White Form service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service interruptions and you are advised not to wait until the last day
of the application period to apply for Hong Kong Offer Shares.
For those applying through the HK eIPO White Form service, once you complete payment in
respect of any application instructions given by you or for your benefit through the HK eIPO White
Form service to make an application for Hong Kong Offer Shares, an actual application shall be
deemed to have been made. If you are a person for whose benefit the electronic application
instructions are given, you shall be deemed to have declared that only one set of electronic
application instructions has been given for your benefit. If you are an agent for another person, you
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 270 ---
shall be deemed to have declared that you have only given one set of electronic application
instructions for the benefit of the person for whom you are an agent and that you are duly authorised
to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the HK eIPO White Form
service more than once and obtaining different payment reference numbers without effecting full
payment in respect of a particular reference number will not constitute an actual application.
If you apply through the HK eIPO White Form service, you are deemed to have authorised 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 authorised 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 as shown on your identity
document
 Full name(s) 2 as shown on your identity
document
 Identity document’s issuing country or
jurisdiction
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. HKID card; or
ii. National identification document; or
iii. Passport; and
 Identity document type, with order of
priority:
i. Legal Entity Identifies (“ LEI”)
registration document; or
ii. Certificate of incorporation; or
iii. Business registration certificate; or
iv. Other equivalent document; and
 Identity document number  Identity document number
HOW TO APPLY FOR HONG KONG OFFER SHARES
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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:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which carries no right to
participate beyond a specified amount in a distribution of either profits or capital).
For those applying through HKSCC EIPO channel, and making an application under a power of
attorney, we and the Overall Coordinators, as our agent, have discretion to consider whether to accept it
on any conditions we think fit, including evidence of the attorney’s authority.
Failing to provide any required information may result in your application being rejected.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 272 ---
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 500 H Shares
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 see the
amount payable associated with each specified board
lot size in the table below.
The Offer Price is HK$7.20 per Offer Share.
If you are applying through the HKSCC EIPO
channel , your broker or custodian may require you to
pre-fund your application, in such amount as
determined by the broker or custodian, based on the
applicable laws and regulations in Hong Kong. You
are responsible for complying with any such
pre-funding requirement imposed by your broker or
custodian with respect to the Hong Kong Offer Shares
you applied for.
By instructing your broker or custodian to apply for
the Hong Kong Offer Shares on your behalf through
the HKSCC EIPO channel , you (and, if you are joint
applicants, each of you jointly and severally) are
deemed to have instructed and authorised HKSCC to
cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of
the Offer Price, brokerage, SFC transaction levy, the
Stock Exchange trading fee and the AFRC transaction
levy by debiting the relevant nominee bank account at
the Designated Bank for your broker or custodian.
If you are applying through the HK eIPO White
Form service, you may see the table below for the
amount payable for the number of Shares you have
selected. You must pay the respective maximum
amount payable on application in full upon application
for Hong Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 273 ---
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
HK$ HK$ HK$ HK$
500 3,636.31 7,000 50,908.29 50,000 363,630.60 700,000 5,090,828.40
1,000 7,272.61 8,000 58,180.90 60,000 436,356.72 800,000 5,818,089.60
1,500 10,908.92 9,000 65,453.51 70,000 509,082.85 900,000 6,545,350.80
2,000 14,545.22 10,000 72,726.12 80,000 581,808.95 1,000,000 7,272,612.00
2,500 18,181.54 15,000 109,089.18 90,000 654,535.08 2,000,000 14,545,224.00
3,000 21,817.83 20,000 145,452.25 100,000 727,261.20 3,000,000 21,817,836.00
3,500 25,454.14 25,000 181,815.30 200,000 1,454,522.40 4,258,000
(1) 30,966,781.90
4,000 29,090.45 30,000 218,178.35 300,000 2,181,783.60
4,500 32,726.75 35,000 254,541.42 400,000 2,909,044.80
5,000 36,363.05 40,000 290,904.48 500,000 3,636,306.00
6,000 43,635.67 45,000 327,267.55 600,000 4,363,567.20
Notes:
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is approximately 50% of the Hong Kong Offer
Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction
levy. If your application is successful, brokerage will be paid to the Exchange Participants (as defined in the Listing Rules)
or to the HK eIPO White Form Service Provider (for applications made through the application channel of the HK eIPO
White Form service) while the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will
be paid to the SFC, the Stock Exchange and the AFRC, respectively.
No application for any other number of Hong Kong Offer Shares will be considered and any such
application is liable to be rejected.
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. Application for Hong Kong Offer Shares —
3. Information Required to Apply” in this section. If you are suspected of submitting or cause to submit
more than one application, all of your applications will be rejected.
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 International Placing
Shares.
The H Share Registrar would record all applications into its system and identify suspected
multiple applications with identical names, identification document numbers and reference numbers
according to the Best Practice Note on Treatment of Multiple/Suspected Multiple Applications (“ Best
Practice Note ”) issued by the Federation of Share Registrars Limited.
Since applications are subject to personal information collection statements, beneficial owner
identification codes displayed are redacted. Applicants with beneficial names only but not identification
document numbers are not disclosed due to personal privacy issue.
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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):
(i) undertake to execute all relevant documents and instruct and authorise us and/or the Overall
Coordinators (or their respective agents or nominees), as our agents, to execute any
documents for you and to do on your behalf all things necessary to register any Hong Kong
Offer Shares allocated to you in your name or in the name of HKSCC Nominees as required
by the Articles of Association, and (if you are applying through the HKSCC EIPO channel)
to deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of your
designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the HK eIPO White
Form service (or as the case may be, the agreement you entered into with your broker or
custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong Offer
Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out in this
prospectus and they do not apply to you, or the person(s) for whose benefit you have made
the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied only on
the information and representations contained therein in making your application (or as the
case may be, causing your application to be made) and will not rely on any other
information or representations;
(vi) agree that our Company, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Underwriters and any of their respective directors, officers, employees,
partners, agents, advisers, or representatives or any other parties involved in the Global
Offering (collectively, the “ Relevant Persons ”), the H Share Registrar and HKSCC will not
be liable for any information and representations not in this prospectus and any supplement
to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit you have
made the application to us, the Relevant Persons, the H Share Registrar, HKSCC, HKSCC
Nominees, the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, for the purposes under the
paragraph headed “— G. Personal Data — 3. Purposes” and “4. Transfer of personal data” in
this section;
(viii) agree (without prejudice to any other rights which you may have once your application (or
as the case may be, HKSCC Nominees’ application) has been accepted) that you will not
rescind it because of an innocent misrepresentation;
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(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, any application made by you or HKSCC Nominees on your behalf
cannot be revoked once it is accepted, which will be evidenced by the notification of the
result of the ballot by the H Share Registrar by way of publication of the results at the time
and in the manner as specified in the paragraph headed “— B. Publication of Results” in this
section;
(x) confirm that you are aware of the situations specified in the paragraph headed “— C.
Circumstances In Which You Will Not Be Allocated Hong Kong Offer Shares” in this
section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it and the
resulting contract will be governed by and construed in accordance with the laws of Hong
Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any place
outside Hong Kong that apply to your application and that neither we nor the Relevant
Persons will breach any law inside and/or outside Hong Kong as a result of the acceptance
of your offer to purchase, or any action arising from your rights and obligations under the
terms and conditions contained in this prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf is not
financed directly or indirectly by our Company, any of the directors, chief executives,
substantial Shareholder(s) or existing shareholder(s) of our Company or any of its
subsidiaries or any of their respective close associates; and (b) you are not accustomed or
will not be accustomed to taking instructions from our Company, any of the directors, chief
executives, substantial shareholder(s) or existing shareholder(s) of our Company or any of 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;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong Kong Offer
Shares to you and that you may be prosecuted for making a false declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated to you
under the application;
(xvii) declare and represent that this is the only application made and the only application intended
by you to be made to benefit you or the person for whose benefit you are applying;
(xviii) (if the application is made for your own benefit) warrant that no other application has been
or will be made for your benefit by giving electronic application instructions to HKSCC
directly or indirectly or through the application channel of the HK eIPO White Form
service or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person) warrant that
(1) no other application has been or will be made by you as agent for or for the benefit of
that person or by that person or by any other person as agent for that person by giving
electronic application instructions to HKSCC or to 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 successfully allocated any Hong Kong Offer Shares through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website The designated results of allocations website at
www.hkeipo.hk/IPOResult or
www.tricor.com.hk/ipo/result with a “search by
ID” function on a 24-hour basis.
The full list of (i) wholly or partially successful
applicants using the HK eIPO White Form
service and HKSCC EIPO channel, and (ii) the
number of Hong Kong Offer Shares
conditionally allotted to them, among other
things, will be displayed at
www.hkeipo.hk/IPOResult
or
www.tricor.com.hk/ipo/result .
24 hours, from 11:00 p.m. on Thursday, 18 June
2026 to 12:00 midnight on Wednesday, 24 June
2026 (Hong Kong time)
The Stock Exchange’s website at
www.hkexnews.hk
and our website at
www.hqvt.com which will provide links to the
above mentioned websites of the H Share
Registrar.
No later than 11:00 p.m. on Thursday, 18 June
2026 (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 Monday, 22 June 2026
to Thursday, 25 June 2026 (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 Wednesday, 17 June 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Wednesday, 17 June 2026 (Hong Kong time) on a 24-hour basis and should report any discrepancies on
allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the results of the 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.hqvt.com by no
later than 11:00 p.m. on Thursday, 18 June 2026 (Hong Kong time).
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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 accept any application, or to accept only part of any application,
without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not grant
permission to list the H Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that longer
period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. You may see the
paragraph headed “— A. Application for Hong Kong Offer Shares — 5. Multiple
Applications Prohibited” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, it or we would
violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC Participants will
be required to hold sufficient application funds on deposit with their Designated Bank before balloting.
After balloting of Hong Kong Offer Shares, the Receiving Bank will collect the portion of these funds
required to settle each HKSCC Participant’s actual Hong Kong Offer Share allotment from their
Designated Bank.
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There is a risk of money settlement failure. In the extreme event of money settlement failure by a
HKSCC Participant (or its Designated Bank), who is acting on your behalf in settling payment for your
allotted 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 International Placing. Hong Kong Offer Shares applied for by
you through the broker or custodian may be affected to the extent of the settlement failure. In the
extreme case, you will not be allocated any Hong Kong Offer Shares due to the money settlement
failure by such HKSCC Participant. None of us, the Relevant Persons, the H Share Registrar and
HKSCC is or will be liable if Hong Kong Offer Shares are not allocated to you due to the money
settlement failure.
D. DESPATCH/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 at 8:00 a.m. on Monday, 22 June 2026 (Hong Kong
time), provided that the Global Offering has become unconditional and the right of termination
described in the section headed “Underwriting” has not been exercised. Investors who trade Shares
prior to the receipt of 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
Despatch/collection of H Share certificate 3
For application of 1,000,000 Hong
Kong Offer Shares or more ......
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
Monday, 22 June 2026 (Hong Kong
time) or such other date as notified by
our Company as the date of
dispatch/collection of H Share
certificates/ HK eIPO White Form
e-Auto Refund payment
instructions/refund cheques
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
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
authorisation from your corporation
stamped with your corporation’s chop
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
For application of less than 1,000,000
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: Thursday, 18 June 2026
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 Thursday, 18 June 2026
rendering it impossible for the relevant H Share certificates to be dispatched to HKSCC in a timely manner, the Company
shall procure the H Share Registrar to arrange for delivery of the supporting documents and H Share certificates in
accordance with the contingency arrangements as agreed between them. You may see “— E. Severe Weather
Arrangements” in this section.
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HK eIPO White Form service HKSCC EIPO channel
Refund mechanism for surplus application monies paid by you
Date ..................... Monday, 22 June 2026 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 Refund
payment instructions to your
designated bank account
Your broker or custodian will arrange
refund to your designated bank
account subject to the arrangement
between you and it
Application monies paid through
multiple bank accounts ........
Refund cheque(s) will be despatched to
the address as specified in your
application instructions by ordinary
post at your own risk
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Tuesday, 16 June 2026 if, there is:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 an “extreme conditions” announcement issued after a super typhoon (“ Extreme
Conditions ”),
(collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, 16 June 2026.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on the next
business day which does not have Severe Weather Signals in force at any time between 9:00 a.m. and
12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the dates
mentioned in the section headed “Expected Timetable” in this prospectus, an announcement will be
made and published on the Stock Exchange’s website at www.hkexnews.hk
and our website at
www.hqvt.com of the revised timetable.
If a Severe Weather Signal is hoisted on Thursday, 18 June 2026, 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 Monday, 22 June 2026.
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If a Severe Weather Signal is hoisted on Thursday, 18 June 2026, for application of less than
1,000,000 Hong Kong Offer Shares, the despatch of physical H Share certificate(s) will be made by
ordinary post when the post office re-opens after the Severe Weather Signal is lowered or cancelled
(e.g. in the afternoon of Thursday, 18 June 2026 or on Monday, 22 June 2026).
If a Severe Weather Signal is hoisted on Monday, 22 June 2026, for application of 1,000,000
Hong Kong Offer Shares or more, physical H Share certificate(s) will be available for collection in
person at the H Share Registrar’s office after the Severe Weather Signal is lowered or cancelled (e.g. in
the afternoon of Monday, 22 June 2026 or on Tuesday, 23 June 2026).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share certificates.
F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the Stock
Exchange and we comply with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect
from the date of commencement of dealings in the Shares or any other date HKSCC chooses.
Settlement of transactions between Exchange Participants is required to take place in CCASS on the
second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC Operational
Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into CCASS.
You should seek the advice of your broker or other professional adviser for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data collected
and held by our Company, the H Share Registrar, the receiving bank and the Relevant Persons about
you in the same way as it applies to personal data about applicants other than HKSCC Nominees. This
personal data may include client identifier(s) and your identification information. By giving application
instructions to HKSCC, you acknowledge that you have read, understood and agree to all of the terms
of the Personal Information Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of, Hong
Kong Offer Shares, of the policies and practices of our Company and the H Share Registrar in relation
to personal data and the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure that
personal data supplied to our Company or its agents and the H Share Registrar is accurate and
up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer Shares into or
out of their names or in procuring the services of the H Share Registrar.
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Failure to supply the requested data or supplying inaccurate data may result in your application
for Hong Kong Offer Shares being rejected, or in the delay or the inability of our Company or the H
Share Registrar to effect transfers or otherwise render their services. It may also prevent or delay
registration or transfers of Hong Kong Offer Shares which you have successfully applied for and/or the
despatch of H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform our Company
and the H Share Registrar immediately of any inaccuracies in the personal data supplied.
3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever means) for the
following purposes:
 processing your application and refund cheque and HK eIPO White Form e-Auto Refund
payment instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of allocation of
Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the Shares
including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of our Company;
 verifying identities of applicants for and holders of the Shares and identifying any duplicate
applications for the Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends, rights issues,
bonus issues, etc.;
 distributing communications from our Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable our
Company and the H Share Registrar to discharge their obligations to applicants and holders
of the Shares and/or regulators and/or any other purposes to which applicants and holders of
the Shares may from time to time agree.
4. Transfer of personal data
Personal data held by our Company and the H Share Registrar relating to the applicants for and
holders of Hong Kong Offer Shares will be kept confidential but our Company and the H Share
Registrar may, to the extent necessary for achieving any of the above purposes, disclose, obtain or
transfer (whether within or outside Hong Kong) the personal data to, from or with any of the following:
HOW TO APPLY FOR HONG KONG OFFER SHARES
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 our Company’s appointed agents such as financial advisers, receiving bank and overseas
principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the personal
data to the H Share Registrar, in each case for the purposes of providing its services or
facilities or performing its functions in accordance with its rules or procedures and operating
FINI and CCASS (including where applicants for the Hong Kong Offer Shares request a
deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to our Company or the H Share
Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental bodies or
otherwise as required by laws, rules or regulations, including for the purpose of the Stock
Exchange’s administration of the Listing Rules and the SFC’s performance of its statutory
functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have or
propose to have dealings, such as their bankers, solicitors, accountants or brokers etc.
5. Retention of personal data
Our Company and the H Share Registrar will keep the personal data of the applicants and holders
of Hong Kong Offer Shares for as long as necessary to 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 our
Company or the H Share Registrar hold their personal data, to obtain a copy of that data, and to correct
any data that is inaccurate. Our Company and the H Share Registrar have the right to charge a
reasonable fee for the processing of such requests. All requests for access to data or correction of data
should be addressed to our Company and the H Share Registrar, at their registered address disclosed in
the section headed “Corporate information” in this prospectus or as notified from time to time, for the
attention of our company secretary, or the H Share Registrar for the attention of the privacy compliance
officer.
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The following is the text of a report set out on pages I-1 to I-2, received from the Company’ s
reporting accountant, Confucius International CP A Limited, Certified Public Accountants, Hong Kong,
for the purpose of incorporation in this prospectus. It is prepared and addressed to the directors of the
Company and to the Joint Sponsors pursuant to the requirements of HKSIR 200, Accountants’ Reports
on Historical Financial Information in Investment Circulars issued by the Hong Kong Institute of
Certified Public Accountants.

楁㷗䀋Ṽ匲⢓㔎忻181嘇⣏㚱⣏⹰15㦻1501-1508⭌
Rooms 1501-8, 15/F., Tai Yau Building,
181 Johnston Road, Wanchai, Hong Kong
暣娙 Tel: (852) 3103 6980
⁛䛇 Fax: (852) 3104 0170
暣悝 Email: info@pccpa.hk
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SHENZHEN HQVT TECHNOLOGY CO., LTD. AND CMBC
INTERNATIONAL CAPITAL LIMITED AND SPDB INTERNATIONAL CAPITAL LIMITED
Introduction
We report on the historical financial information of Shenzhen HQVT Technology Co., Ltd. (the
“Company ”) and its subsidiaries (together, the “ Group ”) set out on pages I-3 to I-64, which comprises
the consolidated statements of financial position of the Group and the statements of financial position
of the Company as at 31 December 2023, 2024 and 2025, and 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 2023, 2024 and 2025
(the “ Track Record Period ”) and material accounting policy information and other explanatory
information (together, the “ Historical Financial Information ”). The Historical Financial Information
set out on pages I-3 to I-64 forms an integral part of this report, which has been prepared for inclusion
in the prospectus of the Company dated 11 June 2026 (the “ Prospectus ”) in connection with the initial
listing of H shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited.
Directors’ Responsibility for the Historical 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 set out in Note 2
to the Historical Financial Information, and for such internal control as the directors of the Company
determine is necessary to enable the preparation of Historical Financial Information that is free from
material misstatement, whether due to fraud or error.
Reporting Accountants’ Responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to report
our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment
Circular Reporting Engagements 200, “ Accountants’ Reports on Historical Financial Information in
Investment Circulars ” issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA”).
This standard requires that we comply with ethical standards and plan and perform our work to obtain
reasonable assurance about whether the Historical Financial Information is free from material
misstatement.
APPENDIX I ACCOUNTANTS’ REPORT
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Our work involved performing procedures to obtain evidence about the amounts and disclosures in
the Historical Financial Information. The procedures selected depend on the reporting accountants’
judgement, including the assessment of risks of material misstatement of the Historical Financial
Information, whether due to fraud or error. In making those risk assessments, the reporting accountant
considers internal control relevant to the entity’s preparation of Historical Financial Information that
gives a true and fair view in accordance with the basis of preparation set out in Note 2 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 Information gives, for the purposes of the accountants’
report, a true and fair view of the Company’s and the Group’s financial position as at 31 December
2023, 2024 and 2025 and of the Group’s financial performance and cash flows for the Track Record
Period in accordance with the basis of preparation and presentation set out in Note 2 to the Historical
Financial Information.
Report on Matters under the Rules Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited (the “Listing Rules”) and the Companies (Winding Up and Miscellaneous
Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying Financial
Statements as defined on page I-3 have been made.
Dividends
We refer to Note 13 to the Historical Financial Information which contains information about the
dividends paid by the Company in respect of the Track Record Period.
Confucius International CPA Limited
Certified Public Accountants
Hong Kong
11 June 2026
APPENDIX I ACCOUNTANTS’ REPORT
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I HISTORICAL FINANCIAL INFORMATION OF THE GROUP
Preparation of 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 Track Record Period, on which the
Historical Financial Information is based, have been prepared in accordance with the accounting
policies which conform with International Financial Reporting Standards (“ IFRS Accounting
Standards ”) issued by the International Accounting Standards Board (“ IASB”). For the purpose of
preparation of the Historical Financial Information, information is considered material if such
information is reasonably expected to influence decisions made by primary users. In addition, the
Historical Financial Information include applicable disclosures required by the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited and by the Hong Kong Companies
Ordinance, and were audited by Confucius International CPA Limited in accordance with Hong Kong
Standards on Auditing issued by HKICPA (“ the Underlying Financial Statements ”).
The Historical Financial Information is presented in Renminbi (“ RMB”), and all values are
rounded to the nearest thousand (RMB’000) except otherwise indicated.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue ............................ 6 117,063 522,568 668,519
Cost of sales ......................... 9 (102,756) (424,399) (519,127)
Gross profit ......................... 14,307 98,169 149,392
Other income ......................... 7 6,863 5,051 7,430
Other (losses)/gains, net ................... 8 (958) 56 (3,897)
General and administrative expenses ............ 9 (11,874) (13,040) (46,802)
Selling and marketing expenses .............. 9 (16,035) (16,470) (17,700)
Research and development expenses ............ 9 (11,084) (25,151) (50,793)
Net impairment losses on financial assets ......... 21,22 (1,631) (5,413) (6,484)
Operating (loss)/profit ................... (20,412) 43,202 31,146
Finance income ........................ 11 613 273 207
Finance costs ......................... 11 (3,055) (1,016) (3,862)
(Loss)/profit before income tax .............. (22,854) 42,459 27,491
Income tax credit/(expenses) ................ 12 4,441 (2,047) 1,863
(Loss)/profit and total comprehensive (loss)/income
for the year ........................ (18,413) 40,412 29,354
(Losses)/earnings per share (expressed in RMB per
share)
— Basic and diluted .................... 14 (2.33) 5.09 3.49
APPENDIX I ACCOUNTANTS’ REPORT
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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment ........... 16 22,959 20,555 25,493
Right-of-use assets ................... 17 21,062 15,283 11,251
Intangible assets ..................... 18 37,407 62,734 110,973
Deferred tax assets ................... 20 5,625 3,586 5,449
Other non-current assets ............... — 859 —
87,053 103,017 153,166
Current assets
Inventories ......................... 23 55,967 31,577 80,194
Trade and notes receivables ............. 21 19,817 145,676 184,423
Prepayments and other receivables ........ 22 8,085 27,066 158,345
Other current assets .................. 22 15,759 13,824 20,654
Notes receivables at fair value through other
comprehensive income ............... 3.5 663 479 —
Term deposits and restricted cash ........ 24 36,502 26,898 61,554
Cash and cash equivalents .............. 24 37,115 56,705 65,556
173,908 302,225 570,726
Current liabilities
Trade and notes payables .............. 26 45,060 79,557 45,882
Accruals and other payables ............ 27 10,044 23,516 25,192
Other current liabilities ................ — 862 998
Current income tax liabilities ........... 1 9——
Contract liabilities ................... 6 21,280 20,280 75,942
Lease liabilities ..................... 17 8,613 10,159 5,672
Borrowings ........................ 25 — 28,584 152,272
85,016 162,958 305,958
Net current assets ................... 88,892 139,267 264,768
Total assets less current liabilities ....... 175,945 242,284 417,934
Non-current liabilities
Lease liabilities ..................... 17 14,512 6,943 6,730
Borrowings ........................ 25 — 964 49,008
14,512 7,907 55,738
Net assets ......................... 161,433 234,377 362,196
Capital and reserves
Share capital ...................... 28 7,903 8,155 8,613
Reserves ......................... 30 153,530 226,222 353,583
Total equity ........................ 161,433 234,377 362,196
APPENDIX I ACCOUNTANTS’ REPORT
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STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment ........... 16 12,231 10,022 5,377
Right-of-use assets ................... 8,443 5,249 8,739
Deferred tax assets ................... 5,624 3,574 5,412
Intangible assets ..................... 18 37,407 62,734 110,973
Investments in subsidiaries ............. 15 22,000 21,000 31,912
85,705 102,579 162,413
Current assets
Inventories ......................... 23 30,957 8,666 49,717
Trade and notes receivables ............. 21 108,350 145,676 184,488
Prepayments and other receivables ........ 22 35,903 76,015 192,418
Other current assets .................. 22 14,201 10,818 6,645
Notes receivables at fair value through other
comprehensive income ............... 663 479 —
Term deposits and restricted cash ........ 24 25,889 25,785 40,409
Cash and cash equivalents .............. 24 34,971 17,136 59,362
250,934 284,575 533,039
Current liabilities
Trade and notes payables .............. 26 109,013 71,072 79,902
Accruals and other payables ............ 27 13,450 20,394 20,941
Other current liabilities ................ — 862 998
Current income tax liabilities ........... 1 9——
Contract liabilities ................... 6 21,280 20,280 75,942
Lease liabilities ..................... 3,227 3,491 3,416
Borrowings ........................ 25 — 18,545 103,193
146,989 134,644 284,392
Net current assets ................... 103,945 149,931 248,647
Total assets less current liabilities ....... 189,650 252,510 411,060
Non-current liability
Borrowings ........................ 25 — — 28,080
Lease liabilities ..................... 5,317 1,984 5,731
5,317 1,984 33,811
Net assets ......................... 184,333 250,526 377,249
Capital and reserves
Share capital ...................... 28 7,903 8,155 8,613
Reserves ......................... 30 176,430 242,371 368,636
Total equity ........................ 184,333 250,526 377,249
APPENDIX I ACCOUNTANTS’ REPORT
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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share capital Share premium
Statutory
reserves Other reserves
Retained
earnings/
(Accumulated
losses) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note (i)) (Note (ii)) (Note (iii))
Balance at 1 January 2023 ...... 7,903 189,365 — 3,942 (21,606) 179,604
Loss for the year ............ ———— (18,413) (18,413)
Total comprehensive expense for the
year .................. ———— (18,413) (18,413)
Share-based payments (Note 10) ... — — — 242 — 242
Balance at 31 December 2023 and 1
January 2024 ............. 7,903 189,365 — 4,184 (40,019) 161,433
Profit for the year ........... ———— 40,412 40,412
Total comprehensive income for the
year .................. ———— 40,412 40,412
Capital injection (Note 28(b)) ..... 252 29,748 — — — 30,000
Appropriations to statutory reserves . — — 1,664 — (1,664) —
Share-based payments (Note 10) ... — — — 2,532 — 2,532
Balance at 31 December 2024 and 1
January 2025 ............. 8,155 219,113 1,664 6,716 (1,271) 234,377
Profit for the year ........... ———— 29,354 29,354
Total comprehensive income for the
year .................. ———— 29,354 29,354
Capital injection (Note 28(b)) ..... 458 89,542 — — — 90,000
Appropriations to statutory reserves . — — 2,826 — (2,826) —
Share-based payment (Note 10) .... — — — 8,465 — 8,465
Balance at 31 December 2025 .... 8,613 308,655 4,490 15,181 25,257 362,196
Notes:
(i) The share premium account records the excess of the total consideration over the par value of the shares issued by the
Company, net of share issue expenses incurred.
(ii) Statutory reserve
Statutory reserve Pursuant to the Company Law of the PRC, the Company is required to appropriate 10% of its net profit
to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital. Subject to the approval of
the shareholders, the statutory reserve may be used to offset accumulated losses, or converted into capital of the Company
provided that the balance of the statutory surplus reserve after such capitalisation is not less than 25% of the registered
capital immediately before the capitalisation. The reserve cannot be used for purposes other than those for which it is
created and is not distributable as cash dividends.
(iii) The other reserves account records share-based compensation expenses.
APPENDIX I ACCOUNTANTS’ REPORT
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CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
OPERATING ACTIVITIES
Cash generated from/(used in) operations ......... 31(a) 68,958 (6,736) (129,362)
Interest received ....................... 613 273 207
Income tax paid ........................ — (28) (760)
Net cash generated from/(used in) operating
activities .......................... 69,571 (6,491) (129,915)
INVESTING ACTIVITIES
Proceeds from disposal of property, plant and
equipment, intangible assets and other non-current
assets ............................ —— 5
Withdraw of term deposits ................. 56,847 11,309 113,076
Payments for purchase of property, plant and
equipment, intangible assets and other non-current
assets ............................ (22,763) (33,987) (77,750)
Placement of term deposits ................. — — (145,809)
Net cash generated from/(used in) investing
activities .......................... 34,084 (22,678) (110,478)
FINANCING ACTIVITIES
Capital contributions from the Company’s shareholders . — 30,000 90,000
Proceeds from borrowings .................. — 29,500 297,040
Repayments of borrowings ................. (141,674) — (125,566)
Principal elements of lease payments ........... (9,285) (9,720) (7,187)
Interests paid ......................... (1,799) (1,021) (3,308)
Payments for listing expenses ................ — — (1,735)
Net cash (used in)/generated from financing
activities .......................... (152,758) 48,759 249,244
Net (decrease)/increase in cash and cash equivalents . (49,103) 19,590 8,851
Cash and cash equivalents at beginning of the year . 86,218 37,115 56,705
Cash and cash equivalents at the end of the year ... 24 37,115 56,705 65,556
APPENDIX I ACCOUNTANTS’ REPORT
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II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. GENERAL INFORMATION
Shenzhen HQVT Technology Co., Ltd. (hereinafter referred to as “ the Company ”) is a joint stock
company with limited liability incorporated in the People’s Republic of China (the “ PRC”). The former
name of the Company, Shenzhen Haiqing Video Technology Co., Ltd. (ʮ̡ ),
was incorporated in Shenzhen, the PRC as a limited liability company on 3 April 2013. The registered
office address of the Company is 3/F, Building 8, Taihua Wutong Industrial Park, Gushu Development
Zone, Xixiang Street, Bao’an District, Shenzhen, PRC.
In August 2022, the Company was converted into a joint stock company with limited liability
under the Company Law of the PRC. In November 2022, the Company completed the change of
industrial and commercial registration and issued a new business licence.
The Company and its subsidiaries (hereinafter collectively referred to as “ the Group ”) are
principally engaged in Multispectral AI Modules, Multispectral AI Perception Terminals, and
Multispectral AI Large Model Services.
The Company’s principal subsidiaries during the Track Record Period and as at the date of this
report are set out in Note 15.
No audited financial statements for the years ended 31 December 2023, 2024 and 2025 have been
prepared as the Company was not subject to any statutory audit requirements under the relevant rules
and regulations in jurisdiction of its registration.
The Historical Financial Information are presented in Renminbi (“ RMB”), which is also the
functional currency of the Company, and all values are rounded to the nearest thousands (RMB’000)
except otherwise indicated.
2. BASIS OF PREPARATION
The Historical Financial Information have been prepared in accordance with the accounting
policies which conform with International Financial Reporting Standards (“ IFRS Accounting
Standards ”) issued by the International Accounting Standards Board (“ IASB”). For the purpose of
preparation of the Historical Financial Information, information is considered material if such
information is reasonably expected to influence decisions made by primary users. In addition, the
Historical Financial Information include applicable disclosures required by the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited and by the Hong Kong Companies
Ordinance.
The Historical Financial Information has been prepared under the historical cost convention, as
modified by the revaluation of financial assets at fair value through other comprehensive income
(“FVOCI ”).
The preparation of the Historical Financial Information in conformity with IFRS Accounting
Standards requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the Historical Financial Information, are disclosed in Note 4 below.
APPENDIX I ACCOUNTANTS’ REPORT
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New standards, amendments and interpretations to the existing standards that are effective during
the Track Record Period have been adopted by the Group consistently throughout the years presented,
unless prohibited by the relevant standard to apply retrospectively.
Other than those material accounting policy information as disclosed elsewhere in this Historical
Financial Information, a summary of the other material accounting policy information has been set out
in Note 35 to this Historical Financial Information.
2.1 New and amendments to IFRS Accounting Standards has been issued but not yet effective
New and amendments to IFRS Accounting Standard that have been issued but not yet effective
and has not early applied are as follows:
Effective for accounting periods
beginning on or after
Amendments to IFRS 10 and IAS 28 ‘Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture’ ............
To be determined
Amendments to IFRS 9 and IFRS 7 ‘Amendments to the Classification
and Measurement of Financial Instruments’ ....................
1 January 2026
Amendments to IFRS 9 and IFRS 7 ‘Contracts Referencing
Nature-dependent Electricity’ ...............................
1 January 2026
Amendments to IFRS Accounting Standards, Annual Improvements to
IFRS accounting standards — V olume 11 ......................
1 January 2026
IFRS 18 ‘Presentation and Disclosure in Financial Statements’ ........ 1 January 2027
IFRS 19 ‘Subsidiaries without Public Accountability: Disclosures’ ..... 1 January 2027
Except for the impact of IFRS 18 mentioned below, other new/amended standards are either not
relevant to the Group or not expected to have a material impact on the Group’s consolidated financial
statements when they become effective.
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 “Presentation and Disclosure in Financial Statements”, which sets out requirements on
presentation and disclosures in financial statements, will replace IAS 1 “Presentation of Financial
Statements”. This new IFRS Accounting Standard, while carrying forward many of the requirements in
IAS 1, introduces new requirements to present specified categories and defined subtotals in the
statement of profit or loss; provide disclosures on management-defined performance measures in the
notes to the financial statements and improve aggregation and disaggregation of information to be
disclosed in the financial statements. In addition, some IAS 1 paragraphs have been moved to IAS 8
“Accounting Policies, Changes in Accounting Estimates and Errors” and IFRS 7 “Financial Instruments:
Disclosures”. Minor amendments to IAS 7 “Statement of Cash Flows” and IAS 33 “Earnings per Share”
are also made.
IFRS 18, and amendments to other standards, will be effective for annual periods beginning on or
after 1 January 2027, with early application permitted. The application of IFRS 18 is not expected to
have significant impact on the Group’s financial position and performance, but may affect the
presentation of the statement of profit or loss and disclosures in the future financial statements.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 293 ---
3. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate
risk and price risk), credit risk and liquidity risk. The Group’s overall risk management focuses on the
unpredictability of financial markets, seeks a balance between risk and return, and minimises the
adverse impact of risk on the Group’s financial performance. Based on this risk management objective,
the basic strategy of the Group’s risk management is to identify and analyse the various risks faced by
the Group, establish appropriate risk tolerance thresholds and timely and reliably supervise various
risks to control them within a limited range.
3.1 Market Risk
(a) Interest Rate Risk
The Group’s interest rate risk primarily arises from cash and cash equivalents, restricted cash and
term deposits, fixed-rate borrowings and lease liabilities. The Group currently does not have an interest
rate hedging policy. The management monitors interest rate risk exposure and will consider hedging
significant interest rate exposure should the need arises.
The Group regularly monitors its interest rate risk to ensure there is no undue exposure to
significant interest rate movements.
(b) Price Risk
The Group is mainly exposed to price risk in respect of the investments held by the Group and
classified as FVOCI. To manage its price risk arising from the investments, the Group diversifies its
portfolio. The investments are managed by management one by one, either for strategic purposes, or for
the purpose of achieving investment yield and balancing the Group’s liquidity level simultaneously. As
at 31 December 2023, 2024 and 2025, the financial impact of price risk is not material.
3.2 Credit Risk
Credit risk arises from cash and cash equivalents, restricted cash and term deposits, as well as
trade and notes receivables and other receivables. The carrying amount of each class of the above
financial assets represents the Group’s maximum exposure to credit risk in relation to the corresponding
class of financial assets.
(a) Risk Management
To manage this risk, cash and cash equivalents as well as restricted cash and term deposits are
mainly placed with state-owned or reputable financial institutions which are all high-credit-quality
financial institutions.
To manage risk from trade and notes receivables as well as other receivables, the Group has
policies in place to ensure that credit terms are made to counterparties with an appropriate credit
history and the management performs ongoing credit evaluations of the counterparties. It also has
continuous monitoring procedures to ensure the collection of the receivables as scheduled and follow up
action is taken to recover overdue debts, if any.
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Impairment of Financial Assets
The Group performs impairment assessments under the expected credit loss (“ ECL”) model on
financial assets at amortised cost, mainly including trade and notes receivables and other receivables.
The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial
recognition.
While cash and cash equivalents, restricted cash and term deposits are also subject to the
impairment requirements of IFRS 9, the identified impairment loss was immaterial.
Trade and notes receivables
For trade and notes receivables, the Group applies the simplified approach permitted by IFRS 9,
which requires expected lifetime losses to be recognised from the initial recognition of the trade and
notes receivables. The expected loss rates are based on the historical payment profiles, historical credit
loss rates by industry and data published by external credit rating institution, adjusted to reflect current
and forward-looking information on macroeconomic factors affecting the ability of the customers to
settle the receivables. The Group has identified Gross Domestic Product (GDP) in which it provides
services to be the most relevant factors, and accordingly adjusts the loss rates based on expected
changes in those factors. Details of the loss allowance of trade and notes receivables as at 31 December
2023, 2024 and 2025 are included in Note 21.
Other Receivables
Other receivables are mainly comprised of deposits and warranties and others. The Group
considers the probability of default upon initial recognition of the assets and whether there has been a
significant increase in credit risk on an ongoing basis throughout each of the periods. To assess whether
there is a significant increase in credit risk, the Group compares the risk of a default occurring on the
assets as of the reporting date with the risk of default as of the date of initial recognition. Especially
the following indicators are incorporated:
 actual or expected significant adverse changes in business, financial or economic conditions
that are expected to cause a significant change to the debtor’s ability to meet its obligations;
 external credit rating of the counterparty;
 actual or expected significant changes in the operating results of the debtor; and
 significant changes in the expected performance and behaviour of the debtor, including
changes in the payment status of debtor.
Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is
more than 365 days past due in making a contractual payment.
If the credit risk of the asset is in line with original expectations, the Group categorises the asset
as performing and recognises 12 months expected credit losses (Stage 1). If a significant credit risk of
the asset has occurred compared to original expectations or the credit is impaired, the asset is
categorised as underperforming or non-performing and lifetime expected credit losses are recognised
(Stages 2 and 3). Details of the loss allowance of other receivables as at 31 December 2023, 2024 and
2025 are included in Note 22.
APPENDIX I ACCOUNTANTS’ REPORT
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3.3 Liquidity Risk
The Group intends to maintain sufficient cash and cash equivalents. Due to the dynamic nature of
the underlying business, the policy of the Group is to regularly monitor the Group’s liquidity risk and
to maintain adequate liquid assets such as cash and cash equivalents and term deposits or to retain
adequate financing arrangements to meet the Group’s liquidity requirements.
The tables below analyse the Group’s financial liabilities that will be settled into relevant maturity
groupings based on the remaining period at each balance sheet date to their contractual maturity date.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12
months equal their carrying balances as the impact of discounting is not significant.
Less than
1 year
Between 1
and 2 years
Between 2
and 5 years
Over
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2023
Trade and notes payables .............. 45,060 — — — 45,060 45,060
Accruals and other payables (excluding
non-financial liabilities) .............. 2,658 — — — 2,658 2,658
Lease liabilities .................... 9,322 9,588 5,335 — 24,245 23,125
57,040 9,588 5,335 — 71,963 70,843
Less than
1 year
Between 1
and 2 years
Between 2
and 5 years
Over
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2024
Trade and notes payables .............. 79,557 — — — 79,557 79,557
Accruals and other payables (excluding
non-financial liabilities) .............. 14,724 — — — 14,724 14,724
Lease liabilities .................... 10,606 5,971 1,081 — 17,658 17,102
Borrowings ...................... 29,394 68 956 — 30,418 29,548
Other current liabilities ............... 862 — — — 862 862
135,143 6,039 2,037 — 143,219 141,793
Less than
1 year
Between 1
and 2 years
Between 2
and 5 years
Over
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2025
Trade and notes payables .............. 45,882 — — — 45,882 45,882
Accruals and other payables (excluding
non-financial liabilities) .............. 11,060 — — — 11,060 11,060
Lease liabilities .................... 5,960 4,682 2,238 — 12,880 12,402
Borrowings ...................... 153,669 49,341 — — 203,010 201,280
Other current liabilities ............... 998 — — — 998 998
217,569 54,023 2,238 — 273,830 271,622
3.4 Capital Management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to
continue as a going concern and to maintain healthy capital ratios in order to support its business and
maximise shareholders’ value.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 296 ---
The Group manages its capital structure in light of changes in economic conditions and the risk
characteristics of the underlying assets. To maintain or adjust the capital structure, the Group may
adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. In the
opinion of the directors of the Company, the Group’s capital risk is not significant.
The Group believes that cash flows from operating activities and available cash and cash
equivalents will be sufficient to fund capital expenditures, debt servicing, dividend payments and other
cash requirements going forward.
3.5 Fair Value Estimation
(a) Determination of Fair V alue and the Fair V alue Hierarchy of Financial Instruments
This note provides information on how the Group determines the fair values of various financial
assets and liabilities.
For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3
based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its entirety, which are described as follows:
 Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date;
 Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and
 Level 3 inputs are unobservable inputs for the asset or liability.
As at 31 December 2023 Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at FVOCI
— Notes receivables ............ — 663 — 663
As at 31 December 2024 Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at FVOCI
— Notes receivables ............ — 479 — 479
As at 31 December 2025 Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at FVOCI
— Notes receivables ............. ————
The timing of transfers is determined at the date of the event or change in circumstances that
caused the transfers. During the Track Record Period, there was no transfer between Level 1 and Level
2.
APPENDIX I ACCOUNTANTS’ REPORT
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(b) The Group’s V aluation Process
For the financial assets and financial liabilities, including Level 3 fair values, the Group’s finance
department performs the valuations for financial reporting purpose. The finance department reports the
valuation results to the management.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group continually evaluates the critical accounting estimates and key judgements applied
based on historical experience and other factors, including expectations of future events that are
believed to be reasonable.
The critical accounting estimates and key assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities are outlined below:
(a) Allowance for Expected Credit Loss of Receivables
The loss allowances for receivables are based on assumptions about the risk of default and
expected loss rates to determine the expected loss. The Group uses judgement in making these
assumptions and selecting the inputs to the impairment calculation. The historical loss rates are adjusted
to reflect the forward-looking information on macroeconomic factors as well as the credit rating
analysis of respective customers and other external data which have impacts to the ability of the
customers to settle the receivables. Details of the key assumptions and inputs are disclosed in Note
3.2(b).
(b) Estimated Net Realisable Value of Inventories
In accordance with the Group’s accounting policy, the Group estimates net realisable value of
inventories based on specific facts and circumstances. For different types of inventories, it requires the
estimation on selling prices, costs of conversion, selling expenses and the related tax expense to
calculate the net realisable amount of inventories. For inventories held for executed sales contracts,
management estimates the net realisable amount based on the contracted price. For raw materials and
work-in-progress, management has established a model in estimating the net realisable amount at which
the inventories can be realisable in the normal course of business after considering the manufacturing
cycles, production capacity and forecasts, estimated future conversion costs and selling prices.
Management also takes into account the price or cost fluctuations and other related matters occurring
after the end of the year which reflect conditions that existed at the end of each year.
It is reasonably possible that if there is a significant change in circumstances including the
Group’s business and the external environment, outcomes would be significantly affected.
(c) Valuation of Share-Based Payments
The fair value of restricted stock units at the grant date is determined by using valuation
techniques. Significant estimates on assumptions are made based on management’s best estimates.
Further details are included in Note 29.
(d) Income Tax
The Group estimates its income tax provision and deferred taxation in accordance with the
prevailing tax rules and regulations, taking into account any special approvals obtained from the
relevant tax authorities and any preferential tax treatment to which it is entitled in each location or
jurisdiction in which the Group operates. There are many transactions and calculations for which the
APPENDIX I ACCOUNTANTS’ REPORT
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ultimate tax determination is uncertain during the ordinary course of business. The Group recognises
liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially recorded,
the differences will impact on the income tax and deferred tax provisions in the period in which the
determination is made.
Deferred tax assets are recognised for unused tax losses and deductible temporary differences,
such as the provision for impairment of receivables, inventories and property, plant and equipment and
accruals of expenses not yet deductible for tax purposes, to the extent that it is probable that taxable
profits will be available against which the unused tax losses and the deductible temporary differences
can be utilised. Significant estimation is required in determining the recoverability of deferred tax
assets.
In the event that future tax rules and regulations or related circumstances change, adjustments to
current and deferred taxation may be necessary which would impact on the Group’s results or financial
position.
5. OPERATING SEGMENT INFORMATION
The Group does not distinguish revenue, costs and expenses between segments in its internal
reporting, and reports costs and expenses by nature as a whole.
The information reported to the directors, who are the chief operating decision makers, for the
purpose of resource allocation and assessment of performance does not contain discrete operating
segment financial information and the directors reviewed the financial results of the Group as a whole.
Therefore, no further information about the operating segment is presented.
(a) Geographical information
The Company is domiciled in Mainland China. The amount of the Group’s revenue from contracts
with external customers by locations is shown in the table below:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Mainland China ...................... 110,186 517,567 662,554
Overseas ........................... 6,877 5,001 5,965
117,063 522,568 668,519
Information about the Group’s non-current assets excluding deferred tax assets and financial
instruments is presented based on the geographical locations of the assets.
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Chinese Mainland .................... 81,428 98,572 147,717
Other countries or regions ............... ———
81,428 98,572 147,717
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(b) Revenue from Major Customers
The major customers who contributed 10% or more of the Group’s revenue for the years ended 31
December 2023, 2024 and 2025 are set out below:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Customer A ......................... 23,002 * *
Customer F ......................... * 185,659 71,777
Customer K ......................... * * 94,000
* Less than 10% of the Group’ s revenue for respective years.
6. REVENUE
(a) Disaggregation of revenue from contracts by products and services:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Multispectral AI
Multispectral AI Modules ............... 99,121 299,228 209,044
Multispectral AI Perception Terminals ...... 12,586 61,229 92,638
Multispectral AI Large Model Services ..... — 113,791 355,364
111,707 474,248 657,046
Others
Other AI Vision Modules ............... 5,150 47,080 10,258
Other Services ....................... 206 1,240 1,215
5,356 48,320 11,473
117,063 522,568 668,519
The timing of revenue recognition is shown in the table below:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At a point in time ..................... 117,063 521,577 667,528
Over time ........................... — 991 991
117,063 522,568 668,519
APPENDIX I ACCOUNTANTS’ REPORT
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Unsatisfied performance obligation
The transaction price allocated to the remaining performance obligations (unsatisfied or partially
unsatisfied) as at 31 December 2023 and the expected timing of recognising revenue are as follows:
Multispectral
AI Modules
Multispectral
AI Perception
Terminals
Multispectral
AI Large Model
Services
Other AI Vision
Modules Other Services Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Within one year ............. 20,344 20 — 51 1 20,416
More than one year but not more
than two years ............ 489 5 — 75 — 569
More than two years .......... 153 — — 142 — 295
20,986 25 — 268 1 21,280
The transaction price allocated to the remaining performance obligations (unsatisfied or partially
unsatisfied) as at 31 December 2024 and the expected timing of recognising revenue are as follows:
Multispectral
AI Modules
Multispectral
AI Perception
Terminals
Multispectral
AI Large Model
Services
Other AI Vision
Modules Other Services Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Within one year ............. 888 15,373 2,876 3 612 19,752
More than one year but not more
than two years ............ 494 7 — 7 — 508
More than two years .......... 2 0————2 0
1,402 15,380 2,876 10 612 20,280
The transaction price allocated to the remaining performance obligations (unsatisfied or partially
unsatisfied) as at 31 December 2025 and the expected timing of recognising revenue are as follows:
Multispectral
AI Modules
Multispectral
AI Perception
Terminals
Multispectral
AI Large Model
Services
Other AI Vision
Modules Other Services Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Within one year ............. 666 774 74,283 164 1 75,888
More than one year but not more
than two years ............ 2 2————2 2
More than two years .......... 3 2————3 2
720 774 74,283 164 1 75,942
(b) Contract Liabilities
During the Track Record Period, the additions to the contract liabilities were primarily due to cash
collections in advance of fulfilling performance obligations, while the reductions to the contract
liabilities were primarily due to the recognition of revenues upon fulfilment of performance obligations.
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Contract liabilities .................... 21,280 20,280 75,942
APPENDIX I ACCOUNTANTS’ REPORT
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The following table shows the amounts of revenue, which was included in the contract liabilities
at the beginning of the period, recognised during the Track Record Period relates to carried-forward
contract liabilities:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue recognised that was included in the
beginning balance ................... 1,030 20,758 19,747
(c) Accounting Policies and Significant Judgements for Revenue Recognition
The Group recognises revenue when (or as) a performance obligation is satisfied, i.e., when
control of the goods or services underlying the particular performance obligation is transferred to the
customer.
If control of the goods and services transfers over time, revenue is recognised over the period of
the contract by reference to the progress towards complete satisfaction of that performance obligation.
Otherwise, revenue is recognised at a point in time when the customer obtains control of the goods and
services.
When the consideration in a contract includes a variable amount, the amount of consideration is
estimated to which the Group will be entitled in exchange for transferring the goods or services to the
customer. The variable consideration is estimated at contract inception and constrained until it is highly
probable that a significant revenue reversal in the amount of cumulative revenue recognised will not
occur when the associated uncertainty with the variable consideration is subsequently resolved.
If a customer pays consideration or the Company has a right to an amount of consideration that is
unconditional, before the Company transfers a good or service to the customer, the Company presents
the contract liability when the payment is made. A contract liability is the Company’s obligation to
transfer goods or services to a customer for which the Company has received consideration (or an
amount of consideration is due) from the customer.
(i) Sales of Goods
Revenue from sales of goods comprises Multispectral AI Modules, Multispectral AI Perception
Terminals, Multispectral AI Large Model Services and Other AI Vision Modules.
Revenue from sales of goods shall be recognised based on the sales contracts, settlement vouchers
and other documents upon completion of product delivery and the buyer’s confirmation for the
acceptance of the products. Upon confirming the acceptance, the buyer has the right to sell the products
at its discretion and takes the risks of any price fluctuation and obsolescence and loss of the products.
(ii) Other Services Revenue
Other services revenue primarily comprises fees from subscription service and maintenance
service.
Subscription service: revenue from this type is systematically recognised on a straight-line basis
over the service terms.
APPENDIX I ACCOUNTANTS’ REPORT
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Maintenance service: revenue from this type is recognised when the company completes the
relevant technical services as stipulated in the contract.
7. OTHER INCOME
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Government grants (Note (i)) ............. 1,986 2,877 2,957
V AT refund (Note (ii)) ................. 2,467 613 291
Interest income (Note (iii)) .............. 2,410 1,100 1,913
Additional deduction for V AT (Note (iv)) .... — 458 2,266
Others ............................. —33
6,863 5,051 7,430
Notes:
(i) The amount represents various subsidies received from the PRC local government authorities as incentives mainly for the
Group’s research and development activities and financing activities. Unconditional government grants are recognised in
profit and loss when received while conditional government grants are recognised in profit or loss when the Group fulfilled
the conditions.
(ii) In accordance with the Notice of Ministry of Finance and State Administration of Taxation on Value-added Tax Policies for
Software Products which was promulgated by the Ministry of Finance and the State Administration of Taxation on 13
October 2011 and came into effect on 1 January 2011, enterprises engaged in the sales of self-developed software in the
PRC are entitled to the value added tax refund to the portion of value-added tax actually paid which exceeds 3% of the
related sale amounts.
(iii) The amount mainly comprises interest income on the Group’s term deposits classified as financial assets at amortised cost
calculated using the effective interest method. Interest income from cash and cash equivalent is included in “Finance
income” (Note 11).
(iv) Pursuant to the Announcement [2023] No. 43 “Notice on the Additional Value-Added Tax (“ VAT”) Deduction Policy for
Advanced Manufacturing Enterprises (ʮѓ )” issued in 2023 by the
Ministry of Finance and the State Taxation Administration, advanced manufacturing enterprises are eligible for a 5%
additional V AT deduction based on deductible input V AT from 1 January 2023 to 31 December 2027.
8. OTHER (LOSSES)/GAINS, NET
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Net losses on disposal of financial
instruments ........................ (940) — (1,762)
Net foreign exchange differences .......... 20 13 29
Net losses on disposal of property, plant and
equipment ........................ (165) (16) (3,792)
Net gains/(losses) on termination of
right-of-use assets ................... 267 (9) 803
Others ............................. (140) 68 825
(958) 56 (3,897)
APPENDIX I ACCOUNTANTS’ REPORT
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9. EXPENSE BY NATURE
Expenses included in cost of sales, general and administrative expenses, selling and marketing
expenses and research and development expenses are analysed as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials and consumables used ....... 72,052 382,319 477,342
Employee benefit expenses (Note 10) ....... 50,645 47,460 70,160
Less: capitalised in development costs ...... (15,903) (11,711) (12,879)
34,742 35,749 57,281
Depreciation and amortisation ............ 17,044 19,333 23,431
Less: capitalised in development costs ...... (2,428) (2,084) (1,765)
14,616 17,249 21,666
Professional services and other consulting
fees ............................. 5,520 14,348 10,260
Less: capitalised in development costs ...... (603) (190) (224)
4,917 14,158 10,036
Outsourcing service fees ................ 290 29,806 60,175
Less: capitalised in development costs ...... (74) (15,603) (29,676)
216 14,203 30,499
Impairment losses on inventories .......... 5,742 4,317 6,894
Business entertainment expenses .......... 2,027 2,072 1,850
Taxes and surcharges .................. 647 1,704 2,063
Office expenses ...................... 633 821 1,436
Marketing expenses ................... 2,025 3,158 2,704
Listing expenses ...................... — — 17,426
Auditors’ remuneration ................. 283 142 —
Other expenses ....................... 3,849 3,168 5,225
141,749 479,060 634,422
10. EMPLOYEE BENEFIT EXPENSES (INCLUDING DIRECTOR’S REMUNERATION)
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, wages and bonuses ............. 45,965 40,760 55,931
Share-based compensation expenses ........ 242 2,532 8,465
Housing fund, medical insurance and other
social insurance ..................... 1,785 1,363 1,741
Pension costs (Note) ................... 1,227 1,706 3,113
Other employee benefits ................ 1,426 1,099 910
50,645 47,460 70,160
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 304 ---
Note: The Group is required to make contributions for its employees in the PRC to the state-sponsored retirement plan at a
certain rate based on the qualified salaries of the individual employees. The PRC government is responsible for the
pension liability of the retired employees.
During the years ended 31 December 2023, 2024 and 2025, no forfeited contributions were utilised by the Group to
reduce its contributions for the current year.
(a) Directors’ and Supervisors’ Remuneration
Directors’ and supervisors’ remuneration for the year, disclosed pursuant to the applicable Listing
Rules and the Hong Kong Companies Ordinance, is as follows:
Y ear ended 31 December 2023 Fees
Salaries,
wages and
bonuses
Retirement
benefits
Housing fund
and other
benefits
Share-based
compensation
expenses
Total
remuneration
before tax
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Directors:
Mr. Zhou Bo ............. — 9 3 1483 9 4 6
Mr. Zou Xiaogang .......... —5 7 4 4 8 —5 8 6
Mr. Chen Yonggang ......... —6 3 9 4 8 —6 5 1
Mr. Miao Rui ............. —6 0 3 4 8 —6 1 5
Mr. Liu Qiang ............ 6 0————6 0
Mr. Gong Zhaohui .......... 6 0————6 0
Mr. Chai Yu .............. 6 0————6 0
Mr. Yu Lijie .............. ——————
Supervisors:
Mr. Liang Shuyu (i) ......... —2 9 9 2 8 —3 0 9
Mr. Wu Xinyu (iv) .......... —3 7 6 4 7 —3 8 7
Mr. Xiao Yuanping (ii) ....... —4 8 6 4 8 —4 9 8
Mr. Liang Feng (iii) ......... —6 0 1 2—6 3
Total .................. 180 3,968 27 57 3 4,235
Y ear ended 31 December 2024 Fees
Salaries,
wages and
bonuses
Retirement
benefits
Housing fund
and other
benefits
Share-based
compensation
expenses
Total
remuneration
before tax
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Directors:
Mr. Zhou Bo ............. — 884 13 9 3 909
Mr. Zou Xiaogang .......... —6 0 9 7 7 —6 2 3
Mr. Chen Yonggang ......... — 711 6 7 — 724
Mr. Miao Rui ............. — 710 6 11 — 727
Mr. Liu Qiang ............ 6 0————6 0
Mr. Gong Zhaohui .......... 6 0————6 0
Mr. Chai Yu .............. 6 0————6 0
Mr. Yu Lijie .............. ——————
Supervisors:
Mr. Wu Xinyu (iv) .......... — 581 6 11 — 598
Mr. Xiao Yuanping (ii) ....... —4 8 1 6 7 —4 9 4
Total .................. 180 3,976 44 52 3 4,255
APPENDIX I ACCOUNTANTS’ REPORT
– I-21 –


--- page 305 ---
Y ear ended
31 December 2025 Fees
Salaries,
wages and
bonuses
Retirement
benefits
Housing fund
and other
benefits
Share-based
compensation
expenses
Total
remuneration
before tax
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Directors:
Mr. Zhou Bo ............. — 2,424 19 12 3 2,458
Mr. Zou Xiaogang .......... —6 2 9 9 8 —6 4 6
Mr. Chen Yonggang ......... —8 1 4 9 7 —8 3 0
Mr. Miao Rui ............. — 986 9 11 — 1,006
Mr. Liu Qiang ............ 3 0————3 0
Mr. Gong Zhaohui .......... 3 0————3 0
Mr. Chai Yu .............. 3 0————3 0
Mr. Chai Jian (v) .......... — 1,163 14 10 2,320 3,507
Mr. Yu Lijie .............. ——————
Ms. He Jiaqian (vi) ......... 7 2————7 2
Mr. Zhong Luhuan (vi) ....... 3 0————3 0
Mr. Chen Haiping (vi) ....... 3 0————3 0
Supervisors:
Mr. Wu Xinyu (iv) .......... —2 8 5 4 8 —2 9 7
Mr. Xiao Yuanping (ii) ....... —2 1 3 4 6 —2 2 3
Total .................. 222 6,514 68 62 2,323 9,189
Notes:
(i) Mr. Liang Shuyu served as a supervisor of the Company from August 2022 and resigned in July 2023.
(ii) Mr. Xiao Yuanping was appointed as a supervisor of the Company from August 2022 and resigned in July 2025.
(iii) Mr. Liang Feng served as a supervisor of the Company from August 2022 and resigned in February 2023.
(iv) Mr. Wu Xinyu was appointed as a supervisor of the Company from February 2023 and resigned in July 2025.
(v) Mr. Chai Jian was appointed as a director of the Company from July 2025.
(vi) Ms. He Jiaqian, Mr. Zhong Luhuan and Mr. Chen Haiping were appointed as directors of the Company from July 2025.
(b) Directors’ and Supervisors’ Other Benefits
No termination benefits were paid to the directors and supervisors of the Company by the Group
in respect of the director’s services as a director and a supervisor of the Group or other services in
connection with the management of the affairs of the Group during the Track Record Period.
No consideration provided to third parties for making available directors’ and supervisors’ services
subsisted at the end of each reporting period or at any time during the Track Record Period.
There were no loans, quasi-loans or other dealings entered into in favour of directors, controlled
bodies corporate by and connected entities with such directors during the Track Record Period.
Save as disclosed in Note 33, there were no significant transactions, arrangements and contracts in
relation to the Group’s business to which the Company was a party and in which a director and a
supervisor of the Company had a material interest, whether directly or indirectly, subsisted during the
Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 306 ---
(c) Five Highest Paid Individuals
The five individuals whose emoluments were the highest in the Group for the years ended 31
December 2023, 2024 and 2025 include 2, 2 and 2 directors respectively whose emoluments are
reflected in the analysis shown in Note 10(a) above. The emoluments paid to the remaining 3, 3 and 3
individuals during the years ended 31 December 2023, 2024 and 2025, respectively, are as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Wages, salaries and bonuses and benefits in
kind (including pension costs) .......... 2,251 2,197 1,607
Share-based payments .................. 167 339 2,369
2,418 2,536 3,976
The number of the above individuals other than directors whose remuneration fell within the
following bands is as follows:
Y ear ended 31 December
2023 2024 2025
HK$500,001 to HK$1,000,000 ............ 33 —
HK$1,000,001 to HK$1,500,000 .......... —— 2
HK$1,500,001 to HKD2,000,000 .......... —— 1
333
11. FINANCE INCOME AND FINANCE COSTS
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Finance income:
Interest income from financial assets held for
cash management purposes ............ 613 273 207
Finance costs:
Interest expenses on lease liabilities ........ (988) (835) (564)
Interest expenses on borrowings .......... (1,955) (66) (3,002)
Others ............................. (112) (115) (296)
(3,055) (1,016) (3,862)
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 307 ---
12. INCOME TAX (CREDIT)/EXPENSES
The income tax expenses of the Group during the Track Record Period are analysed as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Adjustments for current tax of prior years ... 19 8 —
Deferred income tax ................... (4,460) 2,039 (1,863)
(4,441) 2,047 (1,863)
The income tax on the Group’s profit before income tax differs from the theoretical amount that
would arise using the enacted tax rate applicable to profits of the consolidated entities as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
(Loss)/profit before income tax .......... (22,854) 42,459 27,491
Income tax calculated at statutory income tax
rate of 25% in the PRC (a) ............ (5,713) 10,615 6,873
Tax effect of:
Preferential income tax rates applicable to the
Company ......................... 2,115 (3,820) (2,440)
Super deduction for research and
development expenditure (b) ........... (2,158) (4,275) (7,844)
Utilisation of tax losses previously not
recognised (Note 20) ................. — (1,759) (495)
Tax losses and other temporary differences
not recognised as deferred tax assets (Note
20) .............................. 1,125 850 419
Non-deductible expenses for tax purposes ... 171 428 1,624
Under-provision from prior years .......... 19 8 —
(4,441) 2,047 (1,863)
(a) PRC Corporate Income Tax
During the Track Record Period, the Company has obtained High and New Technology
Enterprises certification and hence entitled to a preferential corporate income tax rate of 15% for a
valid period of 3 years.
Under the Law of the PRC on Enterprise Income Tax (the “ EIT Law ”) and Implementation
Regulation of the EIT Law, the tax rate of the PRC subsidiaries is 25% for both years, except for
subsidiaries which are eligible as Small Low-profit Enterprise* (ฆлΆุ ). An entity eligible as a
Small Low-profit Enterprise is subject to preferential tax treatments up to 31 December 2027. The
annual taxable income of a Small Low-profit Enterprise which is not more than RMB3,000,000, 75% of
its taxable income is not subject to EIT and the remaining 25% of its taxable income is subject to EIT
at a tax rate of 20%. During the years ended 31 December 2023, 2024 and 2025, 4, 4 and 3 subsidiaries
are subject to the relevant preferential tax treatments respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 308 ---
(b) Super deduction for research and development expenditure
According to the relevant laws and regulations promulgated by the State Taxation Administration
of the PRC, enterprises engaging in research and development activities are entitled to claim 175%
from 2018 onwards (subsequently raised to 200% from 2023 onwards) of their research and
development expenses incurred as tax deductible expenses when determining their assessable profits for
that year (the “ Super Deduction for research and development ”).
13. DIVIDENDS
No dividends have been declared or paid by the Company during the years ended 31 December
2023, 2024, and 2025.
14. (LOSSES)/EARNINGS PER SHARE
The calculation of the basic earnings/(loss) per share during the Track Record Period is based on
the profit/(loss) attributable to ordinary equity shareholders of the Company and the weighted average
number of ordinary shares in issue or deemed to be in issue during the Track Record Period.
As approved by the Company’s Extraordinary Shareholders’ Meeting held on 31 July 2025,
immediately upon listing, the ordinary shares of the Company will be split on a one-for-eighty basis,
and the nominal value of the shares will be changed from RMB1.0000 each to RMB0.0125 each.
Y ear ended 31 December
2023 2024 2025
(Loss)/profit attributable to ordinary
shareholders of the Company (RMB’000) .. (18,413) 40,412 29,354
Weighted average number of ordinary shares
in issue (thousands) .................. 7,903 7,945 8,409
Basic EPS (RMB per share) ............ (2.33) 5.09 3.49
No adjustment has been made to the basic (losses)/earnings per share amounts presented for the
Track Record Period in respect of a dilution as the Group had no potential dilutive ordinary shares in
issue.
15. SUBSIDIARIES
As at the date of this report and during the Track Record Period, the Company’s major
subsidiaries are as follows:
Name of subsidiary
Place of
incorporation
and type of legal
entity
Share capital
registered/
paid-up capital
Equity interest and voting right held
by the Company
Principal activities
as at 31 December
2023 2024 2025
RMB’000
1 Shenzhen Haiqing Digital
Technology Co., Ltd. ( ଉέ̹ऎ૶
ʮ̡ )( “ Haiqing
Digital ”) (Note (a))
PRC, limited
liability
company
20,000/
20,000
100% 100% 100% R&D and manufacturing of
Multispectral AI Modules,
Multispectral AI Perception
Terminals, and multispectral AI
large model algorithms
APPENDIX I ACCOUNTANTS’ REPORT
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Name of subsidiary
Place of
incorporation
and type of legal
entity
Share capital
registered/
paid-up capital
Equity interest and voting right held
by the Company
Principal activities
as at 31 December
2023 2024 2025
RMB’000
2 Zhejiang Haiqing Zhiyuan
Technology Co., Ltd. ( एϪऎ૶౽
ʮ̡ ) (Note (b))
PRC, limited
liability
company
10,000/
10,000
— 100% 100% Manufacturing and assembly of
Multispectral AI Modules and
Multispectral AI Perception
Terminals
Notes:
(a) For the years ended 31 December 2023, 2024 and 2025, no audited financial statements have been prepared for this entity
as this entity was not subject to any statutory audit requirements under the relevant rules and regulations in the jurisdiction
of its registration.
(b) This entity was incorporated in 2024, and no audited financial statement was issued as it was not required to issue audited
financial statement under the statutory requirements of their places of incorporation.
(c) The English names of the subsidiaries are direct translation or transliteration of their Chinese registered names.
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Investments in subsidiaries .............. 22,000 21,000 31,912
16. PROPERTY, PLANT AND EQUIPMENT
The Group
Machinery
and
equipment
Motor
vehicles
Office
equipment
and others
Electronic
equipment
Leasehold
improvement Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December
2023
Opening carrying amounts ... 10,263 998 2,375 250 13,244 27,130
Additions ............... 625 565 524 110 — 1,824
Disposals ............... — — — (2) — (2)
Depreciation charges ....... (1,405) (400) (882) (138) (3,168) (5,993)
Closing carrying amounts .. 9,483 1,163 2,017 220 10,076 22,959
At 31 December 2023
Cost ................... 12,121 1,884 4,353 575 15,527 34,460
Accumulated depreciation ... (2,638) (721) (2,336) (355) (5,451) (11,501)
Carrying amounts ........ 9,483 1,163 2,017 220 10,076 22,959
APPENDIX I ACCOUNTANTS’ REPORT
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Machinery
and
equipment
Motor
vehicles
Office
equipment
and others
Electronic
equipment
Leasehold
improvement Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December
2024
Opening carrying amounts ... 9,483 1,163 2,017 220 10,076 22,959
Additions ............... 337 — 155 42 2,843 3,377
Disposals ............... — — (16) — — (16)
Depreciation charges ....... (1,358) (444) (664) (115) (3,184) (5,765)
Closing carrying amounts .. 8,462 719 1,492 147 9,735 20,555
At 31 December 2024
Cost ................... 12,458 1,884 4,476 617 15,527 34,962
Accumulated depreciation ... (3,996) (1,165) (2,984) (470) (5,792) (14,407)
Carrying amounts ........ 8,462 719 1,492 147 9,735 20,555
Machinery
and
equipment
Motor
vehicles
Office
equipment
and others
Electronic
equipment
Leasehold
improvement Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December
2025
Opening carrying amounts ... 8,462 719 1,492 147 9,735 20,555
Additions ............... 4,227 2 1,460 1,657 7,905 15,251
Disposals ............... (71) (2) (95) (38) (3,797) (4,003)
Depreciation charges ....... (1,346) (444) (548) (307) (3,665) (6,310)
Closing carrying amounts .. 11,272 275 2,309 1,459 10,178 25,493
At 31 December 2025
Cost .................. 16,614 1,884 5,841 2,236 22,457 49,032
Accumulated depreciation ... (5,342) (1,609) (3,532) (777) (12,279) (23,539)
Carrying amounts ........ 11,272 275 2,309 1,459 10,178 25,493
(a) Property, plant, and equipment are stated at historical cost less accumulated depreciation and
accumulated impairment losses. Historical cost includes expenditure that is directly attributable to
the acquisition of the items.
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual
values, over their estimated useful lives or, in the case of leasehold improvements, the shorter of
lease term as follows:
Machinery and equipment .............. 3−10 years
Motor vehicles ...................... 3−5 years
Office equipment and others ............ 3−5 years
Electronic equipment .................. 3 years
Leasehold improvement ................ Shorter of their useful life and lease term
See Note 35 for the summary of the other material accounting policy information relevant to
property, plant and equipment.
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Depreciation of the Group’s property, plant and equipment has been recognised as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cost of sales ........................ 3,859 3,903 4,212
Selling and marketing expenses ........... 224 130 230
General and administrative expenses ....... 993 910 1,205
Research and development expenses ....... 250 291 327
Capitalised in intangible assets ........... 667 531 336
5,993 5,765 6,310
Details of impairment assessments of the CGU are set out in Note 18.
The Company
Machinery
and
equipment
Motor
vehicles
Office
equipment
and others
Electronic
equipment
Leasehold
improvement Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December
2023
Opening carrying amounts ... 9,477 164 2,274 985 726 13,626
Additions ............... 81 92 511 565 — 1,249
Depreciation charges ....... (1,032) (98) (839) (396) (279) (2,644)
Closing carrying amounts .. 8,526 158 1,946 1,154 447 12,231
At 31 December 2023
Cost ................... 10,086 440 4,163 1,857 1,360 17,906
Accumulated depreciation ... (1,560) (282) (2,217) (703) (913) (5,675)
Carrying amounts ........ 8,526 158 1,946 1,154 447 12,231
Machinery
and
equipment
Motor
vehicles
Office
equipment
and others
Electronic
equipment
Leasehold
improvement Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December
2024
Opening carrying amounts ... 8,526 158 1,946 1,154 447 12,231
Additions ............... 50 30 147 — — 227
Depreciation charges ....... (1,003) (83) (635) (441) (274) (2,436)
Closing carrying amounts .. 7,573 105 1,458 713 173 10,022
At 31 December 2024
Cost ................... 10,136 470 4,310 1,857 1,360 18,133
Accumulated depreciation ... (2,563) (365) (2,852) (1,144) (1,187) (8,111)
Carrying amounts ........ 7,573 105 1,458 713 173 10,022
APPENDIX I ACCOUNTANTS’ REPORT
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Machinery
and
equipment
Motor
vehicles
Office
equipment
and others
Electronic
equipment
Leasehold
improvement Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December
2025
Opening carrying amounts ... 7,573 105 1,458 713 173 10,022
Additions ............... — 333 1,342 — 2,871 4,546
Disposals ............... (7,220) (26) (88) — — (7,334)
Depreciation charges ....... (283) (72) (519) (441) (542) (1,857)
Closing carrying amounts .. 70 340 2,193 272 2,502 5,377
At 31 December 2025
Cost .................. 518 777 5,565 1,857 3,954 12,671
Accumulated depreciation ... (448) (437) (3,372) (1,585) (1,452) (7,294)
Carrying amounts ........ 70 340 2,193 272 2,502 5,377
17. LEASE
This note provides information for leases where the Group is a lessee.
(a) Right-of-Use Assets
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of the year ............ 24,913 21,062 15,283
Additions ........................... 7,880 2,990 7,753
Depreciation charge ................... (9,092) (8,769) (6,888)
Lease alternation ..................... (2,639) — (4,897)
At the end of the year ................. 21,062 15,283 11,251
Details of impairment assessments of the CGU are set out in Note 18.
(b) Lease Liabilities
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current ............................ 8,613 10,159 5,672
Non-current ......................... 14,512 6,943 6,730
23,125 17,102 12,402
APPENDIX I ACCOUNTANTS’ REPORT
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(c) Amounts Recognised in the Consolidated Statements of Profit or Loss and Other
Comprehensive Income
The consolidated statements of profit or loss and other comprehensive income and the
consolidated statements of cash flows contain the following amounts relating to leases:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Depreciation charge of right-of-use assets
(excluding amounts capitalised in
development costs) .................. 7,693 7,564 5,747
Interest expenses (Note 11) .............. 988 835 564
Expense relating to short-term and low value
leases not included in lease liabilities ..... 156 144 353
8,837 8,543 6,664
The total cash outflows for lease payments during the years ended 31 December 2023, 2024 and
2025 were approximately RMB10,429,000, RMB10,699,000 and RMB8,104,000 respectively.
The Group leases properties and offices as lessee. Lease contracts are typically made for fixed
periods from 2 to 5 years. They are stated at cost less accumulated depreciation and accumulated
impairment losses.
See Note 35 for the summary of the other material accounting policy information relevant to
lease.
18. INTANGIBLE ASSETS
The Group
Software and
system Development costs Total
RMB’000 RMB’000 RMB’000
At 1 January 2023
Cost ............................... 5,542 15,464 21,006
Accumulated amortisation ............... (1,018) — (1,018)
Carrying amounts .................... 4,524 15,464 19,988
Y ear ended 31 December 2023
Opening carrying amounts ............... 4,524 15,464 19,988
Additions ........................... 60 19,755 19,815
Disposals ........................... (437) — (437)
Transfer ............................ 13,901 (13,901) —
Amortisation charges .................. (1,959) — (1,959)
Closing carrying amounts .............. 16,089 21,318 37,407
At 31 December 2023
Cost ............................... 18,979 21,318 40,297
Accumulated amortisation ............... (2,890) — (2,890)
Carrying amounts .................... 16,089 21,318 37,407
APPENDIX I ACCOUNTANTS’ REPORT
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Software and
system Development costs Total
RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2024
Opening carrying amounts ............... 16,089 21,318 37,407
Additions ........................... — 30,126 30,126
Transfer ............................ 13,552 (13,552) —
Amortisation charges .................. (4,799) — (4,799)
Closing carrying amounts .............. 24,842 37,892 62,734
At 31 December 2024
Cost ............................... 32,531 37,892 70,423
Accumulated amortisation ............... (7,689) — (7,689)
Carrying amounts .................... 24,842 37,892 62,734
Y ear ended 31 December 2025
Opening carrying amounts ............... 24,842 37,892 62,734
Additions ........................... 3,995 54,477 58,472
Transfer ............................ 46,966 (46,966) —
Amortisation charges .................. (10,233) — (10,233)
Closing carrying amounts .............. 65,570 45,403 110,973
At 31 December 2025
Cost ............................... 83,492 45,403 128,895
Accumulated amortisation ............... (17,922) — (17,922)
Carrying amounts .................... 65,570 45,403 110,973
Amortisation charges were recognised in the following categories:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cost of sales ........................ 1,483 4,323 9,679
General and administrative expenses ....... ——1 9
Research and development expenses ....... 114 128 247
Capitalised in intangible assets ........... 362 348 288
1,959 4,799 10,233
For the purposes of impairment testing, development costs set out in above have been allocated to
individual cash-generating units (“ CGU”), comprising holding company and most of the operating
subsidiaries. The CGU is the smallest identifiable group of assets that generates cash inflows that are
largely independent of the cash inflows from other assets or groups of assets.
In addition to development cost above, property, plant and equipment, software and system
intangible assets and right-of-use assets (including allocation of corporate assets) that generate cash
flows together with the related development costs are also included in the respective cash-generating
unit for the purpose of impairment assessment.
The recoverable amount of the cash generating unit has been determined based on a value-in-use
calculation. The calculation use cash flow projections based on the financial budgets approved by the
management of the Group covering a five-year period.
APPENDIX I ACCOUNTANTS’ REPORT
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Key assumptions and inputs used for the business valuation as at 31 December 2023, 2024 and
2025 are as follows:
31 December
2023 2024 2025
Pre-tax discount rate ................... 15.58% 15.21% 15.14%
Revenue growth rates .................. 1%−346% 1%−37% 2%−25%
Budgeted gross margins ................ 24%−29% 24%−29% 23%−24%
The following describes each of the key assumptions on which management has based its cash
flow projections to undertake impairment testing of cash generating unit:
Discount rates — The discount rates used are pre-tax and reflect market assessments of the time
value and the specific risks relating to the industry.
Revenue growth rates — The basis used to determine the revenue growth rates in the five-year
forecast period are the historical data of the CGU, management’s expectation of the future market and
the average growth rate achieved by comparable companies. Growth rates beyond the first five years
are based on the relevant industry growth forecasts and did not exceed the average long-term growth
rate for the relevant industry.
Budgeted gross margins — The basis used to determine the budgeted gross margins is the average
gross margins achieved in the year immediately before the budget year, adjusted for expected efficiency
improvements, and expected market development.
The values assigned to the key assumptions on market development of the above CGU and
discount rate are consistent with external information sources.
If the recoverable amount of the CGU is estimated to be less than its carrying amount, the
carrying amount of the CGU is reduced to its recoverable amount. The impairment loss will be
recognised in profit or loss. Any change in the assumptions selected by management could materially
affect the value in use calculations used in the impairment testing and therefore may result in an
impairment charge to profit or loss.
As the recoverable amount of CGU as at 31 December 2023, 2024 and 2025 exceeded its carrying
amount, no impairment loss was recognised against the development costs intangible assets with
indefinite useful lives associated with the CGU for the year then ended.
For sensitivity analysis conducted during the impairment review as at 31 December 2023, had
there been a reduction in the total forecasted revenue by 7.04% or an increase in the discount rate of
27.76 percentage point each in isolation, the recoverable amount of the Group’s intangible assets would
be close to the breakeven point. As at 31 December 2023, had there been a reduction in the total
forecasted revenue by 5% or an increase in the discount rate of 5 percentage point each in isolation, the
headroom would be decreased by approximately RMB216,524,000 and RMB83,584,000, respectively.
For sensitivity analysis conducted during the impairment review as at 31 December 2024, had
there been a reduction in the total forecasted revenue by 9.36% or an increase in the discount rate of
36.20 percentage point each in isolation, the recoverable amount of the Group’s intangible assets would
be close to the breakeven point. As at 31 December 2024, had there been a reduction in the total
forecasted revenue by 5% or an increase in the discount rate of 5 percentage point each in isolation, the
headroom would be decreased by approximately RMB287,464,000 and RMB183,709,000, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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For sensitivity analysis conducted during the impairment review as at 31 December 2025, had
there been a reduction in the total forecasted revenue by 3.71% or an increase in the discount rate of
21.38 percentage point each in isolation, the recoverable amount of the Group’s intangible assets would
be close to the breakeven point. As at 31 December 2025, had there been a reduction in the total
forecasted revenue by 5% or an increase in the discount rate of 5 percentage point each in isolation, the
headroom would be decreased by approximately RMB445,830,000 and RMB227,530,000, respectively.
Amortisation Methods and Periods
The Group’s intangible assets mainly include software and system. They are capitalised on the
basis of the costs incurred to acquire the specific software and system. The Group amortises intangible
assets with a limited useful life using the straight-line method over 3−10 years.
Research and Development
Research expenditure is recognised as an expense as incurred. Costs incurred on development
projects (relating to the design and testing of new and improved products) are recognised as
development costs in intangible assets when the following criteria are met:
 It is technically feasible to complete the product so that it will be available for use;
 Management intends to complete the product and use or sell it;
 There is an ability to use or sell the product;
 It can be demonstrated how the product will generate probable future economic benefits;
 Adequate technical, financial and other resources to complete the development and to use or
sell the product are available; and
 The expenditure attributable to the product during its development can be reliably measured.
Other development expenditures that do not meet these criteria are recognised as an expense as
incurred. Development expenditures previously recognised as an expense are not recognised as an asset
in a subsequent period.
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
Software and
system Development costs Total
RMB’000 RMB’000 RMB’000
At 1 January 2023
Cost ............................... 5,019 15,464 20,483
Accumulated amortisation ............... (932) — (932)
Carrying amounts .................... 4,087 15,464 19,551
Y ear ended 31 December 2023
Opening carrying amounts ............... 4,087 15,464 19,551
Additions ........................... 59 19,755 19,814
Transfer ............................ 13,901 (13,901) —
Amortisation charges .................. (1,958) — (1,958)
Closing carrying amounts .............. 16,089 21,318 37,407
At 31 December 2023
Cost ............................... 18,979 21,318 40,297
Accumulated amortisation ............... (2,890) — (2,890)
Carrying amounts .................... 16,089 21,318 37,407
Y ear ended 31 December 2024
Opening carrying amounts ............... 16,089 21,318 37,407
Additions ........................... — 30,126 30,126
Transfer ............................ 13,552 (13,552) —
Amortisation charges .................. (4,799) — (4,799)
Closing carrying amounts .............. 24,842 37,892 62,734
At 31 December 2024
Cost ............................... 32,531 37,892 70,423
Accumulated amortisation ............... (7,689) — (7,689)
Carrying amounts .................... 24,842 37,892 62,734
Y ear ended 31 December 2025
Opening carrying amounts ............... 24,842 37,892 62,734
Additions ........................... 3,995 54,477 58,472
Transfer ............................ 46,966 (46,966) —
Amortisation charges .................. (10,233) — (10,233)
Closing carrying amounts .............. 65,570 45,403 110,973
At 31 December 2025
Cost ............................... 83,492 45,403 128,895
Accumulated amortisation ............... (17,922) — (17,922)
Carrying amounts .................... 65,570 45,403 110,973
APPENDIX I ACCOUNTANTS’ REPORT
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19. FINANCIAL INSTRUMENTS BY CATEGORY
The detail information of financial instruments by category during the Track Record Period is as
below:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial assets
Financial assets measured at FVOCI:
Notes receivables at FVOCI (Note 3.5) .... 663 479 —
Financial assets measured at amortised cost:
Trade and notes receivables (Note 21) .... 19,817 145,676 184,423
Other receivables (Note 22) ............ 5,358 1,977 1,743
Term deposits and restricted
cash (Note 24) .................... 36,502 26,898 61,554
Cash and cash equivalents (Note 24) ..... 37,115 56,705 65,556
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial liabilities
Financial liabilities measured at amortised
cost:
Trade and notes payables (Note 26) ...... 45,060 79,557 45,882
Accruals and other payables (excluding
non-financial liabilities) (Note 27) ..... 2,658 14,724 11,060
Lease liabilities (Note 17) ............. 23,125 17,102 12,402
Borrowings (Note 25) ................ — 29,548 201,280
Other current liabilities (excluding
non-financial liabilities) ............. — 862 998
20. DEFERRED TAX
Deferred tax assets and liabilities are offset when there is a legally enforceable right of offsetting
and when the deferred income taxes relate to the same authority.
The net amounts of deferred tax assets and liabilities after offsetting are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Gross deferred tax assets ................ 10,513 7,162 7,388
Offsetting against deferred tax liabilities .... (4,888) (3,576) (1,939)
Net deferred tax assets ................ 5,625 3,586 5,449
Gross deferred tax liabilities ............. 4,888 3,576 1,939
Offsetting against deferred tax assets ....... (4,888) (3,576) (1,939)
Net deferred tax liabilities ............. ———
APPENDIX I ACCOUNTANTS’ REPORT
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The movements in deferred tax assets and liabilities before offsetting are as follows:
(a) Deferred Tax Assets
Impairment
provisions and
loss allowances Lease liabilities Tax losses Unrealised profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 ...... 342 6,235 757 — 7,334
Credited/(debited) to profit
or loss (Note 12) ...... 164 (1,332) 4,347 — 3,179
At 31 December 2023 ... 506 4,903 5,104 — 10,513
Impairment
provisions and
loss allowances Lease liabilities Tax losses Unrealised profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2024 ...... 506 4,903 5,104 — 10,513
Credited/(debited) to profit
or loss (Note 12) ...... 743 (1,293) (2,813) 12 (3,351)
At 31 December 2024 ... 1,249 3,610 2,291 12 7,162
Impairment
provisions and
loss allowances Lease liabilities Tax losses Unrealised profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2025 ...... 1,249 3,610 2,291 12 7,162
Credited/(debited) to profit
or loss (Note 12) ...... 906 (1,610) 905 25 226
At 31 December 2025 ... 2,155 2,000 3,196 37 7,388
(b) Deferred Tax Liabilities
Right-of-use assets
RMB’000
At 1 January 2023 ................................................ 6,169
Credited to profit or loss (Note 12) .................................. (1,281)
At 31 December 2023 ............................................. 4,888
Right-of-use assets
RMB’000
At 1 January 2024 ................................................ 4,888
Credited to profit or loss (Note 12) .................................. (1,312)
At 31 December 2024 ............................................. 3,576
Right-of-use assets
RMB’000
At 1 January 2025 ................................................ 3,576
Credited to profit or loss (Note 12) .................................... (1,637)
At 31 December 2025 ............................................. 1,939
APPENDIX I ACCOUNTANTS’ REPORT
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(c) Deferred Tax Assets Not Recognised
The Group has not recognised deferred tax assets in respect of the items below, which were
incurred by certain subsidiaries that were not likely to generate taxable profit:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Tax losses .......................... 18,905 14,982 14,500
Deductible temporary differences .......... 7,053 7,340 7,518
25,958 22,322 22,018
The tax losses not recognised deferred tax assets can be carried forward in future years. As at 31
December 2023, 2024 and 2025, the following table shows unused tax losses based on its expected
expiry date:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
2027 .............................. 3,045 3,045 1,747
2028 .............................. 14,811 7,775 7,775
2029 .............................. 1,049 1,049 1,049
2030 .............................. — 3,113 3,113
2031 .............................. — — 816
18,905 14,982 14,500
21. TRADE AND NOTES RECEIV ABLES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables ..................... 21,243 151,560 195,572
Less: credit loss allowance .............. (2,200) (6,746) (12,147)
19,043 144,814 183,425
Notes receivables (Note) ................ 774 862 998
19,817 145,676 184,423
Note: Notes receivables mainly consist of bank-issued notes and the impairment is considered to be minimal.
APPENDIX I ACCOUNTANTS’ REPORT
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(a) Movements on the Group’s credit loss allowance for trade receivables are as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of the year ............. 1,168 2,200 6,746
Credit loss allowance recognised, net ....... 1,032 5,036 5,903
Receivables written off ................. — (490) (502)
At the end of the year .................. 2,200 6,746 12,147
(b) The Group generally grants credit terms of up to 120 days to the customers. The ageing analysis
of trade receivables based on revenue recognition date is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
within 6 months ...................... 14,654 137,257 144,195
6 months to 1 year .................... 4,514 13,091 43,074
1 to 2 years ......................... 1,600 477 8,102
2 to 3 years ......................... 93 535 182
Over 3 years ........................ 382 200 19
21,243 151,560 195,572
(c) As at 31 December 2023, the loss allowance of trade receivables was determined as follows:
within 6
months
6 months to
1 year 1 to 2 years 2 to 3 years
Over
3 years Total
RMB’000, except for percentages
Expected credit loss rate .... 4.27% 8.53% 46.13% 74.19% 100.00%
Gross carrying amount ..... 14,654 4,514 1,600 93 382 21,243
Credit loss allowance ...... 626 385 738 69 382 2,200
As at 31 December 2024, the loss allowance of trade receivables was determined as follows:
within 6
months
6 months to
1 year 1 to 2 years 2 to 3 years
Over
3 years Total
RMB’000, except for percentages
Expected credit loss rate .... 3.59% 7.18% 48.85% 83.74% 100.00%
Gross carrying amount ..... 137,257 13,091 477 535 200 151,560
Credit loss allowance ...... 4,925 940 233 448 200 6,746
As at 31 December 2025, the loss allowance of trade receivables was determined as follows:
within 6
months
6 months to
1 year 1 to 2 years 2 to 3 years
Over
3 years Total
RMB’000, except for percentages
Expected credit loss rate .... 3.23% 6.46% 55.67% 100.00% 100.00%
Gross carrying amount ..... 144,195 43,074 8,102 182 19 195,572
Credit loss allowance ...... 4,654 2,781 4,511 182 19 12,147
APPENDIX I ACCOUNTANTS’ REPORT
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(d) As at 31 December 2025, trade receivables amounting to approximately RMB9,043,000 were
pledged for bank borrowings.
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables ..................... 109,776 151,560 195,637
Less: credit loss allowance .............. (2,200) (6,746) (12,147)
107,576 144,814 183,490
Notes receivables ..................... 774 862 998
108,350 145,676 184,488
The ageing analysis of trade receivables based on revenue recognition date is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
within 6 months ...................... 18,906 137,257 144,260
6 months to 1 year .................... 7,625 13,091 43,074
1 to 2 years ......................... 81,658 477 8,102
2 to 3 years ......................... 93 535 182
Over 3 years ........................ 1,494 200 19
109,776 151,560 195,637
22. PREPAYMENTS, OTHER RECEIV ABLES AND OTHER CURRENT ASSETS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments:
Prepayments to suppliers ................ 2,727 25,089 156,297
Prepaid listing expenses ................ — — 305
Other receivables:
Deposits and warranties ................ 3,262 3,209 3,527
Due from related parties (Note 33) ........ 2,696 63 —
Others ............................. 558 240 332
9,243 28,601 160,461
Less: credit loss allowance .............. (1,158) (1,535) (2,116)
8,085 27,066 158,345
Other receivables had no historical default. The financial assets included in the above balances
relating to receivables were categorised in stage 1 at the end of Track Record Period. In calculating the
expected credit loss rate, the Group considers the historical loss rate and adjusts for forward-looking
macroeconomic data. As at 31 December 2023, 2024 and 2025, the Group estimated the expected credit
losses for other receivables to be RMB1,158,000, RMB1,535,000 and RMB 2,116,000, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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Other receivables are unsecured, non-interest-bearing and are collectable within one year.
(a) Movements on the Group’s credit loss allowance for other receivables are as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of the year/period ........ 559 1,158 1,535
Credit loss allowance recognised, net ....... 599 377 581
At the end of the year/period ............ 1,158 1,535 2,116
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Other current assets:
Deductible input V AT .................. 15,749 13,814 16,978
Prepaid corporate income tax ............ — — 760
Listing expenses ...................... — — 2,916
Others ............................. 10 10 —
15,759 13,824 20,654
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments:
Prepayments to suppliers ................ 2,345 717 19,564
Prepaid listing expenses ................ — — 305
Other receivables:
Due from subsidiaries .................. 28,289 73,497 170,956
Deposits and warranties ................ 3,212 3,111 3,487
Due from related parties (Note 33) ........ 2,696 63 —
Others ............................. 512 145 201
37,054 77,533 194,513
Less: credit loss allowance .............. (1,151) (1,518) (2,095)
35,903 76,015 192,418
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Other current assets:
Deductible input V AT .................. 14,201 10,818 2,969
Listing expenses ...................... — — 2,916
Prepaid corporate income tax ............ — — 760
14,201 10,818 6,645
APPENDIX I ACCOUNTANTS’ REPORT
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23. INVENTORIES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials ....................... 18,766 16,312 18,863
Work in progress ..................... 8,297 7,593 13,487
Finished goods ....................... 4,537 6,090 6,529
Outsourced processing materials .......... 1,017 778 42
Goods in transit ...................... 30,419 8,192 48,895
63,036 38,965 87,816
Less: provision for impairment ........... (7,069) (7,388) (7,622)
55,967 31,577 80,194
The cost of inventories carried forward to the profit or loss during the year is mainly recognised
as the cost of sales. For the years ended 31 December 2023, 2024 and 2025, the cost of inventories
carried forward to the cost of sales amounted to approximately RMB97,235,000, RMB422,072,000 and
RMB485,661,000, respectively.
The provision for impairment of inventories recorded as cost of sales during the years ended 31
December 2023, 2024 and 2025 were RMB5,742,000, RMB4,317,000 and RMB6,894,000, respectively.
The written off of provisions for inventories during the years ended 31 December 2023, 2024 and
2025 were RMB2,825,000, RMB3,998,000 and RMB6,660,000, respectively.
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Goods in transit ...................... 30,419 8,273 49,140
Raw materials ....................... 181 1 2
Finished goods ....................... 377 454 690
Work in progress ..................... 33 1 0
30,980 8,731 49,842
Less: provision for impairment ........... (23) (65) (125)
30,957 8,666 49,717
APPENDIX I ACCOUNTANTS’ REPORT
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24. CASH AND CASH EQUIV ALENTS, TERM DEPOSITS AND RESTRICTED CASH
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and bank balances ................ 73,617 83,603 127,110
Less: term deposits over three months (Note
(i)) .............................. (36,452) (26,898) (61,554)
Less: restricted cash (Note (ii)) ........... (50) — —
Cash and cash equivalents ............. 37,115 56,705 65,556
Notes:
(i) As at 31 December 2023, 2024 and 2025, the Group’s term deposits amounting to RMB5,217,000, RMB16,178,000 and
RMB10,061,000 were pledged as a guarantee for bank borrowings.
(ii) As at 31 December 2023, deposits of RMB50,000 were pledged as security deposits for the issuance of letters of
guarantee.
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and bank balances ................ 60,860 42,921 99,771
Less: term deposits over three months ...... (25,839) (25,785) (40,409)
Less: restricted cash ................... (50) — —
Cash and cash equivalents ............. 34,971 17,136 59,362
25. BORROWINGS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Secured bank loans .................... — 29,500 180,010
Unsecured bank loans .................. — — 20,964
— 29,500 200,974
Interest payables ...................... — 48 306
Less: current-portion for long-term
borrowings ..................... — (39) (33,322)
Less: short-term borrowings ............. — (28,545) (118,950)
— 964 49,008
(a) The Group’s borrowings were dominated in RMB and carried fixed rates with annual interest rates
ranged from 3.30% to 4.25% and 1.00% to 3.30% as at 31 December 2024 and 2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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(b) As at 31 December 2024, secured bank borrowings mainly included: (i) borrowings with a
principal equivalent to approximately RMB18,500,000 guaranteed by Mr. Zhou and secured by the
Group’s certain deposits; (ii) borrowings with a principal equivalent to approximately
RMB1,000,000 guaranteed by Mr. Zhou and the Company; and (iii) borrowings with a principal
equivalent to approximately RMB10,000,000 guaranteed by Haiqing Digital.
As at 31 December 2025, secured bank borrowings mainly included: (i) borrowings with a
principal equivalent to approximately RMB16,320,000 secured by the Group’s certain deposits;
(ii) borrowings with a principal equivalent to approximately RMB40,040,000 guaranteed by Mr.
Zhou; (iii) borrowings with a principal equivalent to approximately RMB20,000,000 guaranteed
by Haiqing Digital; (iv) borrowings with a principal equivalent to approximately RMB73,950,000
guaranteed by Mr. Zhou and Haiqing Digital; (v) borrowings with a principal equivalent to
approximately RMB29,700,000 guaranteed by Haiqing Digital and secured by the Group’s
accounts receivables.
(c) As at 31 December 2023, 2024 and 2025, the Group’s borrowings were repayable as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year ........................ — 28,584 152,272
Between 1 and 2 years ................. — 36 49,008
Between 2 and 5 years ................. — 928 —
— 29,548 201,280
(d) Fair value
For the majority of the borrowings, the fair values are not materially different from their carrying
amounts, since either the interest payable on those borrowings is close to current market rates, or
the borrowings are of a short-term nature.
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Secured bank loans .................... — 18,500 110,970
Unsecured bank loans .................. — — 20,000
18,500 130,970
Interest payables ...................... — 45 303
Less: short-term borrowings ............. — (18,545) (69,910)
Less: current-portion for long-term
borrowings ........................ — — (33,283)
— — 28,080
APPENDIX I ACCOUNTANTS’ REPORT
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26. TRADE AND NOTES PAYABLES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade payables ....................... 45,060 73,550 45,882
Notes payables ....................... — 6,007 —
45,060 79,557 45,882
The Group’s suppliers generally grant credit terms of up to 180 days to the Group. An ageing
analysis of the trade payables based on the invoice date as at the end of the reporting period was as
follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 6 months ...................... 44,393 43,818 36,978
6 months to 1 year .................... 80 20,092 452
1 to 2 years ......................... 587 9,609 5,473
2 to 3 years ......................... — 31 2,951
Over 3 years ........................ ——2 8
45,060 73,550 45,882
As at 31 December 2023, 2024 and 2025, the carrying amounts of trade and notes payables were
denominated in RMB, which approximated their fair values.
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade payables ....................... 109,013 65,065 79,902
Notes payables ....................... — 6,007 —
109,013 71,072 79,902
APPENDIX I ACCOUNTANTS’ REPORT
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The Company’s suppliers generally grant credit terms of up to 180 days to the Company. An
ageing analysis of the trade payables based on the invoice date as at the end of the reporting period was
as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 6 months ...................... 89,806 34,382 72,241
6 months to 1 year .................... 7,697 15,512 440
1 to 2 years ......................... 3,069 5,522 4,329
2 to 3 years ......................... 8,441 2,543 2,892
Over 3 years ........................ — 7,106 —
109,013 65,065 79,902
27. ACCRUALS AND OTHER PAYABLES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, wages and benefits ............. 5,294 6,348 9,893
Taxes other than income tax payables ...... 2,092 2,444 4,239
Deposits ............................ 429 483 850
Outsourcing service fees ................ — 10,791 312
Accruals ............................ 2,017 2,498 1,727
Listing expenses ...................... — — 7,799
Others ............................. 212 952 372
10,044 23,516 25,192
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, wages and benefits ............. 4,268 5,153 8,331
Due to subsidiaries .................... 4,892 — 913
Taxes other than income tax payables ...... 1,755 1,596 1,370
Deposits ............................ 429 483 850
Outsourcing service fees ................ — 10,791 312
Accruals ............................ 1,953 1,578 1,366
Listing expenses ...................... — — 7,799
Others ............................. 153 793 —
13,450 20,394 20,941
APPENDIX I ACCOUNTANTS’ REPORT
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28. SHARE CAPITAL
Number of
ordinary shares Share Capital
RMB’000
At 31 December 2023 ................................ 7,903,225 7,903
Issue of ordinary shares (a) ............................ 252,231 252
At 31 December 2024 ................................ 8,155,456 8,155
Issue of ordinary shares (a) ............................ 457,619 458
At 31 December 2025 ................................ 8,613,074 8,613
(a) In October 2024, the Company issued 252,231 ordinary shares at the consideration of RMB30,000,000 to one investor. The
consideration amounting to RMB30,000,000 was paid in October 2024, of which approximately RMB252,000 represents
share capital and the excess of approximately RMB29,748,000 was credited to the Company’s share premium.
In January 2025, the Company issued 84,077 ordinary shares at the consideration of RMB10,000,000 to one investor, and
the consideration amount of RMB10,000,000 was paid in January 2025, of which approximately RMB84,000 represents
share capital and the excess of approximately RMB9,916,000 was credited to the Company’s share premium.
In June 2025, the Company issued 252,231 ordinary shares at the consideration of RMB30,000,000 to one investor. The
consideration amounting to RMB30,000,000 was paid in June 2025, of which approximately RMB253,000 represents share
capital and the excess of approximately RMB29,747,000 was credited to the Company’s share premium.
In July 2025, the Company issued 121,311 ordinary shares at the consideration of RMB50,000,000 to one investor. The
consideration amounting to RMB50,000,000 was paid in July 2025, of which approximately RMB121,000 represents share
capital and the excess of approximately RMB49,879,000 was credited to the Company’s share premium.
As approved by the Company’s Extraordinary Shareholders’ Meeting held on 31 July 2025, immediately upon listing, the
ordinary shares of the Company will be split on a one-for-eighty basis, and the nominal value of the shares will be
changed from RMB1.0000 each to RMB0.0125 each.
29. SHARE-BASED PAYMENTS
To provide incentives to eligible employees and directors of the Group, an employee share
incentive plan (the “ Share Incentive Scheme ”) was adopted.
In order to implement the Share Incentive Scheme, Shenzhen Zhongcheng Tianying Venture
Capital Fund, L.P. (௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Zhongcheng Tianying LP ”),
Shenzhen Zhongzheng Tianying Venture Capital Fund, L.P. (௴ุҳ༟ΥྫΆุ (Υ
ྫ)) (“ Zhongzheng Tianying LP ”) and Shenzhen Zhongzhi Tianying Venture Capital Fund, L.P. ( ଉέ
௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Zhongzhi Tianying LP ”) were established and designated
as share incentive platforms to hold the shares specially awarded to the eligible participants as the
ultimate beneficial owners.
The movements in the number of the outstanding restricted share units (“ RSUs”) granted under
the Share Incentive Scheme during the Track Record Period were as follows:
Y ear ended 31 December
2023 2024 2025
At the beginning of the year ............. 3,669,993 3,555,490 3,663,000
Granted ............................ 23,710 127,413 118,515
Forfeited ........................... (138,213) (19,903) (120,886)
At the end of the year ................. 3,555,490 3,663,000 3,660,629
APPENDIX I ACCOUNTANTS’ REPORT
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On 8 September 2023, the Group granted 23,710 restricted share units of the Company to 1
eligible employee at a subscribed price of RMB47.32. On 12 July 2024, the Group granted 39,516
restricted share units of the Company to 1 eligible employee at a subscribed price of RMB49.48. On 20
December 2024, the Group granted 87,897 restricted share units of the Company to 13 eligible
employees at a subscribed price of RMB49.96. On 24 January 2025, the Group granted 118,515
restricted share units of the Company to 3 eligible employees at a subscribed price of RMB46.50.
All of the RSUs granted to the Share Incentive Participants shall be subject to both a listing-based
condition (the “ IPO Condition ”) as well as service conditions. The IPO Condition would be satisfied
when the ordinary shares of the Company are successfully listed on a recognised stock exchange.
The fair values of the RSUs granted on 8 September 2023, 12 July 2024, 20 December 2024 and
24 January 2025 were estimated at RMB115.14, RMB130.33, RMB124.83 and RMB124.83 per share
respectively.
The fair value of each RSUs were calculated based on the most recent transaction price of the
Company’s shares at the grant date.
The total expenses arising from share-based payments during the Track Record Period are
recorded as part of employee benefit expenses (Note 10).
30. RESERVES
The Group
Share premium
Statutory
reserves Other reserves
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2023 .. 189,365 — 3,942 (21,606) 171,701
Loss for the year .......... — — — (18,413) (18,413)
Share-based payments
expenses .............. — — 242 — 242
Balance at 31 December 2023
and 1 January 2024 ...... 189,365 — 4,184 (40,019) 153,530
Profit for the year ......... — — — 40,412 40,412
Capital injection (Note 28(a)) .. 29,748 — — — 29,748
Share-based payments
expenses .............. — — 2,532 — 2,532
Appropriation to statutory
reserves .............. — 1,664 — (1,664) —
Balance at 31 December 2024
and 1 January 2025 ...... 219,113 1,664 6,716 (1,271) 226,222
Profit for the period ........ — — — 29,354 29,354
Capital injection (Note 28(a)) .. 89,542 — — — 89,542
Share-based payments
expenses .............. — — 8,465 — 8,465
Appropriation to statutory
reserves .............. — 2,826 — (2,826) —
Balance at 31 December 2025 . 308,655 4,490 15,181 25,257 353,583
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
Share premium
Statutory
reserves Other reserves
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2023 .. 189,265 — 3,942 (313) 192,894
Loss for the year .......... — — — (16,706) (16,706)
Share-based payments
expenses .............. — — 242 — 242
Balance at 31 December 2023
and 1 January 2024 ..... 189,265 — 4,184 (17,019) 176,430
Profit for the year ......... — — — 33,661 33,661
Capital injection (Note 28(a)) .. 29,748 — — — 29,748
Share-based payments
expenses .............. — — 2,532 — 2,532
Appropriation to statutory
reserves .............. — 1,664 — (1,664) —
Balance at 31 December 2024
and 1 January 2025 ...... 219,013 1,664 6,716 14,978 242,371
Profit for the period ........ — — — 28,258 28,258
Capital injection (Note 28(a)) .. 89,542 — — — 89,542
Share-based payments
expenses .............. — — 8,465 — 8,465
Appropriation to statutory
reserves .............. — 2,826 — (2,826) —
Balance at 31 December 2025 . 308,555 4,490 15,181 40,410 368,636
APPENDIX I ACCOUNTANTS’ REPORT
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31. NOTES TO CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Reconciliation of (Loss)/Profit Before Income Tax to Net Cash Generated/(Used in) from
Operations:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
(Loss)/profit before income tax for the year .. (22,854) 42,459 27,491
Adjustments for:
Interest income ....................... (3,023) (1,373) (2,120)
Finance costs ........................ 3,055 1,016 3,862
Depreciation of property, plant and equipment 5,326 5,234 5,974
Depreciation of right-of-use assets ......... 7,693 7,564 5,747
Amortisation of intangible assets .......... 1,597 4,451 9,945
Net (gains)/losses on disposal of property,
plant and equipment and other non-current
assets ............................ (49) 25 2,989
Net impairment losses on financial assets .... 1,631 5,413 6,484
Impairment provision for inventories ....... 5,742 4,317 6,894
Net losses on financial instruments ........ 940 — 1,762
Net foreign exchange gains .............. (20) (13) (29)
Share-based compensation expenses ........ 242 2,532 8,465
Change in working capital:
Decrease/(Increase) in receivables ......... 29,746 (152,286) (172,616)
Increase in payables ................... 54,764 53,852 21,301
(Increase)/Decrease in inventories ......... (15,832) 20,073 (55,511)
Cash generated from/(used in) operations .. 68,958 (6,736) (129,362)
(b) Net Debt Reconciliation
Borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
At 1 January 2023 .................... 141,484 27,231 168,715
Financing cash flows .................. (140,863) (9,285) (150,148)
Interest paid ......................... (811) (988) (1,799)
Interest accrued ...................... 1,955 988 2,943
Other non-cash movements .............. (1,765) 5,179 3,414
At 31 December 2023 ................. — 23,125 23,125
At 1 January 2024 .................... — 23,125 23,125
Financing cash flows .................. 29,686 (9,720) 19,966
Interest paid ......................... (186) (835) (1,021)
Interest accrued ...................... 66 835 901
Other non-cash movements .............. (18) 3,697 3,679
At 31 December 2024 ................. 29,548 17,102 46,650
At 1 January 2025 .................... 29,548 17,102 46,650
Financing cash flows .................. 171,474 (7,187) 164,287
Interest paid ........................ (2,744) (564) (3,308)
Interest accrued ...................... 3,002 564 3,566
Other non-cash movements ............. — 2,487 2,487
As at 31 December 2025 ............... 201,280 12,402 213,682
APPENDIX I ACCOUNTANTS’ REPORT
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32. CONTINGENCIES AND COMMITMENTS
32.1 Contingencies
The Group did not have any material contingent liabilities as at 31 December 2023, 2024 and
2025.
32.2 Capital Commitments
The following shows the major capital commitments of the Group:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Property, plant and equipment commitments:
— Contracted, but not provided for ...... — 12,036 —
33. RELATED PARTY TRANSACTIONS
Related parties are those parties that have the ability, directly and indirectly, to control, jointly
control or exercise significant influence over the other party in making financial and operating
decisions. Parties are also considered to be related because they are subject to common control and
common joint control in the controlling shareholder’s families. Members of key management and their
close family member of the Group are also considered as related parties.
(a) Names and Relationship with Related Parties
The directors of the Company are of the view that the following parties were significant related
parties of the Group that had transactions or balances with the Group during the Track Record Period.
Name of the major related parties Relationship with the Group
Mr. Zhou ..................... Ultimate controller of the Company
Zhongcheng Tianying LP .......... A shareholder of the Company
Zhongzhi Tianying LP ............ A shareholder of the Company
Zhongzheng Tianying LP .......... A shareholder of the Company
Mr. Chen ..................... A shareholder of the Company
APPENDIX I ACCOUNTANTS’ REPORT
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The following transactions and balances were carried out between the Group and its related
parties during the Track Record Period. In the opinion of the directors of the Company, the related
party transactions were carried out in the normal course of business and at terms negotiated between the
Group and the respective related parties. In addition to those disclosed elsewhere in the Historical
Financial Information, the Group has the following transactions with related parties:
(b) Material Transactions and Balance with Related Parties
Prepayments and other receivables
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Zhongzheng Tianying LP ............... 41 41 —
Zhongcheng Tianying LP ............... 5——
Zhongzhi Tianying LP ................. 22 22 —
Mr. Zhou ........................... 2,628 — —
2,696 63 —
Less: credit loss allowance .............. (146) (25) —
2,550 38 —
All the balances with the related parties were related to financing activities which were non-trade
in nature, unsecured and fully settled as of June 2025.
Guarantee
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Guarantor
Mr. Zhou ........................... — 19,500 113,990
The aforesaid guarantee will be released upon listing.
(c) Key Management Compensation
Compensation of the key management personnel of the Group, including amounts paid to the
Company’s directors and supervisors as disclosed in Note 10(a), was as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, wages and bonuses ............. 4,148 4,156 6,966
Share-based compensation expenses ........ 3 3 2,656
Pension costs, housing fund, medical
insurance and other social benefits ....... 84 96 138
4,235 4,255 9,760
APPENDIX I ACCOUNTANTS’ REPORT
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(d) Redemption rights of the Pre-IPO Investors and the New Pre-IPO Investors granted by Mr.
Zhou, Mr. Chen and the Controlling Shareholders as defined in Prospectus
Prior to the Track Record Periods, the Pre-IPO Investors and the New Pre-IPO Investors had been
granted the redemption rights by Mr. Zhou, Mr. Chen and the Controlling Shareholders (i). There are no
side arrangements between the Company, the Pre-IPO Investors and the New Pre-IPO Investors or
between the Company and Mr. Zhou, Mr. Chen and the Controlling Shareholders regarding redemption
rights. Pursuant to supplemental agreements entered into by the Company, the Pre-IPO Investors, the
New Pre-IPO Investors and Mr. Zhou, Mr. Chen and the Controlling Shareholders in July 2025, the
redemption rights granted by Mr. Zhou, Mr. Chen and the Controlling Shareholders were terminated
prior to the submission of the listing application to the Stock Exchange.
The Company has not provided any form of guarantee in connection with any potential default or
failure of Mr. Zhou, Mr. Chen and the Controlling Shareholders to fulfil their obligations relating to the
redemption rights. Accordingly, no financial liability regarding redemption rights granted by Mr. Zhou,
Mr. Chen and the Controlling Shareholders was recorded by the Company during the Track Record
Periods.
(i) The controlling shareholders contain Zhongcheng Tianying LP, Zhongzheng Tianying LP and Zhongzhi Tianying LP.
34. EVENTS AFTER THE REPORTING PERIOD
Up to the date of this report, the Group had no significant subsequent events after 31 December
2025.
35. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
(1) Basis of Consolidation
The Historical Financial Information incorporate the financial statements of the Company and
entities controlled by the Company and its subsidiaries. Control is achieved when the Company:
 has power over the investee;
 is exposed, or has rights, to variable returns from its involvement with the investee; and
 has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and
ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statement of profit
or loss and other comprehensive income from the date the Group gains control until the date when the
Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of
the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is
attributed to the owners of the Company and to the non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
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When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group’s equity therein,
which represent present ownership interests entitling their holders to a proportionate share of net assets
of the relevant subsidiaries upon liquidation.
(2) Separate Financial Statements
Investments in subsidiaries are accounted for at cost less impairment loss. Cost includes direct
attributable costs of investments. The results of subsidiaries are accounted for by the Company on the
basis of dividend received and receivable.
Impairment test of the investments in subsidiaries is required upon receiving a dividend from
these investments if the dividend exceeds the total comprehensive income of the subsidiary in the
period when the dividend is declared or if the carrying amount of the investment in the separate
financial statements exceeds the carrying amount of the investee’s net assets including goodwill.
(3) Foreign Currencies
(i) Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (“ the functional
currency ”). Since the majority of the assets and operations of the Group are located in the PRC, the
Historical Financial Information are presented in RMB, which is also the Company’s functional and the
Group’s presentation currency.
(ii) Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are generally recognised in profit or loss. They are deferred in
equity if they relate to qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings are presented in the consolidated
statements of profit or loss and other comprehensive income, within finance costs. All other foreign
exchange gains and losses are presented in the consolidated statements of profit or loss and other
comprehensive income on a net basis within other (losses)/gains, net.
(4) Property, Plant and Equipment
Property, plant and equipment are tangible assets that are held for use in the production or supply
of goods or services, or for administrative purposes, are stated at cost less accumulated depreciation
and impairment losses, if any. The cost of an item of property, plant and equipment comprises its
purchase price and any directly attributable costs of bringing the asset to its working condition and
location for its intended use.
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Expenditure incurred after items of property, plant and equipment have been put into operation,
such as repairs and maintenance, is normally charged to the statement of profit or loss and other
comprehensive income in the period in which it is incurred. In situations where the recognition criteria
are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as
a replacement. Where significant parts of property, plant and equipment are required to be replaced at
intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates
them accordingly.
Where parts of an item of property, plant and equipment have different useful lives, the cost of
that item is allocated on a reasonable basis among the parts and each part is depreciated separately.
Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at
least at each financial year end.
An item of property, plant and equipment including any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss on disposal or retirement recognised in the statement of profit or loss and other
comprehensive income in the year when the asset is derecognised is the difference between the net sales
proceeds and the carrying amount of the relevant asset.
(5) Intangible Assets
Software and system
Intangible assets included software and system. They are initially recognised and measured at
cost. The Group amortises these intangible assets with a limited useful life using the straight-line
method over 3-10 years.
When determining the length of useful lives of these intangible assets, management take into
account the (i) estimated period during which such assets can bring economic benefits to the Group;
and (ii) the useful life estimated by comparable companies in the market.
Research and Development Costs
All research costs are charged to profit or loss as incurred.
Expenditure incurred to develop new products is capitalised only when the Group can demonstrate
the technical feasibility of completing intangible assets so that it will be available for use or sale, its
intention to complete and its ability to use or sell the asset, how the assets will generate future
economic benefits, the availability of resources to complete the project and the ability to measure
reliably the expenditure during the development. Product development expenditure which does not meet
these criteria is expensed when incurred.
(6) Impairment of Non-Financial Assets
Intangible assets that have an indefinite useful life or are not yet available for use are not subject
to amortisation and are tested annually for impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be fully recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal
and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for
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which there are separately identifiable cash flows (cash-generating units). Non-financial assets other
than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each
reporting date.
(7) Cash and Cash Equivalents
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise
cash on hand and demand deposits, and short term highly liquid investments that are readily convertible
into known amounts of cash, which are subject to an insignificant risk of changes in value, and have a
short maturity of generally within three months when acquired.
(8) Investments and Other Financial Assets
(i) Classification
The Group classifies its financial assets in the following measurement categories:
 those to be measured subsequently at fair value (either through other comprehensive income,
or through profit or loss), and
 those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and
the contractual terms of the cash flows.
For assets measured at fair value through profit and loss (“ FVTPL ”), gains and losses will be
recorded in profit or loss.
(ii) Recognition and Derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on
which the Group commits to purchase or sell the asset. Financial assets are derecognised when the
rights to receive cash flows from the financial assets have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership.
(iii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a
financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for
managing the asset and the cash flow characteristics of the asset. There are three measurement
categories into which the Group classifies its debt instruments:
 Amortised cost: Assets that are held for collection of contractual cash flows, where those
cash flows represent solely payments of principal and interest, are measured at amortised
cost. Interest income from these financial assets is included in finance income using the
effective interest rate method. Any gain or loss arising on derecognition is recognised
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directly in profit or loss and presented in other gains/(losses), net together with foreign
exchange gains and losses. Impairment losses are presented as separate line item in the
statement of profit or loss and other comprehensive income.
 FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at
FVTPL. A gain or loss on a debt investment that is subsequently measured at FVTPL is
recognised in profit or loss and presented net within other gains/(losses), net in the period in
which it arises.
 FVOCI: Assets that are held for collection of contractual cash flows and for selling the
financial assets, where the assets’ cash flows represent solely payments of principal and
interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI,
except for the recognition of impairment gains or losses, interest income and foreign
exchange gains and losses which are recognised in profit or loss. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from
equity to profit or loss and recognised in other gains/(losses). Interest income from these
financial assets is included in finance income using the effective interest rate method.
Foreign exchange gains and losses are presented in other gains/(losses) and impairment
expenses are presented as a separate line item in the statement of profit or loss.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s
management has elected to present fair value gains and losses on equity investments in other
comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or
loss following the derecognition of the investment. Dividends from such investments continue to be
recognised in profit or loss as other income when the Group’s right to receive payments is established.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in
the consolidated statements of comprehensive income. Impairment losses (and reversal of impairment
losses) on equity investments measured at FVOCI are not reported separately from other changes in fair
value.
(iv) Impairment of Financial Assets
The Group recognises an allowance for expected credit losses (“ ECLs”) for all debt instruments
not held at fair value through profit or loss. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The expected cash flows will
include cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms. For details, please see credit risks in Note 3.2.
(9) Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where
the Group currently has a legally enforceable right to offset the recognised amounts, and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously. The Group
has also entered into arrangements that do not meet the criteria for offsetting but still allow for the
related amounts to be set off in certain circumstances, such as bankruptcy or the termination of a
contract.
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(10) Contract Fulfilment Costs
The Group recognises the contract fulfilment costs from the costs incurred to fulfil a contract only
if those costs meet all of the following criteria:
 the costs relate directly to a contract or to an anticipated contract that the entity can
specifically identify;
 the costs generate or enhance resources of the entity that will be used in satisfying (or in
continuing to satisfy) performance obligations in the future; and
 the costs are expected to be recovered.
The contract fulfilment costs recognised shall be amortised to profit or loss on a systematic basis
that is consistent with the transfer to the customer of the services to which the asset relates.
The Group recognises an impairment loss in profit or loss to the extent that the carrying amount
of contract fulfilment cost recognised exceeds:
 the remaining amount of consideration that the entity expects to receive in exchange for the
services to which the asset relates; less
 the costs that relate directly to providing those services and that have not been recognised as
expenses.
(11) Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net
realisable value. Costs of inventories are determined on the month-end weighted average method. Cost
comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal operating capacity. Cost includes the
reclassification from equity of any gains or losses on qualifying cash flow hedges relating to purchases
of raw material but excludes borrowing costs. Costs of purchased inventory are determined after
deducting rebates and discounts. 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.
(12) Paid-in Capital/Share Capital and Reserve
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares are shown in equity as a deduction, net of tax, from the proceeds.
Where any group company purchases the Company’s equity instruments, for example as the result
of a share buy-back or a share-based payment plan, the consideration paid, including any directly
attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners
of the Company as treasury shares until the shares are cancelled or reissued. Where such ordinary
shares are subsequently reissued, any consideration received, net of any directly attributable
incremental transaction costs and the related income tax effects, is included in equity attributable to the
owners of the Company.
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(13) Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end
of financial period which are unpaid. Trade and other payables are presented as current liabilities unless
payment is not due within 12 months after the reporting period. They are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest method.
(14) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognised in profit or loss over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction
costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In
this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is
probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for
liquidity services and amortised over the period of the facility to which it relates.
Borrowings are derecognised when the obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to
a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in
profit or loss, which is measured as the difference between the carrying amount of the financial liability
and the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.
Covenants that the Group is required to comply with, on or before the end of reporting period, are
considered in classifying loan arrangements with covenants as current or non-current. Covenants that
the Group is required to comply with after the reporting period do not affect the classification at the
reporting date.
(15) Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when the
Group has a present legal or constructive obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised
even if the likelihood of an outflow with respect to any one item included in the same class of
obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the end of the reporting period. The discount rate used to
determine the present value is a pre-tax rate that reflects current market assessments of the time value
of money and the risks specific to the liability. The increase in the provision due to the passage of time
is recognised as interest expense.
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(16) Employee Benefits
(i) Short-Term Obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating
sick leave that are expected to be settled wholly within 12 months after the end of the period in which
the employees render the related service are recognised in respect of employees’ services up to the end
of the reporting period and are measured at the amounts expected to be paid when the liabilities are
settled. The liabilities are presented as current employee benefit obligations in the statement of
financial position.
(ii) Housing Funds, Medical Insurances and Other Social Insurances
Employees of the Group in the PRC are entitled to participate in various government-supervised
housing funds, medical insurance and other employee social insurance plan. The Group contributes on a
monthly basis to these funds based on certain percentages of the salaries of the employees, subject to
certain ceiling. The Group’s liability in respect of these funds is limited to the contributions payable in
each year. Contributions to the housing funds, medical insurances and other social insurances are
expensed as incurred.
(iii) Post-Employment Benefits
The Group classifies post-employment benefit plans as either defined contribution plans or
defined benefit plans. Defined contribution plans are post-employment benefit plans under which the
Group pays fixed contributions into a separate fund and will have no obligation to pay further
contributions; and defined benefit plans are post-employment benefit plans other than defined
contribution plans. During the reporting period, the Group’s defined contribution plans mainly include
basic pensions and unemployment insurance.
(iv) Basic Pensions
The Group’s employees participate in the basic pension plan set up and administered by local
authorities of Ministry of Human Resource and Social Security. Monthly payments of premiums on the
basic pensions are calculated according to prescribed bases and percentage by the relevant local
authorities. When employees retire, the relevant local authorities are obliged to pay the basic pensions
to them. The amounts based on the above calculations are recognised as liabilities in the accounting
period in which the service has been rendered by the employees, with a corresponding charge to the
profit or loss for the current period or the cost of relevant assets.
(17) Share-Based Payments
Share-based payments can be distinguished into equity-settled share-based payments and
cash-settled share-based payments. Equity-settled share-based payments are transactions of the Group
settled through the payment of shares or other equity instruments in consideration for receiving
services.
Equity-settled share-based payments made in exchange for services rendered by employees are
measured at the fair value of equity instruments granted to employees. Instruments which are vested
immediately upon the grant are charged to relevant costs or expenses at the fair value on the date of
grant and the capital reserve is credited accordingly. Instruments of which vesting is conditional upon
completion of services or fulfilment of performance conditions are measured by recognising services
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rendered during the period in relevant costs or expenses and crediting the capital reserve accordingly at
the fair value on the date of grant according to the best estimates conducted by the Group at each date
of the end of the reporting period during the pending period. For details see Note 29.
No expense is recognised for awards that do not ultimately vest due to non-fulfilment of
non-market conditions and/or vesting conditions. For the market or non-vesting condition under the
share-based payments agreement, it should be treated as vesting irrespective of whether or not the
market or non-vesting condition is satisfied, provided that other performance condition and/or vesting
conditions are satisfied.
Where the terms of an equity-settled share-based payment are modified, as a minimum, services
obtained are recognised as if the terms had not been modified. In addition, an expense is recognised for
any modification which increases the total fair value of the instrument granted or is otherwise
beneficial to the employee as measured at the date of modification.
(18) Dividend Distribution
Dividend distribution to the shareholders is recognised as a liability in the Group’s financial
statement in the period in which the dividends are approved by the entities’ shareholders or directors,
where appropriate.
(19) Interest Income
Interest income on financial assets at amortised cost and financial assets at FVOCI calculated
using the effective interest method is recognised in profit or loss as part of other income.
Interest income from financial instruments is calculated by effective interest method and
recognised in profit or loss for the current period. Interest income comprises premiums or discounts, or
the amortisation based on effective rates of other difference between the initial carrying amount and the
due amount of interest-earning assets.
The effective interest method is a method of calculating the amortised cost of a financial asset or
liability and the interest income or interest costs based on effective rates. The effective interest rate is
the rate at which the estimated future cash flows during the period of expected duration of the financial
instruments or applicable shorter period are discounted to the current carrying amount of the financial
instruments. When calculating the effective interest rate, the Group estimates cash flows by considering
all contractual terms of the financial instrument (e.g., early repayment options, similar options, etc.),
but without considering future credit losses. The calculation includes all fees and interest paid or
received that are an integral part of the effective interest rate, transaction costs, and all other premiums
or discounts.
Interest income from impaired financial assets is calculated at the interest rate that is used for
discounting estimated future cash flow when measuring the impairment loss.
(20) Dividend Income
Dividend income is recognised when the right to receive dividend payment is established.
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(21) Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
 the profit attributable to owners of the Company, excluding any costs of servicing equity
other than ordinary shares;
 by the weighted average number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the year and excluding treasury
shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share
to take into account:
 the after-income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares, and
 the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
(22) Government Grant
Government grants relating to costs are deferred and recognised in profit or loss over the period
necessary to match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in
non-current liabilities as deferred income and they are credited to profit or loss on a straight-line basis
over the expected lives of the related assets.
(23) Current and Deferred Income Tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable
income, based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred
tax assets and liabilities attributable to temporary differences and to unused tax losses.
(i) Current Income Tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period in the countries where the Company and its subsidiaries and
associates operate and generate taxable income. Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable tax regulation is subject to interpretation and
considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The
Group measures its tax balances either based on the most likely amount or the expected value,
depending on which method provides a better prediction of the resolution of the uncertainty.
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(ii) Deferred Income Tax
Deferred income tax is provided in full, using the liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the Historical
Financial Information. However, deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit or loss and does not give rise to equal
taxable and deductible temporary differences. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantively enacted by the end of the reporting period and are
expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be
available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the
carrying amount and tax bases of investments in foreign operations where the Company is able to
control the timing of the reversal of the temporary differences and it is probable that the differences
will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset
current tax assets and liabilities and where the deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right
to offset and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
For the purposes of measuring deferred tax for leasing transactions in which the Group recognises
the right-of-use assets and the related lease liabilities, the Group first determines whether the tax
deductions are attributable to the right-of-use assets or the lease liabilities.
For leasing transactions in which the tax deductions are attributable to the lease liabilities, the
Group applies IAS 12 Income Taxes requirements to right-of-use assets and lease liabilities separately.
Temporary differences on initial recognition of the relevant right-of-use assets and lease liabilities are
not recognised due to application of the initial recognition exemption. Temporary differences arising
from subsequent revision to the carrying amounts of right-of-use assets and lease liabilities, resulting
from remeasurement of lease liabilities and lease modification, that are not subject to initial recognition
exemption are recognised on the date of remeasurement or modification.
Current and deferred tax are recognised in profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred
tax are also recognised in other comprehensive income or directly in equity respectively. Where current
tax or deferred tax arises from the initial accounting for a business combination, the tax effect is
included in the accounting for the business combination.
In assessing any uncertainty over income tax treatments, the Group considers whether it is
probable that the relevant tax authority will accept the uncertain tax treatment used, or proposed to be
use by individual group entities in their income tax filings. If it is probable, the current and deferred
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taxes are determined consistently with the tax treatment in the income tax filings. If it is not probable
that the relevant taxation authority will accept an uncertain tax treatment, the effect of each uncertainty
is reflected by using either the most likely amount or the expected value.
(24) Leases
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.
For contracts entered into or modified on or after the date of initial application or arising from
business combinations, the Group assesses whether a contract is or contains a lease based on the
definition under IFRS 16 at inception or modification date. Such contract will not be reassessed unless
the terms and conditions of the contract are subsequently changed.
As a practical expedient, leases with similar characteristics are accounted on a portfolio basis
when the Group reasonably expects that the effects on the financial statements would not differ
materially from individual leases within the portfolio.
Short-Term Leases and Leases of Low-V alue Assets
The Group applies the short-term lease recognition exemption to leases that have a lease term of
12 months or less from the commencement date and do not contain a purchase option. It also applies
the recognition exemption for lease of low-value assets. Lease payments on short-term leases and leases
of low-value assets are recognised as expense on a straight-line basis over the lease term.
Right-of-Use Assets
The cost of right-of-use asset includes:
 the amount of the initial measurement of the lease liability;
 any lease payments made at or before the commencement date, less any lease incentives
received;
 any initial direct costs incurred by the Group; and
 an estimate of costs to be incurred by the Group in dismantling and removing the underlying
assets, restoring the site on which it is located or restoring the underlying asset to the
condition required by the terms and conditions of the lease.
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease.
Right-of-use assets in which the Group is reasonably certain to obtain ownership of the underlying
leased assets at the end of the lease term are depreciated from commencement date to the end of the
useful life. Otherwise, right-of-use assets are depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term.
The Group presents right-of-use assets as a separate line item on the consolidated statement of
financial position.
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 347 ---
For payments of a property interest which includes both leasehold land and building elements, the
entire property is presented as property, plant and equipment of the Group when the payments cannot
be allocated reliably between the leasehold land and building elements, except for those that are
classified and accounted for as investment properties.
Land leases are also in the scope of IFRS 16. The Group recognises any prepaid premium for
leasehold lands as right-of-use assets which are depreciated over the relevant lease terms.
Refundable rental deposits paid are accounted under IFRS 9 and initially measured at fair value.
Adjustments to fair value at initial recognition are considered as additional lease payments and included
in the cost of right-of-use assets.
Lease Liabilities
At the commencement date of a lease, the Group recognises and measures the lease liability at the
present value of lease payments that are unpaid at that date. In calculating the present value of lease
payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest
rate implicit in the lease is not readily determinable. The lease payments are discounted using the
interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case
for leases of the Group, the lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to
the right-of-use asset in a similar economic environment with similar terms, security and conditions.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease
liabilities include the net present value of the following lease payments:
 fixed payments (including in-substance fixed payments), less any lease incentives receivable;
 variable lease payments that are based on an index or a rate, initially measured using the
index or rate as at the commencement date;
 amounts expected to be payable by the Group under residual value guarantees;
 the exercise price of a purchase option if the Group is reasonably certain to exercise that
option;
 payments of penalties for terminating the lease, if the lease term reflects the Group
exercising that option; and
 lease payments to be made under reasonably certain extension options are also included in
the measurement of lease liabilities.
After the commencement date, lease liabilities are adjusted by interest accretion and lease
payments.
The Group presents lease liabilities as a separate line item in the consolidated statement of
financial position.
III SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company or any of the companies now
comprising the Group in respect of any period subsequent to 31 December 2025 and up to the date of
this report. No dividend or distribution has been declared or made by the Company or any of the
companies now comprising the Group in respect of any period subsequent to 31 December 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 348 ---
The information set out in this Appendix does not form part of the Accountants’ Report on the
historical information of the Group for the years ended 31 December 2023, 2024 and 2025 (the “ Track
Record Period ”) (the “ Accountants’ report ”) from Confucius International CP A Limited, Hong Kong,
the reporting accountant of the Company as set out in Appendix I in this prospectus, and is included
herein for illustrative purposes only.
The unaudited pro forma financial information should be read in conjunction with the section
headed “Financial Information” in this prospectus and the Accountants’ Report set out in Appendix I to
this prospectus.
A. UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS
The following is the unaudited pro forma statement of adjusted consolidated net tangible assets of
the Group as at 31 December 2025 (the “Unaudited Pro Forma Financial Information”) which has been
prepared by the Directors in accordance with Rule 4.29 of the Listing Rules to illustrate the effects of
the Global Offering as if it had taken place on 31 December 2025 and based on the audited
consolidated net tangible assets of the Group attributable to the owners of the Company as at 31
December 2025.
The Unaudited Pro Forma Financial Information is prepared for illustrative purpose only, and
because of its hypothetical nature, it may not give a true picture of the consolidated net tangible assets
of the Group attributable to the owners of the Company immediately after completion of the Global
Offering or any future date after completion of the Global Offering.
Audited
consolidated net
tangible assets
of the Group
attributable to
owners of the
Company as at
31 December
2025
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
the owners of
the Company as
at 31 December
2025
Unaudited pro forma adjusted
consolidated net tangible assets
per Share as at
31 December 2025
(Note 1) (Note 2) (Note 3) (Note 4)
RMB’000 RMB’000 RMB’000 RMB HK$
Based on an Offer Price
of HK$7.20 per share . 251,223 484,397 735,620 0.95 1.09
Notes:
(1) The audited consolidated net tangible assets of the Group attributable to the owners of the Company as at 3 1 December
2025 is extracted from the Accountants’ Report set out in Appendix I to this document, which is based on the audited
consolidated net assets of the Group attributable to the owners of the Company as at 31 December 2025 of
RMB362,196,000 with adjustments for the intangible assets of RMB110,973,000 attributable to the owners of the
Company.
(2) The estimated net proceeds from the Global Offering are based on 85,162,500 Shares at the indicative Offer Price of
HK$7.20 per share, after deduction of the underwriting fees and other related expenses payable by the Company
(excluding listing expenses of RMB17,426,000 which have been accounted for in the consolidated statements of profit or
loss prior to 31 December 2025) and takes no account of any Shares which may be issued or repurchased by the Company.
(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after the adjustments referred to
in the preceding paragraphs and on the basis that 774,208,420 Shares were in issue assuming that the Global Offering and
Share Subdivision have been completed on 31 December 2025 but takes no account of any Shares which may be issued or
repurchased by the Company.
(4) For the purpose of this unaudited pro forma adjusted consolidated net tangible assets per Share, the amounts stated in
Hong Kong dollars are converted into Renminbi at the rate of RMB1.00 to HK$1.1496. No representation is made that
Hong Kong dollars has been, could have been or may be converted to Renminbi, or vice versa, at that rate.
(5) No adjustment has been made to the unaudited pro forma adjusted net tangible assets of the Group to reflect any trading
results or other transactions of the Group entered into subsequent to 31 December 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 349 ---
楁㷗䀋Ṽ匲⢓㔎忻181嘇⣏㚱⣏⹰15㦻1501-1508⭌
Rooms 1501-8, 15/F., Tai Yau Building,
181 Johnston Road, Wanchai, Hong Kong
暣娙 Tel: (852) 3103 6980
⁛䛇 Fax: (852) 3104 0170
暣悝 Email: info@pccpa.hk
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of Shenzhen HQVT Technology Co., LTD.
We have completed our assurance engagement to report on the compilation of unaudited pro forma
financial information of Shenzhen HQVT Technology Co., LTD. (the “ Company ”) and its subsidiaries
(collectively the “ Group ”) by the directors of the Company (the “ Directors ”) for illustrative purposes
only. The unaudited pro forma financial information consists of the unaudited pro forma statement of
adjusted consolidated net tangible assets of the Group as at 31 December 2025 and related notes (the
“Unaudited Pro Forma Financial Information ”) as set out on pages II-1 to II-2 of the Company’s
prospectus dated 11 June 2026, in connection with the proposed initial public offering of the H shares
of the Company (the “ Prospectus ”). The applicable criteria on the basis of which the Directors have
compiled the Unaudited Pro Forma Financial Information are described on pages II-1 to II-2 of the
Prospectus.
The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate
the impact of the proposed initial public offering on the Group’s consolidated financial position as at 31
December 2025 as if the proposed initial public offering had taken place at 31 December 2025. As part
of this process, information about the Group’s consolidated financial position has been extracted by the
Directors from the Group’s financial information for the year ended 31 December 2025, on which an
accountants’ report has been published.
Directors’ Responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline 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, professional competence and due care, confidentiality and professional behaviour.
Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1, Quality Management
for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related
Services Engagements , issued by the HKICPA, which requires the firm to design, implement and
operate a system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulatory requirements.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 350 ---
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules,
on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept
any responsibility for any reports previously given by us on any financial information used in the
compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom
those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial
Information Included in a Prospectus , issued by the HKICPA. This standard requires that the reporting
accountant plans and performs procedures to obtain reasonable assurance about whether the Directors
have compiled the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of
the Listing Rules and with reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial
Information, nor have we, in the course of this engagement, performed an audit or review of the
financial information used in compiling the Unaudited Pro Forma Financial Information.
The purpose of unaudited pro forma financial information included in a prospectus is solely to
illustrate the impact of a significant event or transaction on unadjusted financial information of the
entity 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
the proposed initial public offering at 31 December 2025 would have been as presented.
A reasonable assurance engagement to report on whether the unaudited pro forma financial
information has been properly compiled on the basis of the applicable criteria involves performing
procedures to assess whether the applicable criteria used by the Directors in the compilation of the
Unaudited Pro Forma Financial Information provide a reasonable basis for presenting the significant
effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence
about whether:
 The related unaudited pro forma adjustments give appropriate effect to those criteria; and
 The unaudited pro forma financial information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountant’s judgement, having regard to the
reporting accountant’s understanding of the nature of the Group, the event or transaction in respect of
which the Unaudited Pro Forma Financial Information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 351 ---
Our work has not been carried out in accordance with auditing standards or other standards and
practices generally accepted in the United States of America or auditing standards of the Public
Company Accounting Oversight Board (United States) or standards and practices of any professional
body in any other overseas jurisdiction and accordingly should not be relied upon as if it had been
carried out in accordance with those standards and practices.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled by the Directors
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 Unaudited Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Confucius International CPA Limited
Certified Public Accountants
Hong Kong,
11 June 2026
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 352 ---
TAXATION OF SECURITY HOLDERS
Income tax and capital gains tax of holders of H shares are subject to the laws and practices of the
PRC and of the jurisdictions in which holders of H shares are resident or otherwise subject to tax. The
following summary of certain relevant taxation provisions is based on current laws and practices, has
not taken into account the possible change or amendment to the relevant laws or policies, and does not
constitute any opinion or advice. This Appendix does not deal with all possible tax consequences
relating to an investment in the H shares, nor does it take into account the specific circumstances of
any particular investor, some of which may be subject to special regulation. Accordingly, investors
should consult their own tax adviser regarding the tax consequences of an investment in the H shares.
The discussion is based upon laws and relevant interpretations in effect as of the Latest Practicable
Date, all of which are subject to change or adjustment and may have retrospective effect.
This Appendix does not address any aspects of PRC taxation other than income tax, capital gains
tax and profits tax, sales tax, value-added tax, stamp duty and estate duty. Investors are advised to
consult their financial advisers regarding the PRC and other tax consequences of owning and disposing
of the H shares.
The PRC Taxation
Taxation on Dividends
Individual Investors
Pursuant to the Individual Income Tax Law of the PRC () (the
“IIT Law”) issued by the SCNPC on 10 September 1980, lastly amended on 31 August 2018 and
effective on 1 January 2019, and the Implementation Rules of the Individual Income Tax Law of the
PRC (ૢԷ ) issued by the State Council on 28 January 1994,
lastly amended on 18 December 2018 and effective on 1 January 2019, interest, dividends and bonuses,
as personal income, shall be subject to individual income tax at a proportional tax rate of 20%. For a
foreign natural person who is not a resident of the PRC, the receipt of dividends from an enterprise in
the PRC is normally subject to individual income tax of 20% unless specifically exempted by the tax
authority of the State Council or reduced by relevant tax agreements.
Meanwhile, according to the Notice on Issues Concerning Differentiated Individual Income Tax
Policies on Dividends and Bonus of Listed Companies (݁
) jointly issued by the MOF, the SAT and the CSRC on 7 September 2015 and
effective on 8 September 2015, where an individual holds the shares of a listed company obtained from
the public offering and market transfer, if the holding period is more than one year, the dividends and
bonus income shall be temporarily exempted from individual income tax. Where an individual holds
shares of a listed company from the public offering and market transfer, if the holding period is within
one month (inclusive), the dividend income shall be included in the taxable income in full; if the
holding period is more than one month but less than one year (inclusive), the dividend income shall be
included in the taxable income at the rate of 50%; the aforesaid income shall be subject to individual
income tax at a uniform rate of 20%.
Pursuant to the Arrangement between the Mainland and the Hong Kong Special Administrative
Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to
Taxes on Income (τર ) (the
“Arrangement ”) signed on 21 August 2006 and implemented on 8 December 2006, the PRC
Government may levy taxes on the dividends paid by a PRC company to Hong Kong residents
(including natural persons and legal entities) in an amount not exceeding 10% of total dividends
payable by the PRC company. If a Hong Kong resident directly holds 25% or more of the equity
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-1 –


--- page 353 ---
interest in a PRC company, then such tax shall not exceed 5% of total dividends payable by the PRC
company. The Fifth Protocol of the Arrangement between the Mainland of China and the Hong Kong
Special Administrative Region on the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion issued by the State Administration of Taxation (ਜ
) (the “ Fifth Protocol of the
Arrangement ”), which came into effect on 6 December 2019, adds a criteria for the qualification of
entitlement to enjoy treaty benefits. Although there may be other provisions under this Arrangement,
the treaty benefits under the criteria shall not be granted in the circumstance where relevant treaty
benefits, after taking into account all relevant facts and conditions, are reasonably deemed to be one of
the main purposes for the arrangement or transactions which will bring any direct or indirect benefits
under this Arrangement, except when the grant of benefits under such circumstance is consistent with
relevant objective and goal under the Arrangement. The application of the dividend clause of tax
agreements is subject to the requirements of PRC tax law and regulation, such as the Notice of the
State Administration of Taxation on the Issues Concerning the Application of the Dividend Clauses of
Tax Agreements ( ).
Enterprise Investors
Pursuant to the Enterprise Income Tax Law of the People’s Republic of China (2018 Amendment)
(ج2018͍)) (the “ EIT Law ”), lastly amended and implemented by
the SCNPC on 29 December 2018, and the Implementation Rules of the Enterprise Income Tax Law of
the People’s Republic of China (ૢԷ ) (the “ Implementation
Rules ”), issued by the State Council on 6 December 2007, lastly amended on 6 December 2024 and to
be implemented on 20 January 2025, a non-resident enterprise is generally subject to a 10% enterprise
income tax on PRC-sourced income, including dividends received from a PRC resident enterprise that
issues shares in Hong Kong, if a non-resident enterprise either does not have an establishment or place
of business in the PRC, or has an establishment or place of business in the PRC but its PRC-sourced
income is not effectively connected with that establishment or place of business, the aforesaid income
tax payable by the non-resident enterprise shall be withheld at source. The payer shall be the
withholding agent, and the tax shall be withheld by the withholding agent from the payment or due
payment every time it is paid or due.
The Notice of the SAT on the Issues concerning Withholding the Enterprise Income Tax on the
Dividends Paid by Chinese Resident Enterprises to H-share Holders Which Are Overseas Non-resident
Enterprises (͏ΆุΣྤ̮ H੻
) issued and implemented by the SAT on 6 November 2008 further clarified that a
PRC-resident enterprise must withhold enterprise income tax at a flat rate of 10% on the dividends of
2008 and onwards that it distributes to overseas non-resident enterprise shareholders of H Shares. The
SAT Response to Questions on Levying Enterprise Income Tax on Dividends Derived by Non-resident
Enterprises from Holding Stocks such as B Shares (͏Άุ՟੻ Bٰ
ҭᔧ) issued and implemented by the SAT on 24 July 2009, further provides
that PRC-resident enterprises listed on Chinese and overseas stock exchanges by issuing stocks (A
shares, B shares and overseas shares) must withhold enterprise income tax at a flat rate of 10% on
dividends of 2008 and onwards that it distributes to non-resident enterprise shareholders. Non-resident
enterprise shareholders shall follow relevant provisions executed by tax agreements where they need to
enjoy the treatment of tax agreements. Pursuant to the Arrangement, the PRC Government may levy
taxes on the dividends paid by a PRC company to Hong Kong residents (including natural persons and
legal entities) in an amount not exceeding 10% of total dividends payable by the PRC company. If a
Hong Kong resident directly holds 25% or more of the equity interest in a PRC company, then such tax
shall not exceed 5% of total dividends payable by the PRC company.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-2 –


--- page 354 ---
The Fifth Protocol of the Arrangement adds a criteria for the qualification of entitlement to enjoy
treaty benefits. Although there may be other provisions under the Arrangement, the treaty benefits
under the criteria shall not be granted in the circumstance where relevant treaty benefits, after taking
into account all relevant facts and conditions, are reasonably deemed to be one of the main purposes for
the arrangement or transactions which will bring any direct or indirect benefits under the Arrangement,
except when the grant of benefits under such circumstance is consistent with relevant objective and
goal under the Arrangement. The application of the dividend clause of tax agreements is subject to the
requirements of PRC tax law and regulation, such as the Notice of the State Administration of Taxation
on the Issues Concerning the Application of the Dividend Clauses of Tax Agreements (೼ਕᐼ҅
 ).
Tax Treaties
Non-Chinese-resident investors who reside in a country that have already signed double taxation
treaties with China or who reside in Hong Kong or Macau may enjoy withholding tax concessions on
dividends received from Chinese companies. Currently, China has signed treaties/arrangements to avoid
double taxation with a number of countries and regions, including Hong Kong, Macau, Australia,
Canada, France, Germany, Japan, Malaysia, the Netherlands, Singapore, the United Kingdom and the
United States. Non-Chinese-resident companies that are entitled to preferential tax rates in accordance
with relevant income tax agreements or arrangements are required to apply to the Chinese tax
authorities for the refund of withholding tax paid in excess of the agreed tax rate, and that the
repayments are subject to approval by the Chinese tax authorities.
Pursuant to the Administrative Measures on Entitlement of Non-resident Taxpayers to Preferential
Treatment under Tax Treaties ( ), which was promulgated by the
STA on 14 October 2019 and became effective on 1 January 2020, non-resident taxpayers are entitled to
preferential treatment under the tax treaties through “self-determination, self-declaration and keeping
and documenting relevant information for inspection”. Where a non-resident taxpayer self-assesses and
concludes that it satisfies the criteria for claiming treaty benefits, it may enjoy treaty benefits at the
time of tax declaration or at the time of withholding declaration through a withholding agent,
simultaneously gather and retain the relevant materials pursuant to the regulations for future inspection,
and be subject to subsequent administration by tax authorities.
Taxation on share transfer
V AT and Local Additional Tax
Pursuant to the Notice of Ministry of Finance and State Administration of Taxation on Fully
Implementing the Pilot Reform for the Transition from Business Tax to Value-added Tax (௅
 )( “ Circular 36 ”), which was
implemented on 1 May 2016, entities and individuals engaged in the services sale in the PRC are
subject to V AT and “engaged in the services sale in the PRC” means that the seller or buyer of the
taxable services is located in the PRC. Circular 36 also provides that transfer of financial products,
including transfer of the ownership of marketable securities, shall be subject to V AT at 6% on the
taxable revenue (which is the balance of sales price upon deduction of purchase price), for a
general or a foreign V AT taxpayer. However, individuals who transfer financial products are exempt
from V AT, which is also provided in the Notice of Ministry of Finance and State Administration of
Taxation on Several Tax Exemption Policies for Business Tax on Sale and Purchase of Financial
Commodities by Individuals (݁
) became effective on 1 January 2009. According to these regulations, if the holder is a
non-resident individual, the PRC V AT is exempted from the sale or disposal of H shares; if the
holder is a non-resident enterprise and the H-share buyer is an individual or entity located outside
China, the holder is not necessarily required to pay the PRC V AT, but if the H-share buyer is an
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-3 –


--- page 355 ---
individual or entity located in China, the holder may be required to pay the PRC V AT. However, it
is still uncertain whether the non-Chinese resident enterprises are required to pay the PRC V AT for
the disposal of H shares in practice.
At the same time, V AT payers are also required to pay urban maintenance and construction tax,
education surtax and local education surcharge (hereinafter collectively referred to as “ Local
Additional Tax ”), which shall be usually subject to 12% of the value-added tax, business tax and
consumption tax actually paid (if any).
Income tax
Individual Investors
According to the IIT Law and Implementing Rules of the EIT Law, gains realised on the sale of
equity interests in PRC resident enterprises are subject to the individual income tax at a rate of 20%.
Pursuant to the Circular of the MOF and SAT on Declaring that Individual Income Tax Continues
to be Exempted over Income of Individuals from the Transfer of Shares (׵
 ) issued and effective on 30 March 1998 by the
MOF and SAT, from 1 January 1997, income of individuals from transfer of the shares of listed
enterprises continues to be exempted from individual income tax. On 31 December 2009, the MOF,
SAT and the CSRC jointly issued and implemented the Circular on Relevant Issues Concerning the
Collection of Individual Income Tax over the Income Received by Individuals from Transfer of Listed
Shares Subject to Sales Limitation (ஷ
), which provides that individuals’ income from individuals’ transfer of shares listed on the
Shanghai Stock Exchange and Shenzhen Stock Exchange shall continue to be exempted from individual
income tax, except for the relevant restricted shares as defined in the Supplementary Circular on
Relevant Issues Concerning the Collection of Individual Income Tax over the Income Received by
Individuals from Transfer of Listed Shares Subject to Sales Limitation (ٰ
 ) jointly issued and effective on 10 November 2010 by the
aforesaid three authorities. As of the Latest Practicable Date, the aforesaid provision has not expressly
provided that individual income tax shall be collected from non-PRC resident individuals on the
transfer of shares of PRC resident enterprises listed on overseas stock exchanges.
Enterprise Investors
In accordance with the EIT Law and its implementing regulations, a non-resident enterprise is
generally subject to a 10% enterprise income tax on the income derived from the PRC (including the
gain derived from the sale of equity interests in the PRC resident enterprise), if such non-resident
enterprise does not have an establishment or place in the PRC or has an establishment or place in the
PRC but the PRC-sourced income has no actual connection with the above establishment or premises;
in respect of the aforementioned income tax payable by the non-resident enterprise, the tax shall be
withheld at source, with the payer as the withholding agent, and the tax shall be withheld by the
withholding agent from the amount paid or due payable each time. The tax may be reduced or exempted
under the relevant tax treaty or agreement for the avoidance of double taxation.
Stamp Duty
According to the Stamp Duty Law of the PRC promulgated by the SCNPC on 10 June 2021 and
became effective on 1 July 2022, the PRC stamp duty is applicable to the entities and individuals that
conclude taxable vouchers or conduct securities trading within the territory of the PRC, and the entities
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-4 –


--- page 356 ---
and individuals outside the territory of the PRC that conclude taxable vouchers that are for use within
the PRC. Therefore, the stamp duty levied on the transfer of shares of listed companies in the PRC does
not apply to the purchase and disposal of H-shares outside the PRC by non-Chinese investors.
Estate Duty
As of the Latest Practicable Date, no estate duty has been levied by the PRC government under
the PRC laws.
MAJOR TAXATION OF OUR COMPANY IN THE PRC
Enterprise Income Tax
According to the EIT Law and its implementation rules, the enterprise income tax rate shall be
25%. Enterprises are classified into resident and non-resident enterprises. A resident enterprise shall pay
enterprise income tax on its incomes derived from both inside and outside China. The enterprise income
tax rate shall be 25%. For a non-resident enterprise having offices or establishments inside China, it
shall pay enterprise income tax on its incomes derived from China as well as on incomes that it earns
outside China but which has real connection with the said offices or establishments. The enterprise
income tax rate shall be 25%.
According to the Announcement of the Ministry of Finance and the State Administration of
Taxation on Relevant Tax and Fee Policies With Respect to Further Supporting the Development of
Small and Micro Enterprises and Individual Businesses (ʃฆ
ʮѓ ) that was promulgated on 2 August 2023 and
implemented on 1 January 2023, for small and micro-profit enterprises, the taxable income will be
calculated at the reduced rate of 25% and the EIT shall be paid at the tax rate of 20%. The policy will
continue to be implemented until 31 December 2027.
According to the Administrative Measures for Recognition of High and New-Technology
Enterprises () that was promulgated by the Ministry of Science and
Technology of the PRC, the MOF and the SAT on 14 April 2008, amended on 29 January 2016 and
came into effect on 1 January 2016, high- and new-tech enterprises can apply for a preferential
enterprise income tax rate of 15% in accordance with the EIT Law.
Value-added tax
According to the Value-Added Tax Law of the People’s Republic of China (࠽
جthe “ V AT Law”) promulgated by the SCNPC on 25 December 2024 and became effective on 1
January 2026, and the Implementation Rules for the Value-Added Tax Law of the PRC ( ʕശɛ͏΍ձ
ૢԷ ) promulgated by the State Council and became effective as of the same date of
the V AT Law, all enterprises and individuals that engage in the sale of goods, the provision
ofprocessing, repair and replacement services, sales of service, intangible assets and real estate and the
importation of goods within the territory of the PRC shall pay value-added tax at the rate of 0%, 6%,
9% and 13% for the different goods it sells and different services it provides, except when specified
otherwise.
Pursuant to the Notice of the Ministry of Finance and the State Administration of Taxation on the
Adjustment to V AT ( ) that was promulgated by
the MOF and the SAT on 4 April 2018 and came into effect on 1 May 2018, the applicable tax rate of
V AT has been adjusted, for taxpayers engaging in taxable sales or importation of goods, the previously
applicable V AT rates of 17.0% and 11.0% are adjusted to 16.0% and 10.0%, respectively.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-5 –


--- page 357 ---
Pursuant to the Announcement on Relevant Policies for Deepening the V AT Reform (ଉʷᄣ
ʮѓ) that was promulgated by the MOF, the SAT and General Administration of
Customs on 20 March 2019 and implemented on 1 April 2019, V AT rates on sale of goods and
importation of goods were adjusted from 16% and 10% to 13% and 9%, respectively.
According to Circular 36, with the approval of the State Council, the state started to fully
implement the pilot change from business tax to value-added tax on 1 May 2016. All taxpayers of
business tax in construction industry, real estate industry, financial industry and living service industry
have been included in the scope of the pilot and should pay value-added tax instead of business tax.
According to the Implementation Measures for the Pilot Programme of Replacing Business Tax with
V AT issued by the MOF and the SAT on 12 December 2013, and amended on 23 March 2016, 11 July
2017, and 20 March 2019, and implemented on 1 April 2019, the tax rates for taxpayers selling
services, intangible assets, or real estate are 17%, 11%, 6%, and zero, respectively.
In accordance with the Announcement on the Policies on Reduction or Exemption of Value-added
Tax for Small-scale V AT Taxpayers (ʮѓ ) promulgated
and implemented by the MOF and the SAT on 1 August 2023, small-scale V AT taxpayers with monthly
sales of less than RMB100,000 (including this amount) will be exempted from V AT. The
implementation period of the announcement is until 31 December 2027.
FOREIGN EXCHANGE
The lawful currency of the PRC is the Renminbi. The SAFE, under the authority of the PBOC, is
empowered with the functions of administering all matters relating to foreign exchange, including the
implementation of foreign exchange regulations.
According to the Foreign Exchange Administration Regulations of the PRC ( ʕശɛ͏΍ձ਷̮
ි၍ଣૢԷ) promulgated by the State Council on 29 January 1996 and latest amended and
implemented on 5 August 2008, payments of current account items, such as profit distributions, interest
payments and trade and service related foreign exchange transactions, can be freely carried out in
foreign currencies without prior approval from the State Administration of Foreign Exchange, by
complying with certain procedural requirements. By contrast, prior approval or registration with the
State Administration of Foreign Exchange or its local branch is required where Renminbi is to be
converted into foreign currency and remitted out of China to pay capital account items, such as direct
investments, repayment of foreign currency-denominated loans, repatriation of investments and
investments in securities outside of China.
According to the Regulations for the Administration of Settlement, Sale and Payment of Foreign
Exchange (), which was promulgated by the PBOC on 20 June 1996 and
implemented on 1 July 1996, it removes other restrictions on convertibility of foreign exchange under
current items, while existing restrictions on foreign exchange transactions under capital account items
were also maintained.
According to the relevant laws and regulations in the PRC, PRC enterprises (including foreign
investment enterprises) which need foreign exchange for current item transactions may, without the
approval of the foreign exchange administrative authorities, effect payment through foreign exchange
accounts opened at the designated 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 strength 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.
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According to the Notice Further Simplifying and Improving Foreign Exchange Administration
Policies on Direct Investment (ஷ
) issued by the SAFE on 13 February 2015 and implemented on 1 June 2015, banks shall, on behalf
of the SAFE, directly examine and handle the foreign exchange registration for domestic direct
investment and foreign exchange registration for overseas direct investment. The SAFE and its branches
shall exercise indirect supervision over the foreign exchange registration of direct investment through
banks.
According to the Decisions on Matters including Cancelling and Adjusting a Batch of
Administrative Approval Items ( )
promulgated and implemented by the State Council on 23 October 2014, it was decided to cancel the
approval requirements of SAFE and its branches on the transfer of overseas raised funds from overseas
listings of foreign shares to onshore RMB accounts and foreign exchange settlement.
According to the Administrative Provisions on Foreign Exchange in Domestic Direct Investment
by Foreign Investors ( ), which promulgated on 10 May 2013,
became effective on 13 May 2013, amended on 10 October 2018 and partially abolished on 30
December 2019, the administration by SAFE or its local branches over direct investment by foreign
investors in the PRC must be conducted by way of registration and banks must process foreign
exchange business relating to the direct investment in the PRC based on the registration information
provided by SAFE and its branches.
According to the Circular of SAFE on Reforming the Management Approach regarding the
Settlement of Foreign Capital of Foreign-invested Enterprise (̮ਠҳ༟
 ) (the “ Circular 19 ”) promulgated on 30 March 2015 and
latest amended and implemented on 23 March 2023 by the SAFE, allows foreign-invested
enterprises to make equity investments by using RMB fund converted from foreign exchange
capital. Pursuant to the Circular 19, the foreign exchange capital in the capital account of
foreign-invested enterprises upon the confirmation of rights and interests of monetary contribution
by the local foreign exchange bureau (or the book-entry registration of monetary contribution by
the banks) can be settled at the banks based on the actual operation needs of the enterprise. The
proportion of discretionary settlement of foreign exchange capital of foreign-invested enterprises is
currently 100%. SAFE can adjust such proportion in due time based on the circumstances of the
international balance of payments. In addition, Circular 19 and the Circular of SAFE on Reforming
and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts ( ਷
 ) (the “ Circular 16 ”) promulgated on
9 June 2016 and latest amended and implemented on 4 December 2023 by the SAFE continue to
prohibit foreign-invested enterprises from, among other things, using RMB fund converted from its
foreign exchange capitals for expenditure beyond its business scope or prohibited by national laws
and regulations, investment and financing (except for security investment or guarantee products
issued by banks), providing loans to non-affiliated enterprises (except where explicitly permitted
by the business scope) or constructing or purchasing real estate not for self-use (except real estate
enterprises). The Notice of the SAFE on Further Deepening Reforms and Facilitating Cross-Border
Trade and Investment (ஷ
)(Hui Fa [2023] No. 28) promulgated on 4 December 2023 by SAFE, which further updates
Circular 16, provides that the use of capital funds of non-financial enterprises, foreign exchange
income under foreign debt and RMB funds derived from foreign exchange settlement shall follow
the principle of truthfulness and self-use, (i) shall not be used directly or indirectly for
expenditures prohibited by national laws and regulations; (ii) unless otherwise expressly provided,
it shall not be used directly or indirectly for investment in securities or other investment and
wealth management (except for wealth management products and structured deposits with risk
ratings of not higher than Level 2); (iii) shall not be used for the issuance of loans to non-affiliated
enterprises (except for those expressly permitted in the scope of business and the four specific
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areas of China, namely, the Lingang New Area of China (Shanghai) Pilot Free Trade Zone, the
Nansha New Area of Guangzhou in China (Guangdong) Pilot Free Trade Zone, the Yangpu
Economic Development Zone of China (Hainan) Pilot Free Trade Port, and the Beilun District of
Ningbo City, Zhejiang Province) i(iv) shall not be used for the purchase of non-self-use residential
properties (except for enterprises engaged in real estate development and operation and real estate
leasing and operation).
The Notice of the SAFE on Further Facilitating Cross-Border Trade and Investment (̮ි၍
 ) promulgated on 23 October 2019 and latest
amended and implemented on 4 December 2023 by SAFE, removes the restrictions on domestic equity
investment using capital funds by non-investment foreign-invested enterprises. The non-investing
foreign-funded enterprises are permitted to legally make domestic equity investments with their capital
funds under the Negative List (૶ఊ) are not violated and domestic invested projects are true
and compliant.
According to the Circular of the State Administration of Foreign Exchange on Optimising Foreign
Exchange Administration to Support the Development of Foreign-Related Businesses (̮ි၍ଣ
 ) promulgated and implemented by the SAFE on 10
April 2020, provided that the use of funds is genuine, compliant and in line with the existing
regulations for the management of the use of income under capital accounts, eligible enterprises will be
allowed to use the income under capital accounts such as capital funds, foreign debt and overseas
listing for domestic payments without having to provide materials proving authenticity to the banks on
a case-by-case basis beforehand. The handling bank shall follow the principle of prudential business
development to manage and control relevant business risks, and conduct random checks on the
facilitation of capital project income payment afterwards in accordance with relevant requirements.
According to the Notice of the PBOC and the SAFE on Issues Concerning the Administration of
Capital Management of Domestic Enterprises in Overseas Listing (׵
ٝwhich was issued by the PBOC and the SAFE on 24
December 2025 and implemented on 1 April 2026, a domestic enterprise listed overseas shall, within 30
working days from the first trading day of its overseas listing or upon completion of the over-allotment,
submit the prescribed documents to a bank in its registered province or municipality separately listed
on the State plan to apply for overseas listing registration. Proceeds from overseas listings shall, in
principle, be repatriated to the PRC in a timely manner. If such proceeds are to be retained overseas for
the purpose of overseas direct investment, overseas securities investment, or overseas lending, the
enterprise shall obtain the approval or filing documents from the competent authorities prior to the
completion of the overseas issuance and listing or the completion of the over-allotment and shall
comply with the relevant cross-border capital administration regulations.
According to the Notice of the SAFE on Further Deepening Reforms and Facilitating
Cross-Border Trade and Investment (лʷ
) promulgated and implemented by the SAFE on 4 December 2023. The notice cancelled
restrictions on domestic equity investments made with capital funds by non-investing foreign-funded
enterprises. In addition, restrictions on the use of funds for foreign exchange settlement of domestic
accounts for the realisation of assets have been removed and restrictions on the use and foreign
exchange settlement of foreign investors’ security deposits have been relaxed. Eligible enterprises in the
pilot area are also allowed to use revenues under capital accounts, such as capital funds, foreign debts
and overseas listing revenues for domestic payments without providing materials to the bank in advance
for authenticity verification on an item by item basis, while the use of funds should be true, in
compliance with applicable rules and conform to the current capital revenue use management
regulations.
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This Appendix outlines of certain aspects of PRC laws and regulations, which are relevant to the
Company’s operations and business. For Laws and regulations relating to taxation in the PRC, please
see “Appendix III — Taxation and Foreign Exchange” in this document. This Appendix also contains a
summary of laws and regulatory provisions of the Company Law. The primary purpose of this summary
is to outline, for potential investors, the main legal and regulatory provisions applicable to the
Company. This summary does not cover all data that may be important to potential investors. For more
details on laws and regulations which are relevant to the Company’s business, please see the section
headed “Regulatory Overview” in this prospectus.
THE PRC LEGAL SYSTEM
The PRC legal system is based on the PRC Constitution (, the
“Constitution ”), and is made up of written laws, administrative regulations, local regulations,
autonomous regulations and separate regulations, rules and regulations of departments of the State
Council, rules and regulations of local governments, special administrative region law and international
treaties and other regulatory documents signed by the PRC government. Court decisions do not
constitute binding precedents, although they are used for the purposes of judicial reference and
guidance.
According to the Constitution and the Legislation Law of the People’s Republic of China ( ʕശ
,o rt h e“ Legislation Law ”), which was lastly amended by the NPC on 13 March
2023 and implemented on 15 March 2023, the NPC and the SCNPC are empowered to exercise the
legislative power of the State. The NPC has the power to formulate and amend basic laws involving
criminal and civil matters, state organs and other matters. The SCNPC is empowered to formulate and
amend laws other than those required to be enacted by the NPC and to supplement and amend any parts
of laws enacted by the NPC during the adjournment of the NPC, provided such supplements and
amendments are not in conflict with the basic principles of such laws.
The State Council is the highest organ of state 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 directly under the Central Government and their respective
standing committees may formulate local regulations based on the specific circumstances and actual
needs of their respective administrative areas, provided that such local regulations do not contravene
any provision of the Constitution, laws or administrative regulations. The people’s congresses of cities
divided into districts and their standing committees may formulate local regulations on matters such as
urban and rural construction and management, environmental protection and historical and cultural
protection based on the specific circumstances and actual needs of such cities, provided that such local
regulations do not contravene any provision of the Constitution, laws, administrative regulations and
local regulations of such provinces or autonomous regions. Where laws have other stipulations on
matters of local regulations formulated by cities divided into districts, such stipulations shall prevail.
The local regulations of cities divided into districts, autonomous prefecture for approval before
implementation.
The standing committees of the people’s congresses of provinces or autonomous regions shall
examine the legality of local regulations submitted for approval, and such approval should be granted
within four months if they are not in conflict with the Constitution, laws, administrative regulations and
local regulations of their respective provinces or autonomous regions. People’s congresses of national
autonomous areas have the power to enact autonomous regulations and separate regulations in the light
of the political, economic and cultural characteristics of the nationality (nationalities) in the areas
concerned. The ministries and commissions of the State Council, PBOC, NAO and institutions with
administrative functions directly under the State Council may formulate rules and regulations within the
jurisdiction of their respective departments based on the laws and the administrative regulations,
decisions and rulings of the State Council.
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The Constitution has supreme legal authority and no laws, administrative regulations, local
regulations, autonomous regulations or separate regulations or rules may contravene the Constitution.
The authority of laws is greater than that of administrative regulations, local regulations and rules. The
authority of administrative regulations is greater than that of local regulations and rules. The authority
of the rules enacted by the people’s governments of the provinces and autonomous regions is greater
than that of the rules enacted by the people’s governments of the cities divided into districts within
their respective administrative regions.
The NPC has the power to alter or annul any inappropriate laws enacted by the SCNPC, and to
annul any autonomous regulations and separate regulations which have been approved by the SCNPC
but which contravene the Constitution and the Legislation Law; the SCNPC has the power to annul
administrative regulations that contravene the Constitution and laws, to annul local regulations that
contravene the Constitution, laws and administrative regulations, and to annul autonomous regulations
and separate regulations which have been approved by the standing committees of the people’s
congresses of the relevant provinces, autonomous regions or municipalities directly under the Central
Government, but which contravene the Constitution and the Legislation Law; the State Council has the
power to alter or annul any inappropriate ministerial rules and rules of local governments; the people’s
congresses of provinces, autonomous regions and municipalities directly under the Central Government
have the power to alter or annul any inappropriate local regulations enacted or approved by their
respective standing committees; the standing committees of the local people’s congresses have the
power to annul inappropriate rules enacted by the people’s governments at the corresponding level; 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 belongs to the
SCNPC. According to the Decision of the SCNPC Regarding the Strengthening of Interpretation of
Laws (Ӕᙄ ) passed by the SCNPC on 10
June 1981 and implemented on the same day, the SCNPC shall give interpretation and make provisions
by means of decrees on issues related to the further clarification or supplement of laws or decrees. The
Supreme People’s Court shall give interpretations on questions involving the specific application of
laws and decrees in court trials. The Supreme People’s Procuratorate shall interpret all issues involving
the specific application of laws and decrees in the procuratorial work. If there are principled differences
in the interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate, they shall
be submitted to the SCNPC for interpretation or decision. Interpretation of questions involving the
specific application of laws and decrees in areas unrelated to judicial and procuratorial work shall be
provided by the State Council and competent authorities.
Where the provisions of local regulations themselves needs to be further defined or additional
stipulations need to be made, the standing committees of the people’s congresses of provinces,
autonomous regions and municipalities directly under the Central Government which have enacted these
regulations shall provide the interpretations or make the stipulations. For matters involving the
interpretation of the specific application of local regulations, the competent departments of the people’s
governments of the provinces, autonomous regions and municipalities directly under the Central
Government shall be responsible.
JUDICIAL SYSTEM OF MAINLAND CHINA
According to the Constitution and the Law of Organisation of the People’s Courts of the PRC
() lastly amended by the SCNPC on 26 October 2018 and
implemented on 1 January 2019, the People’s Court is made up of the Supreme People’s Court, the
local people’s courts, and special people’s courts. The local people’s courts are divided into three
levels, namely the basic people’s courts, the intermediate people’s courts and the higher people’s courts.
The basic people’s courts may set up certain people’s tribunals based on the status of the region,
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population and cases. The Supreme People’s Court shall be the highest judicial organ of the state. The
Supreme People’s Court shall supervise the administration of justice by the local people’s courts at all
levels and by the special people’s courts. The people’s courts at higher levels shall supervise the
judicial work of the people’s courts at lower levels.
According to the Constitution and the Law of Organisation of the People’s Procuratorate of the
PRC () lastly amended by SCNPC on 26 October 2018 and
implemented on 1 January 2019, the People’s Procuratorate is the law supervision organ of the state.
The Supreme People’s Procuratorate shall be the highest procuratorial organ. The Supreme People’s
Procuratorate shall direct the work of the local people’s procuratorates at all levels and of the special
people’s procuratorates; the people’s procuratorates at higher levels shall direct the work of those at
lower levels.
The people’s courts employ a two-instance trial system, and judgement or rulings of the second
instance at the people’s courts are final. A party may appeal against the judgement or ruling of the first
instance of the local people’s courts. The people’s procuratorate may present a protest to the people’s
courts at the next higher level in accordance with the procedures stipulated by the laws. In the absence
of any appeal by the parties and any protest by the people’s procuratorate within the stipulated period,
the judgements or rulings of the people’s courts become final. Judgements or rulings of the second
instance of the intermediate people’s courts, the higher people’s courts and the Supreme People’s Court
and those of the first instance of the Supreme People’s Court are final. However, if the Supreme
People’s Court or the people’s courts at the next higher level finds any definite errors in a legally
effective final judgement or ruling of the people’s court at a lower level, or if the president of a
people’s court at any level finds any definite errors in a legally effective final judgement or ruling of
such court, the case can be retried according to judicial supervision procedures.
The PRC Civil Procedure Law (, the “ Civil Procedure Law ”)
lastly amended by the SCNPC on 1 September 2023 and implemented on 1 January 2024 sets forth the
requirements for instituting a civil action, the jurisdiction of the people’s courts, the procedures to be
followed for conducting a civil action and the procedures for enforcement of a civil judgement or order.
All parties to a civil action conducted within the mainland China must comply with the Civil Procedure
Law. Civil cases are generally heard by the courts where the defendants are located. The court of
jurisdiction in a civil action may be chosen by express agreement between the parties, provided that the
court is located at a place that has direct connection with the dispute, such as the plaintiff’s or the
defendant’s place of domicile, the place where the contract is performed or signed, or the object of the
action is located. However, the choice of the court cannot conflict with the regulations of differentiated
jurisdictions and exclusive jurisdictions in any case.
A foreign individual, a person without nationality, a foreign enterprise or a foreign organisation
must have the same litigation rights and obligations as a PRC citizen, legal person or other
organisations when initiating or defending any proceedings at a people’s court. If a foreign court limits
the litigation rights of PRC citizens, legal person or other organisations, the PRC court may apply the
same limitations to the citizens, legal person or other organisations of such foreign country. A foreign
individual, a person without nationality, a foreign-invested enterprise or a foreign organisation must
engage a lawyer from Mainland China if such person needs to engage a lawyer in initiating or
defending any proceedings at a people’s court. Under an international treaty signed or acceded to by the
mainland China or the principle of reciprocity, the people’s court and foreign courts may require each
other to act on their behalf to serve documents, conduct investigations, collect evidence and take other
actions. If the request by a foreign court would result in the violation of the PRC’s sovereignty, security
or public interest, the people’s court shall decline the request.
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All parties involved must comply with legally effective civil judgements and rulings. If any party
to a civil action refuse to comply with a judgement or order made by a people’s court or an award made
by an arbitration tribunal, the other party may apply to the people’s court for enforcement within two
years. Suspension or disruption of the time limit for applying for such enforcement shall comply with
the provisions of the applicable law concerning the suspension or disruption of the time-barring of
actions.
When a party applies to a people’s court for enforcing an effective judgement or ruling by a
people’s court against a party who is not located within the territory of the mainland China or whose
property is not within the mainland China, the party may apply to a foreign court with proper
jurisdiction for recognition and enforcement of the judgement or ruling. A foreign judgement or ruling
may also be recognised and enforced by the people’s court according to the mainland China
enforcement procedures if the mainland China has entered into, or acceded to, an international treaty
with the relevant foreign country, which provides for such recognition and enforcement, or if the
judgement or ruling satisfies the court’s examination according to the principle of reciprocity, unless
among other exceptions, the people’s court finds that the recognition or enforcement of such judgement
or ruling will result in a violation of the basic legal principles of the mainland China, its sovereignty or
security, or for reasons of social and public interests.
THE COMPANY LA W, OVERSEAS LISTING TRIAL MEASURES AND GUIDELINES FOR
ARTICLES OF ASSOCIATION OF LISTED COMPANIES
A joint stock limited company established in PRC seeking a listing on Hong Kong Stock
Exchange is mainly subject to the following laws and regulations of PRC.
The Company Law, which was lastly amended by the SCNPC on 29 December 2023, and
implemented on 1 July 2024.
The Trial Measures for the Administration of the Offshore Offering and Listing of Securities by
Domestic Enterprises ( , the “ Overseas Listing Trial
Measures ”) and its five interpretative guidelines, were promulgated by the CSRC on 17 February 2023
and came into effect on 31 March 2023 and were applicable to the direct and indirect overseas offering
and listing of PRC domestic companies’ securities. According to the Overseas Listing Trial Measures
and its interpretative guidelines, where a domestic company directly conducts offering and listing
overseas, it shall formulate its Articles of Association in line with the Guidelines for Articles of
Association of Listed Companies (ˏ, the “ Guidelines for Articles of Association ”
), which was lastly amended by the CSRC on 28 March 2025 and implemented on the same day, in
place of the Mandatory Provisions for Articles of Association of Companies to be Listed Overseas ( Ց
ྤ̮ɪ̹ʮ̡௝೻̀௪ૢಛ) which ceased to apply from 31 March 2023.
Set out below is a summary of the major provisions of the Company Law, the Overseas Listing
Trial Measures and the Guidelines for Articles of Association which are applicable to our Company.
GENERAL PROVISIONS
A “joint stock limited company” means a corporate legal person incorporated under the Company
Law, whose registered capital is divided into shares of equal par value. The liability of its shareholders
is limited to the extent of the shares held by them and the liability of a company is limited to the full
value of all the property owned by it.
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A company must conduct its business in accordance with laws and regulations as well as public
and commercial ethics, be honest and trustworthy and accept the supervision of the government and the
public. A company may invest in other companies. If it is prescribed by any law that a company shall
not become a capital contributor that shall bear the joint and several liabilities for the debts of the
enterprises it invests in, such provisions shall prevail.
INCORPORATION
A joint stock limited company may be incorporated by promotion or subscription. A joint stock
limited company may be incorporated by a minimum of one but not more than 200 promoters, and at
least half of the promoters must have residence within the Mainland China.
The promoters of subscription of a joint stock company shall convene an inaugural meeting of the
company within 30 days after the share capital has been paid up and shall notify all subscribers of the
date of the meeting or make an announcement in this regard 15 days before the meeting. The inaugural
meeting may be held only with the presence of subscribers holding more than 50% of the voting rights.
The convening and voting procedures for the inaugural meeting of a joint stock limited company
incorporated by promotion shall be stipulated in the articles of association or the agreement of the
promoters. Powers to be exercised at the inaugural meeting include but are not limited to the adoption
of articles of association and the election of members of the board of directors and the supervisory
committee of a company. The aforesaid matters shall be resolved by more than 50% of the votes to be
cast by subscribers presented at the meeting.
Within 30 days after the conclusion of the inaugural meeting, the board of directors shall apply to
the registration authority for registration of the incorporation of the joint stock limited company. A
company is formally established and has the status of a legal person after the business licence has been
issued by the relevant registration authority.
A joint stock limited company’s promoters shall be liable for: (i) the payment of all expenses and
debts incurred in the incorporation 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 by the company as a result of the default of the promoters in the course of incorporation of the
company.
REGISTERED SHARES
Under the Company Law, shareholders may make capital contributions in currency, or with
non-monetary property that may be valued in money and legally transferred, such as contribution in
kind or with an intellectual property rights, land use rights, shareholding or claims.
The Overseas Listing Trial Measures provides that domestic enterprises that are listed overseas
may raise funds and distribute dividends in foreign currencies or Renminbi.
Under the Company Law, a joint stock limited company is required to maintain a register of
shareholders, detailing the following information: (i) the name and domicile of each shareholder; (ii)
the class and number of shares subscribed for by each shareholder; (iii) the serial number of shares if
issued in paper form; and (iv) the date on which each shareholder acquired the shares.
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ALLOTMENT AND ISSUE OF SHARES
All issues of shares of a joint stock limited company shall be based on the principles of equality
and fairness. The same class of shares must carry equal rights. Shares issued at the same time and
within the same class must be issued on the same conditions and at the same price. A joint stock limited
company may issue shares at a par value or at a premium, but it may not issue shares below the par
value.
Domestic enterprises issued and listed overseas shall file with the CSRC in accordance with the
Overseas Listing Trial Measures, submit filing reports, legal opinions and other relevant materials, and
truthfully, accurately and completely explain shareholders’ information and other information. Where a
domestic enterprise directly issues and is listed overseas, the issuer itself shall file with the CSRC. If a
domestic enterprise is indirectly listed overseas, the issuer shall designate a major domestic operating
entity as the domestic person responsible and file with the CSRC.
INCREASE IN SHARE CAPITAL
Under the Company Law, in the case of a joint stock limited company issuing new shares,
resolutions shall be passed at the shareholders’ meeting in respect of the class and number of new
shares, the issue price of the new shares, the commencement and end dates for the issuance of new
shares and the class and number of the new shares proposed to be issued to original shareholders, if
any. If no par value stock is issued, more than one-half of the proceeds from the issuance of the new
stocks shall be included in the registered capital. Additionally, when the company launches a public
issuance of new shares with the approval of the securities regulatory authorities of the State Council, it
shall publish a prospectus and financial 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: (i) to prepare a balance sheet and a property list; (ii) a company
makes a resolution at the shareholders’ meeting to reduce its registered capital; (iii) a company shall
inform its creditors within 10 days and publish an announcement in newspapers or the National
Enterprise Credit Information Publicity System within 30 days after the approval of resolution of
reducing registered capital; (iv) the creditors shall have the right to require a company to repay its
debts or provide corresponding guarantees within 30 days after receiving the notice or within 45 days
after the announcement if the creditors have not received the notice; (v) when a company reduces its
registered capital, it shall register the change with a company registration authority in accordance with
the law.
When a company reduces its registered capital, it must reduce the amount of capital contribution
or shares in proportion to the capital contribution or shares held by the shareholders, unless otherwise
prescribed by any law, or agreed upon by all the shareholders of a limited liability company, or as
specified in the articles of association of a joint stock limited company.
SHARE BUY-BACK
Under the Company Law, a company shall not purchase its own shares, except for any following
circumstances: (i) reducing the registered capital of the company; (ii) merging with other company that
holds the shares of the company; (iii) using the shares for employee share ownership plan or equity
incentives; (iv) with respect to shareholders voting against any resolution adopted at the shareholders’
meeting on the merger or division of the company, the right to demand the company to acquire the
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shares held by them; (v) using the shares for the conversion of convertible corporate bonds issued by
the company; (vi) as required for maintenance of the corporate value and shareholders’ rights and
interests of a listed company.
The purchase of shares of a company for reasons specified in the case of (i) to (ii) above shall be
subject to the resolution of the shareholders’ meeting; the purchase of shares of a company for reasons
specified in the case of (iii), (v) and (vi) above shall be subject to the resolution of the meetings of the
board of directors attended by more than two-thirds of the directors in accordance with the provisions
of the articles of association or the authorisation from the shareholders’ meeting.
Following the purchase of a company’s shares by a company in accordance with the above
provisions, such shares shall be cancelled within 10 days from the date of buy-back in the case of item
(i) above; such shares shall be transferred or cancelled within six months in the case of items (ii) and
(iv) above; the total numbers of share of the company held by a company shall not exceed 10% of the
total issued shares of the company, and shall be transferred or cancelled within three years in the case
of items (iii), (v) and (vi) above.
TRANSFER OF SHARES
Shares held by a shareholder may be transferred according to the law. Under the Company Law, a
shareholder of a joint stock limited company should affect a transfer of his shares on securities
exchange established according to the law or by any other means as required by the State Council.
Registered shares may be transferred by endorsement of shareholders or by other means stipulated by
laws or administrative regulations. After the transfer, a company shall record the name and address of
the transferee in the register of members. No changes of registration in the share register provided in
the foregoing requirement shall be affected during a period of 20 days prior to the convening of
shareholder’s meeting or 5 days prior to the record date for a company’s distribution of dividends. If
any law, administrative regulation, or any provision by the securities regulatory authority of the State
Council specifies otherwise for the modification of the register of members of a listed company, such
provisions shall prevail.
Under the Company Law, shares issued by a company prior to the public offering of shares shall
not be transferred within one year from the date on which the shares of the company are listed and
traded on a securities exchange. The directors, supervisors and senior management of the company
should declare to the company the shares they hold and the changes thereof. During the term of office
as determined when they assume the posts, the shares transferred each year shall not exceed 25% of the
total shares they hold of the company. Shares of a company held by them shall not be transferred within
one year from the date on which the shares of the company are listed and traded on a securities
exchange, nor within six months after their resignation from their positions with a company.
If the shares are pledged within the time limit for restricted transfer as provided for by laws and
administrative regulations, the pledgee cannot exercise the pledge right within such restricted transfer
period.
SHAREHOLDERS
Under the Company Law and the Guidelines for Articles of Association, the rights of a
shareholder of a company include: (i) to receive dividends and other forms of interest distribution
according to the number of shares held; (ii) to legally require, convene, preside over, participate in or
authorise proxies of shareholders to attend the shareholders’ meeting and exercise corresponding voting
rights; (iii) to supervise business operations of the company, provide suggestions or submit queries; (iv)
to transfer, grant or pledge the company’s shares held according to the provisions of the laws,
administrative regulations and the articles of association; (v) to read and copy the articles of
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association, the register of members, counterfoil of company debentures, shareholders’ meeting minutes,
resolutions of meetings of the board of directors, resolutions of meetings of the board of supervisors
and financial and accounting reports; (vi) shareholders who hold more than 3% of the company’s shares
individually or collectively for more than 180 consecutive days may inspect the company’s accounting
books and accounting vouchers in accordance with laws; (vii) to participate in the distribution of the
remaining assets of the company according to the proportion of shares held upon our termination or
liquidation; (viii) to require the company to acquire the shares from shareholders voting against any
resolutions adopted at the shareholders’ meeting concerning the merger and division of the company;
(ix) other rights conferred by laws, administrative regulations, regulations of the authorities or the
articles of association.
The obligations of a shareholder of a company include: (i) to abide by laws, administrative
regulations and the articles of association; (ii) to provide share capital according to the shares
subscribed for and share participation methods; (iii) not to withdraw shares unless prescribed otherwise
in laws and regulations; (iv) not to abuse shareholders’ rights to harm the interests of the company or
other shareholders; not to abuse the company’s independent legal person status and the limited liability
of shareholders to harm the interests of the company’s creditors; (v) to perform other duties prescribed
in laws, administrative regulations, departmental rules and articles of association.
SHAREHOLDER’S MEETINGS
Under the Company Law, the shareholders’ meeting of a joint stock limited company is made up
of all shareholders. The shareholders’ meeting is the organ of authority of a company, which exercises
the following functions and powers: (i) to elect and replace directors and supervisors and to decide on
matters relating to the remuneration of directors and supervisors; (ii) to examine and approve reports of
the board of directors; (iii) to examine and approve reports of the board of supervisors; (iv) to examine
and approve a company’s profit distribution plans and loss recovery plans; (v) to resolve on the
increase or reduction of a company’s registered capital; (vi) to resolve on the issuance of corporate
bonds; (vii) to resolve on the merger, division, dissolution, liquidation or change of corporate form of a
company; (viii) to amend the company’s articles of association; (ix) other functions and powers
specified in provision of the articles of association.
Under the Company Law, annual shareholders’ meetings are required to be held once every year.
An interim shareholders’ meeting is required to be held within two months after the occurrence of any
of the following circumstances: (i) the number of directors is less than the number stipulated in the
Company Law or less than two-thirds of the number specified in the articles of association; (ii) when
the unrecovered losses of a company amount to one-third of the total paid-up share capital; (iii)
shareholders individually or jointly holding 10% or more of the company’s shares request; (iv) when
deemed necessary by the board of directors; (v) the board of supervisors proposes to convene the
meeting; (vi) other circumstances as stipulated in the articles of association.
Shareholders’ meeting shall be convened by the board of directors and presided over by the
chairperson of the board of directors. In the event that the chairperson is incapable of performing or not
performing his duties, the meeting shall be presided over by the vice chairperson. In the event that the
vice chairperson is incapable of performing or not performing his duties, a director nominated by more
than half of directors shall preside over the meeting.
If the board of directors is incapable of performing or is not performing its duties to convene the
shareholders’ meeting, the board of supervisors should convene and preside over shareholders’ meeting
in a timely manner. If the board of supervisors fails to convene and preside over shareholders’ meeting,
shareholders individually or jointly holding 10% or more of the company’s shares for 90 days or more
consecutively may unilaterally convene and preside over shareholders’ meeting.
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If the shareholders who separately or jointly hold more than 10% of the shares of the company
request to convene an interim shareholders’ meeting, the board of directors and the board of supervisors
should, within 10 days after the receipt of such request, decide whether to hold an interim shareholders’
meeting and reply to the shareholders in writing.
Notice of the shareholders’ 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. A notice of interim
shareholders’ meeting shall be given to all shareholders 15 days prior to the meeting.
There is no specific provision in the Company Law regarding the number of shareholders
constituting a quorum in a shareholders’ meeting. According to the Guidelines for Articles of
Association, for a shareholders’ meeting convened by the board of supervisors and the shareholders on
their own, the board of directors and the secretary to the board of directors shall provide cooperation.
The board of directors shall provide the register of members as of the record date. In addition, when the
shareholder’ meeting is held, all directors, supervisors and the secretary to the board of directors of
such company shall attend the meeting, and the manager and other senior management members shall
attend the meeting as non-voting participants.
Shareholders who individually or jointly hold more than 1% of the company’s shares may put
forward interim proposals and submit them to the board of directors in writing 10 days before the
shareholders’ meeting. The board of directors shall notify other shareholders within two days after
receiving the proposal and submit the interim proposal to the shareholders’ meeting for consideration.
Under the Company Law, a shareholder may entrust a proxy to attend a shareholders’ meeting,
and it should clarify the matters, power and time limit of the proxy. The proxy shall present a power of
attorney issued by the shareholder to the company and shall exercise his voting rights within the scope
of authorisation. There is no specific provision in the Company Law regarding the number of
shareholders constituting a quorum in a shareholders’ meeting.
Under the Company Law, shareholders present at a shareholders’ meeting have one vote for each
share they hold, except the shareholders of classified shares. However, shares held by the company
itself are not entitled to any voting rights.
The cumulative voting system may be adopted for the election of directors and supervisors at the
shareholders’ meeting in accordance with the provisions of the articles of association or the resolutions
of the shareholders’ meeting. Under the accumulative voting system, each share shall have the same
number of voting rights as the number of directors or supervisors to be elected at the shareholders’
meeting, and shareholders may consolidate their voting rights when casting a vote.
Under the Company Law and the Guidelines for Articles of Association, the passing of any
resolution requires affirmative votes of shareholders representing more than half of the voting rights
represented by the shareholders who attend the shareholders’ meeting. Matters relating to merger,
division or dissolution of a company, increase or reduction of registered capital, change of corporate
form or amendments to the articles of association must be approved by more than two-thirds of the
voting rights held by the shareholders present at the meeting.
Under the Company Law, meeting minutes shall be prepared in respect of decisions on matters
discussed at the shareholders’ meeting. The chairperson of the meeting and directors attending the
meeting shall sign to endorse such minutes. The minutes shall be kept together with the shareholders’
attendance register and the proxy forms.
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DIRECTORS
Under the Company Law, a joint stock limited company should have a board of directors, which
consists of more than three members. Members of the board of directors may include employee
representatives of the company, who shall be democratically elected by the company’s staff at the staff
representative assembly, general staff meeting or otherwise. The term of office of a director shall be
stipulated in the articles of association, but each term of offices hall not exceed three years. Directors
may serve consecutive terms if re-elected.
Meetings of the board of directors shall be convened at least twice a year. All directors and
supervisors shall be notified 10 days before the meeting for every meeting. The board of directors
exercises the following functions and powers: (i) to convene shareholder’s meetings and report its work
to the shareholder’s meetings; (ii) to implement the resolutions of the shareholder’s meeting; (iii) to
decide on a company’s business plans and investment plans; (iv) to formulate a company’s profit
distribution plan and loss recovery plan; (v) to formulate proposals for the increase or reduction of a
company’s registered capital and the issue of corporate bonds; (vi) to formulate plans for merger,
division, dissolution or change of corporate form of a company; (vii) to decide on the internal
management structure of a company; (viii) to decide on the appointment or dismissal of the manager of
a company and their remuneration; to decide on the appointment or dismissal of the deputy manager
and financial officer of a company and their remuneration based on the nomination of the manager; (ix)
to formulate a company’s basic management system; (x) other functions and powers specified in the
articles of association or granted by the shareholders’ meeting.
The meetings of the board of directors shall be held only if more than half of the directors are
present. If a director is unable to attend a board meeting, he/she may appoint another director in writing
to attend the meeting on his/her behalf, and the power of attorney shall specify the scope of the
authorisation for another director. If a resolution of the board of directors violates the laws,
administrative regulations or the articles of association, and as a result of which the company suffers
serious losses, the directors participating in the resolution shall be 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
exempt from such liability.
If a resolution of the board of directors violates the laws, administrative regulations or the articles
of association, and as a result of which the company suffers serious losses, the directors participating in
the resolution shall be 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 exempt from such liability.
Under the Company Law, a person may not serve as a director of a company if he/she is: (i) a
person without civil conduct capacity or with limited civil conduct capacity; (ii) a person who has been
sentenced to any criminal penalty due to an offence of corruption, bribery, embezzlement of property,
misappropriation of property, or disrupting the order of the socialist market economy, or has been
deprived of political rights due to a crime, where a five-year period has not elapsed since the date of
completion of the sentence; if he/she is pronounced for suspension of sentence, a two-year period has
not elapsed since the expiration of the suspension period; (iii) a person who was a director, factory
manager or manager of a company or enterprise which 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 insolvency and liquidation of such company or
enterprise; (iv) a person who was legal representative of a company or enterprise which had its business
licence revoked due to violation of the law and had been closed down by order, and who were
personally liable, where less than three years have elapsed since the date of the revocation of the
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business licence of the company or enterprise or the order for closure; and (v) a person listed as
dishonest persons subject to enforcement by the people’s court due to his/her failure to pay off a
relatively large amount of due debts.
The board of directors shall have one chairperson, who shall be elected by more than half of all
the directors. The chairperson shall exercise the following functions and powers (including but not
limited to): (i) to preside over shareholders’ meetings and convene and preside over meetings of the
board of directors; (ii) to examine the implementation of resolutions of the board of directors; (iii) to
exercise other powers conferred by the board of directors.
MANAGERS AND SENIOR MANAGEMENT
According to the Company Law, a company should have a manager who is appointed or removed
by the board of directors. The manager is responsible to the board of directors and exercise his/her
functions and powers according to the articles of association or the authorisation of the board of
directors. The manager attends the meetings of the board of directors as a non-voting member.
According to the Company Law, senior management shall refer to the manager, deputy manager,
financial controller, secretary of the board of directors and other personnel as stipulated in the articles
of association of the listed company.
DUTIES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
Directors, supervisors and senior management of the company are required under the Company
Law to comply with the relevant laws, regulations and the articles of association, 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 the
company’s properties.
Directors, supervisors and senior management are prohibited from: (i) embezzling the company’s
property or misappropriating of the company’s capital; (ii) depositing the company’s capital into
accounts under his/her own name or the name of other individuals; (iii) giving bribes or accepting any
other illegal proceeds by taking advantage of their power; (iv) accept and possess commissions paid by
a third party for transactions conducted with the company; (v) unauthorised disclosure of company
secrets; or (vi) other acts in violation of their fiduciary duty to the company.
If any director, supervisor or senior management directly or indirectly concludes a contract or
conducts a transaction with the company, he/she should report the matters relating to the conclusion of
the contract or transaction to the board of directors or the shareholders’ meeting, subject to the approval
of the board of directors or the shareholders’ meeting according to the articles of association.
The provisions of the preceding paragraph shall apply if any near relatives of the directors,
supervisors or senior management, or any of the enterprises directly or indirectly controlled by the
directors, supervisors or senior management or any of their near relatives, or any related parties with
any other related-party relationship with the directors, supervisors or senior management, concludes a
contract or conducts a transaction with the company.
Neither director, supervisor nor senior management may take advantage of his/her position to seek
any business opportunity that belongs to the company for himself/herself or any other person except
under any of the following circumstances: (i) where he/she has reported to the board of directors or the
shareholders’ meeting and has been approved by a resolution of the board of directors or the
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shareholders’ meeting according to the articles of association; or (ii) where the company cannot make
use of the business opportunity as stipulated by laws, administrative regulations or the articles of
association.
Where any director, supervisor or senior management fails to report to the board of directors or
the shareholders’ meeting and obtain an approval by resolution of the board of directors or the
shareholders’ meeting according to the articles of association, he/she may not engage in any business
that is similar to that of the company where he/she holds office for himself/herself or for any other
person.
A director, supervisor or senior management who contravenes any law, administrative regulation
or the articles of association in the performance of his/her duties resulting in any loss to the company
shall be personally liable for the damages to the company.
If the shareholder’s meeting requires the presence of directors and senior management members,
the directors and senior management members shall be present at the meeting and respond to the
shareholders’ enquiries; the directors and senior management members shall truthfully provide relevant
information and materials to the Audit Committee and not preventing the Audit Committee from
exercising its/their functions and powers.
A director or senior management member other than those on the Audit Committee contravenes
laws, administrative regulations or the articles of association in the performance of his/her duties
resulting in any loss to the company, shareholders who individually or jointly hold more than 1% of the
company’s shares for more than 180 consecutive days may request the audit committee in writing to file
a lawsuit with the people’s court; If a member of the audit committee violates laws, administrative
regulations or the articles of association when performing his/her duties resulting in any loss to the
company, the aforementioned shareholders may request the board of directors in writing to bring a
lawsuit to the people’s court. In the event that the Audit Committee or the board of directors refuse to
file a lawsuit upon receipt of the shareholders’ written request specified in the preceding paragraph, or
fail to file a lawsuit within 30 days upon receipt thereof, or in the event that the failure to immediately
file a lawsuit in an emergency case will cause irreparable damage to the interests of the company, the
shareholders specified in the preceding paragraph may, in their own name, directly file a lawsuit to the
people’s court for the interest of the company. In the event of any other person infringes upon the
legitimate rights and interests of the Company and causes losses thereto, the aforementioned
shareholders may file a lawsuit with the people’s court pursuant to the provisions of the preceding
paragraphs. Where directors or senior management members violate laws, administrative regulations, or
the articles of association, thereby harming the interests of shareholders, the shareholders may file a
lawsuit with the people’s court.
FINANCE AND ACCOUNTING
Under the Company Law, a company shall establish its financial and accounting systems
according to laws, administrative regulations and the regulations of the financial department of the
State Council. At the end of each fiscal year, the company shall prepare financial and accounting
reports which shall be audited by an accounting firm in accordance with the law. The financial and
accounting reports shall be prepared in accordance with the laws, administrative regulations and the
regulations of the financial department of the State Council.
A joint stock limited company shall make its financial and accounting reports available at the
company for inspection by the shareholders 20 days before the convening of an annual meeting of
shareholders. A joint stock limited company issuing its shares in public must publish its financial and
accounting reports.
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When distributing each year’s after-tax profits, the company shall set aside 10% of its profits into
its statutory reserve fund. The company can no longer withdraw statutory reserve fund if it has
accumulated to more than 50% of the registered capital. If the statutory reserve fund of the company is
insufficient to make up for the losses of the previous years, the current year profits shall be used to
make up for the losses before making allocations to the statutory reserve in accordance with the
preceding paragraph. After the company has made an allocation to the statutory reserve fund from its
after-tax profit, it may also make an allocation to the discretionary reserve fund from its after-tax profit
upon a resolution of the shareholders’ meeting.
A joint stock limited company may distribute profits in proportion to the number of shares held by
its shareholders, except for profit distributions that are not in proportion to the number of shares held in
accordance with the provisions of the articles of association of the joint stock limited company.
The premium over the nominal value of the shares of a joint stock limited company from the issue
of shares, the amount of share proceeds from the issuance of no-par shares that have not been credited
to the registered capital and other incomes required by the financial department of the State Council to
be treated as the capital reserve fund shall be accounted for as the capital reserve fund of the company.
The reserve fund of the company shall be used to make up losses of the company, expand the
production and operation of the company or increase the capital of the company. Where the reserve
fund of a company is used for making up losses, the discretionary reserve and statutory reserve shall be
firstly used. If losses still cannot be made up, the capital reserve can be used according to the relevant
provisions. When the statutory reserve fund is converted to increase registered capital, the balance of
the statutory reserve shall not be less than 25% of the registered capital before such conversion.
The company shall not keep accounts other than those provided by law. Its assets shall not be
deposited in any individual’s accounts.
APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRMS
Pursuant to the Company Law, the engagement or dismissal of an accounting firm responsible for
the company’s auditing shall be determined by a shareholders’ meeting, the board of directors or the
board of supervisors in accordance with the articles of association. The accounting firm should be
allowed to make representations when the shareholders’ meeting, the board of directors or the board of
supervisors conduct a vote on the dismissal of the accounting firm. The company should provide true
and complete accounting vouchers, accounting books, financial and accounting reports and other
accounting information to the engaged accounting firm without any refusal or withholding or
falsification of information.
The Guidelines for Articles of Association provides that the company guarantees to provide true
and complete accounting vouchers, accounting books, financial accounting reports and other accounting
materials to the employed accounting firm, and shall not refuse, conceal or falsely report. And the audit
fee of the accounting firm shall be decided by the shareholders’ meeting.
PROFIT DISTRIBUTION
Where a company distributes profits to shareholders in violation of the provisions of the Company
Law, the shareholders shall refund the profits distributed to the company, and the shareholders and
directors, supervisors, and senior management who are responsible for causing losses to the company
shall bear compensation liability.
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AMENDMENTS TO THE ARTICLES OF ASSOCIATION
Any amendment to the Articles of Association of the company must be carried out in accordance
with the procedures stipulated therein. Where such amendment involves registered particulars of the
Company, an application for change registration shall be filed with the registration authority. Pursuant
to the Company Law, any resolution on amending the Articles of Association adopted by the
shareholders’ meeting must be approved by more than two-thirds of the voting rights held by the
shareholders present at the meeting.
Pursuant to the Guidelines for Articles of Association, a company shall amend its Articles of
Association under any of the following circumstances: (i) where provisions of the Articles of
Association conflict with amended laws and/or administrative regulations following revisions to the
Company Law or other applicable laws or administrative regulations; (ii) where the company’s
circumstances undergo changes inconsistent with the contents recorded in the Articles of Association;
and (iii) where the shareholders’ meeting resolves to amend the Articles of Association.
DISSOLUTION AND LIQUIDATION
According to the Company Law, a company shall be dissolved for the following reasons: (i) the
term of business stipulated in the articles of association has expired or other events of dissolution
specified in the articles of association have occurred; (ii) the shareholders’ meeting resolves to dissolve
the company; (iii) dissolution is necessary due to a merger or division of the company; (iv) the business
licence is revoked, or the company is ordered to close down or is revoked in accordance with laws; (v)
where the company encounters serious difficulties in its operation and management and its continuance
shall cause a significant loss in the interest of shareholders, and where this cannot be resolved through
other means, shareholders who hold more than 10% of the total shareholders’ voting rights of the
company may present a petition to a people’s court for the dissolution of the company.
If any of the situations as mentioned in the preceding paragraph arises, a company shall publicise
the situations through the National Enterprise Credit Information Publicity System within ten days.
Where the company is dissolved in accordance with item (i) above, it may carry on its existence
by amending its articles of association or upon a resolution of the shareholders’ meeting, which must be
approved by more than two-thirds of the voting rights held by the shareholders present at the
shareholders’ meeting. Where the company is dissolved pursuant to items (i), (ii), (iv) or (v) above, it
shall be liquidated. The directors, who are the liquidation obligors of the company, shall form a
liquidation group to carry out liquidation within 15 days from the date of occurrence of the cause of
dissolution. The liquidation group shall be composed of the directors, unless it is otherwise provided
for in the company’s articles of association or it is otherwise elected by the shareholders’ meeting. The
liquidation obligors shall be liable for compensation if they fail to fulfil their obligations of liquidation
in a timely manner, and thus any loss is caused to the company or the creditors.
The liquidation group fails to be formed within the time limit or fails to carry out the liquidation
after its formation, any interested party may request the people’s court to designate relevant persons to
form a liquidation group to conduct liquidation. The people’s court shall accept such request and
organise a liquidation group to carry out the liquidation in a timely manner.
The liquidation group shall exercise the following functions and powers during the liquidation
period: (i) to liquidate the company’s property and respectively prepare balance sheet and list of
property; (ii) to notify creditors by notice or public announcement; (iii) to deal with the outstanding
business of the company involved in the liquidation; (iv) to pay all outstanding taxes and taxes arising
in the course of liquidation; (v) to liquidate claims and debts; (vi) to distribute the remaining property
of the company after paying off debts; (vii) to participate in civil litigations on behalf of the company.
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The liquidation group shall notify the company’s creditors within ten days as of its formation and
shall make a public announcement in the newspaper or on the National Enterprise Credit Information
Publicity System within 60 days. The creditors shall file their proofs of claim with the liquidation
group within 30 days as of the receipt of the notice or within 45 days as of the issuance of the public
announcement in the case of failing to receive such notice.
The remaining property of the company after the payment of liquidation expenses, employees’
wages, social insurance expenses and statutory compensation, outstanding taxes and the company’s
debts, shall be distributed to shareholders in proportion to their shareholdings. During the liquidation
period, the company shall continue to exist but shall not carry out any business activities unrelated to
the liquidation. The company’s assets shall not be distributed to the shareholders before the liquidation
in accordance with the preceding paragraph.
If the liquidation group, having thoroughly examined the company’s assets and having prepared a
balance sheet and an inventory of assets, discovers that the company’s assets are insufficient to pay its
debts in full, it shall file an application to a people’s court for bankruptcy liquidation. After the
people’s court accepts the application for bankruptcy, the liquidation group shall hand over the
liquidation matters to the bankruptcy administrator designated by the people’s court.
Upon completion of the liquidation, the liquidation group shall prepare a liquidation report to be
submitted to the shareholders’ meeting or the people’s court for confirmation, and submit to the
company registration authority to apply for cancellation of the company’s registration.
The members of the liquidation group performing their duties of liquidation are obliged to loyalty
and diligence. Any member of the liquidation group who neglects to fulfil his/her liquidation duties,
thus causing any loss to the company shall be liable for compensation, and any member of the
liquidation group who cause any loss to any creditor due to his/her intentional or gross negligence shall
be liable for compensation.
Where, after three years since the business licence of a company is revoked, or the company is
ordered to close down or is revoked, the company fails to apply for its deregistration with the company
registration authority, the said authority may announce the company’s deregistration through the
National Enterprise Credit Information Publicity System for a period of no less than 60 days. If there is
no objection after the announcement period expires, the company registration authority may deregister
the company.
OVERSEAS LISTING
According to the Overseas Listing Trial Measures, where an issuer makes an overseas initial
public offering or listing, it shall file with the CSRC within 3 working days after submitting the
application documents for overseas issuance and listing. If an issuer issues securities in the same
overseas market after overseas issuance and listing, it shall file with the CSRC within 3 working days
after the completion of the issuance. If an issuer issues and lists in other overseas markets after
overseas issuance and listing, it shall be filed in accordance with the provisions of the first paragraph of
Article 16 of the Overseas Listing Trial Measures. Moreover, if the filing materials are complete and
meet the requirements, the CSRC shall complete the filing within 20 working days from the date of
receiving the filing materials, and publicise the filing information through the website. If the filing
materials are incomplete or do not meet the requirements, the CSRC shall inform the issuer of the
materials to be supplemented within 5 working days after receiving the filing materials. The issuer shall
supplement the materials within 30 working days.
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LOSS OF SHARE CERTIFICATES
A shareholder may, in accordance with the public notice procedures set out in the Civil Procedure
Law, apply to a people’s court if his share certificate(s) in registered form is either stolen, lost or
destroyed, for a declaration that such certificate(s) will no longer be valid. After the people’s court
declared that such certificate(s) will no longer be valid, the shareholder may apply to the company for
the issue of a replacement certificate(s).
TERMINATION OF LISTING
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 DIVISION
Where companies merge, a merger agreement shall be executed, and the relevant companies shall
prepare their respective statement of financial position and inventory of assets. The company shall
notify its creditors within 10 days from the date of passing the merger resolution and publish a merger
announcement via newspapers or the National Enterprise Credit Information Publicity System within 30
days. A creditor may require the company to settle any debts or provide corresponding guarantees
within 30 days from receipt of the notice or, if no notice is received, within 45 days from the
announcement date. In case of a merger, the credits and debts of the merging parties shall be assumed
by the surviving or the new company.
In case of a division, the company’s assets shall be divided and a statement of financial position
and an inventory of assets shall be prepared. When a resolution regarding the company’s division is
approved, the company shall notify all creditors within 10 days from the date of passing such resolution
and publish an announcement via newspapers or the National Enterprise Credit Information Publicity
System within 30 days. Except where the company and its creditors reach a written agreement on debt
settlement prior to the division, liabilities incurred prior to the division shall be assumed jointly and
severally by the companies resulting from the division.
Changes in the business registration of the companies as a result of the merger or division shall be
registered with the relevant Administration for Industry and Commerce.
In accordance with the laws, cancellation of a company shall be registered when a company is
dissolved and incorporation of a company shall be registered when a new company is incorporated.
SECURITIES LA W AND REGULATIONS
In October 1992, the State Council established the Securities Committee and the CSRC. The
Securities Committee is responsible for coordinating the drafting of securities regulations, formulating
securities-related policies, planning the development of securities markets, directing, coordinating and
supervising all securities-related institutions in the mainland China 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 companies in mainland China or overseas, regulating the trading of securities, compiling
securities-related statistics and undertaking research and analysis. On 29 March 1998, the State Council
consolidated the above two departments and reformed the CSRC.
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The Provisional Regulations Concerning the Issue and Trading of Shares, promulgated by the
State Council on 22 April 1993 and came into effect on the same day, provide the application and
approval procedures for public offerings of shares, trading in shares, the acquisition of listed
companies, the deposit, settlement and transfer of listed shares, the disclosure of information with
respect to a listed company, investigation and penalties and dispute arbitration.
The Regulations of the State Council Concerning the Domestic Listed Foreign Shares of Joint
Stock Limited Companies, promulgated by the State Council on 25 December 1995 and came into
effect on the same day, mainly provide for the issue, subscription, trading and payment of dividends of
domestic listed foreign shares and disclosure of information of joint stock limited companies with
domestic listed foreign shares.
The Securities Law, which was lastly amended by the SCNPC on 28 December 2019 and came
into effect on 1 March 2020, provides a series of provisions regulating, among other things, the issue
and trading of securities, takeovers by listed companies, securities exchanges, securities companies and
the duties and responsibilities of the State Council’s securities regulatory authorities in the mainland
China, and comprehensively regulates activities in the securities market of mainland China. The
Securities Law provides that a domestic enterprise must comply with the relevant provisions of the
State Council in issuing securities directly or indirectly outside the mainland China or listing and
trading its securities outside the Mainland China. 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.
ARBITRATION AND ENFORCEMENT OF ARBITRAL A W ARDS
Under the Arbitration Law of the PRC (the “ Arbitration Law ”), last amended by the SCNPC on
1 September 2017 and effective on 1 January 2018, the Arbitration Law is applicable to economic
disputes involving foreign parties, and all parties have entered into a written agreement to refer the
matter to an arbitration committee constituted in accordance with the Arbitration Law. An arbitration
committee may, before the promulgation by the PRC Arbitration Association of arbitration regulations,
formulate interim arbitration rules in accordance with relevant regulations under the Arbitration Law
and the Civil Procedure Law. Where both parties have agreed to settle disputes by means of arbitration,
the people’s court will refuse to take legal action brought by a party in the people’s court.
Under the Arbitration Law, an arbitral award is final and binding on the parties. If a party fails to
comply with an award, the other party to the award may apply to the people’s court for enforcement
according to the Civil Procedure Law. If there is evidence to prove that any of the following
circumstances exists: the parties have not stipulated an arbitration clause in the contract or have not
reached a written arbitration agreement afterwards; the respondent has not been notified of the
appointment of the Court of Arbitration or the arbitration proceedings or failed to present views for
other reasons for which the respondent is not responsible; the composition of the arbitral tribunal or the
arbitration procedures are not in accordance with the arbitration rules; the matters awarded are outside
the scope of the arbitration agreement, or the arbitration committee has no jurisdiction to arbitrate, the
people’s court may rule not to enforce such award. A party seeking to enforce an arbitral award of
foreign arbitration commission against a party who or whose property is not within the mainland China
shall apply to a foreign court with jurisdiction over the case for recognition and enforcement. Similarly,
an arbitral award made by a foreign arbitration body may be recognised and enforced by the people’s
court in accordance with the principles of reciprocity or any international treaty concluded or acceded
to by the PRC.
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According to the Arrangement of the Supreme People’s Court on Mutual Enforcement of Arbitral
Awards between the Mainland and the Hong Kong Special Administrative Region promulgated by the
Supreme People’s Court on 24 January 2000 and effective on 1 February 2000, and the Supplementary
Arrangement of the Supreme People’s Court on Mutual Enforcement of Arbitral Awards between the
Mainland and the Hong Kong Special Administrative Region promulgated by the Supreme People’s
Court on 26 November 2020 and effective on 27 November 2020, awards made by arbitral authorities
in mainland China can be applied for enforcement in Hong Kong, and Hong Kong arbitration awards
can also be applied for enforcement in the mainland China.
JUDICIAL DECISION AND ENFORCEMENT
According to the Arrangement of the Supreme People’s Court on Reciprocal Recognition and
Enforcement of Judgements 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 promulgated by the Supreme People’s Court on 3 July 2008 and implemented on 1 August
2008 (the “ Arrangement ”), a party with a final court judgement rendered by a Hong Kong court and a
PRC court requiring payment of money in a civil or commercial case pursuant to a choice of court
agreement in writing may apply to the PRC court or Hong Kong court for recognition and enforcement
of the judgement according to the Arrangement. “ A choice of court agreement in writing ” is defined
as any agreement in writing entered into between parties for the purpose of resolving a dispute that has
arisen or is likely to arise in connection with a particular legal relationship, in which a PRC court or a
Hong Kong court is expressly designated as the court having sole jurisdiction for the dispute.
Accordingly, the final court judgement satisfying the aforesaid conditions of the Arrangement may be
recognised and enforced by the PRC court or Hong Kong court upon the application by the parties
concerned.
On 18 January 2019, the Supreme People’s Court of PRC and the HKSAR Government signed the
Arrangement on Mutual Recognition and Enforcement of Judgements in Civil and Commercial Cases
between the Supreme People’s Courts of PRC and the Hong Kong Special Administrative Region (the
“New Arrangement ”), which aims to establish a clearer and definitive mechanism for the recognition
and enforcement of judgements in a wider range of civil and commercial cases between Hong Kong and
Mainland China. The new arrangement terminates the requirement to enter into jurisdictional
agreements for the mutual recognition and enforcement of judgements. The new arrangement came into
effect on 29 January 2024 after the promulgation of the judicial interpretation by the Supreme People’s
Court and the completion of the relevant legislative procedures in Hong Kong. The New Arrangement
has replaced the Arrangement upon its entry into force.
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This Appendix provides prospective investors with an overview of the Company’s Articles of
Association (which, as set out herein, will become effective from the date of the issuance and listing of
the Company’s H Shares on The Stock Exchange of Hong Kong Limited). The following contents are
for summary purposes only and as such, do not encompass all information that may be material to
prospective investors.
SHARES
Issuance of Share
The shares of the Company shall be in the form of share certificates, which include paperless
securities. The issuance of the shares of the Company shall follow the principles of openness, fairness
and impartiality, and each share of the same class shall have equal rights. For shares of the same class
issued in the same offering, the issuance conditions and price per share shall be the same; subscribers
shall pay the same amount for each share they subscribe to.
INCREASE/DECREASE AND REPURCHASE OF SHARES
The Company may, based on its operation and development needs and in accordance with laws,
regulations and respective resolutions of shareholders’ meetings, increase its capital in the following
ways:
(i) issuance of shares to unspecified parties;
(ii) issuance of shares to specified parties;
(iii) Distribution of bonus shares to existing shareholders;
(iv) conversion of capital reserve into share capital;
(v) other methods prescribed by the law, administrative regulations and rules and approved by
the CSRC and the stock exchange where the Company’s shares are listed.
The Company may reduce its registered capital. The reduction of the Company’s registered capital
shall be handled in accordance with the procedures specified in the Company Law, the Hong Kong
Listing Rules, the securities regulatory rules of the place where the Company’s shares are listed, other
relevant regulations and the Articles of Association.
The Company shall not purchase its own shares. However, the Company may purchase its own
shares under the following circumstances in accordance with the provisions of laws, administrative
regulations, departmental rules, the regulatory rules of the stock exchange where the Company’s shares
are listed, and the Articles of Association:
(i) reduction of the Company’s registered capital;
(ii) merger with another company holding shares in the Company;
(iii) using the shares for employee stock ownership plan or equity incentives;
(iv) acquisition of shares held by shareholders (upon their request) who vote against any
resolution proposed in any shareholders’ meeting on the merger or division of the Company;
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(v) using shares for the conversion of corporate bonds which are convertible into shares issued
by the Company;
(vi) as necessary for maintaining the value of the Company and safeguarding the rights and
interests of shareholders;
(vii) other circumstances permitted by laws, administrative regulations, securities regulatory rules
of the place where the Company’s shares are listed.
Where the Company purchases its own shares under the circumstances described in items (iii), (v),
and (vi) above, such purchases shall be conducted through public centralised trading. Where the
Company purchases its own shares for the reasons set forth in items (i) to (ii) above, it shall be
resolved by the shareholders’ meeting. Where the Company purchases its own shares for the reasons set
forth in items (iii), (v), and (vi) above, it may, in accordance with the provisions of the Articles of
Association or the authorisation of the shareholders’ meeting and subject to compliance with the
securities regulatory rules of the place where the Company’s shares are listed, be resolved by the Board
meetings attended by more than two-thirds of the directors.
After the Company has repurchased its own shares under the Article 1 above, such shares shall be
cancelled within 10 days from the date of repurchase in the case of item (i); such shares shall be
transferred or cancelled within 6 months in the case of items (ii) and (iv); in the case of items (iii), (v)
and (vi), the total number of the Company’s shares held by it shall not exceed 10% of the total shares
issued by the Company, and shall be transferred or cancelled within 3 years.
When the Company purchases its own shares, it shall fulfil its information disclosure obligations
in accordance with relevant laws and regulations and the securities regulatory rules of the place where
the Company’s shares are listed.
The Company shall not offer gifts, advances, loans, guarantees and other financial assistance for
others to acquire the shares of the Company except where such financial assistance is provided with the
implementation of employee stock ownership plans by the Company.
TRANSFER OF SHARES
The shares of the Company shall be transferred in accordance with laws. Transfer of all H shares
shall be executed with a written instrument of transfer in a general or common format or any other
format accepted by the board of directors (including the standard transfer format or form of transfer
specified by the Hong Kong Stock Exchange from time to time); the said instrument of transfer may
only be signed by hand, or be stamped with the valid corporate seal (if the transferor or the transferee
is a company). If the transferor or the transferee is a recognised clearing house or agent thereof as
defined in the relevant ordinances of Hong Kong laws effective from time to time, the instrument of
transfer may be signed by hand or in machine printed form. All instruments of transfer shall be kept at
the legal address of the Company or other place designated by the board of directors from time to time.
The Company does not accept its own shares as collateral of pledge.
Shares issued prior to the public offering of shares by the Company shall not be transferred within
one year from the date on which the shares of the Company are listed and traded on the stock
exchange. If it is otherwise provided in laws, administrative regulations, securities regulatory rules of
the place where the Company’s shares are listed or by the CSRC on the transfer of the Company’s
shares by its shareholders or de facto controllers, such provisions shall prevail.
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The Directors and senior management officers of the Company shall report to the Company on
their shareholdings in the Company and changes thereof, and shall not transfer more than twenty-five
percent of the total shares of the same class held by them in the Company per annum during their terms
of office determined at the time of appointment; the shares of the Company held by them shall not be
transferred within one year from the date on which the shares of the Company are listed and traded.
The aforesaid persons shall not transfer the shares of the Company held by them within half a year
from the date they terminate their employment with the Company.
If it is otherwise provided by the laws, administrative regulations, the CSRC or the securities
regulatory rules of the place where the Company’s shares are listed on the transfer of the Company’s
shares by its shareholders, such provisions shall prevail.
If shares are pledged within the restricted transfer period stipulated by laws, administrative
regulations and the provisions of the regulatory rules of the stock exchange where the Company’s
shares are listed, the pledgee shall not exercise the pledge right within the restricted transfer period.
In the event that any shareholder, director or senior management officer holding more than five
percent of the Company’s shares disposes of any shares or other equity-based securities held by him/her
within 6 months from the date of acquiring, or buy back such shares or equity-based securities within 6
months from the date of disposing, the gains derived therefrom shall belong to the Company and be
recovered by the board of directors of the Company. However, such circumstances where a securities
company holds more than five percent of the Company’s shares due to purchase of the remaining shares
after underwriting, or other circumstance as prescribed by the securities regulatory authority of the
State Council shall be excluded.
Shares or other equity-based securities held by directors, senior management officers and natural
person shareholders as mentioned in the preceding paragraph, include shares or other equity-based
securities held by their spouses, parents or children, or through the accounts of others.
If the board of directors of the Company fails to execute the provisions as stated in Article 1, the
shareholders shall have the right to require the board of directors to execute within thirty days. If the
board of directors of the Company fails to execute such action within the aforesaid time limit, the
shareholders shall have the right to directly initiate a lawsuit in the people’s court in their own names
for the benefit of the Company.
If the board of directors of the Company fails to execute the provisions as stated in Article 1, the
responsible directors shall bear joint and several liabilities under the law.
SHAREHOLDERS AND SHAREHOLDERS’ MEETINGS
General Provisions for Shareholders
Name of shareholders
The Company shall make a register of members in accordance with evidentiary documents
provided by the securities registration authorities, and such register of members shall be the sufficient
evidence substantiating that the shareholders hold the shares of the Company. Shareholders enjoy rights
and undertake obligations according to the class of shares they hold. Holders of the same class shall
enjoy the same rights and bear the same obligations.
For shareholders holding domestic unlisted shares, the register of members shall be determined
conclusively by the data recorded in the securities book-entry system maintained by China Securities
Depository and Clearing Corporation Limited.
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Where the Company convenes a shareholders’ meeting, distributes dividends, liquidates and
participates in other activities requiring the recognition of shareholders’ identities, the board of
directors or the convener of the shareholders’ meeting shall decide the record date, and shareholders
whose names appear on the register of members at the close of business on the record date are entitled
to relevant rights and interests.
Shareholders
Shareholders of the Company shall enjoy the following rights:
(i) to receive dividends and other benefit distributions in proportion to the number of shares
held;
(ii) to require to hold, convene, chair, attend or appoint a proxy to attend shareholders’ meetings
and exercise the corresponding voting rights in accordance with the laws;
(iii) to supervise the operations of the Company, and to put forward suggestions or raise
enquiries;
(iv) to transfer, bestow or pledge shares held by them in accordance with the laws, administrative
regulations, relevant requirements of the securities regulatory authority and stock exchange
of the place where the Company’s shares are listed and the provisions of Articles of
Association;
(v) to inspect and duplicate the Articles of Association, registers of members, the minutes of
shareholders’ meetings, resolutions of the Board meetings and the financial accounting
reports. Shareholders who meet the requirements may inspect the Company’s accounting
books and certificates;
(vi) in the event of the termination or liquidation of the Company, the right to participate in the
distribution of the remaining assets of the Company in proportion to the number of shares
held;
(vii) with respect to shareholders who voted against any resolution adopted at the shareholders’
meeting on the merger or division of the Company, the right to demand the Company to
acquire the shares held by them, provided that all procedural requirements for the
Company’s share repurchase under the Articles of Association and relevant laws and
regulations are satisfied;
(viii) to inspect the Hong Kong branch register of members of the Company, provided that the
Company may temporarily close the register of members in accordance with provisions
equivalent to Section 632 of the Companies Ordinance (Cap. 622 of the Laws of Hong
Kong);
(ix) other rights stipulated in the laws, administrative regulations, departmental rules, securities
regulatory rules of the place where the Company’s shares are listed or the Articles of
Association.
If the content of a resolution passed at the Company’s shareholders’ meeting or Board meeting
violates laws or administrative regulations, shareholders shall have the right to petition the people’s
court to invalidate the resolution. If the procedures for convening, or the method of voting at, a
shareholders’ meeting or Board meeting violate laws, administrative regulations or the Articles of
Association, or the content of a resolution violates the Articles of Association, shareholders shall have
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the right to petition the people’s court to revoke the resolution within 60 days from the date of the
adoption of such resolution. However, except that there are only minor defects in the convening
procedures or voting method of a shareholders’ meeting or a Board meeting, which do not materially
affect the resolution.
Where the directors (other than the members of the audit committee) and senior management
officers violate the laws, administrative regulations or the Articles of Association in performing their
duties and cause any loss to the Company, the shareholder(s) severally or jointly holding more than 1%
of the shares in the Company for more than 180 consecutive days may request the audit committee in
writing to initiate proceedings in the people’s court. Where the members of the audit committee violate
the laws, administrative regulations or the Articles of Association in performing duties to the Company
and cause any loss to the Company, the aforementioned shareholders may request the board of directors
in writing to initiate proceedings in the people’s court.
If the audit committee and the board of directors, upon receipt of the shareholders’ written request
stipulated in the preceding paragraph, reject to initiate a lawsuit, or a lawsuit is not initiated within
thirty days from the date of receipt of such request, or in the event of emergency where the interest of
the Company will suffer irreparable damage if a lawsuit is not initiated immediately, the shareholders
stipulated in the preceding paragraph shall have the right to initiate legal proceedings directly with the
people’s court in their own names for the interest of the Company.
Where other parties infringe the lawful interests of the Company and cause any loss to the
Company, the shareholders stipulated in the first paragraph of this Article may initiate legal proceedings
in a people’s court in accordance with the provisions of the preceding two paragraphs.
Where any director or senior management officer violates the provisions of laws, administrative
regulations or the Articles of Association, and causes damages to the interests of shareholders,
shareholders may initiate legal proceedings to the People’s Court.
The shareholders of the Company shall assume the following obligations:
(i) complying with laws, administrative regulations, the regulatory rules of the stock exchange
where the Company’s shares are listed and the Articles of Association;
(ii) paying share payments as per the shares subscribed for and the method of subscription;
(iii) not to withdraw its share capital, except for circumstances stipulated by laws and
regulations;
(iv) not to abuse the shareholders’ rights to impair the interest of the Company or other
shareholders; not to abuse the independent legal person status of the Company and the
limited liability of shareholders to impair the interest of creditors of the Company;
(v) other obligations required to be assumed under laws, administrative regulations, the
regulatory rules of the stock exchange where the Company’s shares are listed and the
Articles of Association.
Shareholders of the Company shall be liable for making compensation for any loss suffered by the
Company or other shareholders arising from their abuse of shareholders’ rights in accordance with law.
Shareholders of the Company who abuse the independent legal person status of the Company and the
limited liability of shareholders to evade debts and seriously impair the interest of creditors of the
Company shall be jointly and severally liable for the debts of the Company.
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Controlling Shareholders and De Facto Controllers
The controlling shareholders and de facto controllers of the Company shall exercise their rights
and fulfil their obligations in accordance with laws, administrative regulations, provisions of the CSRC
and the stock exchange of the place where the Company’s shares are listed, to safeguard the interests of
the Company.
The controlling shareholders and de facto controllers of the Company shall abide by the following
provisions:
(i) exercise shareholders’ rights in accordance with the law, not to abuse controlling interest, or
exploit connected-party relationships to harm the legitimate rights and interests of the
Company or other shareholders;
(ii) strictly fulfil public statements and commitments made, without unauthorised changes or
waivers;
(iii) strictly fulfil information disclosure obligations in accordance with relevant regulations,
actively cooperate with the Company in information disclosure work, and promptly inform
the Company of significant events that have occurred or are planned to occur;
(iv) shall not misappropriate the Company’s funds in any way;
(v) shall not coerce, instruct, or require the Company and related personnel to illegally provide
guarantees;
(vi) shall not seek benefits using the Company’s undisclosed significant information, shall not
disclose any undisclosed significant information about the Company in any way, shall not
engage in insider trading, short term trading, market manipulation, or other illegal activities;
(vii) shall not damage the legitimate rights and interests of the Company and other shareholders
through unfair connected transactions, profit distribution, asset reorganisation, external
investments, or any other means;
(viii) ensure the integrity of the Company’s assets, personnel independence, financial
independence, institutional independence, and business independence, and shall not in any
way affect the Company’s independence;
(ix) comply with laws, administrative regulations, provisions of the CSRC, the regulatory rules
of the stock exchange of the place where the Company’s shares are listed and other
provisions of the Articles of Association.
The controlling shareholders and de facto controllers of the Company who do not serve as
directors of the Company but actually carry out the Company’s affairs shall be subject to the provisions
of the Articles of Association regarding the fiduciary duty and diligence duty of directors.
Where any controlling shareholder or de facto controller of the Company instructs a director or
senior management officer to engage in conduct that harms the interests of the Company or
shareholders, such controlling shareholder or de facto controller shall bear joint and several liabilities
with that director or senior management officer.
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If the controlling shareholders and de facto controllers pledge the Company’s shares they hold or
actually control, they should maintain the Company’s control rights and ensure stable production and
operation.
If the controlling shareholders and de facto controllers transfer their holdings of the Company’s
shares, they shall comply with the restrictive provisions on share transfer in laws, administrative
regulations, provisions of the CSRC and the stock exchange where the Company’s shares are listed, as
well as the commitments they have made regarding restricted share transfers.
General Provisions for Shareholders’ Meetings
Article 47 The shareholders’ meeting of the Company shall be composed of all shareholders. The
shareholders’ meeting is the authority of power of the Company which shall exercise the following
functions and powers in accordance with the laws:
(i) elect and replace directors, decide on the remuneration matters of the relevant directors;
(ii) consider and approve the reports of the board of directors;
(iii) consider and approve the Company’s profit distribution plans and loss recovery plans;
(iv) pass resolutions to increase or reduce the registered capital of the Company;
(v) pass resolutions on merger, division, dissolution and liquidation or change in corporate form
of the Company;
(vi) amend the Articles of Association;
(vii) pass resolutions on the issuance of corporate bonds;
(viii) pass resolutions on the engagement or dismissal of accounting firms engaged in the audit
work of the Company;
(ix) consider and approve the guarantees prescribed in Article 48 of the Articles of Association;
(x) consider and approve matters regarding the purchase and sale of material assets by the
Company within one year in which the total assets involved or the transaction value
exceeding 30% of the latest audited total assets of the Company;
(xi) consider and approve the changes in the use of proceeds raised;
(xii) consider and approve the equity incentive plans and employee stock ownership plans;
(xiii) consider and approve other matters which shall be decided by the shareholders’ meetings as
stipulated by laws, administrative regulations, departmental rules, securities regulatory rules
of the place where the Company’s shares are listed or the Articles of Association.
The shareholders’ meeting may authorise the board of directors to resolve on the issue of
corporate bonds. Saved as item (vii), the duties and powers of the shareholders’ meeting set forth above
shall not be exercised by the board of directors or other institutions and individuals on its behalf by
way of authorisation. Duties and powers that are not statutorily exercised by the shareholders’ meeting
may be granted to the board of directors after deliberation and approval by the shareholders’ meeting.
The scope of such authorisation shall be clear and specific.
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The following external guarantees of the Company shall be considered and approved at the
shareholders’ meeting:
(i) guarantee with a single sum of guarantee that has exceeded 10% of the latest audited net
assets of the Company;
(ii) guarantee provided after the total amount of external guarantees of the Company has
exceeded 30% of the latest audited total assets;
(iii) guarantee after the total amount of external guarantees provided by the Company and its
holding subsidiaries has exceeded 50% of the latest audited net assets;
(iv) guarantee provided to entities with more than 70% debt equity ratio;
(v) guarantee provided after the amount of external guarantees of the Company within the year
has exceeded 30% of the Company’s latest audited total assets;
(vi) guarantees provided to the shareholders, de facto controllers and their related parties;
(vii) other external guarantee shall be considered and approved by the shareholders’ meeting as
stipulated by laws, normative documents, CSRC, securities regulatory rules of the place
where the Company’s shares are listed or the Articles of Association.
When a guarantee is raised for consideration and discussion at a board meeting, it shall be
considered and approved by more than two-thirds of the directors attending the board meeting. When
the shareholders’ meeting reviews the guarantee mentioned in item (v) of the preceding paragraph, it
shall be approved by more than two-thirds of the voting rights held by the shareholders attending the
meeting.
Shareholders’ meetings include annual shareholders’ meetings and extraordinary shareholders’
meetings. Annual shareholders’ meetings are held once every year and within 6 months from the end of
the preceding financial year.
The Company shall convene an extraordinary shareholders’ meetings within 2 months from the
date of the occurrence of any of the following circumstances:
(i) where the number of directors is less than the number stipulated in the Company Law or
two-thirds of the number prescribed in the Articles of Association;
(ii) where the losses of the Company that have not been made up represent one-third of its total
share capital;
(iii) where such meeting is requested by shareholders individually or jointly holding more than
10% of the shares of the Company;
(iv) where such meeting is deemed necessary by the board of directors;
(v) where such meeting is proposed to be convened by the audit committee;
(vi) other circumstances specified in laws, administrative regulations, departmental rules, the
securities regulatory rules of the place where the Company’s shares are listed or the Articles
of Association.
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Convening of Shareholders’ Meeting
The shareholders who individually or jointly hold 10% or more of the shares of the Company
shall have the right to convene an extraordinary general meeting, and shall make such request to the
board of directors in writing. The board of directors shall, pursuant to the provisions of laws,
administrative regulations, securities regulatory rules of the place where the Company’s shares are
listed and the Articles of Association, give a written reply on whether to convene the extraordinary
shareholders’ meeting or not within 10 days upon receipt of the proposal.
When the board of directors agrees to convene an extraordinary shareholders’ meeting, the board
of directors shall, within 5 days after the board resolution is made, issue a notice calling for the
shareholders’ meeting. Changes in the original proposal in the notice shall be subject to the approval of
the relevant shareholders.
When the board of directors does not agree to convene an extraordinary shareholders’ meeting, or
does not provide feedback within 10 days upon receipts of the request, shareholders who individually or
collectively holding more than 10% of the Company’s shares, shall have the right to propose to the
audit committee to convene an extraordinary shareholders’ meeting, and shall make such proposal in
writing.
When the audit committee agrees to convene an extraordinary shareholders’ meeting, the audit
committee shall, within 5 days after the proposal is received, issue a notice calling for the shareholders’
meeting. Changes in the original proposal in the notice shall be subject to the approval of the relevant
shareholders.
If the audit committee fails to issue a notice of the shareholders’ meeting within the prescribed
time limit, it shall be deemed that the audit committee has not convened and presided over the
shareholders’ meeting. Shareholders who individually or collectively hold more than 10% of the
Company’s shares for a continuous period of more than 90 days may convene and preside over the
meeting on their own.
The aforesaid shall not apply where laws, administrative regulations, departmental rules and
securities regulatory rules of the place where the shares of the Company are listed stipulate otherwise.
The expenses necessary for the shareholders’ meeting convened by the Audit Committee or the
shareholders themselves shall be borne by the Company.
Proposals and Notices of Shareholders’ Meeting
Contents of a proposal for the shareholders’ meeting shall fall within the terms of reference of the
shareholders’ meeting, have definite subjects and specific matters to be resolved, and shall comply with
laws, administrative regulations, securities regulatory rules of the place where the shares of the
Company are listed and provisions of the Articles of Association.
When the Company convenes the shareholders’ meeting, the board of directors, audit committee
and shareholders holding more than 1% of the shares of the Company separately or jointly are entitled
to submit proposals to the Company.
The shareholders holding more than 1% of the shares of the Company separately or jointly may
raise a temporary proposal and submit it to the convener in writing 10 days before the shareholders’
meeting is held. The temporary proposal shall have definite subjects and specific matters to be resolved.
The board of directors shall supplement the notice of shareholders’ meeting in 2 days after receiving
the proposal and publicise the content of the temporary proposal, and submit the temporary proposal to
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the shareholders’ meeting for consideration, except where the temporary proposal is in violation of
laws, administrative regulations or the Articles of Association, or does not fall into the terms of
reference of the shareholders’ meeting. If, in accordance with the provisions of the securities regulatory
rules of the place where the Company’s shares are listed, the shareholders’ meeting must be postponed
due to the issuance of a supplementary notice for the shareholders’ meeting, the convening of the
shareholders’ meeting shall be postponed in accordance with the provisions of the securities regulatory
rules of the place where the Company’s shares are listed.
Save as specified in preceding paragraph, the convener shall neither revise the proposals set out in
the notice of shareholders’ meeting nor add new proposals after issuing the notice of shareholders’
meeting.
The shareholders’ meeting shall not vote or pass resolutions on proposals not listed in the notice
of the shareholders’ meeting or not in conformity with the Articles of Association.
The conveyer shall give notice of the annual shareholders’ meeting to all shareholders by way of
an announcement 21 days before the meeting is convened by the Company. The extraordinary
shareholders’ meeting shall be notified to all shareholders by way of an announcement at least 15 days
before the meeting is convened.
Notice of shareholders’ meetings shall be published on the website of the Company or on the
website designated by the Hong Kong Stock Exchange, in accordance with applicable laws, regulations,
and the securities regulatory rules of the place where the shares of the Company are listed. If, in
accordance with the Articles of Association, an announcement is to be made to shareholders of
foreign-invested shares listed overseas, such announcement shall also be published in accordance with
the methods specified in the Hong Kong Listing Rules. For shareholders of unlisted domestic shares,
notice of shareholders’ meetings may also be given by way of announcement.
The day of the meeting shall not be included in the calculation of the time limit of the notice.
Notice of the shareholders’ meeting shall include the following:
(i) time, venue and duration of the meeting;
(ii) subject matters and proposals submitted for consideration at the meeting;
(iii) clear statement that all holders of the shares are entitled to attend the shareholders’ meeting,
and may appoint a proxy in writing to attend the meeting and vote on his/her behalf and that
such proxy needs not be a shareholder of the Company;
(iv) record date for shareholders entitled to attend the shareholders’ meeting;
(v) name(s) and telephone number(s) of the standing contact person(s) for the affairs of
meetings;
(vi) time and procedure of voting via internet or by other means;
(vii) other matters as required by laws, administrative regulations, departmental rules, securities
regulatory rules of the place where the shares of the Company are listed and the Articles of
Association.
Notice and supplemental notice of the shareholders’ meeting shall fully and completely disclose
the specific content of all proposals.
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The record date for shareholdings shall be determined in accordance with the Hong Kong Listing
Rules and other securities regulatory rules of the place where the Company’s shares are listed.
Where the election of Directors is to be discussed at a shareholders’ meeting, the notice of the
shareholders’ meeting shall fully disclose the particulars of the candidates for election as Directors,
which shall include the following:
(i) personal particulars such as educational background, working experience and parttime jobs;
(ii) whether there is any related relationship with the Company or the controlling shareholder
and the actual controller of the Company;
(iii) disclosure of the number of shares held in the Company;
(iv) whether or not they have been subject to penalties imposed by the CSRC, other relevant
authorities and securities regulatory authorities of the place where the Company’s shares are
listed or any disciplinary action taken by any stock exchange;
(v) other information regarding the candidates for Directors required to be disclosed by the
Hong Kong Listing Rules.
Save in the case of the election of Directors on a cumulative voting basis, a separate resolution
shall be proposed for each of the candidates for election as Directors.
After the notice of the shareholders’ meeting is given, without cogent reason, the shareholders’
meeting shall not be postponed or cancelled, and the proposals set out in the notice shall not be
cancelled. Once the shareholders’ meeting is adjourned or cancelled, the convener shall publish an
announcement and explain the reasons in writing at least two working days before the original holding
date.
If the securities regulatory rules of the place where the shares of the Company are listed stipulate
otherwise in respect of the aforesaid matters, such provisions shall prevail on the premise of not
violating domestic regulatory requirements.
Voting at and Resolutions of General Meeting
Resolutions of the shareholders’ meeting are divided into ordinary resolutions and special
resolutions.
An ordinary resolution of the shareholders’ meeting shall be adopted by a majority of the voting
rights held by the shareholders (including proxies of shareholders) entitled to vote who are present at
the shareholders’ meeting.
Special resolutions of the general meeting shall be passed by more than two-thirds of the voting
rights held by the shareholders with voting rights (including their proxies) present at the meeting.
The following matters shall be resolved by way of ordinary resolution of the general meeting:
(i) working reports of the board of directors;
(ii) profit distribution proposals and proposals for making up losses formulated by the board of
directors;
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(iii) appointment and removal of members of the board of directors, and determination of their
remuneration and payment methods;
(iv) other matters other than those that shall be resolved by special resolutions according to laws,
administrative regulations, securities regulatory rules of the place where the Company’s
shares are listed or the Articles of Association.
The following matters shall be resolved by way of special resolution of the general meeting:
(i) increase or reduction of the Company’s registered capital;
(ii) division, merger, dissolution and liquidation of the Company or alteration on the form of the
Company;
(iii) amendment of the Articles of Association;
(iv) the Company’s purchase or disposal of major assets within one year or guarantee amount
exceeding 30% of the latest audited total assets of the Company set out in the audited
financial statements;
(v) the share incentive plan;
(vi) other matters required to be resolved by way of a special resolution by the laws,
administrative regulations, securities regulatory rules of the place where the Company’s
shares are listed or the Articles of Association, and matters which, according to an ordinary
resolution of the general meeting, may have a significant impact on the Company and shall
be resolved by way of a special resolution.
Shareholders (including their proxies) shall exercise their voting rights by the amount of shares
with voting rights they represent, with each share entitled to one vote.
The Company’s shares held by the Company shall not carry voting rights, and those shares shall
not be included in calculating the total number of shares carrying voting rights at the general meetings.
Where material issues affecting the interests of small and medium-sized investors are considered
at the general meeting, the votes of small and medium-sized investors shall be counted separately. The
separate votes counting results shall be disclosed publicly in a timely manner.
If a shareholder purchases shares with voting rights of the Company in violation of the provisions
of Article 63(1) and (2) of the Securities Law, the voting rights of such shares in excess of the
prescribed proportion shall not be exercised and shall not be counted towards the total number of shares
with voting rights present at the general meeting for thirty-six months after the purchase.
When matters relating to connected transactions are considered at the general meetings, the
connected shareholders shall not vote, and the number of shares with voting rights represented by them
shall not be included in the total number of valid votes; the resolutions of the general meetings shall
specify the voting information of the non-connected shareholders.
In addition to the cumulative voting system, the general meeting shall resolve on all the proposals
separately; in the event of several proposals for the same issue, such proposals shall be voted on and
resolved in the order of time at which they are submitted. Unless the general meeting is adjourned or
no resolution can be made for special reasons such as force majeure, voting of such proposals shall
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neither be shelved nor refused at the general meeting. If there are other provisions on the aforesaid
matters in the securities regulatory rules of the place where the Company’s shares are listed, such
provisions shall prevail.
The general meeting shall vote by open poll.
Before voting on any proposal, a general meeting shall choose two shareholders’ representatives to
participate in the votes counting or scrutinising. When any shareholder is related to any matter under
consideration, the said shareholder and proxy thereof shall not participate in vote counting or
scrutinising.
At the time of voting on a proposal at a general meeting, lawyers (if needed), shareholders’
representatives shall count and scrutinise the votes jointly and announce the voting results on the spot.
The voting results in connection with the resolution shall be recorded in the meeting minutes.
BOARD OF DIRECTORS
General Provisions on Board of Directors
The directors of the Company shall be natural persons. A person in any of the following
categories may not serve as a director of the Company:
(i) persons without capacity or with limited capacity for civil conduct;
(ii) persons who were sentenced for crimes of corruption, bribery, encroachment or
embezzlement of property or disruption of the social and economic order, where five years
have not elapsed following the serving of the sentence, or persons who were deprived of
their political rights for committing a crime, where five years have not elapsed following the
serving of the sentence, or in case of a suspended sentence, no more than two years have
elapsed since the date of expiration of the probationary period;
(iii) persons who acted as directors, or factory managers or managers of bankrupt or liquidated
companies or enterprises who bear personal liability for the bankruptcy of such companies or
enterprises, where three years have not elapsed following the date of completion of such
bankruptcy or liquidation;
(iv) persons who were legal representatives of a company or enterprise, which had its business
licence revoked due to a violation of the law and was ordered to close down, and who were
personally liable for it, where less than three years have elapsed since the date when the
business licence of the company or enterprise was revoked or when it was ordered to close
down;
(v) persons who have been listed by the People’s Court as defaulter because they have incurred
debts of a large amount that have not been settled by the due date;
(vi) persons who are imposed by the CSRC a ban from entering into the securities market for a
period which has not yet expired;
(vii) persons who are publicly deemed to be disqualified to act as a director or senior
management of listed companies by the stock exchange of the place where the Company’s
shares are listed, where the disqualification period remains effective;
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(viii) other requirements stipulated in the laws, administrative regulations or departmental rules,
securities regulatory rules of the CSRC and of the place where the Company’s shares are
listed.
Election, appointment or employment of directors in violation of this Article shall be invalid. In
the event that the circumstances as stipulated in this Article arise during the term of office of any
director, the Company shall remove him/her from his/her position and suspend his/her duties.
Directors shall be elected or replaced by the general meeting and may be removed from office by
the general meeting by way of resolution before the expiration of their term of office, and such removal
shall take effect on the date of the resolution. The directors have a tenure of three years and can be
re-elected upon the expiry of the tenure.
The term of office of directors shall last from the date on which the directors take office to the
expiration of the term of office of the current board of directors. Where a new director is not yet
available upon expiration of a director’s term, such director, before the new director takes his office,
shall continue the performance of his duties in accordance with laws, administrative regulations,
departmental rules, the securities regulatory rules of the place where the Company’s shares are listed
and the Articles of Association.
If a director resigns, he shall notify the Company in writing. The resignation shall take effect on
the date the Company receives the notice. However, under the circumstances specified in the preceding
paragraph, the director shall continue to perform his duties.
A director may be the manager or other senior management concurrently, provided that the total
number of directors who concurrently serve as the manager or other senior management shall not
exceed half of the total number of directors.
The directors shall comply with the provisions of the laws, administrative regulations, the
regulatory rules of the place where the Company’s shares are listed and the Articles of Association and
shall perform the following fiduciary duties to the Company. They shall take measures to avoid
conflicts of interest between their personal interests and those of the Company, and must not exploit
their positions to seek improper gains:
Directors owe the following fiduciary duties to the Company:
(i) shall not misappropriate the Company’s property or embezzle the Company’s funds;
(ii) shall not deposit Company funds into accounts opened in his/her own name or in the name
of any other individual;
(iii) shall not use his/her position to solicit or accept bribes or other unlawful income;
(iv) shall not, directly or indirectly, enter into contracts or conduct transactions with the
Company, unless such matter has been reported to the board of directors or the general
meeting and approved by a resolution of the board of directors or the general meeting in
accordance with the provisions of the Articles of Association;
(v) shall not exploit his/her position to pursue business opportunities belonging to the Company
for himself/herself or for others, except where such matter has been reported to the board of
directors or the general meeting and approved by a resolution of the general meeting, or
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where the Company is unable to take advantage of such business opportunity in accordance
with laws, administrative regulations, securities regulatory rules of the place where the
Company’s shares are listed or the Articles of Association;
(vi) shall not engage in, or assist others in engaging in, any business of the same nature as that
of the Company, unless such matter has been reported to the board of directors or the
general meeting and approved by a resolution of the general meeting;
(vii) shall not accept commissions from transactions between others and the Company for his/her
own benefit;
(viii) shall not disclose the Company’s secrets without authorisation;
(ix) shall not use his/her connected relationships to harm the interests of the Company;
(x) shall not vote on any resolution approving any contract or arrangement or any other proposal
in which such director or any of his associates have a material interest nor shall such
director be counted in the quorum present at the meeting;
(xi) other duties of loyalty stipulated by laws, administrative regulations, departmental rules, the
regulatory rules of the place where the Company’s shares are listed and the Articles of
Association.
Income received by any directors in violation of this article shall be forfeited by the Company.
Any directors who act in violation of this article shall be liable for compensation for any losses caused
to the Company.
The senior management of the Company shall perform their duties with reference to the
aforementioned requirements.
The directors shall abide by the laws, administrative regulations, securities regulatory rules of the
place where the Company’s shares are listed and the Articles of Association and shall be subject to the
following diligence obligations to the Company. When performing their duties, directors shall act in the
best interests of the Company and exercise the reasonable care that would ordinarily be expected of a
manager:
(i) to exercise the rights granted by the Company in a prudent, conscientious and diligent
manner to ensure that the Company’s commercial behaviours comply with the requirements
of national laws, administrative regulations, regulatory rules of the stock exchange where the
Company’s shares are listed and various national economic policies, and that the extent of
the commercial activities do not exceed the business scope stipulated in the business licence;
(ii) to treat all shareholders equally and fairly;
(iii) to keep abreast of the Company’s business operation and management;
(iv) to initial and approve regular reports of the Company and to ensure the integrity, accuracy
and completeness of the information disclosed by the Company;
(v) to provide all relevant information required by the audit committee and shall not intervene
the performance of its duties;
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(vi) to perform other due diligence obligations stipulated by laws, administrative regulations,
departmental rules, the securities regulatory rules of the place where the Company’s shares
are listed and the Articles of Association.
The senior management of the Company shall perform their duties with reference to the
aforementioned requirements.
A director may resign before the expiration of their term of office. If a director fails to attend the
Board meeting and does not entrust another director to attend on their behalf, it shall be deemed that
they are unable to perform their duties, and the board of directors shall propose to the shareholders’
meeting that such director be removed.
A director may resign before the expiry of his/her tenure. The resigning director shall submit to
the Company a written resignation. The resignation shall take effect on the date the Company receives
the written resignation. The Company shall disclose the relevant information within two trading days.
Where, as a result of a director’s resignation, the quorum requirement for the member of the
Board of Directors is no longer met, or the number of independent non–executive directors is less than
one-third (1/3) of the members of the Board of Directors due to the resignation of an independent
nonexecutive director, or there is no accounting professional among the independent non-executive
directors, the outgoing director shall continue to perform a director’s functions in accordance with laws,
administrative regulations, departmental rules, securities regulatory rules of the place where the
Company’s shares are listed and the Articles of Association before the newly elected director assumes
office.
The Company has a system in place to manage the departure of directors, which specifies
safeguard measures for pursuing and recovering liability for unfulfilled public commitments and other
outstanding matters. A director shall complete all formalities for handing over to the board of directors
when his/her resignation takes effect or when his/her term of office expires, and his/her fiduciary duty
towards the Company and its shareholders shall not ipso facto be discharged upon expiration of his/her
term of office. The liability that a director bears during his/her term of office due to the performance of
his/her duties shall not be waived or terminated upon leaving office.
Board of Directors
The Company shall have a board of directors.
The Board shall consist of 9 directors. The Company shall have one chairman, who shall be
elected by more than half of all the directors. There are 3 independent non-executive directors.
Independent non-executive directors shall constitute one-third or more of the total number of the board
of directors. At least one independent non-executive director shall have appropriate professional
qualifications, and one shall ordinarily reside in Hong Kong.
The Board of Directors exercises the following powers:
(i) convene a shareholders’ meeting and report work to the shareholders’ meeting;
(ii) implement the resolutions of the shareholders’ meeting;
(iii) determine the Company’s business plan and investment plan;
(iv) formulate the Company’s profit distribution plan and loss compensation plan;
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(v) formulate plans for the Company to increase or reduce its registered capital, issue bonds or
other securities and for the listing;
(vi) formulate plans for the Company’s major acquisitions, the Company’s acquisition of the
Company’s shares, or merger, division, dissolution and change of form of the Company;
(vii) determine, within the scope of the powers granted by the shareholders’ meeting, matters
including the Company’s external investments, the sale and purchase of assets, asset
mortgages, external guarantees, entrusted financial management, connected transactions,
donations to other organisations, among other matters;
(viii) decide on the establishment of the Company’s internal management agencies;
(ix) appoint or dismiss the Company’s manager, secretary to the Board of Directors and other
senior management personnel, and determine their remuneration, rewards and punishments;
decide on the appointment or dismissal of the Company’s deputy general manager, financial
controller and other senior management personnel based on the nomination of the manager
and decide on their remuneration and rewards and punishments;
(x) manage the Company’s information disclosure matters;
(xi) formulate the Company’s basic management system;
(xii) formulate a plan to amend the Articles of Association;
(xiii) propose to the shareholders’ meeting to hire or change the accounting firm to audit the
Company;
(xiv) listen to the work report of the manager of the Company and inspect the work of the
manager;
(xv) decide on the Company’s repurchase of its shares under the circumstances specified in items
(iii), (v) and (vi) in the first paragraph in Article 25 of the Articles of Association on the
premise of complying with the securities regulatory rules of the place where the shares of
the Company are listed;
(xvi) laws, administrative regulations, departmental rules, securities regulatory rules of the place
where the Company’s shares are listed, or other powers granted by the Articles of
Association.
Matters beyond the scope of authority of the shareholders’ meeting shall be submitted to the
shareholders’ meeting for consideration.
The Company shall disclose to the shareholders the remuneration received by the Directors and
senior management personnel from the Company on a regular basis.
The Board of Directors shall give explanations to the general meeting for the qualified audit
opinions issued by certified public accountants in respect of financial reports of the Company.
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The Board of Directors shall formulate the rules of procedures of meetings of the Board of
Directors to ensure the Board of Directors will implement resolutions of the shareholders’ general
meeting, thereby enhancing efficiency and ensuring scientific decision-making. The rules of procedures
for the Board of Directors shall be appended to the Articles of Association and shall be formulated by
the Board of Directors and approved at the general meetings.
The Board of Directors shall convene at least four meetings each year. All board meetings shall be
convened and presided over by the chairman or, as the case may be, a director. A written notice
specifying the time, venue and agenda of the meeting shall be sent to all directors at least 14 days prior
to the convening of each board meeting. With the unanimous consent of all the Company’s Directors,
the aforesaid notice period for convening regular board meetings may be shortened or waived.
Board meetings shall be attended by more than half of the Directors. Resolutions made by the
Board of Directors shall be approved by more than half of all Directors, unless otherwise provided by
the Articles of Association.
V oting on resolutions of the Board of Directors is based on one person, one vote.
If a Director is related to the corporates or individuals involved in the matters resolved at the
Board meeting, or if the Director himself/herself or any of his/her associates has a material interest
therein, such Director shall promptly report in writing to the Board of Directors. A director who has a
related relationship or who himself or any of his associates has a material interest shall not exercise
voting rights on such resolution, nor shall he act as a proxy for other directors to exercise voting rights.
Such director shall also not be counted in the quorum for the relevant meeting. The Board meeting may
be held if more than half of the unrelated Directors are present, and resolutions made at the Board
meeting shall be passed by more than half of the unrelated Directors. If the number of unrelated
directors present at the meeting of the Board of Directors is less than 3, the matter shall be submitted to
the shareholders’ meeting for review.
Board meetings shall be attended by the director in person; if a director is unable to attend for any
reason, he/she may authorise another director in writing to attend on his/ her behalf. The letter of
authorisation shall state the name of the agent, matters of agency, scope of authorisation and validity
period, and shall be signed or stamped by the principal. Directors who attend meetings on their behalf
shall exercise the rights of directors within the scope of authorisation. If a director fails to attend a
Board meeting or appoint a representative to attend, he/ she shall be deemed to have given up his/her
right to vote at the meeting.
Independent Non-executive Directors
Independent non-executive Directors shall maintain their independence. The following persons
shall not serve as independent non-executive Directors:
(i) persons working for the Company or its subsidiaries, their spouses, parents and children, and
major social relations;
(ii) natural person shareholders who directly or indirectly hold more than 1% of the Company’s
issued shares or who are among the Company’s top ten shareholders, and their spouses,
parents and children;
(iii) persons who work for shareholders who directly or indirectly hold more than 5% of the
Company’s issued shares or who work for the Company’s top five shareholders, and their
spouses, parents, and children;
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(iv) persons serving in the subsidiaries of the Company’s controlling shareholders and de facto
controllers and their spouses, parents and children;
(v) persons who have significant business dealings with the Company, its controlling
shareholders, de facto controllers or their respective subsidiaries, or who serve in entities
with which they have significant business dealings and their controlling shareholders or de
facto controllers;
(vi) persons providing financial, legal, consulting and sponsorship and other services to the
Company, its controlling shareholders, de facto controllers or their respective subsidiaries;
including, but not limited to, all members of the project team of the intermediaries providing
the services, reviewers at all levels, persons signing the report, partners, directors, senior
management and principals;
(vii) persons who have been in the situations listed in the items (i) to (vi) within the last twelve
months;
(viii) other persons who are not independent as stipulated by the laws, administrative regulations,
the CSRC, the securities regulatory rules of the place where the Company’s shares are listed,
as well as the Articles of Association.
The subsidiaries of the Company’s controlling shareholder and de facto controller as referred to in
items (iv) to (vi) of the preceding paragraph do not include those companies which are controlled by
the same state-owned asset administration institution and the Company does and do not have a
connected relationship with the Company in accordance with the relevant regulations.
Independent non-executive Directors shall conduct self-examination of independence each year
and submit the results of self-examination to the Board. The Board shall assess independence of
incumbent independent non-executive Directors and issue special opinions each year, which shall be
disclosed together with annual reports.
The following conditions shall be met in order to serve as independent non-executive Directors of
the Company:
(i) being qualified for serving as director of a listed company according to laws, administrative
regulations, regulatory rules of the stock exchange where the Company’s shares are listed
and other relevant provisions;
(ii) meeting the independence requirements set forth in the Articles of Association;
(iii) having basic knowledge of the operation of listed companies and being familiar with
relevant laws, regulations and rules;
(iv) having more than five years of legal, accounting or economic work experience necessary to
perform the duties of an independent non-executive Director;
(v) having good personal morality, with no bad records such as major dishonesty, etc.;
(vi) other conditions stipulated by the laws, administrative regulations, the requirements of the
CSRC, the securities regulatory rules of the place where the Company’s shares are listed and
the Articles of Association.
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As members of the Board of Directors, the independent non-executive Directors owe fiduciary
duties and diligence to the Company and all shareholders and shall prudently perform the following
duties:
(i) to participate in the decision making of the Board of Directors and provide explicit opinions
on the matters discussed;
(ii) to supervise matters that indicate potential material conflict of interest between the Company
and its controlling shareholders, actual controllers, directors and senior management so as to
protect legitimate rights and interests of minority shareholders;
(iii) to provide professional and objective advice on the Company’s operations and development,
thereby facilitating improvement in the standard of the decision-making of the Board of
Directors;
(iv) other duties stipulated by the laws, administrative regulations, the requirements of the
CSRC, the securities regulatory rules of the place where the Company’s shares are listed and
the Articles of Association.
Independent non-executive Directors shall exercise the following special functions and powers:
(i) independently engage intermediaries to audit, provide consultation on or verify specific
matters of the Company;
(ii) propose the convening of extraordinary general meetings to the Board of Directors;
(iii) propose the convening of Board meetings;
(iv) openly solicit shareholders’ rights from shareholders in accordance with the laws;
(v) express independent opinions on matters potentially detrimental to interests of the Company
or its minority shareholders;
(vi) other functions and powers as provided by the laws, administrative regulations, the CSRC,
the securities regulatory rules of the place where the Company’s shares are listed, as well as
the Articles of Association.
Any exercise of the functions and powers as referred to in items (i) to (iii) of the preceding
paragraph by the independent non-executive Directors shall be approved by more than half of all
independent non-executive Directors.
The Company shall disclose in a timely manner any exercise of the functions and powers set out
in Article 1 by the independent non-executive Directors. If any of the aforesaid functions and powers
could not be exercised properly, the Company shall disclose the specific circumstances and reasons
thereof.
The following matters shall be approved by more than half of all the independent non-executive
Directors of the Company before submitting to the Board of Directors for consideration:
(i) discloseable connected transactions;
(ii) proposals for changing or waiving undertakings made by the Company and relevant parties;
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(iii) decisions and measures taken by the board of directors of the company being acquired in
response to the acquisition;
(iv) other matters as prescribed by laws, administrative regulations, the CSRC, the securities
regulatory rules of the place where the Company’s shares are listed, and the Articles of
Association.
The Company shall establish a mechanism for special meetings which will be attended by
independent non-executive Directors only. Matters such as connected transactions to be considered by
the Board of Directors shall be approved in advance by a special meeting of the independent
non-executive Directors.
The Company shall convene special meetings of the independent non-executive Directors on a
regular or ad hoc basis. Matters listed in items (i) to (iii) of paragraph 1 of Article 136 and in Article
137 of the Articles of Association shall be considered by a special meeting of the independent
non-executive Directors.
The special meetings of the independent non-executive Directors may consider and discuss other
matters of the Company when necessary.
The special meetings of the independent non-executive Directors shall be convened and chaired by
one independent non-executive Director elected by more than half of the independent non-executive
Directors; in the event that the convener fails to or is unable to perform his/her duties, two and more
independent non-executive Directors may convene a meeting on their own and elect one representative
to preside over the meeting.
Minutes of special meetings of independent non-executive Directors should be prepared in
accordance with the regulations and the views of independent non-executive Directors should be set out
in the minutes. The independent non-executive Directors should sign to confirm the minutes of the
meeting.
The Company shall facilitate and support the convention of the special meetings of the
independent non-executive Directors.
Special Committees of the Board of Directors
The board of directors of the Company shall establish the Audit Committee, which shall exercise
the functions and powers of the board of supervisors as stipulated in the Company Law.
The Audit Committee shall consist of 3 members, all of whom are non-executive directors,
including 2 independent non-executive directors. The convener shall be an independent non-executive
director with accounting expertise.
The Audit Committee is responsible for reviewing the financial information of the Company and
its disclosure, supervising and evaluating internal and external audit work and internal control. The
following matters shall be submitted to the Board of Directors for consideration after being approved
by more than half of all members of the Audit Committee:
(i) disclosure of financial information in financial accounting reports and periodic reports, as
well as internal control evaluation reports;
(ii) hiring or dismissing the accounting firm engaged to carry out the audit of the company;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-21 –


--- page 399 ---
(iii) appointment or dismissal of the company’s financial controller;
(iv) changes in accounting policies, accounting estimates or corrections of material accounting
errors for reasons other than changes in accounting standards;
(v) other matters provided for by laws, administrative regulations, the CSRC, the securities
regulatory rules of the place where the Company’s shares are listed and the Articles of
Association.
The Audit Committee shall hold at least one meeting each quarter. An extraordinary meeting may
be held when it is proposed by two or more members, or when it is deemed necessary by the convener.
Meeting of the Audit Committee shall be held only if more than two-thirds of the members are present.
The resolutions made by the Audit Committee shall be passed by more than half of the members
of the Audit Committee. V oting on the resolutions of Audit Committee shall be one person, one vote.
Minutes shall be prepared for the resolutions of the Audit Committee as required and shall be
signed by the members of the Audit Committee present at the meetings. The Board of Directors shall be
responsible for formulating work procedures for the Audit Committee.
The Nomination Committee is responsible for formulating the standards and procedures for the
selection of directors and senior management, selecting and reviewing the candidates for directors and
senior management and their qualifications for office, and making recommendations to the Board of
Directors on the following matters:
(i) nominating or removing of directors;
(ii) appointing or dismissing senior management;
(iii) other matters as provided by laws, administrative regulations, the CSRC, the securities
regulatory rules of the place where the Company’s shares are listed and the Articles of
Association.
If the Board of Directors does not adopt or does not fully adopt the recommendations of the
Nomination Committee, it shall record the opinion of the Nomination Committee and the specific
reasons for not adopting in the resolution of the Board of Directors and disclose the same.
The Remuneration and Appraisal Committee is responsible for the formulation of standards for
appraising and conducting evaluation of Directors and senior management, and the formulation and
review of the remuneration decision mechanisms, decision-making processes, payment and cessation of
payment recovery arrangements, and other remuneration policies and plans for Directors and senior
management, and making recommendations to the Board of Directors on the following matters:
(i) the remuneration of Directors and senior management;
(ii) the formulation or amendment of equity incentive schemes and employee stock ownership
plans, and the granting of rights to incentive recipients and the achievement of conditions
for the exercise of such rights by incentive recipients;
(iii) the arrangement of stock ownership plans for Directors and senior management in the event
of a proposed spin-off of a subsidiary;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-22 –


--- page 400 ---
(iv) other matters stipulated by laws, administrative regulations, the CSRC, the securities
regulatory rules of the place where the Company’s shares are listed and the Articles of
Association.
If the Board of Directors does not adopt or does not fully adopt the recommendations of the
Remuneration and Appraisal Committee, it shall record the opinion of the Remuneration and Appraisal
Committee and the specific reasons for its non-adoption in a resolution of the Board of Directors and
disclose the same.
Manager and Other Senior Management Officers
The Company has a manager, who is appointed or dismissed by the Board of Directors.
The Company has several deputy managers, who are appointed or dismissed by the Board of
Directors.
The Company’s manager, deputy managers, secretary to the Board of Directors, and financial
controller are senior management personnel of the Company.
The provisions of the Articles of Association regarding the circumstances under which a person
may not serve as a director shall apply equally to senior management personnel.
The directors’ duty of loyalty and the directors’ duties of diligence as mentioned in the Articles of
Association shall also apply to senior management.
Any person who takes administrative position other than a director or supervisor in the controlling
shareholder of the Company shall not act as senior management of the Company.
The Company’s senior management are only paid by the Company and are not paid by the
controlling shareholder on behalf of the Company.
The manager is elected for a term of three years, and the manager may be reappointed
consecutively for subsequent terms.
The manager is responsible to the Board of Directors and exercises the following powers:
(i) preside over the Company’s production, operation and management work, organise the
implementation of Board resolutions, and report work to the Board of Directors;
(ii) organise and implement the Company’s annual business plan and investment plan;
(iii) formulate a plan for the establishment of the Company’s internal management organisation;
(iv) formulate the Company’s basic management system;
(v) formulate specific regulations of the Company;
(vi) request the Board of Directors to appoint or dismiss the Company’s deputy general manager
and financial controller;
(vii) decide on the appointment or dismissal of management personnel other than those who shall
be appointed or dismissed by the Board of Directors;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-23 –


--- page 401 ---
(viii) other powers granted by the Articles of Association or the Board of Directors.
The manager attends Board meetings.
The Company shall have a Board secretary, who is responsible for preparing for the Shareholders’
meeting and the board meetings, keeping documents and shareholders’ materials and handling matters
relating to information disclosure, etc..
The Board secretary shall comply with the relevant provisions of the laws, administrative
regulations, departmental rules, securities regulatory rules of the place where the Company’s shares are
listed, and the Articles of Association.
Where a member of senior management causes damage to others in executing his/her office in the
Company, the Company shall be liable for compensation. Where a member of senior management acts
with intent or gross negligence, he/she shall also bear the liability for compensation.
Where a member of senior management violates any laws, administrative regulations,
departmental rules, regulatory rules of the stock exchange where the Company’s shares are listed or the
Articles of Association in executing his/her office in the Company, causing losses to the Company,
he/she shall be liable for compensation.
Senior management members of the Company shall faithfully perform their duties and safeguard
the best interests of the Company and all shareholders. Where a senior management member fails to
perform his/her duties faithfully or violates the fiduciary duty, causing damage to the interests of the
Company and the public shareholders, he/she shall be liable for compensation in accordance with law.
FINANCIAL AND ACCOUNTING SYSTEM, PROFIT DISTRIBUTION AND AUDIT
Financial and Accounting System
The Company formulates its financial accounting system in accordance with laws, administrative
regulations, regulatory rules of the stock exchange where the Company’s shares are listed and the
regulations of the financial departments of the State Council.
The Company shall adopt the Gregorian calendar year as its accounting year, which shall
commence on 1 January and end on 31 December of the same Gregorian calendar year.
The Company shall submit and disclose its annual report to the delegated authorities of CSRC (if
required) and the stock exchange where the Company’s shares are listed within four months after the
end of each accounting year, submit and disclose its interim report to the delegated authorities of CSRC
(if required) and the stock exchange where the Company’s shares are listed within two months after the
end of the first half of each accounting year, and may submit and disclose quarterly reports in
accordance with the relevant rules of the stock exchange where the Company’s shares are listed. Where
the regulatory rules of the stock exchange where the Company’s shares are listed provide otherwise,
such provisions shall prevail.
The above financial and accounting reports shall be prepared in accordance with the relevant laws,
administrative regulations, the provisions of the CSRC, the securities regulatory authorities and stock
exchanges where the Company’s shares are listed.
In addition to the statutory accounting books, the Company will not maintain separate accounting
books. The Company’s funds are not stored in accounts opened in any individual’s name.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-24 –


--- page 402 ---
When distributing after-tax profits of the year, the Company shall allocate 10% of its after-tax
profits for the Company’s statutory reserve fund. If the cumulative amount of the Company’s statutory
reserve fund is more than 50% of the Company’s registered capital, no further withdrawals may be
made.
Where the Company’s statutory reserve fund is not enough to make up losses of the Company for
the preceding year, the current year’s profits shall be applied firstly to make up the losses before being
allocated to the statutory reserve in accordance with the preceding paragraph.
After the Company withdraws the statutory reserve fund from the after-tax profits, it can also
withdraw the discretionary reserve fund from the after-tax profits upon resolution of the Shareholders’
meeting.
The remaining after-tax profits after the Company has made up for its losses and withdrawn the
reserve fund shall be distributed according to the proportion of shares held by shareholders, unless the
Articles of Association stipulated that distribution is not based on the proportion of shareholdings.
If the Shareholders’ meeting violates the provisions of the Company Law and distributes profits to
shareholders, shareholders shall return the profits distributed in violation of the regulations to the
Company; if losses are caused to the Company, the shareholders and the responsible Directors and
senior management shall be liable for compensation.
The Company’s shares held by the Company will not participate in the distribution of profits.
After the Shareholders’ meeting of the Company makes a resolution on the profit distribution
plan, the board of directors of the Company shall complete the distribution of dividends (or shares)
within 2 months after the Shareholders’ meeting. If the specific plan cannot be implemented within 2
months due to the provisions of laws and regulations and the securities regulatory rules of the place
where the Company’s shares are listed, the implementation date of the specific plan may be adjusted
accordingly in accordance with such provisions and the actual situation.
When formulating profit distribution policies and specific plans, the Company shall attach
importance to providing investors with reasonable investment returns, while taking into account the
long-term interests and sustainable development of the Company, and maintaining the continuity and
stability of profit distribution policies.
The Company may distribute profits in the form of cash, shares, a combination of cash and shares,
or other methods permitted by laws and regulations.
Internal Audit
The Company implements an internal audit system, which specifies the leadership system,
responsibilities and authorities, personnel allocation, funding support, application of audit results and
accountability for internal audit work.
The internal audit system of the Company shall be implemented upon approval by the board of
directors and shall be disclosed externally.
The internal audit institution of the Company shall conduct supervisory inspections of the
Company’s business activities, risk management, internal controls, financial information, and other
relevant matters.
The internal audit institution shall be accountable to the board of directors.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-25 –


--- page 403 ---
The internal audit institution shall accept the supervision and guidance from the Audit Committee
in the course of supervising and inspecting the business activities, risk management, internal control
and financial information of the Company. If the internal audit institution discovers relevant major
issues or clues, it shall report directly to the Audit Committee immediately.
Appointment of Accounting Firm
The Company engages an accounting firm that complies with the provisions of the Securities Law
and the provisions of securities regulatory authorities where the Company’s shares are listed to conduct
financial accounting report audits, net asset verification and other related consulting services. The
appointment period is one year and can be renewed.
The Company’s appointment and dismissal of an accounting firm shall be decided on the
Shareholders’ meeting, and the board of directors may not appoint an accounting firm before a decision
is made on the Shareholders’ meeting.
The audit fees of an accounting firm are determined on the Shareholders’ meeting.
When the Company dismisses or no longer re-appoints the accounting firm, it must notify the
accounting firm 30 days in advance; the resolution on dismissal of accounting firm shall be resolved at
the Shareholders’ meeting of the Company and the accounting firm is allowed to give its opinion.
If an accounting firm proposes to resign, it shall explain to the Shareholders’ meeting whether
there is any misconduct in the Company.
MERGER, DIVISION, CAPITAL INCREASE, CAPITAL REDUCTION, DISSOLUTION AND
LIQUIDATION
Merger, Division, Capital Increase and Capital Reduction
Company mergers may take the form of mergers by absorption or mergers by new establishment.
In the event of a merger, the parties to the merger shall enter into a merger agreement, and
prepare balance sheets and property list. The Company shall notify the creditors within 10 days from
the date of the resolution to merge and publish an announcement in a newspaper recognised by the
stock exchange where the Company’s shares are listed or on the National Enterprise Credit Information
Publicity System within 30 days. The creditors may require the Company to settle the debts or provide
appropriate guarantees within 30 days after receipt of the notice or within 45 days after the date of the
announcement if the creditors have not received the notice.
If the Company is divided, a balance sheet and property list shall be prepared. The Company shall
notify the creditors within 10 days from the date of making the separation resolution and publish an
announcement in a newspaper recognised by the stock exchange where the Company’s shares are listed
or on the National Enterprise Credit Information Publicity System within 30 days.
If the Company reduces its registered capital, it must prepare a balance sheet and property list.
The Company shall notify the creditors within 10 days from the date of the Shareholders’ meeting
resolution on capital reduction and publish an announcement in a newspaper recognised by the stock
exchange where the Company’s shares are listed or on the National Enterprise Credit Information
Publicity System within 30 days. The creditors shall have the right to require the Company to settle the
debts or provide appropriate guarantees within 30 days after receipt of the notice or within 45 days
after the date of the announcement if the creditors have not received the notice.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-26 –


--- page 404 ---
When a company reduces its registered capital, in principle, it shall reduce its capital contribution
or shares accordingly according to the proportion of the capital contribution or shares held by
shareholders. However, after deliberation and approval by the Shareholders’ meeting, it may not be
restricted by the same proportion reduction, and the Company may make targeted capital reduction.
The registered capital of the Company after reduction shall not be less than the statutory
minimum.
If the Company is merged or divided and the registered items are changed, the registration of the
change shall be carried out with the Company registration authority in accordance with the law; if the
Company is dissolved, the registration of the cancellation of the Company shall be carried out in
accordance with the law; if a new company is established, the registration of the establishment of such
company shall be carried out in accordance with the law.
If the Company increases or decreases its registered capital, it shall apply for a registration of the
change with the Company registration authority in accordance with the law.
Dissolution and Liquidation
The Company shall be dissolved upon the occurrence of the following events:
(i) The business period stipulated in the Articles of Association expires or other reasons for
dissolution stipulated in the Articles of Association occur;
(ii) The Shareholders’ meeting makes a resolution to dissolve;
(iii) Dissolution is required due to company merger or division;
(iv) The business licence has been revoked, it is ordered to close, or revoked in accordance with
the law;
(v) If the Company encounters serious difficulties in its operation and management, and its
continued existence will cause heavy losses to the interests of shareholders, and cannot be
solved through other means, shareholders holding 10% or above of the voting rights of the
Company may request the People’s Court to dissolve the Company, and the People’s Court
shall dissolve the Company.
If the Company encounters the reasons for dissolution in the preceding paragraph, it shall
publicise the reasons for dissolution through the National Enterprise Credit Information Publicity
System within 10 days.
If the Company is in the situation as described in items (i) and (ii) and has not yet distributed its
properties to Shareholders, it can continue to exist by amending the Articles of Association or through a
resolution of the Shareholders’ meeting.
Any amendment made to the Articles of Association pursuant to the preceding paragraph or by
resolution of the Shareholders’ meeting shall be adopted by no less than two-thirds of all voting
shareholders in attendance at the relevant Shareholders’ meeting.
Where the Company is to be dissolved pursuant to items (i), (ii), (iv), or (v) above, it shall be
liquidated. A liquidation committee shall be established within 15 days from the date when the event of
dissolution occurs with the Directors as the liquidation obligor of the Company. The liquidation
committee shall be composed of directors or any other person appointed by a resolution of the
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-27 –


--- page 405 ---
Shareholders’ meeting. If the liquidation committee is not duly set up for liquidation within the
specified period or fails to carry out the liquidation after its formation, any interested party may request
the People’s Court to designate related persons to form a liquidation committee to carry out liquidation.
If the liquidation obligor fails to perform its liquidation obligations in a timely manner and causes
losses to the Company or its creditors, it shall be liable for compensation.
Where the Company is dissolved in accordance with the circumstances specified in item (iv)
above, the department or the Company registration authority that made the decision to revoke the
business licence, order closure or revocation may apply to the People’s Court for designating relevant
persons to form a liquidation committee to carry out liquidation.
The liquidation committee shall exercise the following powers during the liquidation period:
(i) clean up the Company’s properties and prepare a balance sheet and property list
respectively;
(ii) notify and announce creditors;
(iii) handle the Company’s uncompleted businesses related to liquidation;
(iv) pay the taxes owed and the taxes incurred during the liquidation process;
(v) clear claims and debts;
(vi) distribute the Company’s remaining property after paying off its debts;
(vii) participate in civil litigation activities on behalf of the Company.
The liquidation committee shall notify the creditors within 10 days from the date of establishment
and publish an announcement in a newspaper recognised by the stock exchange where the Company’s
shares are listed or on the National Enterprise Credit Information Publicity System within 60 days.
Creditors shall declare their claims to the liquidation committee within 30 days from the date of receipt
of the notice, or within 45 days from the date of announcement if the notice is not received.
When a creditor declares a creditor’s right, he shall explain the relevant matters of the creditor’s
right and provide supporting materials. The liquidation committee shall register the claims.
The liquidation committee shall not make any settlement to creditors during the period of the
claim.
After cleaning up the Company’s assets and preparing a balance sheet and property list, the
liquidation committee shall formulate a liquidation plan and submit it to the Shareholders’ meeting or
the People’s court for confirmation.
The Company’s property is the remaining property after paying liquidation expenses, employees’
wages, social insurance fees and statutory compensation, paying taxes owed, and settling the
Company’s debts respectively, and the Company distributes the remaining property according to the
proportion of shares held by shareholders.
During the liquidation period, the Company continues to exist, but it cannot carry out business
activities unrelated to the liquidation. The company’s property shall not be distributed to shareholders
before settlements are made in accordance with the provisions of the preceding paragraph.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-28 –


--- page 406 ---
After clearing the Company’s property and preparing a balance sheet and property list, if the
liquidation committee finds that the Company’s property is insufficient to pay off its debts, it shall
apply to the People’s Court for bankruptcy liquidation in accordance with the law.
After the bankruptcy application is accepted by the People’s Court, the liquidation committee shall
hand over the liquidation matters to the bankruptcy administrator designated by the People’s Court.
After the Company’s liquidation is completed, the liquidation committee shall prepare a
liquidation report, submit it to the Shareholders’ meeting or the People’s Court for confirmation, and
submit it to the Company registration authority to apply for cancellation of the Company registration.
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The Company shall amend the Articles of Association in any of the following circumstances:
(i) after the Company Law or relevant laws, administrative regulations and securities regulatory
rules of the place where the Company’s shares are listed are revised, the matters stipulated
in the Articles of Association contradict with the provisions of the revised laws,
administrative regulations;
(ii) if certain changes of the Company occur resulting in the inconsistency with certain terms
specified in the Articles of Association;
(iii) the Shareholders’ meeting has resolved to amend the Articles of Association.
Where the amendments to the Articles of Association passed by resolutions of the Shareholders’
meetings require approval of the competent authorities, the amendments shall be submitted to the
relevant authorities for approval. Where the amendments involve registration matters of the Company,
the involved changes shall be registered in accordance with the laws.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-29 –


--- page 407 ---
A. FURTHER INFORMATION ABOUT OUR COMPANY
1. Incorporation of our Company
Our Company was established as a limited liability company under the laws of the PRC on 3 April
2013 and was converted into a joint stock limited company on 8 November 2022 under the laws of the
PRC. Our Company was registered as a non-Hong Kong company in Hong Kong under Part 16 of the
Companies Ordinance on 24 July 2025 and our principal place of business in Hong Kong is at Room
1802, 18/F, Ruttonjee House, Ruttonjee Centre, 11 Duddell Street, Central, Hong Kong. Ms. Lui Mei
Ka have been appointed as the authorised representatives of our Company for the acceptance of service
of process and notices on behalf of our Company in Hong Kong.
As our Company was established in the PRC, we are subject to the relevant laws and regulations
of the PRC. A summary of the relevant aspects of laws and regulations of the PRC and various
provisions of our constitution is set out in “Regulatory Overview” and “Appendix V — Summary of the
Articles of Association” to this prospectus.
2. Changes in share capital of our Company
As at the date of incorporation, our Company had a registered capital of RMB1,000,000.
Please refer to the sections headed “History, Development and Corporate Structure —
Establishment and Development of our Company” and “History, Development and Corporate Structure
— Pre-IPO Investments” of this prospectus for details of the alteration in our share capital within the
two years immediately preceding the date of this prospectus.
3. Resolutions of our Shareholders
Pursuant to an Extraordinary Shareholders’ Meeting held on 31 July 2025, our Shareholders
resolved to approve, among other things, the following:
(a) immediately upon listing, the ordinary shares of our Company will be split on a
one-for-eighty basis, and the nominal value of the shares will be changed from RMB1.0000
each to RMB0.0125 each;
(b) the issue of H Shares with a nominal value of RMB0.0125 each and such H Shares be listed
on the Stock Exchange;
(c) approving and adopting the Articles of Association, which shall only become effective from
the Listing Date, and authorising the Board or any other person authorised by the Board to
amend the Articles of Association according to applicable laws and regulations as well as
comments and requirements from relevant governmental authorities and regulatory
authorities; and
(d) approving the Board and its authorised persons to handle all matters relating to, among other
things, the issue and listing of H Shares on the Stock Exchange.
4. Changes in share capital of subsidiaries
Our material operating subsidiaries are listed in “History, Development and Corporate Structure”
in this prospectus and all of our subsidiaries are listed in Note 15 under the Accountant’s Report set out
in Appendix I to this prospectus. Save for the subsidiaries mentioned in Appendix I to this prospectus,
our Company has no other subsidiaries.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 408 ---
Save as disclosed below, there has been no other alteration in the share capital of any of the
subsidiaries in our Company within the two years immediately preceding the date of this prospectus:
Zhejiang Haiqing Zhiyuan Technology Co., Ltd. * (ʮ̡ )
Zhejiang Haiqing Zhiyuan Technology Co., Ltd.* (ʮ̡ ) was established
as a limited liability company under the laws of the PRC on 26 June 2024 with a registered share
capital of RMB10 million, which was wholly-owned by our Company.
Hongkong HQVT Technology Limited (
ʮ̡ )
Hongkong HQVT Technology Limited (ʮ̡ ) was incorporated as a
company with limited liability under the laws of Hong Kong on 2 September 2025 with an issued share
capital of HK$1 million, which was wholly-owned by our Company.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of material contracts
The following contracts (not being contracts in the ordinary course of business) have been entered
into by members of our Group within two years preceding the date of this prospectus:
(a) the capital increase agreement ( ᄣ༟՘ᙄ) dated 18 October 2024 entered into among our
Company, Jinhua Jinlan Sunshine Strategy Venture Capital Partnership (Limited
Partnership)* (ᚆජΈᗱଫ௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Jinlan Sunshine ”),
Beward Invest Limited* (׸( ଉέ)ʮ̡)( “ Beward ”), Shenzhen Langke
Investment Co., Ltd.* (ʮ̡ )( “ Langke Investment ”), Mr. Zhou, Mr.
Chen Yonggang, Mr. Xia Dong, Zhongcheng Tianying LP, Zhongzheng Tianying LP,
Zhongzhi Tianying LP, Shenzhen Taolue New Energy Equity Investment Fund Partnership
Enterprise (Limited Partnership)* (ΥྫΆุ (Υྫ))
(“Taolue New Energy ”), Shenzhen Kaiying No. 9 Venture Capital Partnership (Limited
Partnership)* (ɘ໮௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Kaiying No. 9 ”), Shenzhen
Kaiying No. 8 Venture Capital Partnership (Limited Partnership)* (ɞ໮௴ุҳ༟Υ
ྫΆุ(Υྫ)) (“ Kaiying No. 8 ”), Shenzhen HTI Venture Capital Co., Ltd.* ( ଉέ̹৷
ʮ̡ )( “ Gaoxintou ”), Chengdu Shengao Investment Zhongxiaodan
Entrepreneurship Equity Investment Fund Partnership Enterprise (Limited Partnership)* ( ϓ
ΥྫΆุ (Υྫ)) (“ Chengdu Zhongxiaodan ”),
Shenzhen Shenrong Ruihe Venture Capital Partnership (Limited Partnership)* ( ଉέଉႂ๿
Υ௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Shenrong Ruihe ”), Shenzhen City Talent Innovation
Venture II Equity Investment Fund Partnership (Limited Partnership)* ( ଉέ̹ɛʑ௴อ௴ุ
ΥྫΆุ (Υྫ)) (“ Rencai No. 2 ”), Shenzhen Xiaohe Investment
Partnership (Limited Partnership)* ( ଉέ̹ʃͫ௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Xiaohe
Investment LP ”), Shenzhen Taolue Xinwang Venture Capital Partnership Enterprise
(Limited Partnership)* (௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Taolue Xinwang ”),
Shenzhen Kaiying No. 10 Venture Capital Partnership Enterprise (Limited Partnership)* ( ଉ
ɤ໮௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Kaiying No. 10 ”) and Shenzhen Fuquan No. 1
Investment Partnership Enterprise (Limited Partnership)* (ఠ໮ҳ༟ΥྫΆุ (ࠢ
Υྫ)) (“ Fuquan No. 1 ”), in respect of the subscription of RMB504,461 of the registered
capital of our Company by Jinlan Sunshine for a consideration of RMB60.0 million;
(b) the shareholders agreement dated 18 October 2024 entered into among our Company, Jinlan
Sunshine, Beward, Langke Investment, Mr. Zhou, Mr. Chen Yonggang, Mr. Xia Dong,
Zhongcheng Tianying LP, Zhongzheng Tianying LP, Zhongzhi Tianying LP, Taolue New
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 409 ---
Energy, Kaiying No. 9, Kaiying No. 8, Gaoxintou, Chengdu Zhongxiaodan, Shenrong Ruihe,
Rencai No. 2, Xiaohe Investment LP, Taolue Xinwang, Kaiying No. 10 and Fuquan No. 1,
pursuant to which certain shareholder rights were agreed among the parties;
(c) the capital increase agreement ( ᄣ༟՘ᙄ) dated 31 December 2024 entered into among our
Company, Shenzhen Panhui Investment Development Co., Ltd.* (ࠢ
ʮ̡)( “ Panhui Investment ”), Beward, Langke Investment, Mr. Zhou, Mr. Chen Yonggang,
Mr. Xia Dong, Zhongcheng Tianying LP, Zhongzheng Tianying LP, Zhongzhi Tianying LP,
Taolue New Energy, Kaiying No. 9, Kaiying No. 8, Gaoxintou, Chengdu Zhongxiaodan,
Shenrong Ruihe, Rencai No. 2, Xiaohe Investment LP, Taolue Xinwang, Kaiying No. 10,
Fuquan No. 1 and Jinlan Sunshine, in respect of the subscription of RMB84,077 of the
registered capital of our Company by Panhui Investment for a consideration of RMB10.0
million;
(d) the shareholders agreement dated 31 December 2024 entered into among our Company,
Panhui Investment, Beward, Langke Investment, Mr. Zhou, Mr. Chen Yonggang, Mr. Xia
Dong, Zhongcheng Tianying LP, Zhongzheng Tianying LP, Zhongzhi Tianying LP, Taolue
New Energy, Kaiying No. 9, Kaiying No. 8, Gaoxintou, Chengdu Zhongxiaodan, Shenrong
Ruihe, Rencai No. 2, Xiaohe Investment LP, Taolue Xinwang, Kaiying No. 10, Fuquan No. 1
and Jinlan Sunshine, pursuant to which certain shareholder rights were agreed among the
parties;
(e) a capital increase agreement dated 18 July 2025 entered into among our Company, Shanghai
No. 9 Private Investment Fund Partnership Enterprise (Limited Partnership)* (੻ɘ໮
ΥྫΆุ (Υྫ)) (“ Zhide No. 9 ”), Beward, Langke Investment, Mr. Zhou,
Mr. Chen Yonggang, Mr. Xia Dong, Zhongcheng Tianying LP, Zhongzheng Tianying LP,
Zhongzhi Tianying LP, Taolue New Energy, Kaiying No. 9, Kaiying No. 8, Gaoxintou,
Chengdu Zhongxiaodan, Shenrong Ruihe, Rencai No. 2, Xiaohe Investment LP, Taolue
Xinwang, Kaiying No. 10, Fuquan No. 1, Jinlan Sunshine, Panhui Investment and Hainan
Kezhihua Digital Technology Co., Ltd.* (ʮ̡ )( “ Kezhihua ”), in
respect of the subscription of RMB121,311 of the registered capital of our Company by
Zhide No. 9 for a consideration of RMB50.0 million;
(f) the shareholders agreement dated 18 July 2025 entered into among our Company, Zhide No.
9, Beward, Langke Investment, Mr. Zhou, Mr. Chen Yonggang, Mr. Xia Dong, Zhongcheng
Tianying LP, Zhongzheng Tianying LP, Zhongzhi Tianying LP, Taolue New Energy, Kaiying
No. 9, Kaiying No. 8, Gaoxintou, Chengdu Zhongxiaodan, Shenrong Ruihe, Rencai No. 2,
Xiaohe Investment LP, Taolue Xinwang, Kaiying No. 10, Fuquan No. 1, Jinlan Sunshine,
Panhui Investment and Hainan Kezhihua, pursuant to which certain shareholder rights were
agreed among the parties;
(g) the Deed of Indemnity;
(h) the Deed of Non-competition; and
(i) the Hong Kong Underwriting Agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 410 ---
2. Intellectual property rights
i. Trademark(s)
As at the Latest Practicable Date, our Group had registered the following trademark(s) which, in
the opinion of our Directors, are material to our business and are utilised in Multispectral AI Perception
Terminals, Multispectral AI Large Model Services, Multispectral AI Modules and Other AI Vision
Modules:
No. Trademark
Place of
Registration Registered Owner Class
Registration
Number Registration Date Expiry Date
1.
 PRC Our Company 9 19024277 7 March 2017 6 March 2027
2.
 PRC Our Company 35 22645363 14 February 2018 13 February 2028
3.
 PRC Our Company 35 68596320 14 June 2023 13 June 2033
4.
 PRC Our Company 9 68596312 14 June 2023 13 June 2033
5.
 PRC Our Company 35 68596322 14 June 2023 13 June 2033
6.
 PRC Our Company 35 58445295 14 February 2022 13 February 2032
7.
 PRC Our Company 9 58469954 14 February 2022 13 February 2032
8.
 PRC Our Company 42 64013768 7 October 2022 6 October 2032
9.
 PRC Our Company 35 63997234 7 October 2022 6 October 2032
10.
 PRC Our Company 9 64012381 7 October 2022 6 October 2032
11.
 PRC Our Company 35 64012412 7 October 2022 6 October 2032
12.
 PRC Our Company 42 64003515 14 October 2022 13 October 2032
13.
 PRC Our Company 9 64007738 14 October 2022 13 October 2032
14.
 PRC Our Company 9 68581465 14 June 2023 13 June 2033
15.
 PRC Our Company 42 68586712 14 June 2023 13 June 2033
16.
 PRC Our Company 42 68592678 14 June 2023 13 June 2033
17.
 Hong
Kong
Our Company 16, 42 307017273 3 September 2025 2 September 2035
18.
 Hong
Kong
Our Company 16, 42 307017282 3 September 2025 2 September 2035
19.
 Hong
Kong
Our Company 16, 42 307017291 3 September 2025 2 September 2035
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 411 ---
ii. Copyright(s)
As at the Latest Practicable Date, our Group had registered the following software copyright(s)
which, in the opinion of our Directors, are material to our business:
No. Copyright Version
Place of
Application Registration Number
First Publication
Date/Registration Date Applicable Product
1. Face surveillance management
system ( ɛᑕ̺છ၍ଣӻ୕ ) .
V1.0 PRC 2017SR193338 22 March 2017 Multispectral AI
Large Model
Services
2. Video structuring management
system ( ൖ᎖ഐ࿴ʷ၍ଣӻ
୕) ................
V1.0 PRC 2018SR194015 22 September 2017 Multispectral AI
Large Model
Services
3. Multi-channel face snapshot
comparison server software
(ਕኜழ
΁) ................
V1.0 PRC 2018SR1036613 28 June 2018 Other AI Vision
Modules
4. High-definition intelligent
analysis system ( ৷૶౽ঐʱ
ӻ୕) .............
V1.0 PRC 2018SR1074194 1 August 2018 Other AI Vision
Modules
5. People and vehicles cloud
comprehensive management
system software ( ɛԓථၝΥ
၍ଣӻ୕ழ΁ ) .........
V1.0 PRC 2018SR1070808 1 August 2018 Multispectral AI
Large Model
Services
6. Thermal imaging dual-light
temperature measurement
camera system ( ᆠϓ྅ᕐΈ
಻๝ᙲ྅ዚӻ䕠 ) ........
V1.0 PRC 2021SR0632943 9 October 2020 Multispectral AI
Perception
Terminals
7. AI algorithm computing power
and scenario model
application control software
(AIᏐ͜
છՓழ΁) ............
V1.0 PRC 2022SR0354989 16 March 2022 Multispectral AI
Modules
8. Industrial thermal imaging
embedded software ( ʈุᆠ
ϓ྅లɝόழ΁ ) ........
V1.0 PRC 2022SR0561132 1 January 2022 Multispectral AI
Modules
9. IVMS-6800 management system
(IVMS-6800 ၍ଣӻ୕).....
V1.0 PRC 2022SR0692448 1 March 2022 Multispectral AI
Large Model
Services
10. Multi-spectrum NVR mobile
software ( εΈᗅNVR˓ዚ၌
ழ΁)...............
V1.0 PRC 2022SR0786912 1 January 2022 Multispectral AI
Perception
Terminals
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 412 ---
No. Copyright Version
Place of
Application Registration Number
First Publication
Date/Registration Date Applicable Product
11. Multi-spectrum physical
perception management cloud
platform (၍
ଣථ̨̻) ............
V1.0 PRC 2022SR1516478 15 August 2022 Multispectral AI
Large Model
Services
12. AI security large model service
system (AIਕӻ
୕) ................
V1.0 PRC 2024SR0208325 6 September 2023 Multispectral AI
Large Model
Services
13. Intelligent access control
attendance management cloud
platform (ຫϽා၍ଣ
ථ̨̻) .............
V1.0 PRC 2024SR0155853 2 June 2023 Multispectral AI
Large Model
Services
14. F8000 comprehensive access
control management system
(F8000ຫ၍ଣӻ୕ ) ..
V1.0 PRC 2024SR1132116 2 June 2024 Multispectral AI
Large Model
Services
15. Xiaoyuan Dazhi APP ( ʃʩɽ౽
APP) ...............
V1.0 PRC 2024SR1308935 8 July 2024 Multispectral AI
Perception
Terminals
16. Park safety protection system
(෤ਜτΌԣᇍӻ୕ ) ......
V1.0 PRC 2025SR0452423 31 May 2024 Multispectral AI
Large Model
Services
iii. Patent(s)
As at the Latest Practicable Date, our Group had registered the following patent(s) which, in the
opinion of our Directors, are material to our business:
No. Patent Name Type Patentee
Place of
Registration Patent Number Application Date Expiry Date Applicable Product
1. A face information
collection method
based on camera
face recognition ( ɓ
ᙲ྅ዚɛᑕ
ϗ
ج).....
Invention Our Company PRC 2017105577080 10 July 2017 9 July 2037 Other AI Vision
Modules
2. Image recognition
method, device,
equipment, medium
and product ( ྡ྅ᗆ
eༀໄeண
ۜ) .
Invention Our Company PRC 2021108678836 30 July 2021 29 July 2041 Multispectral AI
Large Model
Services
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 413 ---
No. Patent Name Type Patentee
Place of
Registration Patent Number Application Date Expiry Date Applicable Product
3. Target recognition
method, device,
equipment and
storage medium ( ͦ
eༀໄ
eண௪ʿπᎷʧሯ )
Invention Our Company PRC 2022100074279 6 January 2022 5 January 2042 Other AI Vision
Modules
4. A children face
recognition method
and system ( ɓ၇Յ
ʿ
ӻ୕) .......
Invention Our Company PRC 2021106982259 23 June 2021 22 June 2041 Multispectral AI
Modules
5. Handwashing action
detection method,
model training
method, device and
electronic
equipment (˓ਗ
ۨ
eༀໄʿ
ཥɿண௪) .....
Invention Our Company PRC 2022100515676 18 January 2022 17 January 2042 Other AI Vision
Modules
6. A method and system
for high-altitude
falling object
recognition ( ɓ၇৷
ʿ
ӻ୕) .......
Invention Our Company PRC 2021104702639 28 April 2021 27 April 2041 Multispectral AI
Modules
7. Coal mine personnel
behaviour detection
method, equipment
and storage medium
(Ꮸ಻
eண௪ʿπᎷ
ʧሯ) .......
Invention Our Company PRC 2022100120934 7 January 2022 6 January 2042 Multispectral AI
Perception
Terminals
8. Face recognition
method, device,
recognition terminal
and storage medium
(e
ༀໄeᗆй୞၌ʿ
πᎷʧሯ) .....
Invention Our Company PRC 202210119656X 9 February 2022 8 February 2042 Multispectral AI
Modules
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 414 ---
No. Patent Name Type Patentee
Place of
Registration Patent Number Application Date Expiry Date Applicable Product
9. Training method for
panoramic
segmentation model,
panoramic
segmentation
method and device
(৅
eΌ౻ʱ௲
ʿༀໄ ) ....
Invention Our Company PRC 2022100465075 17 January 2022 16 January 2042 Multispectral AI
Perception
Terminals
10. Flame detection
method and flame
detection equipment
(ʿ˦
ೋᏨ಻ண௪ ) ...
Invention Our Company PRC 2022102744148 21 March 2022 20 March 2042 Multispectral AI
Perception
Terminals
11. Test method and
device for face
recognition
equipment ( ɛᑕᗆ
ج
ձༀໄ) .....
Invention Our Company PRC 2021106393324 8 June 2021 7 June 2041 Multispectral AI
Modules
12. Image acquisition
method, device,
equipment and
storage medium ( ྡ
eༀໄ
eண௪ʿπᎷʧሯ )
Invention Our Company PRC 2022102490033 15 March 2022 14 March 2042 Multispectral AI
Modules
13. Target recognition
method and device
(ʿༀ
ໄ) ........
Invention Our Company PRC 2022102665555 18 March 2022 17 March 2042 Multispectral AI
Perception
Terminals
14. Thermal imaging data
processing method,
device, thermal
imaging
photographic
equipment and
storage medium ( ᆠ
ج
eༀໄeᆠϓ྅ᙲ
ᅂண௪ʿπᎷʧሯ )
Invention Our Company PRC 2022103359010 1 April 2022 31 March 2042 Multispectral AI
Perception
Terminals
15. Multi-target pedestrian
trajectory prediction
model training
method, prediction
method and device
(༦ཫ
e
ʿༀໄ ) .
Invention Our Company PRC 2022102440265 14 March 2022 13 March 2042 Multispectral AI
Perception
Terminals
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 415 ---
No. Patent Name Type Patentee
Place of
Registration Patent Number Application Date Expiry Date Applicable Product
16. Image processing
method, device,
equipment and
system ( ྡ྅ஈଣ˙
eༀໄeண௪ʿ
ӻ୕) .......
Invention Our Company PRC 2022104132771 20 April 2022 19 April 2042 Other AI Vision
Modules
17. Human eye state
detection method,
device, electronic
equipment and
storage medium ( ɛ
e
ༀໄeཥɿண௪ʿ
πᎷʧሯ) ....
Invention Our Company PRC 2022104129124 20 April 2022 19 April 2042 Multispectral AI
Modules
18. Fill light control
method, device,
equipment and
storage medium for
face recognition
equipment ( ɛᑕᗆ
йண௪໾ΈછՓ˙
eༀໄeண௪ʿ
πᎷʧሯ) ....
Invention Our Company PRC 2022105001429 10 May 2022 9 May 2042 Multispectral AI
Perception
Terminals
19. User facial expression
recognition method,
device and
equipment (ࠦ
e
ༀໄձண௪ ) ...
Invention Our Company PRC 2022105414313 19 May 2022 18 May 2042 Multispectral AI
Modules
20. Image fusion
processing method,
device, equipment
and storage medium
(ج
eༀໄeண௪ʿπ
Ꮇʧሯ) .....
Invention Our Company PRC 2022106180144 2 June 2022 1 June 2042 Multispectral AI
Modules
21. Fire detection method
and related
equipment ( ˦ӨᏨ
ᗫண௪ )
Invention Our Company PRC 2022109297501 4 August 2022 3 August 2042 Multispectral AI
Perception
Terminals
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 416 ---
No. Patent Name Type Patentee
Place of
Registration Patent Number Application Date Expiry Date Applicable Product
22. Method, device,
equipment, medium
and programme
product for
identifying artefacts
in thermal imaging
(ᗆ
eༀໄeண
௪eʧሯʿ೻ҏପ
ۜ)........
Invention Our Company PRC 2022110365764 29 August 2022 28 August 2042 Multispectral AI
Perception
Terminals
23. Handwashing guidance
method, device and
system based on
thermal imaging
(˓
eༀໄձ
ӻ୕) .......
Invention Our Company PRC 2022109135530 1 August 2022 31 July 2042 Other AI Vision
Modules
24. Three-dimensional
animation character
model generation
method and device
(ۨ
ʿༀໄ ) .
Invention Our Company PRC 2021115832867 22 December 2021 21 December 2041 Multispectral AI
Modules
25. Method for repelling
target object,
controller and
aiming device ( ɓ၇
ج
eછՓኜձ်๟ண
௪) ........
Invention Our Company PRC 2022104141893 20 April 2022 19 April 2042 Other AI Vision
Modules
26. Living face
recognition method
based on colour
image and
near-infrared image
(ڐ
᜗ɛ
ج) ...
Invention Our Company PRC 2021100535548 15 January 2021 14 January 2041 Multispectral AI
Perception
Terminals
27. A camera and face
information
collection method
based on camera
face recognition ( ɓ
ᙲ
ɛ
ج) .
Invention Our Company PRC 2021104381197 10 July 2017 9 July 2037 Multispectral AI
Large Model
Services
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-10 –


--- page 417 ---
No. Patent Name Type Patentee
Place of
Registration Patent Number Application Date Expiry Date Applicable Product
28. Cross-age face
recognition method
and device ( ༨ϋᙧ
ʿண
௪) ........
Invention Our Company PRC 2021104302176 21 April 2021 20 April 2041 Multispectral AI
Perception
Terminals
29. Human body tracking
method and related
equipment ( ɛ᜗৛
ᗫண௪ )
Invention Our Company PRC 2022102783918 21 March 2022 20 March 2042 Multispectral AI
Perception
Terminals
30. Image processing
method, device and
equipment ( ྡ྅ஈ
eༀໄʿண
௪) ........
Invention Our Company PRC 2022105447340 19 May 2022 18 May 2042 Multispectral AI
Modules
31. Image acquisition
device and
panoramic image
acquisition method
(ྡ྅મණༀໄձΌ
ج) .
Invention Our Company PRC 202210284657X 22 March 2022 21 March 2042 Multispectral AI
Modules
32. Flame Detection
Methods, Systems,
Equipment, and
Storage Media
(eӻ
୕eண௪˸ʿπᎷ
ʧሯ) .......
Invention Our Company PRC 2025110371608 28 July 2025 27 July 2045 Multispectral AI
Perception
Terminals
As at the Latest Practicable Date, our Group had applied for registration of the following patent
which, in the opinion of our Directors, are material to our business:
No. Patent Name for Application Type Applicant
Place of
Application Application Number Application Date Applicable Product
1 Path Planning Method,
Device, Equipment, and
Medium for Autonomous
Driving Systems (Іਗ
e
ༀໄeண௪˸ʿʧሯ )....
Invention Our Company PRC 2024114471206 16 October
2024
Multispectral Large
Model Services
2 A Method for Fabricating a
Dual-Band Uncooled
Infrared Detector (ت
̮ᇞઞ಻ኜႡЪ
ج)............
Invention Our Company PRC 2025113047023 12 September
2025
Multispectral AI
Perception
Terminals
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-11 –


--- page 418 ---
No. Patent Name for Application Type Applicant
Place of
Application Application Number Application Date Applicable Product
3 A Rapid Method for Detecting
Bacterial Species and
Concentrations in Gases
Using Raman Spectroscopy
(ं᜗
ʕ୚ഽ၇ᗳၾўඎҞ஺Ꮸ಻
ج)............
Invention Our Company PRC 2025116265424 7 November
2025
Multispectral AI
Perception
Terminals
iv. Domain name(s)
As at the Latest Practicable Date, our Group has registered the following domain names which, in
the opinion of our Directors, are material to our business:
Domain name Registrant Registration date Expiry date Applicable product
hqvt.com ....... Our Company 6 November
2020
28 October
2027
Multispectral AI Perception Terminals,
Multispectral AI Large Model
Services, Multispectral AI Modules
and Other AI Vision Modules
iotisyun.com ..... Our Company 23 June 2022 23 June 2029 Multispectral AI Perception Terminals,
Multispectral AI Modules and Other
AI Vision Modules
C. FURTHER INFORMATION ABOUT DIRECTORS AND SHAREHOLDERS
1. Disclosure of interests
(a) Interests and short positions of the Directors and the chief executives of our Company in the
shares, underlying shares and debentures of our Company and our associated corporations
As at the date of this prospectus and immediately following completion of the Share Subdivision
and the Global Offering, the interests or short positions of our Directors and the chief executive of our
Company in our Shares, underlying Shares and debentures of our associated corporations, within the
meaning of Part XV of the SFO which will have to be notified to our Company and the Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he
is 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 recorded in the register referred to therein or which will be required to be
notified to us and the Stock Exchange pursuant to the Model Code for Securities Transactions by
Directors of Listed Companies contained in the Listing Rules, will be as follows:
Name
Capacity/
Nature of interest
Number of Shares held/interested
in immediately following
completion of
the Share Subdivision and
the Global Offering
Percentage of
shareholding immediately
following completion of
the Share Subdivision and
the Global Offering
Mr. Zhou ................. Beneficial owner 41,082,080
H Shares (L)
5.31%
Interest in a controlled
corporation (1)
295,680,000
H Shares (L)
38.19%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-12 –


--- page 419 ---
Name
Capacity/
Nature of interest
Number of Shares held/interested
in immediately following
completion of
the Share Subdivision and
the Global Offering
Percentage of
shareholding immediately
following completion of
the Share Subdivision and
the Global Offering
Mr. Chen Yonggang ........... Beneficial owner 23,774,800
H Shares (L)
3.07%
Note:
(1) As at the date of this prospectus, Zhongcheng Tianying LP held 3,301,887 Unlisted Shares, Zhongzheng Tianying LP held
240,000 Unlisted Shares of our Company and Zhongzhi Tianying LP held 154,113 Unlisted Shares of our Company,
accounting for 38.34%, 2.79% and 1.79% of the equity interests in our Company. The general partner of Zhongcheng
Tianying LP, Zhongzheng Tianying LP and Zhongzhi Tianying LP is Mr. Zhou, respectively. Under the SFO, Mr. Zhou is
deemed to be interested in the entire Shares held by each of Zhongcheng Tianying LP, Zhongzheng Tianying LP and
Zhongzhi Tianying LP.
(b) Interests and short positions of substantial shareholders in the Shares and underlying Shares of
our Company
So far as is known to our Directors and taking no account of any Shares which may be taken up
under the Global Offering, the following persons (not being a Director or chief executive of our
Company) will, immediately following the completion of the Share Subdivision and the Global
Offering, have interests or short positions in 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 SFO or, who are, directly or indirectly, interested in 10% or more of the issued voting shares of
any other member of our Group:
Name
Capacity/
Nature of interest
Number of Shares
held/interested in immediately
following completion of
the Share Subdivision and
the Global Offering
Percentage of
shareholding immediately
following completion of
the Share Subdivision and
the Global Offering
Zhongcheng Tianying LP ....... Beneficial owner 264,150,960
H Shares (L)
34.12%
Zhejiang Business Venture ...... Interest in controlled
corporation
102,356,720
H Shares (L)
13.22%
Zheshang Capital ........... Interest in controlled
corporation
102,356,720
H Shares (L)
13.22%
Note:
(1) As at the date of this prospectus, Taolue New Energy held 654,192 Unlisted Shares of our Company, Taolue Xinwang held
120,806 Unlisted Shares of our Company and Jinlan Sunshine held 504,461 Unlisted Shares of our Company. The general
partner of Taolue New Energy, Taolue Xinwang and Jinlan Sunshine is Zhejiang Business Venture Capital Management
(Shenzhen) Co., Ltd. ( एਠ௴ุҳ༟၍ଣ (ଉέ)ʮ̡), respectively. Under the SFO, Zhejiang Business Venture Capital
Management (Shenzhen) Co., Ltd. ( एਠ௴ุҳ༟၍ଣ (ଉέ)ʮ̡) is deemed to be interested in the entire Shares held
by each of Taolue New Energy, Taolue Xinwang and Jinlan Sunshine. The controlling shareholder of Zhejiang Business
Venture Capital Management (Shenzhen) Co., Ltd. ( एਠ௴ุҳ༟၍ଣ (ଉέ)ʮ̡) is Zheshang Venture Capital Co.,
Ltd. (ʮ̡ ). Accordingly, Zheshang Venture Capital Co., Ltd. (ʮ̡ ) is therefore be
deemed or taken to be interested in the Shares in which Zhejiang Business Venture Capital Management (Shenzhen) Co.,
Ltd. ( एਠ௴ุҳ༟၍ଣ (ଉέ)ʮ̡) is interested pursuant to the SFO.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-13 –


--- page 420 ---
2. Particulars of service agreements
Each of our Directors has entered into a service agreement with our Company. The service
contracts may be renewed in accordance with their respective terms, the Articles of Association and the
applicable laws, rules and regulations.
Save as disclosed above, none of our Directors has entered into, or has proposed to enter into, a
service agreement with any member of our Group (other than contracts expiring or determinable by the
employer within one year without the payment of compensation (other than statutory compensation)).
3. Directors’ remuneration
Save as disclosed in the sections headed “Directors and senior management” and “Appendix I —
Accountants’ Report — II. Notes to the historical financial information — 10(a) Directors’ and
Supervisors’ Remuneration and 33(c) Key Management Compensation” for FY2023, FY2024 and
FY2025, none of our Directors received other remunerations of benefits in kind from our Company.
During the Track Record Period, no fees were paid by our Group to any of the Directors or the
five highest paid individuals as an inducement to join our Group or as compensation for loss of office.
4. Fees or commission received
Save as disclosed in this prospectus, none of our Directors or the experts named in the paragraph
headed “D. Other Information — 7. Consents of experts” in this Appendix had received any agency
fees, discounts, commissions, brokerages or other special terms in connection with the issue or sale of
any capital of any member of our Group within the two years preceding the date of this prospectus.
5. Related party transactions
Details of the related party transactions are set out under Note 33 to the Accountants’ Report set
out in Appendix I to this prospectus.
6. Disclaimers
Save as otherwise disclosed in this section:
(a) there are no existing or proposed service contracts (excluding contracts expiring or
determinable by the employer within one year without payment of compensation (other than
statutory compensation)) between our Directors and any members of our Group;
(b) none of our Directors or the experts named in the paragraph headed “D. Other information
— 6. Qualifications of experts” in this Appendix has any direct or indirect interest in the
promotion of, or in any assets which have been, within the 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 our
Group;
(c) none of our Directors or the experts named in the paragraph headed “D. Other information
— 7. Consents of experts” in this Appendix is materially interested in any contract or
arrangement subsisting at the date of this prospectus which is significant in relation to the
business of our Group taken as a whole;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-14 –


--- page 421 ---
(d) none of our Directors or the experts named in the paragraph headed “D. Other information
— 7. Consents of experts” in this Appendix has any shareholding in any member of our
Group or the right (whether legally enforceable or not) to subscribe for or to nominate
persons to subscribe for securities in any member of our Group;
(e) none of our Directors knows of any person (not being a Director or chief executive of our
Company) who will, immediately following completion of the Share Subdivision and the
Global Offering, have any interest in Shares or underlying Shares which would fall to be
disclosed to our Company under the provisions of Divisions 2 and 3 of Part XV of SFO, or
who will be interested, directly or indirectly, in 10% or more of the nominal value of any
class of share capital carrying rights to vote in all circumstances at general meetings of any
other member of our Group;
(f) none of our Directors or chief executive of our Company has any interest or short position in
our Shares, underlying Shares or debentures of our Company or any of the associated
corporations (within the meaning of SFO) which, once our Shares are listed on the Stock
Exchange, will have to be notified to our Company and the Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of SFO (including any interests and short positions which he
will be taken or deemed to have under such provisions of SFO) or which will be required,
pursuant to section 352 of 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
Listing Companies in the Listing Rules, to be notified to our Company and the Stock
Exchange;
(g) so far as is known to our Directors, none of our Directors, their respective close associates
(as defined under the Listing Rules) or Shareholders who are interested in more than 5% of
the issued share capital of our Company has any interests in the top five customers or the
top five suppliers of our Group in each year during the Track Record Period; and
(h) no remuneration or other benefits in kind have been paid by any member of our Group to
any Director since the date of incorporation of our Company, nor are any remuneration or
benefits in kind payable by any member of our Group to any Director in respect of the
current financial year under any arrangement in force as at the Latest Practicable Date.
D. OTHER INFORMATION
1. Tax and other indemnities
Each of our Controlling Shareholders have entered into the Deed of Indemnity in favour of our
Company (for itself and as trustee for each of its present subsidiaries) to provide indemnities, on a joint
and several basis, in connection with, among other things:
(a) any taxation claim and the amount of any and all taxation (including tax penalty, if any)
falling on any member of our Group resulting from or by reference to any income, profits or
gains earned, accrued or received (or deemed to be so earned, accrued or received) as well
as any other claim to which any member of our Group may be subject and payable on or
before the date on which the Global Offering becomes unconditional or any event, act or
omission occurring or deemed to occur on or before such date whether alone or in
conjunction with any other event, act, omission or circumstance whenever occurring and
whether or not such Taxation or Taxation Claim is chargeable against or attributable to any
other person, firm or company;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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(b) all costs (including all legal costs), expenses or other liabilities which any member of our
Group may reasonably incur in connection with:
(i) the investigation, assessment or the contesting of any taxation claim;
(ii) the settlement of any claim under the Deed of Indemnity;
(iii) any legal proceedings in which any member of our Group claims under or in respect of
the Deed of Indemnity and in which judgment is given for any member of our Group;
or
(iv) the enforcement of any such settlement or judgment falling on any member of our
Group;
(c) any undeclared tax, overdue tax and any other form of tax burden (including tax burden
arising from receipt, accumulation or acceptance of income, profit or gain) of any members
of our Group before the date on which the Global Offering becomes unconditional; and
(d) any claim, fine or other form of liability that may arise from breach of any law, regulation
and rule by any members of our Group before the date on which the Global Offering
becomes unconditional.
2. Litigation
Save as disclosed in the section headed “Business — Legal Proceedings” of this prospectus, as at
the Latest Practicable Date, no member of our Group was engaged in any litigation or arbitration of
material importance and no litigation or claim of material importance is known to our Directors to be
pending or threatened against any member of our Group.
3. Joint Sponsors
The Joint Sponsors have made an application on behalf of our Company to the Listing Committee
for the listing of, and permission to deal in, the Shares in issue and to be issued as mentioned herein.
The Joint Sponsors have confirmed to the Stock Exchange that it satisfies the independence test as
stipulated under Rule 3A.07 of the Listing Rules.
Our Company has entered into an agreement with each of the Joint Sponsors, pursuant to which
our Company agreed to pay an aggregate amount of HK$6.4 million to the Joint Sponsors to act as the
Joint Sponsors to our Company for purposes of the Global Offering.
4. Preliminary expenses
Our Company did not incur any material preliminary expenses.
5. Promoter
Our Company has no promoter for the purpose of the Listing Rules.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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6. Qualifications of experts
The following are the respective qualifications of the experts (as defined under the Listing Rules
and the Companies (Winding Up and Miscellaneous Provisions) Ordinance) who have given their
opinions and/or advice which is contained in this prospectus:
Name Qualification
CMBC International Capital Limited A corporation licenced under SFO and permitted to
carry out Type 1 (dealing in securities) and Type 6
(advising on corporate finance) of the regulated
activities as defined under SFO
SPDB International Capital Limited A corporation licenced under SFO and permitted to
carry out Type 1 (dealing in securities) and Type 6
(advising on corporate finance) of the regulated
activities as defined under SFO
Confucius International CPA Limited Certified Public Accountants under the Professional
Accountants Ordinance (Chapter 50 of the Laws of
Hong Kong)
Registered Public Interest Entity Auditor under the
Accounting and Financial Reporting Council
Ordinance (Chapter 588 of the Laws of Hong Kong)
AllBright Law Offices (Shenzhen) Legal advisers to our Company as to PRC law
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Independent industry consultant
AllBright Law Offices (Shanghai) Legal advisers to our Company as to PRC data
compliance law
DeHeng Law Offices Legal advisers as to U.S. export controls and
sanctions
7. Consents of experts
Each of the above experts has given and has not withdrawn their respective consent to the issue of
this prospectus with the inclusion of its report and/or letter and/or summary of valuations and/or legal
opinion (as the case may be) and references to its name included in the form and context in which it
respectively appears.
None of the experts named above has any shareholding interests in our Company or any of our
subsidiaries or the right (whether legally enforceable or not) to subscribe for or to nominate persons to
subscribe for securities in our Company or any of our subsidiaries.
8. Binding effect
This prospectus shall have the effect, if an application is made in pursuance of it, of rendering all
persons concerned bound by all the provisions (other than the penal provisions) of sections 44A and
44B of the Companies (WUMP) Ordinance so far as applicable.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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9. No material adverse change
Save for the expenses expected to be incurred in connection with the Listing, our Directors
confirm that there has been no material adverse change in the financial or trading position or prospects
of our Company or its subsidiaries since 31 December 2025 (being the date to which the latest audited
financial statements of our Group were made up), and there is no event since 31 December 2025 which
would materially affect the information shown in our consolidated financial information included in the
Accountants’ Report set forth in Appendix I to this prospectus.
10. Taxation of holders of H Shares
The sale, purchase and transfer of H Shares registered with our Hong Kong branch register of
members will be subject to Hong Kong stamp duty. The current rate charged on each of the purchaser
and seller is 0.1% of the consideration of or, if higher, of the fair value of our Shares being sold or
transferred.
11. Miscellaneous
(a) Save as disclosed in this prospectus, within the two years immediately preceding the date of
this prospectus:
(i) no share or loan capital of our Company or any of the subsidiaries has been issued,
agreed to be issued or is proposed to be issued fully or partly paid either for cash or
for a consideration than cash;
(ii) no commissions, discounts, brokerages or other special terms have been granted or
agreed to be granted in connection with the issue or sale of any share or loan capital of
our Company or any of the subsidiaries and no commission has been paid or is payable
in connection with the issue or sale of any capital of our Company or any of the
subsidiaries;
(iii) no commission has been paid or is payable for subscribing or agreeing to subscribe, or
procuring or agreeing to procure subscriptions, for any shares or debenture of any of
our Company or the subsidiaries;
(iv) no founder, management or deferred shares or any debentures of our Company have
been issued or agreed to be issued; and
(v) no share or loan capital of our Company or any of the subsidiaries is under option or is
agreed conditionally or unconditionally to be put under option;
(b) Save as disclosed in the section headed “Underwriting” in this prospectus, none of the
parties listed in the paragraph headed “Consents of experts” in this Appendix is interested
legally or beneficially in any securities of our Company or any of its subsidiaries; or has any
right or option (whether legally enforceable or not) to subscribe for or to nominate persons
to subscribe for any securities of our Company or any of its subsidiaries;
(c) There has not been any interruption in the business of our Group which may have or have
had a significant effect on the financial position of our Group in the 12 months immediately
preceding the date of this prospectus;
(d) No company within our Group is presently listed on any stock exchange or traded on any
trading system;
(e) Our Group has no outstanding convertible debt securities;
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(f) Our Company is a joint stock limited company and is subject to the PRC Company Law;
(g) Our Company has adopted a code of conduct regarding Directors’ securities transactions on
terms as required under the Model Code for Securities Transactions by Directors of Listed
Issuers as set out in Appendix C3 to the Hong Kong Listing Rules; and
(h) The English text of this prospectus shall prevail over the Chinese text.
12. Bilingual Prospectus
The English language and Chinese language versions of this prospectus are being published
separately in reliance upon the exemption provided in section 4 of the Companies (Exemption of
Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of
Hong Kong).
13. Financial Adviser
China Harbour International Capital Limited has been appointed by our Company as the financial
adviser to our Company in respect of the Listing. China Harbour International Capital Limited is a
corporation licensed under the SFO to conduct Type 6 (advising on corporate finance) regulated
activities under the SFO.
The fee (the “ Service Fee ”) payable by us for the services of our Financial Adviser is HK$2.2
million. This Service Fee was negotiated between our Company and our Financial Adviser and was
determined after comprehensive consideration of factors, such as the scope of services, the level of
responsibility of the personnel involved, the duration of services, and the manpower and time costs
expected to be incurred in providing the services. The service period commenced on the date of the
service agreements to six months after the Listing. During the service period, our Financial Adviser will
(a) advise us on shareholding structure restructuring, and assist us in setting up relevant structure; (b)
provide us guidance prior to the Listing, recommend and coordinate with professional parties involved
in the Listing; (c) assist our Company in communicating with investors prior to the Listing regarding
financing matters; and (d) provide advice to our Company concerning circulation of our Shares
following the Listing.
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DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were, among other documents:
(a) the written consents referred to in “Appendix VI — Statutory and General Information — D.
Other Information — 7. Consents of Experts;” and
(b) a copy of the material contract referred to in “Appendix VI — Statutory and General
Information — B. Further Information about Our Business — 1. Summary of Material
Contracts.”
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the Stock Exchange’s website
at www.hkexnews.hk
and our Company’s website at www.hqvt.com during a period of 14 days from
the date of this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report and the report on the unaudited pro forma financial information
prepared by Confucius International CPA Limited, the texts of which are set out in
Appendices I and II to this prospectus;
(c) the audited consolidated financial statements of our Company as have been prepared for the
companies comprising our Group for FY2023, FY2024 and FY2025;
(d) the PRC legal opinion issued by AllBright Law Offices (Shenzhen), our PRC Legal Advisers
in respect of the general matters and property interests of our Company in the PRC;
(e) the legal memorandum issued by AllBright Law Offices (Shanghai), the legal advisers to our
Company as to PRC data compliance law in respect of the data compliance of our Company
in the PRC;
(f) the legal memorandum issued by DeHeng Law Offices, our legal advisers as to U.S. export
controls and sanctions;
(g) the market research report prepared by Frost & Sullivan on the overview of the industry in
which our Group operates;
(h) the material contracts referred to the section headed “Statutory and General information —
B. Further Information about Our business — 1. Summary of Material Contracts” in
Appendix VI to this prospectus;
(i) the written consents referred to in the section headed “Statutory and General Information —
D. Other Information — 7. Consents of Experts” in Appendix VI to this prospectus;
(j) the service agreements with each of our Directors referred to in the paragraph headed
“Statutory and General Information — C. Further Information about Directors and
Shareholders — 2. Particulars of Service Agreements” in Appendix VI to this prospectus;
and
(k) PRC Company Law, the PRC Securities Law, the Guidelines for Articles of Association of
Listed Companies, the Overseas Listing Trial Measures together with their unofficial English
translation.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
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Shenzhen HQVT Technology Co., Ltd.
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