--- page 1 ---
Zhongmiao Holdings (Qingdao) Co., Ltd.
眾淼控股 （ 青島 ） 股份有限公司
Zhongmiao Holdings (Qingdao) Co., Ltd.
眾淼控股 （ 青島 ） 股份有限公司
GLOBAL
OFFERING
专业价值PING AN OF CHINA CAPITAL (HONG KONG)
专业 价值 PING AN OF CHINA CAPITAL (HONG KONG)
专业 价值 PA SECURITIES (HK)
Joint Sponsors (in alphabetical order)
Overall Coordinators, Joint Global Coordinators  (in alphabetical order)
(in alphabetical order)
Joint Bookrunners and Joint Lead Managers  (in alphabetical order)
专业 价值 PA SECURITIES (HK)
Zhongmiao Holdings (Qingdao) Co., Ltd.
眾淼控股 （ 青島 ） 股份有限公司
(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock Code : 1471


--- page 2 ---
IMPORTANT: If you are in any doubt about any of the contents of this p rospectus, you should seek independent professional advice.
Zhongmiao Holdings (Qingdao) Co., Ltd.
眾 淼 控 股（ 青 島 ）股 份 有 限 公 司
(A joint stock company incorporated in the Peopl e’s Republic of China with limited liability)
GLOBAL OFFERING
N u m b e ro fO f f e rS h a r e su n d e r
the Global Offering
: 35,300,000 H Shares (subject to the Over-allotment
Option)
Number of Hong Kong Offer Shares : 3,530,000 H Shares (subject to reallocation)
Number of International Offer Shares : 31,770,000 H Shares (subject to reallocation and
the Over-allotment Option)
Maximum Offer Price : HK$10.2 per H Share plus brokerage of 1.0%, SFC
transaction levy of 0.0027%, Stock Exchange
trading fee of 0.00565% and AFRC transaction levy
of 0.00015% (payable in full on application in Hong
Kong dollars and subject to refund)
Nominal value : RMB1.00 per H Share
Stock Code : 1471
Joint Sponsors
(in alphabetical order)
Overall Coordinators, Joint Global Coordinators
(in alphabetical order)
PA SECURITIES (HK)
Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
PA SECURITIES (HK)
Joint Lead Managers
(in alphabetical order)
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 e xpressly disclaim any liability whatsoever for any loss howsoever arisin g from or in reliance upon the whole or any
part of the contents of this prospectus.
A copy of this prospectus, having attached thereto t he documents specified in ‘‘Documents Delivered to the Registrar of Companies and Documents on Di splay’’ in Appendix VII 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 P rovisions) Ordinance (Chapter 32
of the Laws of Hong Kong). The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any other
documents referred to above.
The Offer Price is expected to be determined by agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters) and our C ompany on the Price Determination
Date, which is expected to be on or about Friday, 2 August 2024 and, in any event, not later than 12 : 00 noon on Friday, 2 August 2024. The Offer Price will no t be more than HK$10.2 per H
Share and is expected to be not less than HK$7.0 per H Share, unless otherwise announced.
The Overall Coordinators (for themselves and on behalf of the Underwriters), may, with our Company’s consent, reduce the number of Offer Shares being offered under the Global Offering
and/or the indicative Offer Price range below as stated in this prospectus at any time on or prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In
such a case, an announcement will be published on the websites of the Stock Exchange at www.hkexnews.hk and our Company at www.haierbx.net not later than the morning of the day which is
the last day for lodging applications under the Hong Kong Public Offering. Details of the arrangement will then be announced by us as soon as practicabl e. For more details, please refer to the
sections headed ‘‘Structure of the Global Offering’’ and ‘‘How to Apply for Hong Kong Offer Shares’’ in this prospectus.
We are incorporated, and substantially all of our businesses are located, in the PRC. Potential investors should be aware of the differences in the leg al, economic and financial systems between
the mainland of the PRC and Hong Kong and that there are different risk factor s relating to investment in PRC-incorporated business. Potential invest o r ss h o u l da l s ob ea w a r et h a tt h e
regulatory framework in the PRC is different from the regulatory framework in Hong Kong and should take into consideration the different market natur e of the H Shares. Such differences and
risk factors are set out in ‘‘Risk Factors’’, ‘‘Summary of Principal Laws and Regulations’’ in Appendix IV and ‘‘Summary of Articles of Association’’ in Appendix V.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall Coordinators (for t h e m s e l v e sa n do nb e h a l fo ft h e
Hong Kong Underwriters) if certain grounds arise prior to 8 : 00 a.m. on the Listing Date. Such grounds are set out in ‘‘Underwriting — Hong Kong Public Of fering — Hong Kong Public
Offering — Grounds for Termination’’.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws of the United States and may not be off ered, sold, pledged or transferred
within the United States. The Offer Shares may be offered, sold or delivered outside the United States in offshore transactions in accordance with Reg ulation S under the U.S. Securities Act.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering pursuant to Rule 12.11 of the Listing Rules. We will not provid e 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 and our website at www.haierbx.net . If you require a printed copy of this prospectus, you may
download and print from the website addresses above.
29 July 2024
IMPORTANT


--- page 3 ---
IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering. We
will not provide 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.haierbx.net. If you require a printed copy of this prospectus, you may download and print
from the website addresses above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online via the HK eIPO White Form service in the IPO App (which can be
downloaded by searching ‘‘ IPO App ’’ in App Store or Google Play or downloaded at
www.hkeipo.hk/IPOApp or www.tricorglobal.com/IPOApp )o ra t www.hkeipo.hk ;o r
(2) apply through the HKSCC EIPO channel to electronically cause HKSCC Nominees to
apply on your behalf, including by:
i. instructing your broker or custodian who is a HKSCC Participant or a HKSCC
Custodian Participant to give electronic application instructions via CCASS
terminals to apply for the Hong Kong Offer Shares on your behalf; or
ii. apply through the HKSCC EIPO channel to electronically 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 Hong Kong Offer Shares on your behalf.
The contents of the electronic version of th is prospectus are identical to the printed
document as registered with the Registrar of Companies in Hong Kong pursuant to Section 342C
of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this prospectus i s available online at the website addresses above.
For more details on the procedures through which you can apply for the Hong Kong Offer
Shares electronically, please refer to the sect ion headed ‘‘How to Apply for Hong Kong Offer
Shares’’ in this prospectus.
IMPORTANT
–i–


--- page 4 ---
Your application through the HK eIPO White Form service or the HKSCC EIPO channel 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. If you are applying through the
HK eIPO White Form service, you may refer to the table below for the amount payable for the
number of Shares you have selected. You must pay the respective maximum amount payable on
application in full upon application for Hong Kong Offer Shares. If you are applying through the
HKSCC EIPO channel, you are required to pre-fund your application based on the amount specified
by your broker or custodian, as determined based on the applicable laws and regulations in Hong
Kong.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
500 5,151.44 7,000 72,120.07 50 ,000 515,143.36 700,000 7,212,006.90
1,000 10,302.88 8,000 82,422.93 60,000 618,172.02 800,000 8,242,293.60
1,500 15,454.29 9,000 92,725.81 70,000 721,200.69 900,000 9,272,580.30
2,000 20,605.73 10,000 103,028.66 80,000 824,229.35 1,000,000 10,302,867.00
2,500 25,757.17 15,000 154,543.00 90,000 927,258.04 1,200,000 12,363,440.40
3,000 30,908.61 20,000 206,057.35 10 0,000 1,030,286.70 1,400,000 14,424,013.80
3,500 36,060.03 25,000 257,571. 68 200,000 2,060,573.40 1,765,000 (1) 18,184,560.25
4,000 41,211.47 30,000 309,086.01 300,000 3,090,860.10
4,500 46,362.90 35,000 360,600.35 400,000 4,121,146.80
5,000 51,514.34 40,000 412,114.68 500,000 5,151,433.50
6,000 61,817.20 45,000 463,629.01 600,000 6,181,720.20
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong
Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is s uccessful, 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 t he application channel of the HK eIPO White Form Service Provider)
while the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will
be paid to the SFC, the Stock Exchange and the AFRC, respectively.
No application for any other number of Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
–i i–


--- page 5 ---
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.haierbx.net and the website of the Stock Exchange at www.hkexnews.hk .
H o n gK o n gP u b l i cO f f e r i n gc o m m e n c e s .......................... 9 : 0 0a . m .o n
Monday, 29 July 2024
Latest time to complete elect ronic applications under
the HK eIPO White Form service through one of the
below ways (2) :
(1) the IPO App , which can be downloaded by searching ‘‘ IPO App ’’
in App Store or Google Play or downloaded at www.hkeipo.hk/IPOApp or
www.tricorglobal.com/IPOApp
(2) the designated website www.hkeipo.hk ................... 1 1 : 3 0a . m .o n
Thursday, 1 August 2024
Application lists open (3) ..................................... 1 1 : 4 5a . m .o n
Thursday, 1 August 2024
Latest time to give electronic application instructions to
HKSCC (4) ............................................1 2 : 0 0n o o no n
Thursday, 1 August 2024
Latest time to complete payment of HK eIPO White
Form applications by effecting Internet banking
t r a n s f e r ( s )o rP P Sp a y m e n tt r a n s f e r ( s ) ........................1 2 : 0 0n o o no n
Thursday, 1 August 2024
If you are instructing your broker or cus todian who is HKSCC Participant to give
electronic application instructions via FINI to apply for the Hong Kong Offer Shares on
your behalf, you are advised to contact your broker or custodian for the latest time for
giving such instructions which may be different from the latest time as stated above.
Application lists close
(3) ...................................1 2 : 0 0n o o no n
Thursday, 1 August 2024
Expected Price Determination Date (5) ................. a to rb e f o r e1 2 : 0 0n o o no n
Friday, 2 August 2024
EXPECTED TIMETABLE (1)
– iii –


--- page 6 ---
(1) Announcement of:
. the Offer Price;
. the level of applications in the Hong Kong Public Offering;
. the level of indications of interest in the International Offering; and
. the basis of allocation of the Hong Kong Offer Shares
to be published on our website at
www.haierbx.net (6) and
the website of the Stock Exchange at
www.hkexnews.hk (6) ........................... a to rb e f o r e1 1 : 0 0p . m .o n
Monday, 5 August 2024
(2) Results of allocations in the Hong Kong Public
Offering (with successful ap plicants’ identification
document numbers, where appropriate) to be
available through a variety of channels as
described in the section headed ‘‘How to Apply for
Hong Kong Offer Shares — B. Publication of
R e s u l t s ’ ’i nt h i sp r o s p e c t u s ...................... a to rb e f o r e1 1 : 0 0p . m .o n
Monday, 5 August 2024
(3) A full announcement of the Hong Kong Public
Offering containing (1) and (2) above to be
published on the website of the Stock Exchange at
www.hkexnews.hk and our Company’s website at
www.haierbx.net (6) ............................ a to rb e f o r e1 1 : 0 0p . m .o n
Monday, 5 August 2024
Result of allocations in the Hong Kong Public Offering
(with successful applicants’ identification document
numbers, where appropriate) will be available at the
‘‘IPO Results’’ function in the IPO App or at
www.hkeipo.hk/IPOResult or
www.tricor.com.hk/ipo/result w i t ha‘ ‘ s e a r c hb yI D ’ ’
f u n c t i o nf r o m................................... M o n d a y ,5A u g u s t 2024
H Share certificates in respect of wholly or partially
successful applications to be dispatched or deposited
i n t oC C A S So no rb e f o r e(7) ......................... M o n d a y ,5A u g u s t 2024
HK eIPO White Form e-Auto Refund payment
instructions/refund cheques in respect of wholly or
partially unsuccessful app lications pursuant to the
Hong Kong Public Offering to be dispatched on or
before (8)(9) ..................................... T u e s d a y ,6A u g u s t 2024
EXPECTED TIMETABLE (1)
–i v–


--- page 7 ---
Dealings in H Shares on the Stock Exchange expected
t oc o m m e n c ea t .......................................... 9 : 0 0a . m .o n
Tuesday, 6 August 2024
(1) All dates and times refer to Hong Kong local dates and time, except as otherwise stated.
(2) You will not be permitted to s ubmit your application through the IPO App or 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 through the IPO App or the designated website at www.hkeipo.hk and obtained an
application reference number from the IPO App or the designated website before 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/are a tropical cyclone warning signal number 8 or above, a ‘‘black’’ rainstorm warning signal
and/or Extreme Conditions in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on
Thursday, 1 August 2024, the application lists will not open on that day. For more details, please refer to
the section headed ‘‘How to Apply for Hong Kong Offer Shares — E. Severe Weather Arrangement’’ in
this prospectus.
(4) Applicants who apply for the Hong Kong Offer Shares by giving electronic application instructions to
HKSCC via CCASS should refer to the section headed ‘‘How to Apply for Hong Kong Offer Shares — A.
Application for Hong Kong Offer Shares — 2. A pplication Channels’’ in this prospectus.
(5) The Price Determination Date is expected to be on or about Friday, 2 August 2024 and, in any event, not
later than 12 : 00 noon on Friday, 2 August 2024. If, for any reason, the Offer Price is not agreed between
the Overall Coordinators (for themselves and on b ehalf of the Underwriters) and us on or before 12 : 00
noon on Friday, 2 August 2024, the Global Offering will lapse.
(6) None of the websites or any of the information cont ained on the websites forms part of this prospectus.
(7) No temporary documents of title will be issued in re spect of the Offer Shares. H Share certificates for the
Hong Kong Offer Shares will only become valid evidence of title provided that (i) the Global Offering has
become unconditional in all respects; and (ii) neither o f the Underwriting Agreements has been terminated
in accordance with their terms prior to 9 : 00 a.m. on t he Listing Date. Investors who trade H Shares on the
basis of publicly available allocation details prior t o the receipt of H Share certificates or prior to the H
Share certificates becoming valid do so at their own risk.
(8) e-Auto Refund payment instructi on/refund cheques will be issued i n respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering and also in respect of wholly or
partially successful applications in the event that th e final Offer Price is less than the price payable per
Offer Share on application.
(9) Applicants who have applied through the HK eIPO White Form service for 1,000,000 or more Hong Kong
Offer Shares may collect any H Share certificates in person from our H Share Registrar, Tricor Investor
Services Limited at 17/F, Far East Finance Cent re, 16 Harcourt Road, Hong Kong from 9 : 00 a.m. to
1 : 00 p.m. on Tuesday, 6 August 2024 or such other date as notified by us as the date of
dispatch/collection of H Share certificates/e-Au to Refund payment instructions/refund cheques.
Applicants being individuals who are eligible for p ersonal collection may not authorise any other
person to collect on their behalf. Individuals must pr oduce, at the time of collection, evidence of identity
acceptable to our H Share Registrar. Applicants be ing corporations who are eligible for personal
collection must attend by their authorised represen tatives bearing letters of authorisation from their
corporations stamped with the cor porations’ chop. Identification and ( where applicable) authorisation
EXPECTED TIMETABLE (1)
–v–


--- page 8 ---
documents acceptable to our H Share Registrar, Tricor Investor Services Limited, must be produced at the
time of collection. Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO
channel should refer to the section headed ‘‘How to Apply for Hong Kong Offer Shares — D.
Despatch/Collection of H Share Certificates and Ref und of Application Monies’’ in this prospectus for
details.
Applicants who have applied through the HK eIPO White Form service and paid their application monies
through single bank account may have refund monies (i f any) dispatched to the bank account, in the form
of e-Auto Refund payment instructions . Applicants who have applied through the HK eIPO White Form
service and paid their application monies through mul tiple bank accounts may have refund monies (if any)
dispatched to the address as specified in their applic ation instructions, in the form of refund cheques in
favour of the applicant (or, in the case of joint applicat ions, the first-named applicant), by ordinary post
at their own risk.
H Share certificates and/or refund cheques (if applic able) for applicants who have applied for less than
1,000,000 Hong Kong Offer Shares and any uncollect ed H Share certificates will be dispatched by
ordinary post, at the applicants’ risk, to the addr esses specified in the r elevant applications.
Further information is set out in the sections he aded ‘‘How to Apply for Hong Kong Offer Shares — D.
Despatch/Collection of H Share Certificates and R efund of Application Monies’’ in this prospectus.
The H Share certificates will only become valid evidence of title provided that the
Global Offering has become unconditional in all respects and neither the Hong Kong
Underwriting Agreement nor the International Underwriting Agreement is terminated in
accordance with their respective terms prio r to 8 : 00 a.m. on the Listing Date. The Listing
Date is expected to be on or about Tuesday, 6 August 2024. Investors who trade the H
Shares on the basis of publicly available allo cation details prior to the receipt of H Share
certificates or prior to the H Share certificates becoming valid evidence of title do so
entirely at their own risk.
The above expected timetable is a summary only. For more details on the structure of
the Global Offering, including the conditions of the Global Offering, and the procedures for
application for the Hong Kong Offer Shares, plea se refer to the sections headed ‘‘Structure
of the Global Offering’’ and ‘‘How to Apply for Hong Kong Offer Shares’’ in this
prospectus.
EXPECTED TIMETABLE (1)
–v i–


--- page 9 ---
IMPORTANT NOTICE TO INVESTORS
We have issued this prospectus solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares, and it does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Hong Kong Offer Shares offered
by this prospectus pursuant to the Hong Kong Public Offering. This prospectus may not be
used for the purpose of, and does not constitute, an offer or invitation in any other
jurisdiction or in any other circumstances. We have taken no action to permit a public
offering of the Offer Shares in any jurisdiction other than Hong Kong, and we have taken no
action to permit the distribution of this prospectus in any jurisdiction other than Hong Kong.
The distribution of this prospectus and the offering and sale of the Offer Shares in other
jurisdictions are subject to restrictions an d may not be made except as permitted under the
applicable securities laws of such jurisdictions pursuant to registration with or authorisation
by the relevant securities regulatory authorities or in reliance of an exemption therefrom.
You should rely on the information contained in this prospectus to make your
investment decision. We 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 in this prospectus must not be relied on by you as having been authorised by us, or any
of the Relevant Persons. Information contained on our website at
www.haierbx.net does not
form part of this prospectus.
Page
Expected Timetable ................................................................ i i i
Contents ........................................................................... v i i
Summary .......................................................................... 1
Definitions ........................................................................ 2 6
Glossary of Technical Terms ....................................................... 4 1
Forward-looking Statements ....................................................... 4 3
Risk Factors ....................................................................... 4 5
Information about this Prospectus and the Global Offering ......................... 7 1
Waiver from Strict Compliance with the Listing Rules .............................. 7 6
Directors, Supervisors and Parties Involved in the Global Offering .................. 8 1
Corporate Information ............................................................. 8 7
Industry Overview ................................................................. 8 9
CONTENTS
–v i i–


--- page 10 ---
Page
Regulatory Overview ............................................................... 1 0 8
History and Development .......................................................... 1 3 9
Business ........................................................................... 1 6 1
Directors, Supervisors and Senior Management ..................................... 2 6 9
Relationship with Our C ontrolling Shareholders .................................... 2 8 6
Connected Transactions ............................................................ 2 9 7
Substantial Shareholders ........................................................... 3 0 8
Cornerstone Investors .............................................................. 3 1 1
Share Capital ...................................................................... 3 1 6
Financial Information .............................................................. 3 1 9
Future Plans and Use of Proceeds .................................................. 3 7 3
Underwriting ...................................................................... 3 8 4
Structure of the Global Offering ................................................... 4 0 0
How to Apply for Hong Kong Offer Shares ........................................ 4 1 1
Appendix I — Accountants’ Report .............................................. I - 1
Appendix II — Unaudited Pro Forma Financial Information ...................... I I - 1
Appendix III — Taxation and Foreign Exchange .................................. III-1
Appendix IV — Summary of Principal Laws and Regulations ..................... I V - 1
Appendix V — Summary of Articles of Association .............................. V - 1
Appendix VI — Statutory and General Information ............................... V I - 1
Appendix VII— Documents Delivered to the Registrar of Companies and
Documents on Display .......................................... V I I - 1
CONTENTS
– viii –


--- page 11 ---
This summary aims to give you an overview of the information contained in this
prospectus. Because this is a summary, it does not contain all the information that may be
important to you. You should read the entire prospectus before you decide to invest in the
Offer Shares. There are risks associated with any investment.
Some of the particular risks in investing in the Offer Shares are set out in ‘‘Risk
Factors’’. You should read that section carefully before you decide to invest in the Offer
Shares. Various expressions used in this section are defined in sections headed ‘‘Definitions’’
and ‘‘Glossary of Technical Terms’’ in this prospectus.
OVERVIEW
We are an insurance agency service provider in Shandong province, the PRC,
dedicated to distributing a wide range of insurance products covering (i) property insurance
products, (ii) life and health insurance product s, (iii) accident insurance products and (iv)
automobile insurance products, to both corporate and household insurance clients. We
acquired Haier Insurance Agency from Haier Group in 2017 and have been the designated
insurance agency service provider to handle and manage all insurance related matters for
Haier Group in the PRC. Revenue attributab le or relating to Haier Group accounted for
approximately 25.3%, 32.0%, 25.5%, 18.8% and 23.1% of our total revenue for the years
ended 31 December 2021, 2022 and 2023 and the four months ended 30 April 2023 and
2024, respectively. According to Frost & Sul livan, the China insurance intermediary
industry has experienced constant growth an d will maintain a steady growth trend, and the
scale of underwriting premium in the industry is expected to grow at a CAGR of 12.8%
between 2024 and 2028, reaching RMB1,505.5 billion in 2028. Our total revenue increased
from RMB120.0 million for FY2021 to RMB174.0 million for FY2023, representing a
CAGR of 20.4%, and from RMB53.4 million for 4M2023 to RMB58.6 million for 4M2024.
We collaborate and cooperate with different industry participants including insurance
company partners, which are our customers, insurance agents and strategic channel
partners to promote and distribute insura nce products from our insurance company
partners to corporate and household insurance clients. Leveraging our sales channels, we
promote and distribute insurance products underwritten by insurance companies to
insurance clients and receive commission from insurance companies for successful
purchase of their insurance products by our insurance clients. Our services cover major
stages of insurance business including assistance on risk assessment and product selection,
confirmation of insurance policy, premium p ayment, policy administr ation and insurance
claims. Our sales channels, with are primarily offline, comprise (i) sales through insurance
agents (whom we engage to promote and distribute insurance products to mainly our
household insurance clients, in return for commissions we paid for successful purchase of
insurance products by insurance clients), (ii) referral from strategic channel partners
(through whom a large population of corporate and household insurance clients are
referred, in return for referral fees we paid fo r successful purchase of insurance products by
insurance clients) and (iii) direct sales. At th e upstream end, we provide insurance agency
SUMMARY
–1–


--- page 12 ---
services to our insurance company partners, expa nd their insurance client base, whilst at the
downstream end, we distribute insurance products to our corporate and household
insurance clients and enhance their user experience.
Through our access to a comprehensive mix of insurance products and our in-depth
understanding and analysis of the risk portfolios in different scenarios, we are able to
provide insurance solutions and recommend different combinations of existing insurance
products with different premium rates offered by our insurance company partners to our
insurance clients, taking into account their particular needs and risk exposure with an aim
to maximise their insurance claim coverage in the cost-effective manner. We provide
insurance knowledge, training and IT support to our insurance agents, to facilitate their
distribution of insurance products to our insurance clients. We also provide IT services and
consulting services as an extension of our insurance agency business, to various
participants, including insurance companies, insurance intermediaries and other
companies from different industries. Duri ng the Track Record Period, we had connected
with: (i) over 70 insurance companies as our customers, covering the top three insurance
groups in the PRC in terms of market capitalisation; (ii) insurance agents across Shandong,
Hebei, Henan and Jilin provinces; (iii) 20 st rategic channel partners, and (iv) we had
distributed insurance products to over 20,000 corporate insurance clients and 368,000
household insurance clients. The diagram below illustrates our business model and our
ecosystem:
Provide IT and consulting services
Four major categories
of insurance products
Our Group
Online
platforms
Corporate Insurance
Interactive Service Platform
ਕ̨̻
“Quan Zhanggui
(Ό౛ᓞ)”
APP
Enhance
user experience
Expand
insurance client base
Automobile
AccidentProperty
Life and
health
Insurance
companies
Insurance
intermediaries
Other companies in
different industries
Purchase insurance products
Network
Resources
& referrals
Provide insurance
knowledge,
training & IT
support
Distribution
of insurance
products
Insurance agents
Direct distribution of insurance products
Strategic
channel partners
Corporate and
household
insurance clients
Provide insurance products
Provide insurance agency services
SUMMARY
–2–


--- page 13 ---
Since our establishment in 2017, we have developed our online platforms, including
our ‘‘Corporate Insurance Interactive Service Platform ( 企業保險交互服務平台)’’, our
‘‘Quan Zhanggui ( 全掌櫃)’’ APP, our WeChat official account and WeChat mini
programme ‘‘Quan Zhanggui Claim Centre ( 全掌櫃理賠中心)’’, to enhance user
experience of our insurance clients and provide comprehensive service support to our
insurance agents. For details of their functionalities, please refer to the section headed
‘‘Business — Our Online Platforms’’ in this prospectus. For FY2021, FY2022, FY2023 and
4M2024, revenue attributable to our insurance agency business amounted to RMB116.1
million, RMB130.7 million, RMB155.7 millio n and RMB54.8 million, respectively.
We extended and developed our IT services by leveraging on our IT technology and
knowhow accumulated over years in view of the inherent commonality between the
digitalised solutions we developed for our insurance agency business and the digitalised
solutions demanded by our customers. We offer IT services to various participants,
including companies in insurance industry and companies from different industries, by
designing and developing digitalised solutions based on their needs. For FY2021, FY2022,
FY2023 and 4M2024, revenue attributable to our IT services amounted to RMB1.3 million,
RMB15.0 million, RMB15.8 million and RMB3.2 million, respectively.
In view of the insurance clients base we gained from insurance agency business, the
derived cross-selling opportunities drove us t o provide consulting services including HR
consulting services and marketing and promotion services, which have gradually become
one of our business segments. In particular, we provide advice to our customers on human
resource management and recruitment strategi es, and provide recruitment services directly
to locate, attract and identify suitable tale nts for our customers. Based on our marketing
and promotion capabilities accumulated in the insurance agency business and the insurance
client base we have access to, we also provide marketing and promotion services to our
customers, including the design of promotional materials and advertisements, etc. For
FY2021, FY2022, FY2023 and 4M2024, revenue attributable to our consulting services
amounted to RMB2.7 million, RMB2.7 million, RMB2.5 million and RMB0.6 million,
respectively.
SUMMARY
–3–


--- page 14 ---
OUR BUSINESS MODEL
Our Business
Our business mainly consists of three segments: (i) insurance agency business; and (ii)
IT services and (iii) consulting services.
. Insurance agency business . We distribute insurance products underwritten by insurance
companies to insurance clients through our s ales channels including (i) sales through
insurance agents (whom we engage to promote and distribute the insurance products to
mainly our household insurance clients), (ii) referral from strategic channel partners
(through whom a large population of corporate and household insurance clients are
referred) and (iii) direct sales (where we distribute insurance products directly to
insurance clients, which mainly include Ha ier Group insurance clients, through our
in-house sales executives, while also distributing to non-Haier Group insurance
clients). The diagram below illustrates the business flow and revenue source of our
insurance agency business:
Insurance agency business
Commissions
Provide
insurance
agency service
Insurance premiums
Underwritten insurance products
Commission
income
Provide
insurance
agency
serviceInsurance
companies
Referral fees
Direct sales
Resources &
referrals
Insurance
agents
Strategic
channel
partners
Distribution
of insurance
products
Network
Cash flow Business activitiesBusiness activities
Corporate and
household
clients (Note)
Our Group
Note: Include Haier Group and its affiliated companies as c orporate insurance clients and employees of Haier
Group and their respective family members as household insurance clients
SUMMARY
–4–


--- page 15 ---
. IT services . We offer IT services to insurance company partners, insurance
intermediaries and companies from different industries, by designing and developing
digitalised solutions based on their needs. O ur IT services offering includes insurance
related systems such as insurance claims sys tem, insurance intermediary core business
system and AI service system providing certificate recognition and document
processing services. The diagram below illustrates the business flow and revenue
source of our IT services:
IT services
Provide IT services
Service fee
Insurance
companies
Insurance
intermediaries
Companies
from different
industries (Note)
Our Group
Cash flow Business activitiesBusiness activities
Note: Include Haier Group and its affiliated companies as customers
. Consulting services . We also provide consulting services including the provision of
human resources consulting services and marketing and promotion services. In
particular, we provide advice to our customers on human resource management and
recruitment strategies, and provide recruitment services directly to locate, attract and
identify suitable talents for our customers. Based on our marketing and promotion
capabilities accumulated in the insurance agency business and the insurance client base
SUMMARY
–5–


--- page 16 ---
we have access to, we also provide marketing and promotion services to our customers,
including the design of promotional materials and advertisements, etc. The diagram
below illustrates the business flow and revenue source of our consulting services:
Consulting services
Provide HR consulting
services
Service fee
Provide marketing and
promotion services
Service fee
Companies
from different
industries (Note)
Insurance
companies
Our Group
Cash flow Business activitiesBusiness activities
Note: Include Haier Group and its affiliated companies as customers
For more details on our business, please refer to the section headed ‘‘Business’’ in this
prospectus.
OUR STRENGTHS
We believe the following strengths contribute to our success:
. insurance agency service and solution provider with considerable growth;
. ecosystem creating mutual benefits;
. digital capabilities;
. wide range of insurance products offered to both our corporate and household
insurance clients; and
. we have an experienced management team.
For more details, please refer to the section headed ‘‘Business — Our Strengths’’ in this
prospectus.
SUMMARY
–6–


--- page 17 ---
OUR STRATEGIES
Our Company will continue to focus on providing insurance agency services, IT
services and consulting services. To continue on the rapid development in our principal
business, we intend to adopt the following strategies:
. expand our insurance client coverage, strengthen our relationship with insurance
company partners and enhance training support to our insurance agents;
. continue to strengthen our digital capab ilities and further develop our IT service
offerings;
. promote our brand awareness and market presence; and
. selective investments and acquisitions in ins urance intermediary and fintech industry.
For more details, please refer to the section headed ‘‘Business — Our Strategies’’ in this
prospectus.
RISK FACTORS
Our business and the Global Offering involv e certain risks, which are set out in the
section headed ‘‘Risk Factors’’ in this pros pectus. You should read that section in its
entirety carefully before you decide to invest in the Offer Shares. Some of the major risks we
face include: (i) we may not be able to provide diversified insurance products and services to
effectively address our insurance clients’ needs, which could have a material adverse effect
on our business, results of operations and financial condition; (ii) if we fail to maintain
stable relationships with our business partners, our business, results of operations, financial
condition and business prospects could be mate rially and adversely affected; (iii) we are
subject to customer concentration risk. Our growth and revenue could be materially and
adversely affected if we lose any significant cu stomer, or if any significant customer fails to
cooperate with us at anticipated levels; (iv) our Group had a concentrating of major
suppliers during the Track Record Period ; (v) our historical business growth and
profitability may not be indicative of futur e performance; and (vi) our businesses are
subject to regulation and administration by the insurance regulatory authorities and other
government authorities, and insufficient m easures under any applic able regulations and
rules by us could result in financial losses or harm to our business.
SUMMARY
–7–


--- page 18 ---
IMPACTS OF THE COVID-19 OUTBREAK
In 2022, there was a resurgence of COVID-19 pandemic including the highly
transmissible Delta and Omicron variants ac ross the world, which had adversely affected
the economy globally. As a result, certain of our business operations and financial
performance were negatively affected, primarily because (i) consumers’ demand for certain
life and health insurance products, which are non-essential insurance products and not
compulsory under the applicable laws, was we akened due to the increased uncertainty in
global economic outlook; and (ii) offline sales activities of our insurance agents were
affected. In particular, revenue generated from the distribution of life and health insurance
products was reduced in 2022 as compared to 2021 as it became difficult for our insurance
agents to arrange face-to-face meetings with household insurance clients. Despite the
challenges posed by COVID-19 pandemic, our business operations and financial
performance had not been significantly affected during the Track Record Period as our
overall revenue reached RMB120.0 millio n in 2021, RMB148.4 million in 2022 and
RMB174.0 million in 2023, representing a CAGR of 20.4%, and from RMB53.4 million for
4M2023 to RMB58.6 million for 4M2024. This i s mainly contributed by our diversified
product portfolio and sales channels, which allow us to respond to the changing market and
mitigate risk by reducing reliance on any single category of insurance products or sales
channel. While we recorded rapid growth dur ing the Track Record Period, we cannot assure
you that we will be able to deliver similar gro wth in the future, or avoid any decline in the
future. For more details, please refer to the sec tion headed ‘‘Risk Factors—If we are unable
to manage our growth or execute our strategies effectively, our business and prospects may
be materially and adversely affected’’ in this prospectus.
SUMMARY
–8–


--- page 19 ---
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
Summary of Consolidated 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/periods indicated:
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue 119,974 148,398 174,011 53,425 58,644
Cost of sales (71,925) (81,139) (99,498) (28,549) (33,805)
Gross profit 48,049 67,259 74,513 24,876 24,839
Other income 7,682 8,176 11,324 3,937 3,014
Research and development costs (4,739) (6,843) (7,141) (2,774) (2,809)
General and administrative expenses (11,383) (12,854) (18,566) (5,283) (3,806)
Sales and marketing costs (6,836) (9,948) (11,871) (3,964) (2,886)
Reversal of/(provision for)
impairment loss 11 (44) (34) (55) (39)
Profit from operations 32,784 45,746 48,225 16,737 18,313
Finance costs (176) (154) (206) (40) (53)
Profit before taxation 32,608 45,592 48,019 16,697 18,260
Income tax (5,616) (9,243) (9,026) (3,292) (3,431)
Profit for the year/period 26,992 36,349 38,993 13,405 14,829
Attributable to:
Equity shareholders of our Company 27,047 37,776 40,372 13,937 15,067
Non-controlling interests (55) (1,427) (1,379) (532) (238)
Profit for the year/period 26,992 36,349 38,993 13,405 14,829
SUMMARY
–9–


--- page 20 ---
Non-IFRS Measure
To supplement our consolidated financial statements of profit or loss and other
comprehensive income, which are presented i n accordance with IFRS, we also use adjusted
profit for the year/period (non-IFRS measure) as an additional financial measure. We
present this financial measure because it is used by our management to evaluate our
financial performance by eliminating the im pact of the Listing expenses. We also believe
that this non-IFRS measure provides additional information to investors and others in
understanding and evaluating our consolidated results of operations in the same manner as
they help our management and in comparing fin ancial results across accounting periods and
to those of our peer companies.
The term adjusted profit for the year/period is not defined under IFRS. As a non-IFRS
measure, adjusted profit for the year/period is presented because our management believes
such information will be helpful for investors in assessing the effect of the Listing expenses
on our profit. The use of the adjusted profit for the year/period (non-IFRS measure) has
material limitations as an analytical tool as it does not include all items that impact our
profit for the relevant periods. In light of the foregoing limitations, when assessing our
operating and financial performance, you should not view the adjusted profit for the
year/period (non-IFRS measure) in isolation or as a substitute for our profit for the
year/period or any other operating performance measure that is calculated in accordance
with IFRS. In addition, because this non-IFRS measure may not be calculated in the same
manner by all companies, they may not be comparable to other similarly titled measures
used by other companies.
The following table reconciles our adjusted profit for the year/period (non-IFRS
measure) against profit for the year/period presented in accordance with IFRS, which is
profit from our continuing operations:
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Profit for the year/period 26,992 36,349 38,993 13,405 14,829
Add:
Listing expenses — — 4,754 714 250
Adjusted profit for the year/period
(non-IFRS measure) 26,992 36,349 43,747 14,119 15,079
Our net profit increased from RMB27.0 million in FY2021 to RMB36.3 million in
FY2022 and further to RMB39.0 million in F Y2023, and from RMB13.4 million in 4M2023
to RMB14.8 million in 4M2024 as we continuousl y improved our operational efficiency.
SUMMARY
–1 0–


--- page 21 ---
Selected Consolidated Statements of Profit or Loss Items and Other Comprehensive Income
Revenue, gross profit and gross profit margin by business segments
The following table sets forth a breakdown of revenue, gross profit and gross profit
margin by business segments for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Insurance Agency business 116,056 45,154 38.9 130,721 58,241 44.6 155,748 64,007 41.1 51,630 23,767 46.0 54,802 22,589 41.2
IT services 1,264 807 63.8 14,953 7,267 48.6 15,782 9,170 58.1 1,046 674 64.4 3,218 1,866 58.0
Consulting services
(Note) 2,654 2,088 78.7 2,724 1,751 64.3 2,481 1,336 53.8 749 435 58.1 624 384 61.5
Total 119,974 48,049 40.0 148,398 67,259 45.3 174,011 74,513 42.8 53,425 24,876 46.6 58,644 24,839 42.4
Note: Consulting services mainly include HR consulti ng services (amounted to RMB1.4 million, RMB2.4
million, RMB1.8 million, RMB0.7 million and RMB0.4 million, representing 1.2%, 1.6%, 1.0%, 1.4%
and 0.7% of our total revenue during the years ended 31 December 2021, 2022 and 2023 and the four
months ended 30 April 2023 and 2024, respectively) and marketing and promotion services (amounted
to RMB1.3 million, RMB0.3 million, RMB0.7 mi llion, RMB26 thousand and RMB0.2 million,
representing 1.0%, 0.2%, 0.4%, 0.0% and 0.4% of our total revenue during the years ended 31
December 2021, 2022 and 2023 and the four months ended 30 April 2023 and 2024, respectively).
The following table sets forth a breakdown of revenue, gross profit and gross profit
margin attributable to each type of insuranc e clients of our insurance agency business for
the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Household insurance clients 74,641 20,820 27.9 80,498 23,874 29.7 91,478 21,573 23.6 27,189 8,189 30.1 28,487 5,507 19.3
Corporate insurance clients 41,415 24,334 58.8 50,223 34,367 68.4 64,270 42,434 66.0 24,441 15,578 63.7 26,315 17,082 64.9
— Haier Group insurance clients 18,288 13,377 73.1 23,809 17,923 75.3 24,100 17,681 73.4 7,088 5,154 72.7 9,107 6,680 73.4
— Non-Haier Group insurance
clients 23,127 10,957 47.4 26,414 16,444 62.3 40,170 24,753 61.6 17,353 10,424 60.1 17,208 10,402 60.4
Total 116,056 45,154 38.9 130,721 58,241 44.6 155,748 64,007 41.1 51,630 23,767 46.0 54,802 22,589 41.2
Note: The revenue, gross profit and gross profit margin are derived from the commi ssion income generated
from insurance companies for distribution of the ir insurance products to the underlying insurance
clients.
The gross profit margin attributable to Ha ier Group insurance clients was generally
higher than that of non-Haier Group insurance clients as the cost of sales incurred for the
distribution of insurance products to Haier Gro up insurance clients is significantly lower
than that for non-Haier Group insurance clients. This is because the distribution of
insurance products to Haier Group insurance clients is through our direct sales channel
only without paying any referral fees to strategic channel partners or commissions to
insurance agents, and such referral fees and commissions in aggregate accounted for
approximately 80% or more than 80% of our co st of sales for each year/period during the
Track Record Period.
SUMMARY
–1 1–


--- page 22 ---
The decrease in gross profit margin attributable to household insurance clients from
30.1% for 4M2023 to 19.3% for 4M2024 was primarily attributed to (i) the increase in
proportion of commission income contributed by the distribution of accident insurance
products and automobile insurance products, both with comparatively lower gross profit
margins; and (ii) the decrease in gross profit for the distribution of life and health insurance
products, which generally have higher gross profit margin.
The following table sets forth the GWP and commission income generated from
insurance company partners for distribution of their insurance products for each of Internet
insurance products and non-Internet insurance products for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Non-Internet insurance products 661,483 114,049 98.3 1,013,768 129,577 99.1 1,254,661 154,846 99.4 375,570 51,197 99.2 425,164 54,547 99.5
Internet insurance products 4,898 2,007 1.7 4,606 1,144 0.9 4,460 902 0.6 1,518 433 0.8 1,223 255 0.5
Total 666,381 116,056 100.0 1,018,374 130,721 100.0 1,259,121 155,748 100.0 377,088 51,630 100.0 426,387 54,802 100.0
Note: Non-Internet insurance products refers to the purchas e transaction of insurance policy of which involves
manual involvement to certain exten t, despite the utilisation of our onl ine platforms, whilst Internet
insurance products refers to the purchase transacti on of insurance policy of which is self-serviced by our
insurance clients through our APP without manual involvement.
Sales channel of non-Internet insurance products co mprise (i) sales through insurance agents, (ii)
referral from strategic channel partners and (iii) dir ect sales, whilst sales channel of Internet insurance
products comprise only direct sales.
The following table sets forth a breakdown of revenue, gross profit and gross profit
margin of our IT services by type of customers for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Haier Group and its affiliated companies 577 284 49.2 6,042 3,681 60.9 8,732 4,870 55.8 75 43 57.3 1,665 968 58.1
Non-Haier Group 687 523 76.1 8,911 3,586 40.2 7,050 4,300 61.0 971 631 65.0 1,553 898 57.8
Total 1,264 807 63.8 14,953 7,267 48.6 15,782 9,170 58.1 1,046 674 64.4 3,218 1,866 58.0
SUMMARY
–1 2–


--- page 23 ---
Revenue from insurance agency business by category of insurance products
We offer a comprehensive mix of insurance pro ducts, providing insurance clients with
broad selections and adequate options to choose from in order to satisfy their protection
needs in different scenarios and at different life stages. We primarily distribute four
categories of insurance products, namely (i) property insurance products; (ii) life and health
insurance products; (iii) accident insurance products; and (iv) automobile insurance
products. These insurance products are underwritten by insurance companies directly, and
we are not a party to the insurance policy or other insurance agreements with the purchasers
of the policies. The table below sets forth the GWP, commission income generated from
insurance company partners for distribution of their insurance products and average
commission rate for each category of insuran ce products we offered for the years/periods
indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate
RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % %
Property insurance products 228,554 39,658 34.2 17.4 290,994 47,620 36. 4 16.4 334,332 59,806 38.4 17.9 117,189 22,910 44.4 19.5 119,574 25,733 47.0 2 1.5
Life and health insurance products 176,086 48,332 41.6 27.4 223,853 36,156 27.7 16.2 228,817 33,757 21.7 14.8 92,051 12,958 25.1 14.1 78,133 8,102 14. 8 10.4
Accident insurance products 55,465 16,171 13.9 29.2 82,116 24,096 18.4 2 9.3 84,121 27,830 17.9 33.1 28,505 7,741 15.0 27.2 24,034 9,162 16.7 38.1
Automobile insurance products 206,276 11,895 10.3 5.8 421,411 22,849 17.5 5.4 611,851 34,355 22.1 5.6 139,343 8,021 15.5 5.8 204,646 11,805 21.5 5.8
Total 666,381 116,056 100.0 17.4 1,018,374 130,721 100.0 12.8 1,259 ,121 155,748 100.0 12.4 377,088 51,630 100.0 13.7 426,387 54,802 100.0 12.9
During the Track Record Period, our commission income from the distribution of
property insurance products and automobile insurance products recorded an increasing
trend as the GWP we facilitated for such insur ance products increased gradually. The
commission income from the distribution of accident insurance products recorded an
i n c r e a s i n gt r e n dd u r i n gt h eT r a c kR e c o r dPeriod as (i) the GWP we facilitated for such
insurance products increased gradually from FY2021 to FY2023 and (ii) the average
commission rate of such insurance product s increased from 27.2% for 4M2023 to 38.1% for
4M2024 despite a decrease in the GWP recorded for the same period due to the higher
commission rates offered by our insurance com pany partners for distribution of traffic
accident insurance products as part of their product focus and business strategies. However,
the commission income from the distribution of life and health insurance products recorded
a decreasing trend during the Track Record Period mainly as a result of (i) the COVID-19
pandemic weakening consumers’ demand for certain life and health insurance products,
which are non-essential insurance products and not compulsory under the applicable laws,
and affecting offline sales activities of our insurance agents, and (ii) the decline in average
commission rates for life and health insurance products due to the uncertainty in global
economy outlook where our insurance clients purchased fewer new policies that offer higher
commission rates, or purchased life and health insurance products with shorter duration
that offer lower commission rates. Despite the se challenges, we maintain a positive outlook
on potential increase in commission income from the distribution of life and health
insurance products in the near future, taking into account the resumption of sales activities
of our insurance agents and the gradual economic recovery following the impact of the
COVID-19.
SUMMARY
–1 3–


--- page 24 ---
Revenue from insurance agency business by type of insurance clients
We define our insurance clients as purchasers of the insurance products we distribute,
which include (i) corporate insurance clients; and (ii) household insurance clients. Through
offering a comprehensive mix of insurance products, we have accumulated a wide base of
insurance clients and are able to provide them with various options to choose from in order
to serve their protection needs in different scenarios and at different life stages.
The table below sets forth the GWP we facili tated, commission income generated from
insurance company partners for distribution of their insurance products and the average
commission rate by type of insurance clients for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
(Note)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
(Note)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
(Note)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate
RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % %
Household insurance clients 429,127 74,641 64.3 17.4 708,461 80,498 61.6 1 1.4 901,435 91,478 58.7 10.1 251,178 27,189 52.7 10.8 304,550 28,487 52.0 9 .4
Corporate insurance clients 237,254 41,415 35.7 17.5 309,913 50,223 38. 4 16.2 357,686 64,270 41.3 18.0 125,910 24,441 47.3 19.4 121,837 26,315 48.0 2 1.6
— Haier Group insurance clients 152,484 18,288 15.8 12.0 192,856 23,809 18. 2 12.3 190,960 24,100 15.5 12.6 50,578 7,088 13.7 14.0 59,792 9,107 16.6 15. 2
— Non-Haier Group insurance
clients 84,770 23,127 19.9 27.3 117,057 26,414 20.2 22.6 166,726 40,170 25.8 24.1 75,332 17,353 33.7 23.0 62,045 17,208 31.4 27.7
Total 666,381 116,056 100.0 17.4 1,018,374 130,721 100.0 12.8 1,259 ,121 155,748 100.0 12.4 377,088 51,630 100.0 13.7 426,387 54,802 100.0 12.9
Note: Commission income represents commission r eceived from insurance company partners for
distribution of their insurance products to corporate and household insurance clients.
Our commission income generated from insurance company partners for distributing
insurance products to household and corporate insurance clients both recorded an
increasing trend during the Track Record Period. The commission income attributable to
household insurance clients increased from RMB74.6 million in FY2021 to RMB80.5
million in FY2022 and further to RMB91.5 million in FY2023, and from RMB27.2 million
in 4M2023 to RMB28.5 million in 4M2024, while the commission income attributable to
corporate insurance clients increased from RMB41.4 million in FY2021 to RMB50.2
million in FY2022 and further to RMB64.3 million in FY2023, and from RMB24.4 million
in 4M2023 to RMB26.3 million in 4M2024.
SUMMARY
–1 4–


--- page 25 ---
Summary of Consolidated Statements of Financial Position
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Total non-current assets 9,328 9,191 140,665 142,247
Total current assets 275,506 317,909 249,287 265,596
Total assets 284,834 327,100 389,952 407,843
Total non-current liabilities 164 — — —
Total current liabilities 2 7,992 34,073 26,733 29,195
Total liabilities 28,156 34,073 26,733 29,195
Net current assets 247,514 283,836 222,554 236,401
Total equity attributable to
equity shareholders of the
Company 255,863 293,639 365,210 380,277
Non-controlling interests 815 (612) (1,991) (1,629)
Total equity 256,678 293,027 363,219 378,648
Our net current assets increased from R MB247.5 million as at 31 December 2021 to
RMB283.8 million as at 31 December 2022 primarily due to the increases in accounts
receivables and time deposits, and net off by a decrease in financial assets at fair value
through profit or loss and increase in account and other payables. Our net current assets
decreased from RMB283.8 million as at 31 D ecember 2022 to RMB222.6 million as at 31
December 2023 primarily due to the decrease in time deposits, and net off by an increase in
cash and cash equivalents and accounts receiva bles. Our net current assets increased from
RMB222.6 million as at 31 December 2023 to RMB236.4 million as at 30 April 2024
primarily due to the increase in ac counts receivables and deposits.
Our total equity increased from RMB256.7 million as at 31 December 2021 to
RMB293.0 million as at 31 December 2022 mainly driven by the net profit for FY2022. Our
total equity further increased fro m RMB293.0 million as at 31 December 2022 to
RMB363.2 million as at 31 December 2023 prima rily due to the net profit for FY2023 and
capital contributions from shareholders in January 2023. Our total equity further increased
from RMB363.2 million as at 31 December 2023 to RMB378.6 million as at 30 April 2024
primarily due to the net profit for 4M2024.
SUMMARY
–1 5–


--- page 26 ---
Summary of Consolidated Statements of Cash Flows
During the Track Record Period, we have funded our operations primarily with net
cash generated from our operations. The follo wing table summaries for the years/periods
indicated, our consolidated statements of cash flows:
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Cash generated from operations 30,260 34,913 29,651 11,411 19,591
Income tax paid (5,674) (7,711) (9,672) (5,878) (3,499)
Net cash generated from operating
activities 24,586 27,202 19,979 5,533 16,092
Net cash (used in)/generated from
investing activities (151,039) (19,753) 138,224 2,241 (150,001)
Net cash generated from/(used in)
financing activities 127,148 (1,891) 21,889 26,199 (6,052)
Net increase in cash and cash
equivalents 695 5,558 180,092 33,973 (139,961)
Cash and cash equivalents at the
beginning of the year/period 17,293 17,988 23,546 23,546 203,638
Cash and cash equivalents at the end
of the year/period 17,988 23,546 203,638 57,519 63,677
SUMMARY
–1 6–


--- page 27 ---
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios for the periods/as at the dates
indicated:
For the year ended 31 December
For the four
months
ended
30 April
2021 2022 2023 2024
Gross profit margin (1) 40.0% 45.3% 42.8% 42.4%
N e tp r o f i tm a r g i n(2) 22.5% 24.5% 22.4% 25.3%
Return on equity (3) 15.0% 13.2% 11.9% N/A
Return on total assets (4) 13.0% 11.9% 10.9% N/A
As at 31 December
As at
30 April
2021 2022 2023 2024
Current/quick ratio (5) 9 . 8t i m e s 9 . 3t i m e s 9 . 3t i m e s 9 . 1t i m e s
Notes:
(1) Gross profit margin for the years ended 31 December 2021, 2022 and 2023 and the four months ended 30
April 2024 was calculated based on gross profit d ivided by revenue for the respective years/period.
(2) Net profit margin for the years ended 31 December 2021, 2022 and 2023 and the four months ended 30
April 2024 was calculated based on net profit div ided by revenue for the respective years/period.
(3) Return on equity for the years ended 31 December 2021, 2022 and 2023 was calculated based on net profit
of the respective years, divided by the arithmetic m ean of the opening and closing balances of total equity
and multiplied by 100%. Return on equity for 4M2024 is not meaningful as it is not comparable to annual
figures.
(4) Return on total assets for the years ended 31 December 2021, 2022 and 2023 was calculated based on net
profit of the respective years, divided by the arithme tic mean of the opening and closing balances of total
assets and multiplied by 100%. Return on total assets for 4M2024 is not meaningful as it is not
comparable to annual figures.
(5) Current/quick ratio as at 31 December 2021, 2022 and 2023 and 30 April 2024 was calculated based on the
total current assets divided by the total current liabilities.
For more details on our key financial ratios, please refer to the section headed
‘‘Financial Information — Key Financial Ratios’’ in this prospectus.
SUMMARY
–1 7–


--- page 28 ---
OUR CUSTOMERS AND SUPPLIERS
Our customers for the insurance agency business are insurance companies in the PRC,
which we consider as our ‘‘insurance company partners’’. During the Track Record Period,
we had established business relationships with over 70 insurance companies in the PRC. For
FY2021, FY2022, FY2023, 4M2023 and 4M2024, the aggregate revenue generated from our
top five customers in each ye ar/period during the Track Record Period amounted to
RMB90.1 million, RMB97.0 million, RMB114.1 million, RMB36.1 million and RMB41.3
million, respectively, representing 75.0%, 6 5.5%, 65.6%, 67.6% and 70.3% of our total
revenue, respectively. Revenue generated from our largest customer accounted for
approximately 35.0%, 38.1%, 36.1%, 34. 1% and 31.7% of our total revenue for the
years ended 31 December 2021, 2022 and 2023 and the four months ended 30 April 2023 and
2024, respectively. For more details, please refer to the section headed ‘‘Business — Our
Customers’’ in this prospectus.
Our suppliers primarily consist of: (i) insura nce agents; (ii) strategic channel providers;
(iii) IT services providers; and (iv) other su ppliers such as risk management and training
service providers for insurance and consulting services. For FY2021, FY2022, FY2023,
4M2023 and 4M2024, purchases from our five largest suppliers in each year/period during
the Track Record Period amounted to RMB42.1 million, RMB58.6 million, RMB74.4
million, RMB20.5 million and RMB26.8 million, respectively, accounting for 58.5%,
72.2%, 74.7%, 71.7% and 79.3% of our total purchases, respectively. The increase in
purchases from our five largest suppliers are primarily due to our business efforts and
strategy to cooperate with strategic channel p artners to reach more insurance clients. In
particular, we have reliance on referral services provided by Supplier A, which was our
largest supplier and strategic channel partner in each year/period during the Track Record
Period, as we continued to strengthen our cooperation with Supplier A to expand our
insurance client base and had established a strong and strategic relationship. Purchases
from Supplier A accounted for approximately 36.8%, 39.3%, 45.6% and 45.8% of our total
purchases for FY2021, FY2022, FY2023 and 4M2024, respectively. Since majority of the
insurance clients referred by Supplier A continued to purchase insurance products from us
on an annual basis during the Track Record Period and Supplier A continued to refer new
insurance clients to us to purchase insurance products, there had been an increase in our
referral fees to Supplier A during the Track R ecord Period. For more details, please refer to
the sections headed ‘‘Business — Our Suppliers’’ and ‘‘— Subcontracting’’ in this
prospectus.
MARKET AND COMPETITION
The China insurance intermediary industry has experienced constant growth.
According to Frost & Sullivan, the China insur ance intermediary industry will maintain a
steady growth trend, and the scale of underwriting premium in the industry is expected to
grow at a CAGR of 12.8% between 2024 and 2 028, reaching RMB1,505.5 billion in 2028.
The insurance intermediary industry in China, as depicted by the end-of-2022 data and
insights from the latest ‘‘China Insurance Yearbook’’ published in December 2023, presents
a highly competitive and fragmented market landscape. There were 2,215 insurance
intermediary companies in China by the end of 2022. At the same time, due to the insurance
SUMMARY
–1 8–


--- page 29 ---
intermediary licence being recognised at the natio nal level without geographical restriction,
competitors from other provinces have als o entered the market to compete for market
share. Our Company has distinguished ourselves from traditional insurance agencies in the
insurance intermediary industry with a comprehensive mix of insurance products, allowing
us to thrive in this competitive market envir onment. We compete with online and offline
insurance agencies and insurance companies to distribute insurance products. It is expected
that there will not be material impact on our Group in terms of competition given the
existing major entry barriers of the market as stated in the section headed ‘‘Industry
Overview’’ in this prospectus.
SALES AND MARKETING
We promote and distribute insurance products mainly through (i) insurance agents; (ii)
strategic channel partners; an d (iii) direct sales. We had built a sales network consisting of
insurance agents across Shandong, Hebei, Henan and Jilin provinces and 20 strategic
channel partners during the Track Record Peri od. In order to comply with the relevant laws
and regulations and better serve our insurance clients, we set up branch offices at locations
where we conduct and plan to conduct our insurance agency business.
OUR CONTROLLING SHAREHOLDERS
As at the Latest Practicable Date, by virtue of its direct interest in Qingdao
Haichuanghui IoT of 51.20% and the voting right arrangement of the remaining 48.80%,
Haier Group controlled 100% of the voting rig hts of Qingdao Haichuanghui IoT, and as
such, held indirectly approximately 60.44% of the voting rights of our Company through
Qingdao Haichuanghui IoT. Qingdao Haichuanghui IoT was (i) indirectly interested in
approximately 52.88% of our total issued share capital through its indirect shareholding in
Qingdao Haiyinghui through Qingdao Haichuanghui Investment; and (ii) indirectly
interested in approximately 7.56% of our t otal issued share capital through (a) its
indirect shareholding in Qingdao Haichuanghui Venture, which is the general partner of
Qingdao Haichuanghui, through Qingdao Haichuanghui Investment, Haichuanghui
Holding, Ningbo Meishan and (b) its direct shareholding in Qingdao Haichuanghui
Investment, which owned 49.50% interest in Qingdao Haichuanghui as its limited partner.
Immediately following the completion of the Global Offering (assuming the Over-allotment
Option is not exercised), Haier Group will ho ld an aggregate of approximately 45.33% of
the voting rights of our Company through Qingdao Haichuanghui IoT. As such, Haier
Group, together with Qingdao Haichuanghui IoT, Qingdao Haichuanghui Investment,
Haichuanghui Holding, Ningbo Meishan, Qingdao Haichuanghui Venture, Qingdao
Haiyinghui and Qingdao Haichuanghui , will constitute a group of Controlling
Shareholders of our Company.
For more details, please refer to the sections headed ‘‘Relationship with Our
Controlling Shareholders’’ in this prospectus.
SUMMARY
–1 9–


--- page 30 ---
CONTINUING CONNEC TED TRANSACTIONS
We have entered into following agreements with Haier Group, including (i) Utility
Service Framework Agreement, (ii) Comprehensive Services Framework Agreement and
(iii) IT and Consulting Services Framework Ag reement, and the transactions contemplated
under such agreements which will constitute continuing connected transactions under
Chapter 14A of the Listing Rules upon the Listing.
For details of other continuing connected transactions, please refer to the section
headed ‘‘Connected Transactions’’ in this prospectus.
OUR PRE-IPO INVESTORS
Our Company obtained several rounds of investments from the Pre-IPO Investors
through subscriptions for new registered capital of our Company between September 2019
and February 2021. For more details on the P re-IPO Investments and identities and
background of the Pre-IPO Investors, please refer to the section headed ‘‘History and
Development — Pre-IPO Investments’’ in this prospectus.
DIVIDEND
We do not have any fix dividend policy nor pre-determined dividend payout ratio. No
dividends had been declared during the Track Record Period and up to the Latest
Practicable Date. According to our dividend policy, the Articles of Association and
applicable laws and regulations, any future plan of declarations and payments of dividends
will be formulated by our Directors and determined by our Shareholders, and will depend
on our actual and expected results of operations, cash flow and financial position, general
business conditions and business strategies, expected working capital requirements and
future expansion plans, legal, regulatory and other contractual restrictions, and other
factors which our Directors and Shareholders consider relevant. No dividend shall be
declared or payable except out of our profits and reserves lawfully available for
distribution. According to relevant PRC laws, any future net profit that we make will
have to be first applied to make up for our histo rically accumulated losses, after which we
will be obliged to allocate 10% of our net profit to our statutory common reserve fund until
such fund has reached more than 50% of our registered capital.
SUMMARY
–2 0–


--- page 31 ---
F U T U R EP L A N SA N DU S EO FP R O C E E D S
We estimate that the net proceeds we will receive from the Global Offering (after
deducting underwriting commissions, fees and anticipated expenses payable by us in
connection with the Global Offering) will be approximately HK$249.5 million (equivalent
to approximately RMB227.8 million), assumin g the Over-allotment Option is not exercised
and an Offer Price of HK$8.6 per Offer Share, being the mid-point of the Offer Price range
of HK$7.0 to HK$10.2 per Offer Share as stated in this prospectus. Our Directors presently
intend to apply such net proceeds as follows:
. approximately 53.8%, or approximat ely HK$134.1 million (equivalent to
approximately RMB122.5 million), will be used for the development of our
insurance agency business within three years upon Listing;
. approximately 26.2%, or approximately HK$65.4 million (equivalent to
approximately RMB59.7 million), will be used for enhancing our IT service offerings
and research and development capabilit ies within five years upon Listing;
. approximately 10.0%, or approximately HK$25.0 million (equivalent to
approximately RMB22.8 million), will be use d for pursuing selective investment and
acquisitions of two to three target compan ies in insurance intermediary and fintech
industry that have complementary or synergistic effects on our current business to
further accelerate the development of our business and strengthen our competitiveness.
We also intend to apply our internal resources (including cash on hand and releases of
time deposits upon their maturity) of appr oximately RMB100 million to finance the
abovementioned investment and acquisition s to further allow us for more selections;
and
. approximately 10.0%, or approximately HK$25.0 million (equivalent to
approximately RMB22.8 million), will be used for our general working capital and
general corporate purpose.
The above allocation of the net proceeds from the Global Offering will be adjusted on
a pro rata basis in the event that the Offer Price is fixed at a higher or lower level compared
to the mid-point of the indicative Offer Pri ce range stated in this prospectus. If the
Over-allotment Option is exe rcised in full, the net proceeds that we will receive will be
approximately HK$292.7 million (equivalent to approximately RMB267.3 million),
assuming an Offer Price of HK$8.6 per Offer S hare (being the mid-point of the indicative
Offer Price range). In the event that the Over-allotment Option is exercised, we intend to
apply the additional net proceeds to the above purposes in the proportions stated above.
For more details, please refer to the section headed ‘‘Future Plans and Use of Proceeds’’ in
this prospectus.
SUMMARY
–2 1–


--- page 32 ---
STATISTICS OF THE GLOBAL OFFERING
The statistics below are based on the assu mption that 35,300,000 Offer Shares are
issued under the Global Offering:
B a s e do nt h el o we n d
of the indicative
Offer Price range of
HK$7.0 per
Offer Share
Based on the high
end of the indicative
Offer Price range of
HK$10.2 per
Offer Share
Our H Shares market capitalisation (1) HK$247.1 million HK$360.1 million
Our market capitalisation (2) HK$988.4 million HK$1,440.2 million
Unaudited pro forma adjusted consolidated
net tangible assets attributable to equity
shareholders of the Company per Share
(3) HK$4.38 HK$5.14
Notes:
(1) The calculation of market capitalisation is bas ed on the assumption that 35,300,000 H Shares will be in
issue immediately following the com pletion of the Global Offering, assu ming the Over-allotment Option is
not exercised.
(2) The calculation of market capitalisation is based on the assumption that 141,195,600 Shares will be in
issue immediately following the com pletion of the Global Offering, assu ming the Over-allotment Option is
not exercised.
(3) The unaudited pro forma adjusted consolidated net tan gible assets attributable to equity shareholders of
our Company per Share is calculated after the adjustme nts referred to in the section headed ‘‘Appendix II
— Unaudited Pro Forma Financial Information’’ in this prospectus.
LEGAL PROCEEDINGS AND COMPLIANCE
During the Track Record Period and up to the Latest Practicable Date, there was no
litigation or arbitration pending or threate ned against our Group or any of our Directors
which could have a material adverse effect on our Group’s financial condition or results of
operations.
We are of the view that, we had complied, in all material respects, with all relevant laws
and regulations in the PRC during the Track Record Period and up to the Latest
Practicable Date. As confirmed by our PRC Legal Advisers, during the Track Record
Period and up to the Latest Practicable Date, our business operation in the PRC complied
with the relevant PRC laws and regulations in all material respects, and no material
administrative penalties imposed on us have been found that may have a material adverse
effect on our Group’s business operations.
SUMMARY
–2 2–


--- page 33 ---
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
i n c u r r e di nc o n n e c t i o nw i t ht h eG l o b a lo f f ering. Assuming an Offer Price of HK$8.6 per
Offer Share, being the mid-point of the indicative Offer Price range of HK$7.0 to HK$10.2
per Offer Share, the total estimated Listing expenses in connection with the Global Offering
(including underwriting commission) are es timated to be HK$54.1 million (representing
approximately 17.8% of the estimated gros s proceeds from the Global Offering). The
Listing expenses include (i) underwriting c ommission of approximately HK$15.2 million,
and (ii) non-underwriting related expense s of approximately HK$38.9 million, which
consist of fees and expenses of the legal ad visors and reporting accountants of our
Company of approximately HK$22.6 million and other fees and expenses of approximately
HK$16.3 million.
During the Track Record Pe riod, we incurred Listing expenses of RMB18.8 million
(equivalent to approximately HK$20.6 millio n), of which HK$5.5 million was charged to
consolidated statements of profit or loss an d comprehensive income and the remaining
amount of HK$15.1 million will be accounted for as a deduction from equity upon
successful Listing under the relevant accounting standards. We expect to further incur
Listing expenses of HK$33.5 million by the completion of the Listing, of which an estimated
amount of HK2.2 million will be charged to consolidated statements of profit or loss and
comprehensive income and HK$31.3 million w ill be accounted for as a deduction from
equity upon successful Listing. The Listing expenses above are the best estimate as at the
Latest Practicable Date and for reference on ly and the actual amount may differ from this
estimate.
RECENT DEVELOPMENTS
Recent Business Developments
Subsequent to the Track Record Period and up to the Latest Practicable Date, we
continued to focus on our three business segmen ts: (i) insurance agency business; and (ii) IT
services and (iii) consulting services. Our busi ness operation remained stable and there was
no change to our general business model as at the Latest Practicable Date.
Based on our unaudited management accounts for the five months ended 31 May 2024,
our revenue increased as compared with the corresponding period in 2023. Such increase in
revenue was primarily attributable to incre ase in the GWP we facilitated for our insurance
agency business. Our Directors consider that the growth in revenue of our Company is in
line with that of the industry.
In May 2024, a new branch office was set up in Cangzhou, Hebei by Haier Insurance
Agency.
SUMMARY
–2 3–


--- page 34 ---
Recent Regulatory Developments
Pursuant to the Overseas Listing Trial Measures, domestic companies that seek to list
overseas, both directly and indirectly, should f ulfil the filing procedur es and report relevant
information to the CSRC. Please refer to th e section headed ‘‘Regulatory Overview —
Regulations related to Overseas Securities Offering and Listing and Full Circulation’’ in this
prospectus for more details. We have submi tted a filing to the CSRC with respect to the
listing of our H Shares on the Stock Exchange and Global Offering and the CSRC
published a notice on the completion of the filing procedures on 7 August 2023.
The NFRA promulgated the Administrative M easures for Insurance Sales Practises
(《保險銷售行為管理辦法》) on 20 September 2023, which took effect on 1 March 2024.
These measures require full-chain regulation o f insurance sales activities from pre-sale,
during sale, to post-sale stages for insurance intermediary companies including insurance
agencies like us, whether through our in-house sales executives or insurance agents. These
measures also require insurance intermed iaries like us to perform sales management
responsibilities by establishing and improvi ng management rules for insurance sales,
strengthening the management of the identities of insurance sales personnel entrusted by
them, etc. To ensure compliance with these measures, we need to have better knowledge of
and effectively manage our sales personnel, s creen and optimise our sales personnel team,
provide sales practise training courses to them from time to time as well as regularly
self-examine and evaluate the effectiveness and implementation of our insurance sales
management.
Our Directors are of the view that, after consulting the PRC Legal Advisers, we have
complied with the Administrative Measures fo r Insurance Sales Practises in all material
respects since its implementation, and such measures would not have any material adverse
effect on our business operations or financial performance on the basis that: (i) we have
taken various steps including, among others, (a) screening the insurance sales personnel: the
relevant candidates shall fill in an applicat ion form and provide information including
education background and work experiences. In order to screen the qualified insurance
sales personnel, we may verify their identific ations and academic qualifications as well as
conduct necessary background research. In ad dition, our insurance sales personnel shall
complete the practice registration and corre sponding identity authentication with the
competent governmental authorities before conducting insurance agency business; (b)
training the insurance sales personnel: we provide the insurance sales personnel with online
and offline trainings including, induction t rainings for new joiners with a focus on basic
knowledge of insurance industry and regulatory requirements, post-exam trainings designed
for further strengthening their insurance kno wledge and skills, other training sessions from
time to time covering industry laws and regul ations, professional e thics and compliance
requirements, with an aim to improve their serv ice qualities; (c) internal policies: we have
designed and implemented internal polic ies, such as the Management Measures for
Practitioners which set forth the basic entry requirements, restrictions, recruitment
procedures, training and management of the insurance sales personnel; the Business
Operation Management Policy which sets forth the management of the full-chain of
insurance sales activities covering customer profile survey, needs assessment, insurance plan
analysis, completing insurance purchase procedures, assisting with claims and renewal
SUMMARY
–2 4–


--- page 35 ---
arrangements, etc.; the Comprehensive Risk Management Measures which are designed to
address various potential risks identified in relation to our operations and setting forth
procedures to identify, analyse, categorise, mitigate and monitor various risks as well as
reporting hierarchy of risks identified in o ur operation. In addition, Haier Insurance
Agency has submitted the 2023 annual report to the local counterpart of the NFRA in
March 2024, which emphasised the relevant steps and efforts so as to satisfy relevant
requirements under the newly issued Administrative Measures for Insurance Sales Practises;
(ii) since the implementation of the Administrative Measures for Insurance Sales Practises
and up to the Latest Practicable Date, we had not been subject to any material
investigation, inquiry, penalty, litigation or legal proceedings due to violation of the
Administrative Measures for Insurance Sales Practises, nor had we received any
requirement from the PRC governmental aut horities to take rectification measures
pursuant to such new regulations; and (iii) we will closely monitor and assess further
regulatory developments regarding the insu rance sales practises and endeavour to comply
with the latest regulatory requirements in all material respects on an ongoing basis.
Based on (i) the above management measures, training and risk management policies
adopted by our Company; (ii) no enforcement a ction or rectification request has been made
by the PRC governmental authorities against our Company in relation to the
Administrative Measures for Insurance Sales Practises since its implementation and up to
the Latest Practicable Date; and (iii) the Joint Sponsors’ discussion with the PRC Legal
Advisers as to our Company’s compliance with the Administrative Measures for Insurance
Sales Practises, the Joint Sponsors concur with the Directors’ view in relation to our
Company’s compliance with the Administrative Measures for Insurance Sales Practises in
all material respects since its implementation. Please refer to the sections headed ‘‘Risk
Factors — Risks Relating to Our Industry — Our businesses are subject to regulation and
administration by the insurance regulatory au thorities and other government authorities,
and insufficient measures under any applicab le regulations and rules by us could result in
financial losses or harm to our business’’ and ‘‘Regulatory Overview — Regulations Related
to Insurance Agency Business — Market Beha viours — Management of Insurance Sales’’ in
this prospectus for more details.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, there has been no material adverse change in our business,
financial condition and results of operations since 30 April 2024, being the latest balance
sheet date of our consolidated financial statements as set out in the Accountants’ Report
included in Appendix I to this prospectus, and up to the date of this prospectus.
SUMMARY
–2 5–


--- page 36 ---
In this prospectus, the following words and expressions shall have the meanings set out
below unless the context otherwise requires. Certain other terms are explained in the section
headed ‘‘Glossary of Technical Terms’’ in this prospectus.
‘‘affiliate(s)’’ with respect to any speci fied person, any other person, directly or
indirectly, controlling or controlled by or under direct or indirect
common control with such specified person
‘‘AFRC’’ Accounting and Financial Reporting Council
‘‘Articles of
Association’’ or
‘‘Articles’’
the amended and restated articles of association of our
Company, conditionally adopted by the then Shareholders on
17 June 2024 which will become effective on the Listing Date, as
amended, supplemented or otherw ise modified from time to time,
a summary of which is set out in Appendix V to this prospectus
‘‘Audit Committee’’ the audit committee of our Board
‘‘Beijing
Quanzhanggui’’
Beijing Quanzhanggui Internet Technology Co., Ltd ( 北京全掌櫃
互聯網科技有限公司), a limited liability company established in
the PRC on 28 April 2016, which was owned as to 70% by Mr.
Zhang and 30% by Li Jia ( 李佳), the spouse of Mr. Zhang
‘‘Board’’ the board of Directors
‘‘business day(s)’’ any day(s) (other than Saturday(s), Sunday(s) or public
holiday(s) in Hong Kong) on which licensed banks in Hong
Kong are generally open for general banking business
throughout their normal business hours
‘‘Capital Market
Intermediary(ies)’’ or
‘‘CMI(s)’’
the capital market intermediari es participating in the Global
Offering and has the meaning ascribed thereto under the Listing
Rules
‘‘CBIRC’’ the China Banking and Insurance Regulatory Commission ( 中國
銀行保險監督管理委員會), the predecessor of NFRA
‘‘CCASS’’ the Central Clearing and Settlement System established and
operated by HKSCC
‘‘China’’ or ‘‘PRC’’ the People’s Republ ic of China and, except where the context
otherwise requires and only for the purpose of this prospectus,
references in this prospectus to China or the PRC exclude Hong
Kong, the Macao Special Administrative Region and Taiwan
Region
DEFINITIONS
–2 6–


--- page 37 ---
‘‘Chinese government’’
or ‘‘PRC
government’’
the central people’s government of the PRC, including all
governmental subdivisions (inclu ding provincial, municipal and
other regional or local government entities) and instrumentalities
thereof or, where the context requires, any of them
‘‘CIRC’’ China Insurance Regulatory Commission ( 中國保險監督管理委
員會), which was merged with the China Banking Regulatory
Commission to form the CBIRC a ccording to the Decision of the
First Session of the Thirteenth National People’s Congress on
the State Council Institutional Reform Plan ( 《第十三屆全國人民
代表大會第一次會議關於國務院機構改革方案的決定》) issued by
the National People’s Congress on 17 March 2018
‘‘Companies
Ordinance’’
the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented and otherwise modified from
time to time
‘‘Companies (WUMP)
Ordinance’’ or
‘‘Companies
(Winding Up and
Miscellaneous
Provisions)
Ordinance’’
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as amended,
supplemented or otherwise modified from time to time
‘‘Company’’ or ‘‘our
Company’’
Zhongmiao Holdings (Qingdao) Co., Ltd. ( 眾淼控股（青島）股份
有限公司) (formerly known as Zhongmiao Innovation
Technology (Qingdao) Co., Ltd. ( 眾淼創新科技（青島）股份有限
公司
)), a limited liability company established in the PRC on 16
March 2017 and subsequently converted into a joint stock
company with limited liability on 14 March 2023, whose
predecessor was known as Zhongmiao Chuangke (Qingdao)
Co., Ltd. ( 眾淼創新科技（青島）有限公司) (formerly known as
Qingdao Quanzhanggui Technology Co., Ltd. ( 青島全掌櫃科技
有限公司))
‘‘Controlling
Shareholder(s)’’
has the meaning ascribed to it under the Listing Rules and unless
the context requires otherwise, refers to Haier Group, Qingdao
Haichuanghui IoT, Qingdao Haichuanghui Investment,
Haichuanghui Holding, Ningbo Meishan, Qingdao
Haichuanghui Venture, Qingdao Haiyinghui and Qingdao
Haichuanghui
‘‘Corporate Governance
Code’’ or ‘‘CG Code’’
the Corporate Governance Code as set out in Appendix C1 to the
Listing Rules
‘‘CSDC’’ China Securities Depositor y and Clearing Corporation Limited
DEFINITIONS
–2 7–


--- page 38 ---
‘‘CSDC (Hong Kong)’’ China Securities Depository and Clearing (Hong Kong)
Company Limited
‘‘CSRC’’ the China Securiti es Regulatory Commission ( 中國證券監督管理
委員會)
‘‘Designated Bank’’ HKSCC Participant’s EIPO Designated Bank
‘‘Director(s)’’ the director(s) of our Company
‘‘Domestic Share(s)’’ ordinary share in our capital, with a nominal value of RMB1.0
each, which are subscribed for and paid up in Renminbi, which
a r en o tl i s t e do na n ys t o c ke x c h a n g e
‘‘EIT’’ the PRC enterprise income tax
‘‘EIT Law’’ the PRC Enterprise Income Tax Law ( 《中華人民共和國企業所得
稅法》), as amended, supplemented or otherwise modified from
time to time
‘‘Extreme Conditions’’ the occurrence of ‘‘extreme conditions’’ as announced by any
government authority of Hong Kong due to serious disruption of
public transport services, extens ive flooding, major landslides,
large-scale power outage or any other adverse conditions before
Typhoon Signal No. 8 or above is replaced with Typhoon Signal
No. 3 or below
‘‘FINI’’ or ‘‘Fast
Interface for New
Issuance’’
an online platform operated by HKSCC that is mandatory for
admission to trading and, where applicable, the collection and
processing of specified information on subscription in and
settlement for all new issues
‘‘Frost & Sullivan’’ Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., an
independent industry consultant commissioned by us to
prepare the Frost & Sullivan Report
‘‘Frost & Sullivan
Report’’
an independent market research report, commissioned by our
Company and prepared by Frost & Sullivan
‘‘FY2021’’ the financial year ended 31 December 2021
‘‘FY2022’’ the financial year ended 31 December 2022
‘‘FY2023’’ the financial year ended 31 December 2023
‘‘Global Offering’’ the Hong Kong Public Offering and the International Offering
DEFINITIONS
–2 8–


--- page 39 ---
‘‘Group’’, ‘‘our Group’’,
‘‘we’’, ‘‘us’’, or ‘‘our’’
our Company and our subsidiaries, or any one of them as the
context may require or, where the context refers to any time prior
to its incorporation, the business which its predecessors or the
predecessors of its present subsid iaries, or any one of them as the
context may require, were or was engaged in and which were
subsequently assumed by it
‘‘Guide’’ the Guide for New Listing Applicants published by the Stock
Exchange
‘‘H Share Registrar’’ Tricor Investor Services Limited
‘‘H Share(s)’’ ordinary share(s) in the share capital of our Company with
nominal value of RMB1.0 each, which are to be subscribed for
and traded in Hong Kong dollars and are to be listed on the
Stock Exchange
‘‘Haichuanghui
Holding’’
Haichuanghui Holding Co., Ltd. ( 海創匯控股有限公司), a
company established in the PRC with limited liability on 16
March 2018 which is wholly owned by Qingdao Haichuanghui
Investment, and is one of our Controlling Shareholders
‘‘Haier Group’’ Haier Group Corporation ( 海爾集團公司), a collectively-owned
enterprise incorporated under the laws of the PRC and is one of
our Controlling Shareholders, which includes its subsidiaries
where the context requires
‘‘Haier Group insurance
clients’’
Haier Group, its subsidiaries and their respective affiliated
companies which purchase insurance products through our
Group as insurance clients
‘‘Haier Insurance
Agency’’
Qingdao Haier Insurance Agency Co., Ltd. ( 青島海爾保險代理有
限公司), a limited liability company established in the PRC on 17
December 2001 and a wholly-owned subsidiary of our Company
‘‘Hebei Zhongbao’’ Hebei Zhongbao Enterprise Management Consulting
Partnership (Limited Partnership) ( 河北眾保企業管理諮詢合夥
企業（有限合夥）), a limited partnership established in the PRC
on 7 July 2021, a shareholder of Yunhai Lianji Technology, and
owned by employees of our Group
‘‘HK eIPO White Form ’ ’ t h ea p p l i c a t i o no ft h eH o n gK o n gO f f e rS h a r e st ob ei s s u e di nt h e
applicant’s own name by submitting applications online through
the IPO App or 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 in the IPO App or the designated website
at www.hkeipo.hk
DEFINITIONS
–2 9–


--- page 40 ---
‘‘HK$’’ or ‘‘Hong Kong
dollars’’ or ‘‘HK
dollars’’
Hong Kong dollars and cents respect ively, the lawful currency of
Hong Kong
‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
‘‘HKSCC EIPO ’’ the application for the Hong Kong Offer Shares to be issued in
the name of HKSCC Nominees and deposited directly into
C C A S St ob ec r e d i t e dt oy o u rd e s i g n a t e dH K S C CP a r t i c i p a n t ’ s
stock account through causing HKSCC Nominees to apply on
your behalf, including by instructing your broker or custodian
who is a HKSCC Participant to give electronic application
instructions via HKSCC’s FINI system to apply for the Hong
Kong Offer Shares on your behalf
‘‘HKSCC Nominees’’ HKSCC Nominees Lim ited, a wholly-owned subsidiary of
HKSCC
‘‘HKSCC Participant’’ a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a custodian
participant
‘‘Hong Kong’’ or ‘‘HK’’ the Hong Kong Special Administrative Region of the People’s
Republic of China
‘‘Hong Kong Offer
Shares’’
the 3,530,000 H Shares initially offered for subscription pursuant
to the Hong Kong Public Offering, subject to reallocation as
described in the section headed ‘‘Structure of the Global
Offering’’ in this prospectus
‘‘Hong Kong Public
Offering’’
the 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 of the Global Offering’’ in this
prospectus
‘‘Hong Kong
Underwriters’’
the underwriters of the Hong Kong Public Offering listed in the
section headed ‘‘Underwriting — Hong Kong Underwriters’’ in
this prospectus
DEFINITIONS
–3 0–


--- page 41 ---
‘‘Hong Kong
Underwriting
Agreement’’
the underwriting agreement dat ed 26 July 2024 relating to the
Hong Kong Public Offering and entered into by our Company,
Qingdao Haiyinghui and Qingdao Haichuanghui (as warranting
shareholders), our executive Directors (as warranting directors),
the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the CMIs and the Hong Kong Underwriters, as further described
in the section headed ‘‘Underwriting — Underwriting
Arrangements and Expenses — Hong Kong Public Offering —
Hong Kong Underwriting Agreement’’ in this prospectus
‘‘IFRS’’ IFRS Accounting Standards issued by the International
Accounting Standards Board (IASB)
‘‘Independent Third
Party(ies)’’
an individual(s) or a company(ies) who or which, as far as our
Directors are aware after having made all reasonable enquiries,
is/are not a connected person of our Company
‘‘Insurance
Association’’
The Insurance Association of China ( 中國保險行業協會)
‘‘Insurance
Intermediary
Licence’’
Insurance Intermediary Licence ( 保險中介許可證), formerly
known as Licence for Operating Insurance Agency Business ( 經
營保險代理業務許可證)
‘‘Insurance Law’’ the PRC Insurance Law ( 《中華人民共和國保險法》), as amended,
supplemented or otherwise modified from time to time
‘‘International Offer
Shares’’
the 31,770,000 H Shares initia lly offered for subscription
pursuant to the International Offering, subject to the
Over-allotment Option and reallocation as described in the
section headed ‘‘Structure of the Global Offering’’ in this
prospectus
‘‘International
Offering’’
the conditional placing of the International Offer Shares by the
International Underwriters at the Offer Price outside the United
States in offshore transactions in reliance on Regulation S, as
further described in the section headed ‘‘Structure of the Global
Offering’’ in this prospectus
‘‘International
Underwriters’’
the group of underwriters, led by the Overall Coordinators, that
is expected to enter into the International Underwriting
Agreement to underwrite the International Offering
DEFINITIONS
–3 1–


--- page 42 ---
‘‘International
Underwriting
Agreement’’
the underwriting agreement expected to be entered into by our
executive Directors (as warranting directors), Qingdao
Haiyinghui and Qingdao Haichuanghui (as warranting
shareholders), the Joint Sponsors, the Overall Coordinators,
the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the CMIs, the International Underwriters and
our Company in respect of the International Offering
‘‘IPO App ’’ the mobile application for the HK eIPO White Form service
which can be downloaded by searching ‘‘ IPO App ’’ in App Store
or Google Play or downloaded at
http://www.hkeipo.hk/IPOApp
or http://www.trico rglobal.com/IPOApp
‘‘Joint Bookrunners’’ China PA Securities (Hong Kong) Company Limited, CLSA
Limited, CMB International Capital Limited, Fosun
International Securities Limited, Hong Tai Securities Limited
and Patrons Securities Limited
‘‘Joint Lead Managers’’ China PA Securities (Hong Kong) Company Limited, CLSA
Limited, CMB International Capital Limited, Fosun
International Securities Limited, Hong Tai Securities Limited,
Patrons Securities Limited, China Industrial Securities
International Capital Limited, Eddid Securities and Futures
Limited, Fortune (HK) Securities Limited, ICBC International
Securities Limited and Tiger Brokers (HK) Global Limited
‘‘Joint Sponsors
(in alphabetical
order) ’’
CITIC Securities (Hong Kong) Limited and Ping An of China
Capital (Hong Kong) Company Limited, being the joint sponsors
to the Global Offering
‘‘Latest Practicable
Date’’
20 July 2024, being the latest practicable date prior to the
printing of this prospectus for as certaining certain information in
this prospectus
‘‘Listing’’ the listing of the H Shares on the Main Board
‘‘Listing Committee’’ the Listing Committee of the Stock Exchange
‘‘Listing Date’’ the date on which dealings in our H Shares first commence on the
Main Board
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended, supplemented or
otherwise modified from time to time
‘‘Main Board’’ the stock market (excluding the option market) operated by the
Stock Exchange which is independent from and operated in
parallel with GEM of the Stock Exchange
DEFINITIONS
–3 2–


--- page 43 ---
‘‘MOF’’ the Ministry of Finance of the PRC ( 中華人民共和國財政部)
‘‘MOFCOM’’ the Ministry of Commerce of the PRC ( 中華人民共和國商務部)
‘‘Mr. Chung’’ Mr. Chung Wai Man ( 鍾偉文), an independent non-executive
Director
‘‘Mr. Lu’’ Mr. Lu Yao ( 鹿遙), chairman of our Board, an executive
Director and general manager of our Company
‘‘Mr. Wang’’ Mr. Wang Heping ( 王合平), an executive Director and chief
technology officer of our Company
‘‘Mr. Zhang’’ Mr. Zhang Zhiquan ( 張志全), an executive Director and deputy
general manager of our Company
‘‘Ms. Fang’’ Ms. Fang Qiaoling ( 房巧玲), an independent non-executive
Director
‘‘Ms. Li’’ Ms. Li Tian ( 李甜), an executive Directo r and chief financial
officer of our Company
‘‘Ms. Ng’’ Ms. Ng Sin Kiu ( 吳先僑), an independent non-executive Director
‘‘NDRC’’ the National Development and Reform Commission of the PRC
(中華人民共和國國家發展和改革委員會)
‘‘NFRA’’ the National Financial Regulatory Administration ( 國家金融監
督管理總局)
‘‘Ningbo Meishan’’ Ningbo Meishan Free Trade Port Area Haichuanghui
Investment Management Co., Ltd. ( 寧波梅山保稅港區海創匯投
資管理有限公司), a company established in the PRC with limited
liability on 2 June 2016 which is wholly owned by Haichuanghui
Holding, and is one of our Controlling Shareholders
‘‘Nomination
Committee’’
the nomination committee of our Board
‘‘NPC’’ or ‘‘National
People’s Congress’’
the National People’s Congress of the PRC ( 中華人民共和國全國
人民代表大會)
‘‘NPC Standing
Committee’’
the Standing Committee of National People’s Congress ( 全國人
民代表大會常務委員會)
DEFINITIONS
–3 3–


--- page 44 ---
‘‘Offer Price’’ the final offer price pe r Offer Share in Hong Kong (exclusive of
brokerage, SFC transaction levy, AFRC transaction levy and
Stock Exchange trading fee) of not more than HK$10.2 and
expected to be not less than HK$7.0 at which the Offer Shares
are to be subscribed for and issued pursuant to the Global
Offering, to be determined in the manner further described in the
section headed ‘‘Underwriting’’ in this prospectus
‘‘Offer Share(s)’’ the Hong Kong Offer Shares and the International Offer Shares,
collectively, and where relevant, together with any additional
Shares which may be issued pursuant to the exercise of the
Over-allotment Option
‘‘Over-allotment
Option’’
t h eo p t i o ne x p e c t e dt ob eg r a n t e db yo u rC o m p a n yt ot h e
International Underwriters, exercisable at the sole discretion of
the Overall Coordinators (for themselves and on behalf of the
International Underwriters) pursuant to which our Company
may be required to allot and issue up to 5,295,000 H Shares at
the Offer Price (representing 15 % of the Offer Shares initially
being offered under the Global Offering) to cover over-allocation
in the International Offering. For more details, please refer to
the section headed ‘‘Underwriting’’ in this prospectus
‘‘Overall Coordinators’’
and ‘‘Joint Global
Coordinators’’(in
alphabetical order) ’’
China PA Securities (Hong Kong) Company Limited and CLSA
Limited
‘‘Overseas Listing Trial
Measures’’
the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies ( 《境內企業境外發
行證券和上市管理試行辦法》)
‘‘PBOC’’ the People’s Bank of China ( 中國人民銀行), the central bank of
the PRC
‘‘PRC Company Law’’
or ‘‘Company Law’’
the Company Law of the PRC 《中華人民共和國公司法》,a s
enacted by the Standing Committee of the Eighth National
People’s Congress on 29 Decemb er 1993 and effective on 1 July
1994, as amended, supplemented or otherwise modified from
time to time
‘‘PRC GAAP’’ PRC Generally Accepted Accounting Principles
‘‘PRC Legal Advisers’’ Fangda Partners, le gal advisers to our Company as to PRC Law
DEFINITIONS
–3 4–


--- page 45 ---
‘‘Pre-IPO
Investment(s)’’
the pre-IPO investment(s) in o ur Company undertaken by the
Pre-IPO Investors. For more details, please refer to the section
headed ‘‘History and Development — Pre-IPO Investments’’ in
this prospectus
‘‘Pre-IPO Investor(s)’’ Qingdao Haizhon gjie, Qingdao Haixinsheng and Qingdao
Haichuangying
‘‘Price Determination
Agreement’’
the price determination agreement to be entered into between our
Company and the Overall Coordinators (for themselves and on
behalf of the Underwriters) on the Price Determination Date to
record and fix the Offer Price
‘‘Price Determination
Date’’
the date, expected to be on or around Friday, 2 August 2024 but
in any event not later than 12 : 00 noon on Friday, 2 August 2024,
on which the Offer Price will be determined for the purposes of
the Global Offering
‘‘prospectus’’ this prospectus being issued in connection with the Hong Kong
Public Offering
‘‘province’’ All provincial-level administrative regions of the PRC, including
provinces, autonomous regions, municipalities directly under the
Central Government and special administrative regions of the
PRC
‘‘Qingdao Haichuang’’ Qingdao Haichuang Management Consultant Co., Ltd. ( 青島嗨
創管理諮詢有限公司), a limited liability company established in
the PRC on 13 October 2017 and is wholly owned by Mr. Lu
‘‘Qingdao
Haichuanghui’’
Qingdao Haichuanghui Ronghai Venture Capital Center
(Limited Partnership) ( 青島海創匯融海創業投資中心（有限合
夥）), a limited partnership established in the PRC on 20
December 2016, owned as to 1.00% by Qingdao Haichuanghui
Venture Capital Co., Ltd. ( 青島海創匯創業投資有限公司)a si t s
general partner, as to 49.50% each by Qingdao Haichuanghui
Investment Co., Ltd. ( 青島海創匯投資有限公司) and Qingdao
Ronghai Guotou Equity Investment Fund Co., Ltd. ( 青島融海國
投股權投資基金有限
公司) as its limited partners, and one of our
Controlling Shareholders
‘‘Qingdao
Haichuanghui
Investment’’
Qingdao Haichuanghui Investment Co., Ltd. ( 青島海創匯投資有
限公司), a company established in the PRC with limited liability
on 17 July 2014 which is wholly owned by Qingdao
Haichuanghui IoT, and is one of our Controlling Shareholders
DEFINITIONS
–3 5–


--- page 46 ---
‘‘Qingdao
Haichuanghui IoT’’
Qingdao Haichuanghui IoT Co., Ltd. ( 青島海創匯物聯有限公
司), a company established in the PRC with limited liability on
18 December 2023 which is owned as to 51.2% by Haier Group
and 48.8% by Qingdao Haichuangke (the voting rights of which
is entrusted to Haier Group), and is one of our Controlling
Shareholders
‘‘Qingdao
Haichuanghui
Venture’’
Qingdao Haichuanghui Venture Capital Co., Ltd. ( 青島海創匯創
業投資有限公司), a company established in the PRC with limited
liability on 14 December 2016 which is wholly owned by Ningbo
Meishan, and is one of our Controlling Shareholders
‘‘Qingdao
Haichuangke’’
Qingdao Haichuangke Management Consulting Enterprise
(Limited Partnership) ( 青島海創客管理諮詢企業（有限合夥）), a
limited partnership established in the PRC on 16 September
2014, which is ultimately controlled by Mr. Zhang Ruimin ( 張瑞
敏), one of the founders of Haier Group
‘‘Qingdao
Haichuangying’’
Qingdao Haichuangying Equity Investment Partnership (Limited
Partnership) ( 青島海創贏股權投資合夥企業（有限合夥）), a
limited partnership established in the PRC on 3 December
2020, was owned as to 29.61% by Qingdao Haichuangying No. 4
Management Consulting Enterprise (Limited Partnership) ( 青島
海創贏肆管理諮詢企業（有限合夥
）), 27.64% by Qingdao
Haichuangying No. 1 Management Consulting Enterprise
(Limited Partnership) ( 青島海創贏壹管理諮詢企業（有限合夥）),
21.32% by Qingdao Haichuangying No. 2 Management
Consulting Enterprise (Limited Partnership) ( 青島海創贏貳管理
諮詢企業（有限合夥）), 13.03% by Qingdao Haichuangying No. 5
Management Consulting Enterprise (Limited Partnership) ( 青島
海創贏伍管理諮詢企業（有限合夥）), 7.90% by Qingdao
Haichuangying No. 3 Management Consulting Enterprise
(Limited Partnership) ( 青島海創贏叁管理諮詢企業（有限合夥）)
all being its limited partners, and 0.5% by Qingdao Haizhi
Huiying Equity Investment Management Co., Ltd. ( 青島海智匯
贏股權投資管理有限公司) as its general partner, all of which are
controlled by Zhang Ruimin ( 張瑞敏), who is one of the founders
of Haier Group, and our Pre-IPO Investor
‘‘Qingdao Haixinsheng’’ Qingdao Haixinsheng Management Consulting Enterprise
(Limited Partnership) ( 青島海欣盛管理諮詢企業（有限合夥）), a
limited partnership established in the PRC on 16 April 2020
owned as to 99.8% by Yang Yimin ( 楊宜民) as the limited
partner and as to 0.2% by Qingdao Haichuang as its general
partner, our Pre-IPO Investor
DEFINITIONS
–3 6–


--- page 47 ---
‘‘Qingdao Haiyinghui’’ Qingdao Haiyinghui Management Consulting Co., Ltd. ( 青島海
盈匯管理諮詢有限公司), a limited liability company established
in the PRC on 23 February 2017, ultimately controlled by Haier
Group, and one of our Controlling Shareholders
‘‘Qingdao Haizhongjie’’ Qingdao Haizhongjie Management Consulting Enterprise
(Limited Partnership) ( 青島海眾捷管理諮詢企業（有限合夥）), a
limited partnership established in the PRC on 12 April 2017 and
owned as to 0.10% by Qingdao Haichuang as its general partner,
46.80% by 29 individuals and 53.10% by Qingdao Yunmiaoyue
Management Consulting Partnership (Limited Partnership) ( 青
島雲淼岳管理諮詢合夥企業) (owned as to 0.0021% by Qingdao
Haichuang as its general partner and 99.9979% by 33 individuals
as its limited partners) as limited partners, and our Pre-IPO
Investor
‘‘Receiving Bank’’ Bank of China (Hong Kong) Limited
‘‘Regulation S’’ Regulation S under the U.S. Securities Act
‘‘Relevant Persons’’ the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Underwriters, any of their or our Company’s respective
directors, advisers, officers, empl oyees, agents or representatives
or any other person or party involved in the Global Offering
‘‘Remuneration
Committee’’
the remuneration committee of our Board
‘‘Reporting
Accountants’’
KPMG
‘‘RMB’’ or ‘‘Renminbi’’ Renminbi, the lawful currency of the PRC
‘‘SAFE’’ the State Administration of Foreign Exchange of the PRC ( 中華
人民共和國外匯管理局)
‘‘SAMR’’ the State Administration for Market Regulation of the PRC ( 中
華人民共和國國家市場監督管理總局)
‘‘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 and modified from
time to time
DEFINITIONS
–3 7–


--- page 48 ---
‘‘Shanghai Zhaoqi’’ Shanghai Zhaoqi Management Consulting Partnership (Limited
Partnership) ( 上海曌奇管理諮詢合夥企業（有限合夥）), a limited
partnership established in the PRC on 1 February 2018 and
owned as to 0.20% by Qingdao Haichuang as its general partner
and Mr. Lu, Mr. Zhang, Ms. Li, Mr. Wang, Zhu Rongwei ( 朱榮
偉), Wang Yangyang ( 王陽陽), Beijing Quanzhanggui and other
9 employees as its limited partners (as to 27.20%, 31.40%,
2.00%, 5.00%, 0.20%, 0.20%, 28.60% and 5.20%), and our
substantial Shareholder
‘‘Share(s)’’ ordinary share(s) with nominal value RMB1.0 each in the share
capital of our Company, comp rising Domestic Shares and H
Shares
‘‘Shareholder(s)’’ holder(s) of the Share(s)
‘‘STA’’ the State Taxation Administration of the PRC ( 中華人民共和國
國家稅務總局)
‘‘Stabilising Manager’’ CLSA Limited
‘‘State Council’’ the State Council of the PRC ( 中華人民共和國國務院)
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘subsidiary(ies)’’ has the meaning ascribed to it under the Listing Rules
‘‘Supervisor(s)’’ member(s) of our Supervisory Committee
‘‘Supervisory
Committee’’
the supervisory committee of our Company
‘‘Takeovers Code’’ The Codes on Takeovers and Mergers and Share Buy-backs
issued by the SFC, as amended, supplemented or otherwise
modified from time to time
‘‘Track Record Period’’ the period comprising the financial years ended 31 December
2021, 2022 and 2023 and the four months ended 30 April 2024
‘‘Underwriters’’ the Hong Kong Underwriters and the International Underwriters
‘‘Underwriting
Agreements’’
the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
‘‘United States’’ or
‘‘U.S.’’
the United States of America
DEFINITIONS
–3 8–


--- page 49 ---
‘‘U.S. Securities Act’’ the United States Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time, and the
rules and regulations promulgated thereunder
‘‘VAT’’ value-added tax
‘‘Yunhai Lianji
Technology’’
Qingdao Yunhai Lianji Technology Co., Ltd. ( 青島雲海聯冀科技
有限公司), a limited liability company established in the PRC on
16 August 2021 and a non-wholly owned subsidiary of our
Company
‘‘Zhongmiao Caizhi’’ Qingdao Zhongmiao Caizhi Human Resource Management
Consulting Co., Ltd. ( 青島眾淼才智人力資源管理諮詢有限公
司), a limited liability company established in the PRC on 11
September 2020 and a wholly-owned subsidiary of our Company
‘‘Zhongmiao Shujin’’ Qingdao Zhongmiao Shujin Technology Co., Ltd. ( 青島眾淼數金
科技有限公司), formerly known as Qingdao Quanzhanggui
Enterprise Consulting Co., Ltd. ( 青島全掌櫃企業管理諮詢服務
有限公司), a limited liability company established in the PRC on
31 December 2021 and a wholly -owned subsidiary of our
Company
‘‘sq.m.’’ square metre(s)
‘‘%’’ per cent
‘‘4M2023’’ the four months ended 30 April 2023
‘‘4M2024’’ the four months ended 30 April 2024
Unless otherwise expressly stated or the cont ent otherwise requires, in this prospectus:
. 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; and
. 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 figures preceding them.
DEFINITIONS
–3 9–


--- page 50 ---
The English names of the PRC entities, laws, rules, regulations, nationals, entities,
governmental authorities, institutions, facilitie s, certificates and title s etc. mentioned in this
prospectus, 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
–4 0–


--- page 51 ---
This glossary contains explanations of certain terms, definitions and abbreviations used
in this prospectus in connection with our Group and our business. The terms and their
meanings may not correspond to standard industry meaning or usage of those terms.
‘‘AI’’ artificial intelligence, inte lligence exhibited by machines in the
area of computer science that emphasises that creation of
intelligent machines that work and react like human or other
natural intelligence
‘‘AML’’ anti-money laundering
‘‘APP’’ a computer programme designed to run on a mobile device
‘‘CAGR’’ compounded annual growth rate
‘‘corporate insurance
client(s)’’
company(ies) which purchase insurance products
‘‘COVID-19’’ the coronavirus disease
‘‘CV’’ computer vision, a field of AI that uses machine learning and
neural networks to teach computers and systems to derive
meaningful information from dig ital images, videos and other
visual inputs
‘‘GDP’’ gross domestic product
‘‘GWP’’ or ‘‘gross
written premiums’’
total premiums (whether or not earned) for insurance contracts
written or assumed during a specific period, without deduction
for premiums ceded
‘‘household insurance
client(s)’’
individual(s) who purchase insurance products
‘‘HR’’ human resources
‘‘insurance business
income’’
income derived from commissions earned by distributing
insurance products on behalf of insurance companies based on
policyholder premiums
‘‘IT’’ information technology
‘‘long-term life and
health insurance
products’’
life and health insurance products with duration of over one year
GLOSSARY OF TECHNICAL TERMS
–4 1–


--- page 52 ---
‘‘NLP’’ acronym for ‘‘natural language processing’’, a way for computers
to analyse, understand and derive meaning from human language
in a smart and useful way
‘‘OCR’’ the electronic or mechanical conversion of images of typed,
handwritten or printed text into machine-encoded text
‘‘premium persistency
ratio’’
the denominator is the premiums paid in the previous year for
the long-term life and health insurance products which came into
force in the previous year, while the numerator is the actual
premiums paid in the current year for the life and health
insurance products which came into force in the previous year
‘‘R&D’’ research and development
‘‘short-term life and
health insurance
products’’
life and health insurance products with duration of one year or
shorter
‘‘software’’ any set of machine-readable instructions that directs a
computer’s processor to perform specific operations
GLOSSARY OF TECHNICAL TERMS
–4 2–


--- page 53 ---
This prospectus contains certain statements that are, or may be deemed to be,
‘‘forward-looking statements’’. These forward-looking statements may be identified by the
use of forward-looking terminology, including the terms ‘‘believe(s)’’, ‘‘aim(s)’’,
‘‘estimate(s)’’, ‘‘plan(s)’’, ‘‘project(s)’’, ‘‘anticipate(s)’’, ‘‘expect(s)’’, ‘‘going forward’’,
‘‘intend(s)’’, ‘‘may’’, ‘‘might’’, ‘‘seek(s)’’, ‘‘can’’, ‘‘could’’, ‘‘ought to’’, ‘‘potential’’, ‘‘will’’ or
‘‘should’’ or similar expressions, or, in each case, their negative or other variations, or
comparable terminology, or by discussions of strategy, plans, objectives, goals, future
events or intentions. In particular, references to ‘‘estimate(s)’’ only refer to situations where
best estimates have been adopted by the management. These forward-looking statements
include all matters that are not historical facts. They appear in a number of places
throughout this prospectus and include, but are not limited to, statements regarding our
intentions, beliefs or current expectations concerning, among other things, our business,
results of operations, financial position, liquidity, prospects, growth, strategies and the
industries and markets in which we operate or may operate in the future.
By their nature, forward-looking statements involve risk and uncertainty because they
relate to future events and circumstances. For ward-looking statements are not guarantees
of future performance or the actual results of our operations, financial position and
liquidity. The development of the markets and the industries in which we operate may differ
materially from the description or implication suggested by the forward-looking statements
contained in this prospectus. In addition, even if our results of operations, financial
position and liquidity as well as the development of the markets and the industries in which
we operate are consistent with the forward-looking statements contained in this prospectus,
those results or developments may not be indicative of results or developments in
subsequent periods. A number of risks, uncertainties and other factors could cause results
and developments to differ materially from those expressed or implied by the
forward-looking statements i ncluding, without limitation:
. our operations and business prospects;
. our ability to maintain and enhance our market position;
. the effects of competition in the industries or markets we operate and its potential
impact on our business;
. developments in, or changes to, laws, regulations, governmental policies, taxation or
accounting standards or practises affecting our operations, especially those related to
the operation of our business;
. global general political and economic conditions;
. our ability to successfully implement any of ou r business strategies, plans, objectives
and goals;
. our ability to expand and mana ge our business operations;
FORWARD-LOOKING STATEMENTS
–4 3–


--- page 54 ---
. our ability to obtain or extend the terms o f the licences and leases necessary for the
operation of our business;
. changes to our expansion plans and estimated capital expenditures;
. adverse changes or developments in the industries in which we operate;
. fluctuations in inflation, inte rest rates and exchange rates;
. changes in the availability of, or ne w requirements, for financing; and
. our success in accurately identifying future risks to our business and managing the
risks of the aforementioned factors.
Forward-looking statements may and often d o differ materially from actual results.
Any forward-looking statement in this prospectus reflect our management’s current view
with respect to future events and are subject t o risks relating to future events and other
risks, uncertainties and assump tions. Investors should specifically consider the factors
identified in this prospectus, which could cause actual results to differ, before making any
investment decision. Subject to the requirements of the Listing Rules and except as may be
required by applicable law, we undertake no o bligation to revise any forward-looking
statements that appear in this prospectus to re flect any change in our expectations, or any
events or circumstances, that may occur or arise after the date of this prospectus. All
forward-looking statements in this prospectus are qualified by reference to this cautionary
statement.
FORWARD-LOOKING STATEMENTS
–4 4–


--- page 55 ---
You should carefully consider all the information in this prospectus, including the risks
and uncertainties described below and our historical financial information and the related
notes, prior to investing in the H Shares. The risk factors relating to our business, industry
and the PRC may not typically be associated with investing in equity securities of similar
companies from other jurisdictions. Our business, financial condition, results of operations
or prospects could be materially and adversely affected by any of these risks. The trading
price of the H Shares could decrease due to any of these risks and you may lose all or part of
your investment.
We believe that there are certain risks invo lved in our operations, some of which are
beyond our control. These risks can be broadly categorised into: (i) risks relating to our
business; (ii) risks relating to our industry; (i ii) risks relating to conducting our business in
the PRC; and (iv) risks relating to the Global Offering.
RISKS RELATING TO OUR BUSINESS
We may not be able to provide diversified insurance products and services to effectively
address our insurance clients’ needs, which could have a material adverse effect on our
business, results of operations and financial condition.
We attract, procure and retain insurance clients by offering a comprehensive mix of
insurance products underwritten by our insurance company partners. To continue to grow
our insurance client base, we seek to collaborate with more insurance companies located in
our existing and new geographical markets, while maintaining comprehensive insurance
product choices.
We also strive to continuously enhance our insurance agency services, IT services and
consulting services by offering more comp rehensive service packages and enhanced
experience. However, expansion into new pro duct and service categories involves new
risks and challenges. If we fail to respond to the changing and emerging needs and
preferences of our customers and insurance clients and offer new products and services that
are favoured to them, we may lose out on our business volume and/or not be able to
continue to attract new customers or maintain existing customers. If any of the foregoing
occurs, our business, results of operations and financial condition may be materially and
adversely affected.
If we fail to maintain stable relationships with our business partners, our business, results of
operations, financial condition and business prospects could be materially and adversely
affected.
We cooperate with a variety of business partners in conducting our businesses,
including customers and suppliers in our bus iness operation. Our success depends on our
ability to, among other things, develop and maintain relationships with our existing
business partners and attract new business partners.
RISK FACTORS
–4 5–


--- page 56 ---
Failure to maintain stable relationships with insurance company partners and insurance clients
We generally provide insurance agency services to our insurance company partners
which are major insurance companies in the PRC and receive commissions from them for
successful distributions of their insurance products. For more details, please refer to the
section headed ‘‘Business — Our Business Mod el — (i) insurance agency business’’ in this
prospectus. Our relationships with these insurance company partners are governed by
agreements between the insurance company p artners and us. These agreements generally
provide, among other things, the scope of our services and our commission rates, and
typically have a term of one year and may be terminated with prior written notice. Our
insurance company partners may terminate the agreement with cause, including but not
limited to our breach of laws and regulations, unauthorised changes of insurance term and
forgery of documents and information. There is no assurance that we would be able to
renew any such agreements upon their expiry with terms that are comparable to or better
than the existing ones, if at all. Any interruption to or discontinuation of our relationships
with our insurance company partners may severely and negatively impact our results of
operations.
In addition, our insurance company partne rs and insurance clients’ recognition is
critical for us to remain competitive. Our ability to maintain and enhance their recognition
and reputation depends primarily on the qua l i t yo fs e r v i c e sw eo f f e rt ot h e m .I fw ea r e
unable to maintain and further enhance their recognition and our reputation, we may not be
able to maintain or continue to expand our insurance client base, and our results of
operations may be materially and adversely affected. Furthermore, any negative or
malicious publicity relating to our Group a nd services could harm our reputation and in
turn materially and adversely affect ou rb u s i n e s sa n dr e s u l t so fo p e r a t i o n s .
Furthermore, we also derived a significant portion of our revenue from a small number
of insurance company partners with respect to our insurance agency services. For more
details, please refer to the paragraph headed ‘‘We are subject to customer concentration
risk. Our growth and revenue could be materially and adversely affected if we lose any
significant customer, or if any significant cu stomer fails to cooperate with us at anticipated
levels’’ in this section.
Failure to maintain stable relationships with strategic channel partners
During the Track Record Period, our revenue was generated through strategic channel
partners (to which approximately 38.7%, 53.0%, 60.5% and 65.8% of our commission
income was attributable), insurance agents (to which approximately 42.8%, 21.4%, 18.6%
and 14.1% of our commission income was attributable) and direct sales (to which
approximately 18.5%, 25.7%, 20.9% and 20.1% of our commission income was
attributable). As such, we primarily rely on strategic channel partners to expedite our
market penetration and broaden our insurance client base. For more details, please refer to
the paragraph headed ‘‘Our Group had a concentration of major suppliers during the Track
Record Period’’ in this section. Failure to estab lish and maintain stable relationships with
RISK FACTORS
–4 6–


--- page 57 ---
our strategic channel partners may materially and adversely affect our exposure to business
opportunities, which in turn could adversely affect our results of operations and business
prospects.
Our agreements with our strategic channel partners generally have a term of one year
to three years. They may choose to cooperate with our competitors or offer competing
services themselves after the agreement expires . In addition, there is an increasing trend that
major insurance companies build their own Inte rnet or mobile channels and strengthen their
in-house capabilities to distribute their insura nce products, as well as establishing their own
insurance agency arms. In any event, there is no assurance that we will be able to
continuously maintain a mutually beneficial relationship with our strategic channel
partners, or continue to cooperate with them on terms favourable to us, or at all. If any
of the foregoing occurs, our business growth, results of operations and financial condition
will be adversely affected.
We are subject to customer concentration risk. Our growth and revenue could be materially
and adversely affected if we lose any significant customer, or if any significant customer fails
to cooperate with us at anticipated levels.
We derived a significant portion of our revenue from a small number of insurance
company partners with respect to our insurance agency services. This concentration of our
major customers is mainly due to the fact th at the insurance market in the PRC is highly
concentrated, where the top 10 insurance providers in the PRC accounted for
approximately over 60% of the market sha re in 2023. For the years ended 31 December
2021, 2022 and 2023 and the four months ended 30 April 2024, revenue generated from our
top five customers in each year/period dur ing the Track Record Period, in aggregate,
accounted for approximately 75.0%, 65.5%, 65.6% and 70.3% of our total revenue,
respectively. For the same periods, revenue generated from our largest customer accounted
for 35.0%, 38.1%, 36.1% and 31.7% of our total revenue, respectively. For more details,
please refer to the section headed ‘‘Business — Our Customers — Reliance on major
customers’’ in this prospectus.
There are a number of factors, other than ou r performance, that could cause the loss
of, or decrease in the volume of business from, a customer. We cannot assure you that we
will continue to maintain the business coopera tion with these customers at the same level,
or at all. The loss of business from any of these significant customers, or any downward
adjustment of the commission rates paid to us or the number of products offered to us,
could materially adversely affect our revenue and profit. Furthermore, if any significant
customer terminates its relationship with us, we cannot assure you that we will be able to
secure an alternative arrangement with comp arable insurance company partner in a timely
manner, or at all.
Our Group had a concentration of major suppliers during the Track Record Period.
Our Group had a concentration of major s uppliers during the Track Record Period.
We rely on our major suppliers to provide us with referral services for our insurance agency
business. For the years ended 31 December 2021, 2022 and 2023 and the four months ended
RISK FACTORS
–4 7–


--- page 58 ---
30 April 2024, our purchases from our five larg est suppliers in each year/period during the
Track Record Period amounted to approx imately RMB42.1 million, RMB58.6 million,
RMB74.4 million and RMB26.8 million, respecti vely, accounting for 58.5%, 72.2%, 74.7%
and 79.3% of our total purchases, respectivel y, while purchase from our largest supplier
amounted to RMB26.5 million, RMB31.9 m illion, RMB45.3 million and RMB15.5 million,
respectively, accounting for 36.8%, 39.3%, 45.6% and 45.8% of our total purchases,
respectively. As such, our reliance on our five largest suppliers in providing services to us
during the Track Record Period was relatively high. In particular, we have reliance on
referral services provided by Supplier A for our insurance agency business, where Supplier
A was our largest supplier and strategic channel partner in each of the years ended 31
December 2021, 2022 and 2023 and the four mont hs ended 30 April 2024. Since majority of
the insurance clients referred by Supplier A continued to purchase insurance products from
us on an annual basis during the Track Record Period and Supplier A continued to refer
new insurance clients to us to purchase insurance products, there had been an increase in
our referral fees to Supplier A during the Track Record Period. We normally enter into
collaboration agreements with our insurance agents for a term of three years and strategic
channel partners for a term of one year to three years. The termination of cooperation from
any of these major suppliers could materially and adversely affect our revenue and profit.
Furthermore, if any major supplier terminates its relationship with us, we cannot assure you
that we will be able to secure an alternative arrangement with comparable supplier in a
timely manner, or at all.
Our historical business growth and profitabilit y may not be indicative of future performance.
You should not rely on the results of our operations as an indication of future revenue, profit or
growth.
Our Group’s operations have grown rapidly and our revenue and profit in turn have
grown accordingly. Our total revenue in creased from RMB120.0 million in 2021 to
RMB148.4 million in 2022 and further to RMB 174.0 million in 2023, representing a CAGR
of 20.4%, and from RMB53.4 million in 4M2023 to RMB58.6 million in 4M2024. In
addition, our net profit increased from RM B27.0 million in 2021, to RMB36.3 million in
2022 and further to RMB39.0 million in 2023, re presenting a CAGR of 20.2%, and further
from RMB13.4 million in 4M2023 to RMB14.8 million in 4M2024.
However, our historical performance may not be indicative of our future growth or
financial results. We cannot assure you that we will be able to deliver similar growth in the
future, or avoid any decline in the future. Our growth may slow down or become negative,
and revenue and net profit may decline for a number of possible reasons, including the risk
factors set forth in this prospectus. Some of the risks are beyond our control, including
declining growth of our overall market or industry, increasing competition, the emergence
of alternative business models, decreasing cu stomer base, changes in rules, regulations,
government policies or general economic con ditions, and we may encounter unforeseen
expenses, difficulties, complications, delays and other unknown factors. You should
consider our business and prospects in light of these risks, and not unduly rely on our past
r e s u l t so fo p e r a t i o n so rh i s t o r i c a lg r o w t hr a t ea sa ni n d i c a t o ro fo u rf u t u r ep e r f o r m a n c e .
RISK FACTORS
–4 8–


--- page 59 ---
As the commission income we receive from the distribution of insurance products to insurance
clients is based on premium and commission rates set by our insurance company partners, any
decrease in these commission rates, or any incre ase in the commissions or referral fees we pay,
may have an adverse effect on our results of operation.
We derive a majority of our revenue from our insurance agency business by receiving
commissions from our insurance company partners for successful distribution of their
insurance products to insurance clients through us. Our commissions are generally
calculated based on a percentage of the premiums of insurance policies sold through us.
Our revenue and results of operations are thus directly affected by the size of insurance
premiums and the commission rates for such policies.
Insurance premiums and commission ra tes can change based on the prevailing
economic, regulatory, taxatio n-related and competitive fac tors that affect insurance
companies and end consumers. These factors, many of which are not within our control,
include insurance companies’ expectation on profits, the expected claim ratios, insurance
clients’ demand for insurance products in the market, the availability and pricing of
comparable products from other insurance companies, requirements set by the industry
association, regulatory requirements and governmental policies and other factors that affect
our insurance company partners at the relevant time.
On the other hand, we engage insurance agents to promote and distribute the insurance
products authorised by our insurance company partners and cooperate with strategic
channel partners to expand our reach to large population of corporate and household
insurance clients, and we pay commissions to insurance agents and referral fees to strategic
channel partners for successful purchase of insurance products conducted by them. We may
adjust the rates of commissions and referra l fees at our discretion, depending on the
competitive landscape and market conditions in the respective geographical markets.
Accordingly, any increase in such rates would reduce our profit margin.
As we do not determine, and cannot predict, the timing or extent of premium or
commission rate changes, we cannot predict the effect any of these changes may have on our
operations. Any decrease in the commission rates as set by our insurance company partners,
any increase in the rates of commissions we pay to our insurance agents and referral fees we
pay to our strategic channel partners, could significantly affect our profitability. In
addition, our capital expenditures and other expenditures may be disrupted by unexpected
decreases in revenue caused by decreases in premiums or commission rates, thereby
adversely affecting our operations and business plans.
We face intense competition in the markets we operate in, and some of our competitors may
have greater resources or brand recognition than us.
We expect competition to persist and inten sify. In insurance agency business, we face
competition from insurance companies that use their in-house sales force, exclusive sales
agents, telemarketing, and Internet or mob ile channels to distribute their insurance
products, and from business entities that d istribute insurance products on an ancillary
basis, such as commercial banks and postal offices, as well as from other professional
RISK FACTORS
–4 9–


--- page 60 ---
insurance intermediaries. The increasing competition with insurance companies and other
insurance intermediaries that operate their businesses through online channels presents
further challenges as they continue to enhance their client experience through user-friendly
interfaces and instant quoting tools, which all ow them to gain competitive edges in offering
seamless online experience to insurance clients. Failure to provide seamless online
experience may result in losing market share and may lead to diminished competitiveness.
We have many competitors across geographies including individual insurance agents,
insurance intermediaries, Internet insura nce platforms and other insurance companies.
Some of our competitors have greater financial and marketing resources than we do, and
may be able to offer products and services that we do not currently offer and may not offer
in the future. The disruption of business coop eration with major insurance companies we
cooperate with may cause us to lose our competitive advantages in certain areas. If we are
unable to compete effectively against and s tay ahead of our competitors, we may lose
customers and our financial results may be negatively affected.
Any significant disruption in services on our online platforms, websites or computer systems,
including events beyond our control, could materially and adversely affect our business,
financial condition and results of operation.
Our business is highly dependent on the ab ility of our information technology systems
to timely process a large number of information across different markets and products at a
time when the volume of such transactions is growing rapidly. We are also increasingly
relying on our online platforms, including ‘‘Quan Zhanggui ( 全掌櫃)’’ APP and our website,
to facilitate the business operation. Usa bility and stability of our online platforms as
perceived by users can influence insurance clie nts’ satisfaction. The proper functioning and
improvement of our online platforms, is crit ical to our business and to our ability to
compete effectively. We cannot assure you that our business activities would not be
materially disrupted in the event of a partial or complete failure of functions on our online
platforms, which could be caused by, among other things, software malfunction, computer
virus attacks or conversion errors due to system upgrading. In addition, a prolonged failure
of any of our information technology systems could damage our reputation and materially
and adversely affect our operations and profitability.
Any breaches to our security measures, including unauthorised access to our systems,
computer viruses and cyber attacks may adversely affect our database and reduce the use of
our services and damage our reputation and brand names.
Breaches to our security measures, including computer viruses and cyber attacks, may
result in significant damage to our hardw are and software systems and database,
disruptions to our business activities, inadvertent disclosure of confidential or sensitive
information, interruptions in access to our pla tforms, and other material adverse effects on
our operations. Our security measures to protect systems and database could be breached or
compromised as a result of third-party action, employee error, malfeasance or otherwise,
during transfer of data or at any time, and res ult in persons obtaining unauthorised access
to our systems and data. If our security measures are breached and unauthorised access to
our systems and database is obtained, our services may be perceived as insecure, and
RISK FACTORS
–5 0–


--- page 61 ---
customers and end consumers may curtail or st op using our services altogether and we may
incur significant legal and financial exposur e and liabilities. We may incur significant costs
to protect our systems and equipment against the threat of, and to repair any damage
caused by computer viruses and ‘‘hacking’’. Moreover, if a computer virus or cyber attack
affects our systems and/or our customers or end consumers, or if it is highly publicised, our
reputation and brand names could be materially damaged and the use of our services may
decrease and materially and adversely affe c to u rb u s i n e s s ,r e s u l t so fo p e r a t i o n sa n d
financial condition.
Some landlords have not provided to us relevant title certificates with respect to some of our
leased properties in the PRC and some of our lease agreements were not registered with the
relevant government authorities.
As at the Latest Practicable Date, certa in landlords failed to provide valid title
certificates or certificate of authorisation to rent with respect to four of our leased
properties in the PRC whilst two of our leased properties are subject to mortgage and two
of our leased properties are utilised in a way deviated from usage stipulated in the title
certificates. We may need to seek alternatives premises and incur additional costs for
relocation, if (i) our landlords are not the owner or no longer the owner due to realisation of
the aforesaid mortgage or not authorised by the real owner or not permitted to lease the
properties to us, (ii) any disput e or claim arises in relation to the rights to use or lease of the
properties occupied by us, or (iii) any of our leas es is terminated as a result of any challenge
by third-parties or any failures of our landlo rds to renew the leases or obtain their legal
titles or the requisite government approval or consent to lease the relevant properties, which
could materially and adversely impact our bus iness, financial condition and results of
operations.
Pursuant to relevant PRC regulations, part ies to a lease agreement are required to file
the lease agreements for registration and obtain property leasing filing certificates for their
leases. The registration is subject to the cooperation from the landlords of the leased
properties as the registration requires the submission of certain documents from the
landlords, including their identification docu mentation and property ownership certificates,
to the relevant authorities. As at the Latest Pr acticable Date, we had not filed all nine lease
agreements for our leased properties under which we are the tenants of the leased
properties. As advised by our PRC Legal Advisers, the failure to register the lease
agreements does not affect the validity of the lease agreements under the relevant PRC laws
and regulations. Meanwhile, we may be required by relevant government authorities to
complete the registration formalities withi n the prescribed time limit or otherwise we may
be subject to fines imposed by PRC government authorities ranging from RMB1,000 and
RMB10,000 for each unregistered lease agreements. As further advised by our PRC Legal
Advisers, the risk of us being fined is low provided that we will and will be able to carry out
rectification in accordance with the laws and regulations in a timely manner if the relevant
regulatory authorities so order. During t h eT r a c kR e c o r dP e r i o da n du pt ot h eL a t e s t
Practicable Date, we were not aware of any notice or allegation of penalty from PRC
government authorities for our failure on the r egistration of lease agreements. However,
there can be no assurance that the relevant government authorities would not impose
administrative penalties on us as a result of the non-registration of these lease agreements.
RISK FACTORS
–5 1–


--- page 62 ---
If we are liable for fines because of the non-registration of lease agreements, our business
operation could be adversely affected. For more details, please refer to the section headed
‘‘Business — Properties’’ in this prospectus.
Certain ancillary work of our IT services are subc ontracted to subcontractors. Our operations
and financial results may be adversely affected by any delay or defects in their work.
We, from time to time, engage subcontrac tors to carry out certain ancillary work in
our provision of IT services. During the Track Record Period, we had engaged two
subcontractors for certain software technical services in our provision of IT services. For
the years ended 31 December 2021, 2022 and 2023 and the four months ended 30 April 2024,
our subcontracting c ost amounted to RMB0.2 million, RMB5.4 million, RMB2.5 million
and RMB0.2 million, respectively, which a ccounted for 0.3%, 6.7%, 2.5% and 0.6%,
respectively, of our total purchase, for the relevant years. For more details, please refer to
the section headed ‘‘Business — Subcontracting’’ in this prospectus. If our subcontractors
fail to meet our requirements, the quality of o ur IT infrastructure and programmes may be
adversely affected, thereby damaging our business reputation, hindering our opportunity to
secure future projects, and potentially expos ing us to litigation and damages claims from
our clients. In addition, when our needs for outsourcing arise, our subcontractors may not
always be readily available. There is no assu rance that we would be able to maintain such
relationships in the future. O ur subcontractors are not obliged to provide services to us on
our future projects on similar terms and conditions. We cannot assure that we would be able
to find alternative subcontractors with the requisite knowledge, expertise, experience and
capability that meet our project needs and wo rk requirements and timely complete our
projects in accordance with the project terms with compe titive prices. Our ability to
complete projects on time and with effective cost could be impaired, thereby damaging our
business reputation and adversely affecting our operations and financial results if we are
unable to engage such suitable alternative subcontractors.
A certain portion of our gross profit was generated from our insurance agency business for the
distribution of insurance products to Haier Group insurance clients. There is no assurance that
Haier Group insurance clients will continue to purchase insurance products through us.
For the years ended 31 December 2021, 2022 and 2023 and the four months ended 30
April 2024, the gross profit from the distribution of insurance products underwritten by our
insurance company partners attributable to Haier Group insurance clients was
approximately RMB13.4 million, RMB1 7.9 million, RMB17.7 million and RMB6.7
million, respectively, which amounted to 29 .6%, 30.8%, 27.6% and 29.6%, respectively,
of the total gross profit generated from our insurance agency business for the distribution
for insurance products. We expect that distribution of insurance products to Haier Group
insurance clients will continue to contribute a certain portion of our gross profit generated
from our insurance agency business for the distribution of insurance products in the
foreseeable future. There is no assurance that Haier Group insurance clients will continue
to purchase insurance products through us. In the event that Haier Group insurance clients
ceases to purchase insurance p roducts through us, our business, results of operations,
financial condition and future prospects may be adversely affected.
RISK FACTORS
–5 2–


--- page 63 ---
We are subject to credit risk for accounts receivables arising from our customers and other
parties.
Failure to collect our accounts receivables fully or timely may have material adverse
effect on our business operations and financial condition. The credit period offered by our
Group is generally within three months. As at 31 December 2021, 2022 and 2023 and 30
April 2024, we had net accounts receivables o f approximately RMB12.0 million, RMB21.1
million, RMB30.8 million and RMB27.2 million, respectively. As a result, we may be
exposed to credit risk. For FY2021, FY2022, FY2023 and 4M2024, the average turnover
days of accounts receivables wa s approximately 34.6 days, 40.7 days, 54.5 days and 59.8
days, respectively, and as at 31 December 2021, 2022 and 2023 and 30 April 2024, our loss
allowances were approximately RMB13 thousand, RMB57 thousand, RMB91 thousand
and RMB130 thousand, respectively. Our Dire ctors confirm our management’s estimation
and the related assumptions have been made in accordance with the information currently
available to us. However, such estimation or assumptions may need to be adjusted if new
information becomes known. In the event tha t the actual recoverability is lower than
expected, or that our past allowance for impairment of trade receivables becomes
insufficient in light of the new information, we may need to make more impairment
allowance for account receivables, which may in turn materially and adversely affect our
business operation, financial condition, and results of operations. For details of our
accounts receivables, please refer to the section headed ‘‘Financial Information —
Description of Certain Items of Consolid ated Statements of Financial Position —
Accounts receivables’’ in this prospectus.
Our Controlling Shareholder has the ability to e xert substantial influence over us and can
influence our business in ways which may not act in the best interests of our independent
Shareholders.
Immediately following the Global Offeri ng, our Controlling Shareholder will in
aggregate be indirectly interested in approximately 45.33% of the voting rights of our
Company. Our Controlling Shareholders will also, through their voting power at the
shareholders meetings, have significant infl uence over our business and affairs, including
decisions in respect of mergers or other business combinations, acquisition or disposition of
assets, issuance of additional shares or other equity securities, timing and amount of
dividend payments, and our management. Our C ontrolling Shareholders may not act in the
best interests of our minority Shareholders. In addition, without the consent of our
Controlling Shareholders, we could be prevented from entering into transactions that could
be beneficial to us. This concentration of ownership may also discourage, delay or prevent a
change in control of our Company.
RISK FACTORS
–5 3–


--- page 64 ---
Our business model and our planned business developments are dependent on the proper
function of our IT systems and infrastructure and our ability to continuously improve our IT
systems and infrastructure and adopt advancing technologies. Breakdown of any of our major
IT systems or failure to keep up with technological developments would materially and
adversely affect our business, results of operations and future prospects.
Our proprietary technology and technological capabilities are critical to the
development and maintenance of our IT systems and infrastructure, which in turn is vital
to our business operations and planned developments. We need to continue to develop our
IT technology, and continuously invest in significant resources, including financial and
human capital resources to maintain, upgrade and expand our IT systems and
infrastructure in tandem with our business g rowth and developments. However, research
and development activities are inherently uncertain, and investments in information
technologies and development of proprietary technologies may not always lead to
commercialisation or monetisation, or le ad to increased business volume and/or
profitability. The fast evolving IT developments may also render our existing systems and
infrastructure and those that are newly developed and implemented obsolete before we are
able to reap sufficient benefits to recover thei r investment costs, and may lead to substantial
impairments which would adversely affect our results of operations. Obsolescence in our
proprietary technology, IT systems and infrastructure may also significantly impair our
ability to conduct and grow our business and co mpete effectively, which could materially
and adversely impact our results of operation s and business prospects. On the other hand,
any significant breakdown of our IT systems and infrastructure may materially and
adversely affect our business, results of opera tions, reputation and business prospects, and
may even subject us to potential claims or eve n litigations, particularly as parts of our IT
systems and infrastructure are linked to or connected with IT systems and infrastructure of
our insurance company partners, who are mostly sizeable and reputable financial
institutions whom themselves are subject to stringent regulatory supervision. As we rely
heavily on our IT systems and infrastructur e to facilitate and conduct our business, any
prolonged breakdown of systems and infrastructure could also materially impact our
business and results of operations.
Insufficient measures under applicable data protection laws and regulations could subject us to
regulatory actions and other legal liabilities, negatively impact our r eputation and deter
insurance clients from using our platforms.
In providing our services, a challenge we face is the secured collection, storage and
transmission of confidential information. We acquire certain personal information of our
insurance agents, insurance clients and APP registered users, such as name, ID number and
telephone number during the course of our business. For more details, please refer to the
sections headed ‘‘ Business — Data Privacy and Data Security’’ and ‘‘Regulatory Overview’’
in this prospectus.
The interpretation and application of laws, re gulations and standards on cybersecurity,
data protection and privacy are still evolving. We cannot assure you that the relevant
measures we have taken are, and will be, always c onsidered sufficient under applicable laws
and regulations related to cybersecurity, dat a protection and privacy. We may be subject to
RISK FACTORS
–5 4–


--- page 65 ---
investigations and inspections by governmental authorities regarding our compliance with
such laws and regulations. While we have taken steps to protect the personal data that we
have access to, our security measures could b e breached. Any accidental or wilful security
breaches or other unauthorised access to our system could cause confidential personal data
t ob es t o l e na n du s e df o rc r i m i n a lp u r p o s e s ,a n dc o u l da l s oe x p o s eu st ol i a b i l i t yr e l a t e dt o
the loss of information, and the risk of litigation and negative publicity. If security
measures are breached or if we fail to protect confidentiality of the personal data of end
consumers otherwise, our insurance company partners, our butler partners as well as end
consumers may be deterred from choosing us, which could result in significant loss of
business and we could incur significant liab ility, and our business and operations could be
adversely affected.
We may fail to attract and retain an experienced management team, qualified personnel and
insurance agents.
Our continued success depends on our abili ty to attract and retain an experienced
management team, other employees and insurance agents with the requisite expertise and
skills. Our ability to do so is influenced by a varie ty of factors, including the structure of the
compensation package that we formulate and the competitive market position of our
overall compensation package. Our management team and skilled employees may leave us
or we may terminate their employment at any time. We cannot assure you that we will be
able to retain our management team, skille d employees and insurance agents or find
suitable or comparable replacements on a tim ely basis. Moreover, if any of our management
team, skilled employees or insurance agents l eaves us or joins a competitor, we may lose
customers or insurance clients. In addition, former employees may request certain
compensation arising from their resignation o r retirement, which we typically negotiate
on a case-by-case basis. However, if we are unable to reach a mutually acceptable resolution
with such employees, they may take other actions including, but not limited to, initiating
legal proceedings. Such legal proceedings may require us to pay damages, divert our
management’s attention cause us to incur c osts and harm our reputation. Each of these
foregoing factors could have a material adverse effect on our business, financial condition
and results of operations.
Misconduct of our insurance agents to promote our insurance agency services is difficult to
detect and deter and could harm our reputation or lead to regulatory sanctions or litigation
costs.
We engage insurance agents to promote and distribute the insurance products
authorised by our insurance company partners to expand our reach to large population
of corporate and household insurance clients. The activities and regulatory compliance of
these insurance agents associated with our insurance agency business are subject to the
terms of the agreements we entered into with them and subject to applicable PRC laws.
Misconduct of any of them could result in violation of law by us, regulatory sanctions,
litigation or serious reputational or fin ancial harm. Misconduct could include:
. making misrepresentation when marketing or selling insurance to insurance clients;
RISK FACTORS
–5 5–


--- page 66 ---
. hindering insurance applicants from making full and accurate mandatory disclosures
or inducing applicants to make misrepresentations;
. hiding or falsifying material information in relation to insurance contracts;
. fabricating or altering insuran ce contracts without authorisation from relevant parties,
selling false policies, or providing false documents on behalf of the applicants;
. falsifying insurance agency business or fraudulently returning insurance policies to
obtain commissions;
. colluding with applicants, insured persons, or beneficiaries to obtain insurance
benefits;
. engaging in false or falsified claims; or
. otherwise not complying with laws and regula tions or our control policies, procedures,
and undertakings.
We cannot assure you, therefore, that misconduct by any of our insurance agent may
not occur, whether unintentional or otherwise, which may negatively impact our business,
results of operations or financial condition. In addition, the general increase in misconduct
in the industry could potentially harm the reputation of the industry and have an adverse
impact on our business.
Acquisition, strategic alliances and investments could be difficult to integrate, disrupt our
business and lower our result of operations and the value of your investment.
As part of our business strategy, we will evaluate and make investments in or
acquisitions of complementary businesses, jo int ventures, services and technologies, or
enter into alliances with strategic partners i n the future. Acquisitions, alliances and
investments involve numerous risks, including the potential failure to achieve the expected
benefits of the combination or acquisition; difficulties in, and the cost of, integrating
operations, technologies, services and personn el; potential write-offs of acquired assets or
investments; and downward effect on our results of operations.
In addition, if we finance acquisitions by issuing equity or convertible debt securities,
shareholdings of our existing shareholders may be diluted, which could affect the market
price of our shares. Further, if we fail to properly evaluate and execute acquisitions or
investments, our business and prospects may be adversely affected and the value of your
investment may decline.
Furthermore, we may fail to identify or secure suitable acquisition and business
partnership opportunities or our competitors may capitalise on such opportunities before
we do, which could impair our ability to compete with our competitors and adversely affect
our growth prospects and results of operations.
RISK FACTORS
–5 6–


--- page 67 ---
We may not be able to implement our business development strategy as we plan.
Our business development plan include strengthening and expanding our geographical
presence in the PRC. For more details, please refer to the sections headed ‘‘Business — Our
Strategies’’ and ‘‘Future Plans and Use of Pr oceeds’’ in this prospectus. We may not be able
to effectively manage the wider scope of our ope rations or achieve the desired profitability
from such expansion. The challenges that we may face in relation to this may include, but
not limited to:
. our Directors’ experience or knowledge in the new locations and the regulatory
requirements applicable to such new locations;
. the different extent of market development and competitiveness in the cities in
w h i c hw ep l a nt oe x p a n do u rp r e s e n c ei n ;
. our ability to obtain necessary regula tory approvals and registrations;
. our ability to obtain capital at reasonable costs to fund pre-opening expenses as
well as our ability to control expenses and prevent delays or cost overruns;
. our ability to identify suitable locations to establish our new branches; and
. our ability to negotiate the commercially acceptable rental arrangements for
setting up our new branches.
Any of the aforementioned factors could extend the time required to achieve
profitability which in turn impacts our busine ss, financial condition, operating results
and business prospects. Our expansion into new locations may present competitive and
operational challenges that are different from those we currently encounter. Our failure to
respond to these challenges could materially and adversely affect our business prospects and
may have material adverse impact on our business operations and financial position.
If we are unable to manage our growth or execute our strategies effectively, our business and
prospects may be materially and adversely affected.
Our business has grown substantially since our inception, and we expect continued
growth in the scale of our business and our operations. As we pursue our business growth
and strive to expand our customer base, we endeavour to establish presence in new
geographical markets, offer comprehensive mix of insurance products and different types of
IT services and solutions, and work with a variety of additional business partners, including
insurance company partners, insurance agents and strategic channel partners to address the
evolving needs of the end consumer market. We may have limited or no experience for
certain new product and service offerings, and our expansion into these new product and
service offerings may not achieve broad acceptance among our customers or end consumers.
These offerings may present new and difficult te chnological or operational challenges, and
we may be subject to claims if end consume rs, mainly insurance clients, do not have
satisfactory experiences in general. To effectively manage the expected growth of our
business and operational scale, we will need to continue improving our transaction
RISK FACTORS
–5 7–


--- page 68 ---
processing, technological, operational and financial systems, policies, procedures and
controls. All of these endeavours involve risks and will require significant management,
financial and human resources. We cannot a ssure you that we will be able to effectively
m a n a g eo u rg r o w t ho rt oi m p l e m e n to u rs t rategies successfully. If we are not able to
manage our growth effectively, or at all, our business and prospects may be materially and
adversely affected.
We may be subject to intellectual property infringement claims or other allegations by third
parties, which may materially and adversely affect our business, results of operations and
prospects.
We cannot be certain that our operations do not or will not infringe upon or otherwise
violate intellectual property rights or other rights held by third parties. We may be from
time to time subject to legal proceedings and claims relating to the intellectual property
rights or other rights of third parties. There can be no assurance that we will succeed in
contesting these claims or legal proceedings.
Additionally, there may be third-party inte llectual property rights or other rights that
are infringed by products underwritten by our insurance company partners, our services or
other aspects of our business without our awareness. To the extent that our employees or
insurance agents use intellectual property owned by others in their work for us, disputes
may arise as to the rights in related know-how and inventions or other proprietary assets. If
any third-party infringement claims are brought against us, we may be forced to divert
management’s time and other resources from our business and operations to defend against
these claims, regardless of their merits.
The application and interpretation of China intellectual property laws and the
procedures and standards for granting trademarks, copyrights, proprietary technology or
other intellectual property rights in China are still evolving. If we were found to have
violated the intellectual property rights o f others, we may be subject to liability for our
infringement activities or may be prohibite d from using such intellectual property or
relevant contents, and we may incur licencing or usage fees or be forced to develop
alternatives of our own. As a result, our re putation may be harmed and our business and
financial performance may be materially and adversely affected.
We may not be able to prevent others from making unauthorised use of our intellectual
property.
We regard our software registration, t rademarks, domain names, know-how,
proprietary technologies and similar intellectual property as critical to our success, and
we rely on a combination of intellectual property laws and contractual arrangements,
including confidentiality and non-compete arrangements with our key employees and others
to protect our intellectual property rights. Despite these measures, any of our intellectual
property rights could be challenged, invalidated, circumvented or misappropriated, or such
intellectual property may not be sufficient t o provide us with competitive advantages. In
addition, there can be no assurance that (i) our application for the registration of
trademarks and other intellectual property r ights will be approved; (ii) any intellectual
property rights will be adequately protected; or ( iii) such intellectual property rights will not
RISK FACTORS
–5 8–


--- page 69 ---
be challenged by third parties or found by a judicial authority to be invalid or
unenforceable. If the trademarks or other intellectual property rights we use could not be
registered, we may fail to prevent others from using these marks or other intellectual
property rights, and our business, financial condition and results of operations may be
materially and adversely affected.
Furthermore, preventing any unauthorised use of our intellectual property is difficult
and costly and the steps we take may be inadequate to prevent the misappropriation of our
intellectual property. In the event that we reso rt to litigation to enforce our intellectual
property rights, such litigation could result in rising costs and a diversion of our managerial
and financial resources. We can provide no assu rance that we will prevail in such litigation.
In addition, our trade secrets may be leaked or otherwise become available to, or be
discovered by, our competitors. To the extent that our employees or insurance agents use
intellectual property owned by others in th e i rw o r kf o ru s ,d i s p u t e sm a ya r i s ea st ot h e
rights in related know-how and inventions. Any failure in protecting or enforcing our
intellectual property rights could have a material adverse effect on our business, financial
condition and results of operations.
We may be involved in legal proceedings arising from our operations and may accordingly be
subject to material liabilities or incur additio nal costs, and the regulatory measures and legal
procedures against us may have a material adverse effect on our business, financial condition,
results of operations and prospects.
We may be involved in legal and administrative proceedings from time to time. As our
business expands, we expect we will continue to face litigations and disputes in the ordinary
course of our business, which may result in cl aims for actual damages, freezing of our assets
and diversion of our management’s attention, as well as legal proceedings against our
Directors, officers or employees. We are unable to estimate the outcome of such potential
claims, investigations and proceedings. Any event defending against these claims may cost
time and legal fees. Therefore, our reserves for such matters may be inadequate, and any
unfavourable final resolution of any such litigation or proceedings could have a material
adverse effect on our business, results of ope rations and financial condition. Moreover,
even if we eventually prevail in these matters, we could incur legal fees or suffer
reputational harm, which could have a materi al adverse effect on our prospects and future
growth.
We may also face regulatory measures actions from time to time. A material legal
liability or regulatory measure could have a n adverse effect on us or cause damage to our
reputation, which may harm our business prospects. We are subject to periodic inspections
by PRC regulatory authorities or the insurance industry associations, which may impose
fines and other penalties on us if we fail to abide by the applicable laws and regulations.
During the Track Record Period, the Rizhao branch of Haier Insurance Agency received an
administrative fine from Rizhao Regulatory Bureau of the CBIRC (currently known as
Rizhao Regulatory Bureau of the NFRA) in the amount of RMB10,000 for failing to (i)
ensure the accuracy of the education information of an insurance agent; and (ii) present the
latest customer notification letter at one of our branch offices. During the Track Record
Period, our Group obtained a confirmation from Rizhao Regulatory Bureau of the NFRA
RISK FACTORS
–5 9–


--- page 70 ---
confirming that the relevant non-compliance had been rectified and that no further
regulatory action would be taken against our Group in connection with the aforementioned
non-compliance. As Rizhao Regulatory Bureau of the NFRA is the governmental authority
that imposed the aforementioned administrat ive fine on us, and according to applicable
PRC laws and regulations, the local offices of the insurance regulatory authority under the
State Council take charge of the supervision and administration of insurance agencies
within their jurisdictions, conduct on-site inspections and off-site supervision and
administration and impose administrative pen alties and take other regulatory measures in
accordance with law, as advised by our PRC L egal Advisers, Rizhao Regulatory Bureau of
the NFRA is the competent authority to provide such confirmation. Save for the above, no
other administrative penalties had been impos ed against us by any regulatory authorities
during the Track Record Period and up to the Latest Practicable Date. As at the Latest
Practicable Date, our Group has completed the rectification work and settled the
administration fine. In addition, the PRC regulatory authorities or the insurance industry
associations also conducted the following onsite inspections on our Group during the Track
Record Period: (i) Binzhou Regulatory Bureau of the CBIRC conducted an onsite
inspection on Binzhou branch office of Haier Insurance Agency on 14 June 2022 to inspect
its qualifications, personnel, workplace and business operations; (ii) Jinan Banking and
Insurance Association conducted an onsite inspection on Jinan branch office of Haier
Insurance Agency in early July 2022 to inspect its business operation status in various
aspects, including business performance, wo rkplace construction, senior management,
insurance sales practitioners, informatio n technology construction, etc.; (iii) Zibo
Regulatory Bureau of the CBIRC conducted an onsite inspection on Zibo branch office
of Haier Insurance Agency on 1 July 2022 to inspect its current situation, the allocation and
performance of senior management, authenticity of business and finance, internal control
management, information technology construction, the shareholder and equity status and
other situations; (iv) Henan Regulatory Bureau of the CBIRC conducted an onsite
inspection on Henan branch office of Haier Insurance Agency in early August 2022 to
inspect its informatisatio n construction work; (v) Hebei Insurance Intermediary
Association conducted an onsite inspection on Hebei branch office of Haier Insurance
Agency in September 2023 to inspect various a spects, including business performance,
personnel management and operational risks, etc.; and (vi) Weihai Insurance Industry
Association conducted an onsite inspection on Weihai branch office of Haier Insurance
Agency in September 2023 to inspect, including among others, whether the relevant
institution conducts business without obtaining approval from or without reporting to
regulatory authorities and whether the practitioners conduct business without practise
registration. There were no material findin gs from the PRC regulatory authorities or the
insurance industry associations with respect to the foregoing onsite inspections, and our
Group has not been imposed on any administrative penalty with respect to the foregoing
onsite inspections. While the above administr ative penalty and inspections did not have a
material adverse effect on our business, results of operations or financial condition, we
cannot assure you that future inspections conducted by regulatory authorities or the
insurance industry associations would not result in penalties, fines or other punishments, or
the issuance of negative reports or opinions, due to our failure to abide by the relevant laws
and regulations, that could materially and adversely affect our reputation, business, results
of operations or financial condition.
RISK FACTORS
–6 0–


--- page 71 ---
Our limited insurance coverage could expose us to significant costs and business disruption.
We believe we maintain insurance policie s covering risks in line with industry
standards. We maintain limited business liab ility, litigation and property insurance. We do
not have any business interruption insurance. Any uninsured occurrence of business
disruption, litigation or natural disaster, or significant damages to our uninsured equipment
or facilities could have an adverse effect on our results of operations. The insurance
companies currently offer limited business-related insurance products. As such, we may not
be able to insure certain risks related to our assets or business even if we desire to. If we
were to incur substantial losses or liabilitie s due to natural disaster, disruption in our
network infrastructure or business operations, or any material litigation, our results of
operations could be materially and adversely affected. Our current insurance coverage may
not be sufficient to prevent us from any loss, and we may not be able to successfully claim
our losses under our current insurance policies on a timely basis, or at all. If we incur any
loss beyond the coverage of our insurance polic ies, or the amount indemnified is significant
less than our actual loss, our business, financial condition and results of operations could be
materially affected.
We face risks related to climate change, natura l disasters, health epidemics, civil and social
disruption and other outbreaks, which could significantly disrupt our operations.
We are vulnerable to social and natural catastrophic events that are beyond our
control, such as climate change, natural disas ters, health epidemics, and other catastrophes,
which may materially and adversely affect our b usiness. Natural disasters may give rise to
server interruptions, breakdowns, system failu res, technology platform failures or Internet
failures, which could cause the loss or corruption of data or malfunctions of software or
hardware as well as adversely affect our ability to operate our platform and provide
services. Climate change may increase the f requency and unpredictability of extreme
meteorological disasters in China, making the potential impact of these natural disasters
more severe for us. Our business could also be adversely affected if our employees are
affected by health epidemics. In addition, our results of operations could be adversely
affected to the extent that any health epidemic harms the economy in general. For example,
sales activities of our insurance agents may be affected as it became difficult for them to
arrange face-to-face me etings with household clients, wh ich to a certain extent has also
hindered the business activities of our business partners, and in turn, have a negative impact
on our business with these business partners. The frequency and magnitude of effect
brought by these risks may be beyond our control and we could not guarantee that our IT
infrastructure that allow for remote access of computer systems could adequately support
our business operations. Also, natural disasters, health epidemics or other public safety
concerns may severely affect and restrict the level of economic activities, which in turn may
have a material and adverse effect on our bus iness, financial position and results of
operations. Natural disasters, health epidemic s or other public safety concerns, regardless
of scope and intensity, together with their impact on our business activities and the broader
economy are still difficult to assess or predict a nd pose uncertainties that will be difficult to
quantify. Consequently, if any natural disasters, health epidemics or other public safety
concerns were to affect our offices, we cannot assure you that we will be able to take
RISK FACTORS
–6 1–


--- page 72 ---
adequate steps to mitigate the potential impact of such unforeseeable events, or to
effectively respond to them, which may advers ely affect our business, results of operations
and financial condition.
RISKS RELATING TO OUR INDUSTRY
Our businesses are subject to regulation and administration by the insurance regulatory
authorities and other government authorities, and insufficient measures under any applicable
regulations and rules by us could result in financial losses or harm to our business.
We are subject to Insurance Law, Provision s on the Regulation of Insurance Agents
(《保險代理人監管規定》), Measures for the Regulation of Internet Insurance Business ( 《互
聯網保險業務監管辦法》), and related rules and regulations. Our insurance agency business,
which involves distribution of property, life and health, accident and automobile insurance
products, is regulated by the insurance regulatory authorities, which have been given
discretion in its administration of these laws, rules and regulations as well as the authority
to impose regulatory sanctions on illegal activi ties. Under the amendments to the Insurance
Law promulgated in 2009, the insurance regulatory authorities have been granted greater
regulatory oversight over the PRC insuran ce industry, to afford policyholders more
protection.
The terms and premium rates of the insurance products we carry, the commission rates
we earn, as well as the way we operate our insurance agency businesses, are subject to
regulations. The legal requirements for t he terms and premium rates of the insurance
products are stipulated in the Administrat ive Measures of the Insurance Terms and
Premium Rates of Property Insurance Companies ( 《財產保險公司保險條款和保險費率管理
辦法》) promulgated by the CBIRC on 16 August 2021 and the Administrative Measures of
the Insurance Terms and Premium Rates of Personal Insurance Companies ( 《人身保險公司
保險條款和保險費率管理辦法》) promulgated by the CIRC, on 19 October 2015. In
addition, the Provisions on the Regulation of Insurance Agents 《保險代理人監管規
定》)
also specify the requirements for the insurance agencies on the way they open the bank
accounts and collect the commissions. Developments and changes in these regulations may
affect our profitability on the products we dist ribute. For instance, the Guiding Opinions
on the implementation of the Comprehensive Reform of Automobile Insurance ( 《關於實施
車險綜合改革的指導意見》) issued by the CBIRC that came into effect in September 2020
lowered the premium paid to insurance companies leading to a lower average commission
rate of automobile insurance products, which has led to a decrease of the average
commission rate for the distribution of autom obile insurance products since 2021 to 2023. It
could have material adverse impact on the reve nue and profitability of our insurance agency
business, if we are not able to increase our insurance business volume sufficiently to
compensate for the reduced revenue generate d from the commissions collected, or pass on
any downward impact on our commission rates to our insurance agents and/or referral fees
to our strategic channel partners.
RISK FACTORS
–6 2–


--- page 73 ---
Furthermore, the regulatory authorities continuously strengthen the regulation and
administration for the sale and informati on disclosure of insurance products, the
informatisation work and Internet insura nce business of the insurance agencies by
releasing (i) the Administrative Mea sures for Insurance Sales Practises ( 《保險銷售行為管
理辦法》) on 20 September 2023; (ii) the Administrative Measures for the Disclosure of
Information on Personal Insurance Products ( 《人身保險產品信息披露管理辦法》)o n1 1
November 2022; (iii) the Regulat ory Measures for the Informa tisation Work of Insurance
Intermediaries ( 《保險中介機構信息化工作監管辦法》) on 5 January 2021; and (iv) the
Notice on Commencement of Specific Rectification of Market Chaos in the Internet
Insurance Industry ( 《關於開展互聯網保險亂象專項整治工作的通知》) in August 2021.
Furthermore, laws, rules and regulations applicable to insurance companies may also
indirectly affect us. The laws, rules and regulations under which we are regulated or
indirectly affected may be amended from time to time, and we are subject to their
interpretation and application. For instanc e, the General Office of the NFRA issued the
Notice on Matters Related to Regulating Bancassurance Channels of Life Insurance
Companies (《關於規範人身保險公司銀行代
理渠道業務有關事項的通知》) in January 2024.
This notice emphasised that life insurance comp anies shall strictly enforce the insurance
terms and premium rates that have been filed with the insurance regulatory authorities
when conducting its business through bancassurance channels ( 銀行代理渠道)a n dt h e
insurance regulatory authorities shall stren gthen the on-site and off-site inspections and
supervisions on the insurance companies in this regard. Our Directors confirm that as this
notice explicitly provides that it aims to regu late the life insurance companies’ business
through bancassurance channels, this notice does not apply to us or our cooperation with
insurance companies directly. However, the PRC regulators may promulgate similar laws,
regulations or rules or take similar measures to tightening the supervision on our business
or our cooperation with the insurance companies in the future. We will closely monitor the
updates of the relevant regulations and seek the guidance from the regulators and make
endeavours to ensure the compliance with any applicable provisions or regulatory measures
in this regard. However, we cannot assure you that future legislative or regulatory
evolvements would not have a material adverse effect on our business, results of operations
and financial condition.
Failure to obtain, renew, or retain certain licences, permits or approvals may materially and
adversely affect our ability to conduct our business.
We are required by PRC laws and regulations to hold various licences, permits and
approvals issued by relevant regulatory authorities to allow us to conduct our business
operations including licence for operating in surance agency service. Any infringement of
legal or regulatory requirements, or any suspension or revocation of these licences, permits
and approvals may have a material adverse impact on our business. As the relevant
regulatory requirements within the insurance and insurance agency industry are constantly
developing, we may be subject to more stringent regulatory requirements. We may be
required to obtain other licences, permits or a pprovals, or otherwise comply with applicable
regulatory requirements in the future. Failure to retain, obtain or renew relevant licences,
permits or approvals in the future may hinder our business operations and materially and
adversely affect our business, results of operations and financial condition.
RISK FACTORS
–6 3–


--- page 74 ---
More insurance clients may decide to purchase insurance directly from insurance companies,
which would have a material adverse impact on our financial condition, results of operations
and prospects.
The advancement of financial technologies a nd the emergence of Internet insurance
products allow insurance companies to directly access to a broader client base at a low cost,
and more insurance clients may decide to purchase insurance directly from insurance
companies. A rising number of traditional insurance companies have established their own
online platforms to sell Internet insurance products directly to insurance clients. The
process of eliminating agencies as intermediaries, known as ‘‘disintermediation,’’ could
place us at a competitive disadvantage and reduce the need for our products and services.
Disintermediation could also result in significant decrease in business volume and loss of
commission income from our insurance agency business, which could have a material
adverse effect on our business, financial condition, results of operations and prospects.
RISKS RELATING TO CONDUCTING OUR BUSINESS IN THE PRC
We conduct our business operations within the PRC. You should therefore be aware that
economic conditions in the PRC and regulatory policies could affect our results of operations,
financial condition and prospects.
We conduct our business operations within the PRC. Our operating performance has
been and will continue to be affected by the PRC economy, which in turn is influenced by
the global economy. The uncertainties relating to the global economy and the political
environment in various regions of the world will continue to impact PRC’s economic
growth. We are unable to predict all the risks that we face as a result of current economic
developments, and many of these risks are beyond our control. All such factors may
adversely affect our business, financial condition and results of operations.
Our business and operations are governed by PRC laws, regulations and rules. Over
the past decades, the PRC government has continued to develop and enhance the laws and
regulations dealing with foreign investment, enterprise composition and governance, taxes,
trade and other economic matters in China, and such laws and regulations will continue to
evolve in accordance with the overall economi c and social developments. We will closely
monitor the updates of applicable laws and regulations and make endeavours to comply
with any existing or future PRC laws or regulations on an ongoing basis. However, there is
no assurance that our Group’s efforts will be effective and adequate, and insufficient
measures under relevant laws and regulations may materially and adversely affect our
business and operations.
Dividends payable to investors and proceeds from sale of H Shares by investors are subject to
PRC income tax.
Under current PRC tax laws, regulations and rules, individuals and enterprises that are
not PRC residents are subject to different tax o bligations with respect to the dividends paid
by us or the gains realised upon the sale or other disposition of H Shares.
RISK FACTORS
–6 4–


--- page 75 ---
Pursuant to the Notice of the State Taxation Administration on Issues Concerning the
Levy and Administration of Individual Income Tax After the Repeal of Guo Shui Fa [1993]
No. 45 (Guo Shui Han [2011] No. 348) ( 國家稅務總局關於國稅發[1993]045 號文件廢止後有
關個人所得稅徵管問題的通知（國稅函[2011]348 號）) issued by the STA on 28 June 2011, we
are required to withhold taxes from dividen d payments to non-PRC resident individual
holders of H Shares at rates ranging from 5% to 20% (usually 10%), depending on the
applicable tax treaty between the PRC and the jurisdiction in which t he non-PRC resident
individual holder of H Shares resides. Non-PRC resident individual holders of H Shares
who reside in jurisdictions that have not entered into tax treaties with the PRC are subject
to a 20% withholding tax on dividends received from us.
Under the EIT Law and its implementation ru les, for non-PRC resident enterprises
that do not have offices or establishments in th e PRC, or have offices or establishments in
the PRC to which their income is not related, d ividends paid by us and the gains realised by
such non-PRC resident enterprises upon the sale or other disposition of H Shares are
ordinarily subject to EIT at a rate of 10%, subject to a further reduction under a special
arrangement or applicable treaty between t he PRC and the jurisdiction of the relevant
foreign enterprise’s residence. In accordance with the Notice of the STA on the Issues
Concerning Withholding the Enterprise Income Tax on the Dividends Paid by Chinese
Resident Enterprises to H-Share Holders Whi ch Are Overseas Non-re sident Enterprises
(Guo Shui Han [2008] No. 897) ( 國家稅務總局關於中國居民企業向境外H股非居民企業股
東派發股息代扣代繳企業所得稅
有關問題的通知（國稅函[2008]897 號）), which became
effective on 6 November 2008, 10% withholdi ng tax shall be imposed on dividends paid
by Chinese resident enterprises to holders of H Shares that are overseas non-resident
enterprises. These holders of H Shares may apply for tax refunds in accordance with
applicable tax treaties or arrangements, if any . PRC tax authorities will determine whether
and how to collect individual income tax and the EIT on gains realised by non-resident
holders of H shares through the sale, or trans fer by other means, of H shares in accordance
with applicable PRC tax laws and regulations. Non-resident holders of our H Shares should
be aware that they may be obligated to pay PRC income tax on the dividends and gains
realised through sale or transfers of the H Shares.
Currency conversion policy and fluctuations in the exchange rates of the Renminbi may affect
our business and results of operations and our ability to remit dividends.
Substantially all of our revenue and expenses are denominated in Renminbi. At
present, the conversion of RMB into foreign c urrencies is subject to applicable laws and
regulations. We may need to convert a portion o f our revenue to foreign currencies to meet
some of our financial obligations (e.g. to p ay out declared dividends on H Shares in the
Global Offering).
Under existing Chinese foreign exchange regulations, payments of current account
items, including dividend payments, interest payments and expenditures from trade-related
transactions, can be made in foreign curre ncies without prior approval from SAFE by
complying with certain procedural requir ements. Approval from SAFE is required for
foreign currency conversions for payment under capital account items such as equity
RISK FACTORS
–6 5–


--- page 76 ---
investments. As a result, if we fail to satisfy r elevant procedural requirements or obtain the
relevant approval, we might not be able to pay dividends to the holders of our H Shares in
foreign currencies.
Since a significant amount of our future cash flows from operations will be
denominated in Renminbi, if we fail to satisfy relevant procedural requirements or obtain
the relevant approval, our ability to purchase goods and services outside of China or
otherwise fund our business activities that are conducted in foreign currencies may be
limited. This could also affect our ability of to obtain foreign debt or equity financing,
including by means of loans or capital contributions from us.
Fluctuation of the exchange rate between Renminbi and Hong Kong dollars may also
affect the dividends that we pay to our H Share Shareholders. To the extent that we need to
convert Hong Kong dollars that we will receiv e from the Global Offering into Renminbi for
our operations, appreciation of Renminbi against the Hong Kong dollar would have an
adverse effect on the Renminbi amount that we will receive. Conversely, if we decide to
convert our Renminbi into Hong Kong dollars for the purpose of making dividend
payments on our H Shares or for other business purposes, appreciation of the Hong Kong
dollar against Renminbi would reduce the Hong Kong dollar amount available to us.
It may be difficult to effect service of legal process or enforce judgements against us .
Almost all of our Directors, Supervisors or executive officers domicile in the PRC. You
should therefore consider relevant procedure and costs that may be required and incurred
by you in serving process against us and the af orementioned individuals domiciling in the
PRC. In addition, subject to satisfaction of other requirements, a judgement of a court of
another jurisdiction may be reciprocally recognised or enforced in China only if the
jurisdiction has a treaty with China or if the jurisdiction has been otherwise deemed by PRC
courts to satisfy the requirements for reciprocal recognition. China has not entered into any
treaty for reciprocal recognition and enfor cement of court judgements with the U.S., the
United Kingdom, Japan and many other countries. As a result, investors should be aware
that a foreign judgement rendered against us or our Directors, our Supervisors or executive
officers may not receive recognition and enforcement in PRC courts.
RISKS RELATING TO THE GLOBAL OFFERING
Any possible conversion of our Domestic Shares into H Shares in the future could increase the
supply of our H Shares in the market and negatively impact the market price of our H Shares .
According to applicable PRC laws and regulations, all of our Domestic Shares may be
converted into H Shares in the future, and suc h converted Shares may be listed or traded on
an overseas stock exchange, provided that prior to the conversion and trading of such
converted Shares any requisite internal approval by our Shareholders in a general meeting
shall have been duly obtained and the filing w ith the CSRC shall have been completed.
However, the PRC Company Law provides th at in relation to the public offering of a
company, the shares of that company which are issued prior to the public offering shall not
be transferred within one year from the date of the listing. Therefore, upon obtaining the
requisite approval and completing the requisite regulatory procedures, our Domestic Shares
RISK FACTORS
–6 6–


--- page 77 ---
may be traded, after the conversion, in the form of H Shares on the Stock Exchange after
one year of the Global Offering, which could further increase the supply of our H Shares in
the market and negatively impact the market price of our H Shares.
There has been no prior public market for our Shares; the liquidity and market price of our H
Shares may be volatile.
Prior to the Global Offering, there has been no public market for our H Shares. The
initial issue price range for our H Shares was the result of negotiations among our Company
and the Overall Coordinators on behalf of the Underwriters and the Offer Price may differ
significantly from the market price for our H Shares following the Global Offering. We
have applied for listing of and permission to deal in our H Shares on the Stock Exchange. A
listing on the Stock Exchange, however, does not guarantee that an active and liquid
trading market for our H Shares will develop, or if it does develop, will be sustained
following the Global Offering. The market pric e of our H Shares may also decline following
the Global Offering. In addition, the Global Offering may not result in the development of
an active and liquid public trading market for our H Shares. Furthermore, the price and
trading volume of our H Shares may be volatile. Factors such as the following may affect
the volume and price at which our H Shares will trade:
. actual or anticipated fluctuations in our revenue and results of operations;
. loss of significant customers or material default by our customers;
. news regarding recruitment or departure of key personnel by us or our competitors;
. announcements of new investments, strateg ic alliances and/or acquisitions in our
industry;
. changes in earnings estimates or reco mmendations by financial analysts;
. potential litigation or regulatory investigations;
. general market conditions or other developments affecting us or our industry;
. the release of lock-up or other transfer restrictions on our outstanding H Shares, or
sales or perceived sales of additional H Shares by us or other shareholders;
. our inability to obtain or maintain regulatory approval for our business operations;
and
. the operating and stock price performance of other companies, other industries and
o t h e re v e n t so rf a c t o r sb e y o n do u rc o n t r o l .
Any such developments may result in large and sudden changes in the volume and price
at which our H Shares will trade. We can give no assurance that these developments will not
occur in the future.
RISK FACTORS
–6 7–


--- page 78 ---
In addition, in recent years, stock markets in general, and particularly the shares of
companies with substantial operations in the PRC, have experienced increasing price and
volume fluctuations, some of which have been unrelated or disproportionate to the
operating performance of such companies. As a result, investors in our H Shares may
experience volatility in the market price of their H Shares and a decrease in the value of H
Shares regardless of our operating performance or prospects.
Future sales or perceived sales of substantial amounts of our H Shares in the public market
could have a material adverse effect on the prevailing market price of our H Shares and our
ability to raise capital in the future, or may result in dilution of your shareholding.
The market price of our H Shares could decline as a result of 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 the percepti on that such sales or issuances may occur.
Future sales, or perceived sales, of substantial amounts of our H Shares could also
materially and adversely affect our ability to raise capital in the future at a time and at a
price we deem appropriate. In addition, our Sha reholders may experience dilution in their
holdings to the extent we issue additional H Shares in future offerings.
Our future financing may cause dilution of your shareholding or place restrictions on our
operations.
In order to raise capital and expand our business, we may consider offering and issuing
additional H Shares or other securities convertible into or exchangeable for the H Shares in
the future other than on a pro rata basis to our then existing Shareholders. As a result, the
shareholdings of those Shareholders may experience dilution in net asset value per Share. If
additional funds are to be raised through deb t financing, certain restrictions may be
imposed on our operations, which may (i) fur ther limit our ability or discretion to pay
dividends; (ii) increase our risks in adverse ec onomic conditions; (iii) adversely affect our
cash flows; or (iv) limit our flexibility in b usiness development and strategic plans.
You will experience immediate dilution and m ay experience further dilution if we issue
additional H Shares or convert Domestic Shares into H Shares under the H Share full
circulation.
Potential investors will pay a price per H Share that substantially exceeds the per H
Share value of our Company’s tangible assets after subtracting our Company’s total
liabilities and will therefore experience imm ediate dilution when purchasing the H Shares
offered in the Global Offering. As a result, if our Company were to distribute its net
tangible assets to our Shareholders immediately following the Global Offering, potential
investors would receive less than the amount they paid for their H Shares. In addition, if we
issue additional H Shares or equity-linked securities at a price lower than the net tangible
asset value per H Share at the time of issuance, you and other purchasers of our H Shares
may experience further dilution in the net tangible asset value per H Share. Given the
promotion of H Share full circulation by the CSRC in November 2019, we may be allowed
to convert certain of our Domestic Shares into H Shares after the Listing if we are qualified
pursuant to the relevant CSRC requirements. Such conversion will increase the number of
H Shares and your shareholding under the class of holders of our H Shares will be diluted.
RISK FACTORS
–6 8–


--- page 79 ---
We may not be able to pay any dividends or make other distributions on our Shares.
We did not declare or pay any dividend during the Track Record Period. Our Board
has discretion in determining the frequency and amount of dividend distributions, which
will be subject to the approval of our Shareholders at a general meeting. A decision to
declare or to pay any dividends and the amount of any dividends will depend on various
factors, including but not limited to our cash flows, financial condition and results of
operations, capital adequacy ratios, operating and capital expenditure requirements,
distributable profits of our PRC subsidiaries as determined under PRC GAAP or IFRS
(whichever is lower), our Articles of Association, regulatory provisions on the payment of
dividends and other factors that our Board deems relevant. Although the PRC GAAP are in
all material aspects identical with IFRS and the differences between our distributable
profits recorded under the PRC GAAP and IFRS are immaterial, the calculation of
distributable profits under the PRC GAAP may be different from the calculation under
IFRS in certain respects, and our operating subsidiaries may not have distributable profits
as determined under the PRC GAAP even if they have profits for that year as determined
under IFRS, or vice versa. Accordingly, we may not receive sufficient distributions from
our PRC subsidiaries.
We have significant discretion as to how we will use the net proceeds of the Global Offering,
and you may not necessarily agree with how we use them.
Our management may spend the net proceeds from the Global Offering in ways you
may not agree with or that do not yield a favourable return. For more details on our
intended use of proceeds, please refer to the section headed ‘‘Future Plans and Use of
Proceeds’’ in this prospectus. However, our management will have discretion as to the
actual application of our net proceeds. You are entrusting your funds to our management,
upon whose judgement you must depend, for the specific uses we will make of the net
proceeds from this Global Offering.
We cannot assure you the accuracy of facts, forecasts and other statistics with respect to the
industry in which we operate contained in this prospectus.
We have derived certain facts, forecasts and o t h e rs t a t i s t i c si nt h i sp r o s p e c t u sf r o m
information provided by relevant government a gencies, industry associations, independent
research institutes or other third-party sources. While we have taken reasonable care in the
reproduction of the information, the information from official government sources has not
been independently verified by us, the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters or
any of our or their respective affiliates or advis ers, and no representation is given as to its
accuracy or completeness. Such facts, forecasts and statistics include the facts, forecasts and
statistics used in the section headed ‘‘Risk Facto rs’’, ‘‘Industry Overview’’ and ‘‘Business’’ in
this prospectus. Because of possibly flawed or ineffective collection methods or
discrepancies between published informati on and market practise and other problems,
the statistics herein may be inaccurate or may n ot be comparable to statistics produced for
other economies, and you should not place undue reliance on them. Furthermore, we
cannot assure you that they are stated or compiled on the same basis, or with the same
RISK FACTORS
–6 9–


--- page 80 ---
degree of accuracy, as similar statistics pre sented elsewhere. In all cases, you should
consider carefully how much weight or importance you should attach to or place on such
facts, forecasts or statistics.
This prospectus contains certain hypothetical information based on changes relative to
historical events and analysis based on it, and you should not place undue reliance on this
information or analysis.
This prospectus contains certain hypothet ical information and analysis based on it,
which includes the use of certain accompanying assumptions. Our Company cannot offer
assurances that the assumptions would have been true under the hypotheses presented or
that the results of these hypothetical changes would have matched the results presented. For
more details, please refer to the section hea ded ‘‘Financial Information — Key Factors
Affecting Our Results of Operation — Cost of insurance agency business’’ in this
prospectus. Given the hypothetical nature of this information and the uncertainty of the
assumptions made, the results that would have resulted under these hypotheses might not
have occurred in the way we had expected. Accordingly, you should not place undue
reliance on the hypothetical information and related analysis included in this prospectus.
Investors should read the entire prospectus carefully and should not place any reliance on any
information contained in press articles or other media in making your investment decision.
Prior or subsequent to the publication of this prospectus, there may have been or be
press and media coverage regarding us and the Global Offering, which includes certain
information about us that does not appear in, or is different to what is contained in, this
prospectus. We have not authorised the disclosure of any such information in the press or
media. Financial information, financial projections, valuation and other information about
us contained in such unauthorised press or media coverage may not truly reflect what is
disclosed in the prospectus or the actual cir cumstances. We do not ac cept any responsibility
for such unauthorised press and media coverage or for the accuracy or completeness of any
such information. We make no representati on as to the appropriateness, accuracy,
completeness or reliability of any such inform ation. To the extent that any information
appearing in the press and media is inconsistent or conflicts with the information contained
in this prospectus, we disclaim it. Investors should rely only on the information contained in
this prospectus in making an investment decision.
RISK FACTORS
–7 0–


--- page 81 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors c ollectively and individually accept full
responsibility, includes particulars given in compliance with the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, the Securities and Futures (Stock Market
Listing) Rules (Chapter 571V of the Laws of Hong Kong) and the Listing Rules for the
purpose of giving information with regard to our Company.
Our Directors, having made all reasonable en quiries, confirm that to the best of their
knowledge and belief the information contained in this prospectus is accurate and complete
in all material respects and not misleading or deceptive, and there are no other matters the
omission of which would make any statement herein or this prospectus misleading.
CSRC FILING
The CSRC published a notice on the complet ion of the filing procedures for the Global
Offering and the making of the application to list our H Shares on the Stock Exchange on 7
August 2023. In completing such filing proce dure, 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.
Our Company has completed all the necessary filing procedures and report relevant
materials in relation to the Global Offering to the CSRC prior to the Listing.
THE HONG KONG PUBLIC OFFERING AND THIS PROSPECTUS
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 contains the terms and conditions of the Hong Kong Public
Offering.
The Hong Kong Offer Shares are offered solely on the basis of the information
contained and representations made in this prospectus and on the terms and subject to the
conditions set out herein and therein. No perso n is authorised to give any information in
connection with the Global Offering or to make any representation not contained in this
prospectus, and any information or representation not contained herein and therein must
not be relied upon as having been authorised by our Company, the Joint Sponsors, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Underwriters, any of their respective directors, agents, employees or
advisers or any other party involved in the Global Offering.
Neither the delivery of this prospectus nor any offering, subscription, acquisition, sale
or delivery made in connection with the H Shares shall, under any circumstances, constitute
a representation that there has been no change or development reasonably likely to involve
a change in our affairs since the date of this prospectus or imply that the information
contained in this prospectus is correct as at any date subsequent to the date of such
information.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–7 1–


--- page 82 ---
OFFER SHARES FULLY UNDERWRITTEN
The Listing is sponsored by the Joint Sponsors and the Global Offering is managed by
the Overall Coordinators. Pursuant to the Hong Kong Underwriting Agreement, the Hong
Kong Public Offering is fully underwritten by the Hong Kong Underwriters under the terms
of the Hong Kong Underwriting Agreement, subject to agreement on the Offer Price to be
determined between the Overall Coordinators (for themselves and on behalf of the
Underwriters) and us on the Price Determination Date. The International Offering is
expected to be fully underwritten by the Internat ional Underwriters subject to the terms and
conditions of the International Underwriting Agreement, which is expected to be entered
into on or about the Price Determination Date.
The Offer Price is expected to be fixed by the Overall Coordinators (for themselves and
on behalf of the Underwriters) and our Company on the Price Determination Date. The
Price Determination Date is expected to be on or around Friday, 2 August 2024 and, in any
event, not later than 12 : 00 noon on Friday, 2 August 2024 (unless otherwise determined by
the Overall Coordinators (for themselves and on behalf of the Underwriters) and our
Company). If, for whatever reason, the Offer Price is not agreed between the Overall
Coordinators and our Company on or before 12 : 00 noon on Friday, 2 August 2024, the
Global Offering will not become unconditio nal and will lapse immediately. Further
information about the Underwriters and the underwriting arrangements is set out in the
section headed ‘‘Underwriting’’ in this prospectus.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in the section
headed ‘‘How to Apply for Hong Kong Offer Shares’’ in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
For more details on the structure of the Glo bal Offering, including its conditions,
p l e a s er e f e rt ot h es e c t i o nh e a d e d‘ ‘ S t r u c t u r eof the Global Offering’’ in this prospectus.
OVER-ALLOTMENT OPTI ON AND STABILISATION
F o rm o r ed e t a i l so nt h ea r r a n g e m e n t sr e lating to the Over-allotment Option and
stabilisation, please refer to the section heade d ‘‘Structure of the Global Offering’’ in this
prospectus.
RESTRICTIONS ON OFFER AND SALE OF H SHARES
Each person acquiring the H Shares will be required to confirm, or by his/her/its
acquisition of H Shares be deemed to confirm, that he/she/it is aware of the restrictions on
offers and sales of the H Shares described in this prospectus.
No action has been taken to permit a public offering of the H Shares in any jurisdiction
other than Hong Kong or the distribution of this prospectus in any jurisdiction other than
Hong Kong. Accordingly, this prospectus may not be used for the purpose of, and does not
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–7 2–


--- page 83 ---
constitute, an offer or invitation in any jurisd iction 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 thi s prospectus and the offering and sales of the H
Shares in other jurisdictions are subject to restrictions and may not be made except as
permitted under the applicable securities laws of such jurisdictions pursuant to registration
with or authorisation by the relevant securi ties regulatory authorities or an exemption
therefrom. In particular, the H Shares have not been publicly offered or sold, directly or
indirectly, in the PRC.
APPLICATION FOR LISTIN G ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the granting of
the listing of, and permission to deal in, our H Shares to be issued pursuant to the Global
Offering (including any additional H Shares which may be issued pursuant to the exercise of
the Over-allotment Option).
Under section 44B(l) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, if the permission for the H Shares to be listed on the Stock Exchange pursuant
to this prospectus has been refused before the expiration of three weeks from the date of the
closing of the Global Offering or such longer period not exceeding six weeks as may, within
the said three weeks, be notified to us by or on behalf of the Stock Exchange, then any
allotment made on an application in pursuance of this prospectus shall, whenever made, be
void.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares on the
Stock Exchange and compliance with the stock admission requirements of HKSCC, the H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the Lis ting Date or on any other date as determined
by HKSCC. Settlement of transactions between participants of the Stock Exchange is
required to take place in CCASS on the second settlement day after any trading day. All
activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time. All necessary arrangements have been
made for the H Shares to be admitted into CCASS. Investors should seek the advice of their
stockbroker or other professional adviser for details of those settlement arrangements and
how such arrangements will affect their rights and interests.
H SHARE REGISTER AND STAMP DUTY
All of the H Shares issued pursuant to applications made in the Global Offering will be
registered on our H Share register of members to be maintained in Hong Kong by our H
Share Registrar, Tricor Investor Services Lim ited. Our principal register of members will be
maintained by us at our head office in the PRC . Dealings in the 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 stamp duty is charged to each of the seller and purchaser at the ad valorem
rate of 0.10% of the consideration for, or (if gr eater) the value of, the H Shares transferred.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–7 3–


--- page 84 ---
In other words, a total of 0.2% is currently payable on a typical sale and purchase
transaction of the H Shares. In addition, a fixed duty of HK$5 is charged on each
instrument of transfer (if required).
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their
professional advisors if they are in any doubt as to the taxation implications of
subscribing for, holding and dealing in the H Shares or exercising any rights attached to
them. It is emphasised that none of our Company, the Joint Sponsors, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Underwriters, any of their res pective affiliates, directors, supervisors,
officers, employees, agents or advisors or any other party involved in the Global Offering
accepts responsibility for any tax effects on, or liabilities of any holders of the H Shares
resulting from the subscription, purchase, ho lding or disposal of the H Shares or exercising
any rights attached to them.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Compan y, dividends payable in respect of our H
Shares will be paid to the Shareholders listed on the H Share register of member of our
Company in Hong Kong, by ordinary post, at the Shareholders’ risk, to the registered
address of each Shareholder.
EXCHANGE RATE CONVERSION
Solely for your convenience, this prospectus contains translations of certain Renminbi
amounts into Hong Kong dollars at specified rates.
Unless we indicate otherwise, the translation of Renminbi into Hong Kong dollars and
vice versa, in this prospectus was made at the f ollowing rate set by the PBOC prevailing on
the Latest Practicable Date:
RMB1.00 : HK$1.0952
No representation is made that any amounts in HK$ can be or could have been
converted at the relevant dates at the above rates or any other rates at all.
LANGUAGE
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail unless otherwise stated. However, the translated
English names of the PRC nationals, entities, dep artments, facilities, certificates, titles, laws
and regulations (including certain of our su bsidiaries) and the like included in this
p r o s p e c t u sa n df o rw h i c hn oo f f i c i a lE n g l i s ht r a n slation exists are unoffi cial translations for
your reference only. If there is any inconsistency, the Chinese name prevails.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–7 4–


--- page 85 ---
ROUNDING
Certain amounts and percentages figures incl uded in this prospectus have been subject
to rounding adjustments, or have been rounded to one or two decimal places. Any
discrepancies in any table in this prospectus between total and sum of amounts listed
therein are due to rounding.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–7 5–


--- page 86 ---
In preparation for the Listing, our Company has sought the following waivers from
strict compliance with the relevant provisions of the Listing Rules:
WAIVER IN RELATION TO MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, a new applicant for listing on the Stock
Exchange must have sufficient management pr esence in Hong Kong, which normally means
that at least two of the executive Directors must be ordinarily resident in Hong Kong. Rule
19A.15 of the Listing Rules further provides that the requirement in Rule 8.12 may be
waived by having regard to, among other considerations, the applicant’s arrangements for
maintaining regular communic a t i o nw i t ht h eS t o c kE x c h a n g e .
Since our headquarters and principal business operations and management of our
Group are carried out in mainland China, our e xecutive Directors are based in mainland
China to better manage and attend to our Group’s business operations. Therefore, we do
not and, in the foreseeable future, will not have sufficient management presence in Hong
Kong for the purpose of satisfying the requirement under Rule 8.12 of the Listing Rules.
Accordingly, pursuant to Rule 19A.15 of the Listing Rules, we have applied to the
Stock Exchange for, and the Stock Exchange has granted, a waiver from strict compliance
with the requirement under Rule 8.12 and Rule 19A.15 of the Listing Rules. In order to
maintain effective communication with the Stock Exchange, we will put in place the
following measures in order to ensure that regular communication is maintained between
the Stock Exchange and us:
(a) we have appointed two authorised representatives pursuant to Rule 3.05 of the Listing
Rules. The two authorised representatives are Mr. Lu, our executive Director, and Ms.
Chan Sau Ling ( 陳秀玲)( ‘ ‘Ms. Chan ’’), our joint company secretary. The authorised
representatives will act as the principal channel of communication between the Stock
Exchange and our Company. The authorised representatives will be available to meet
with the Stock Exchange in Hong Kong within a reasonable period of time upon
request and will be readily contactable by the Stock Exchange by telephone, facsimile
and/or email to deal promptly with any enquiries which may be made by the Stock
Exchange. Each of the authorised representatives is authorised to communicate on
behalf of our Company with the Stock Exchange;
(b) each of the authorised representatives has means to contact all Directors (including the
independent non-executive Directors) promptly at all times as and when the Stock
Exchange wishes to contact the Directors on any matters. We will implement a policy
whereby:
(i) each Director will provide his/her mobile phone number, office phone number,
residential phone number, email address and facsimile number to the authorised
representatives;
(ii) each Director will provide his/her phone numbers or means of communication to
the authorised representatives when he/she is travelling; and
WAIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–7 6–


--- page 87 ---
(iii) each Director will provide his/her m obile phone number, office phone number,
email address and facsimile number to the Stock Exchange;
(c) in compliance with Rule 3A.19 of the Listing Rules, we have retained Ping An of China
Capital (Hong Kong) Company Limited to act as our Compliance Adviser, who will
act as an additional channel of communic ation between the Stock Exchange and our
Company for the period commencing on the Listing Date and ending on the date that
our Company publishes our financial results for the first full financial year after the
Listing Date pursuant to Rule 13.46 of the Listing Rules;
(d) our Company will inform the Stock Exchange promptly in respect of any change in our
Company’s authorised representatives and Compliance Adviser;
(e) each Director who is not ordinarily resident in Hong Kong has confirmed that each of
them possesses or can apply for valid travel documents to visit Hong Kong and can
meet with the Stock Exchange within a reasonable period; and
( f ) w ew i l lr e t a i naH o n gK o n gl e g a la d v i s e rt oadvise us on the application of the Listing
Rules and other applicable Hong Kong la ws and regulations after our Listing.
WAIVER IN RELATION TO JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, our company secretary must be
an individual who, by virtue of his or her academic or professional qualifications or
relevant experience, is, in the opinion of the Stock Exchange, capable of discharging the
functions of company secretary. The Stock Ex change 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 th e Legal Practitioners Ordinance (Chapter
159 of the laws of Hong Kong); or
(c) a certified public accountant as defined in the Professional Accountants
Ordinance (Chapter 50 of the laws of Hong Kong).
N o t e2t oR u l e3 . 2 8o ft h eL i s t i n gR u l e sf u r ther provides that 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 he/she
played;
(b) familiarity with the Listing Rules and othe r relevant law and regulations including
the SFO, 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 (i.e. not less than 15 hours of
relevant professional training in each financial year); and
WAIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–7 7–


--- page 88 ---
(d) professional qualifications in other jurisdictions.
We have appointed Ms. Sun Yanlu (‘‘ Ms. Sun ’ ’ ) ,w h oi ss e c r e t a r yo fo u rB o a r da n d
financial manager of our Company, as one of our joint company secretaries. Due to the
work allocation within our Group, Ms. Sun resigned as a Supervisor on 17 June 2024 in
order to devote more time to concentrate her roles as our joint company secretary, secretary
of our Board and financial manager of our Company. Although Ms. Sun does not possess
the qualification and sufficient relevant expe rience as stipulated in the Notes to Rule 3.28 of
the Listing Rules, we would like to appoint her as our joint company secretary due to her
past experience within our Group and her thorough understanding of the internal
administration and business operations of our Group. We believe that it would be in the
best interests of our Company and the corpo rate governance of our Group to have Ms. Sun,
who is our employee and has day-to-day knowledge of our affairs, as our joint company
secretary. Ms. Sun has the necessary nexus to our Board and close working relationship
with management of our Company in order to perform the function of a joint company
secretary and to take the necessary actions i n the most effective and efficient manner. In
addition, we have appointed Ms. Chan Sau Ling, who fulfils the requisite qualification as
required under Note 1 to Rule 3.28 of the Listing Rules, to act as our other joint company
secretary and to assist Ms. Sun to acquire all qualifications and experience as the company
secretary of our Company required under Rule 3.28 of the Listing Rules. Please refer to the
section headed ‘‘Directors, Supervisors and Senior Management’’ in this prospectus for
further information regarding the qualifications and experience of Ms. Sun and Ms. Chan.
Apart from discharging her functions in her role as one of our joint company
secretaries, Ms. Chan will assist Ms. Sun in enabling her to acquire the relevant company
secretary experience as required under Rule 3.28 of the Listing Rules and to become
familiar with the requirements of the Listing Rules and other applicable Hong Kong laws.
In addition, Ms. Sun will also attend relevant professional training during each financial
year as required under Rule 3.29 of the Listing Rules.
We have applied for, and the Stock Exchange has granted, a waiver from strict
compliance of Rules 3.28 and 8.17 of the Listing Rules in respect of the appointment of Ms.
Sun as one of our joint company secretaries pursuant to Chapter 3.10 of the Guide for New
Listing Applicants on the following conditions:
(a) Ms. Sun must be assisted by Ms. Chan, who possesses the qualifications and
experience required under Rule 3.28 of the Listing Rules and is appointed as a
joint company secretary of our Company throughout the validity period of the
waiver;
(b) the waiver is valid for an initial period of three years commencing from the Listing
Date and will be revoked immediately if Ms. Chan ceases to provide such
assistance or if there are material brea ches of the Listing Rules by our Company;
and
(c) before the end of the three-year period, the qualifications and experience of Ms.
Sun and the need for on-going assistance of Ms. Chan will be further evaluated by
our Company. Our Company will then endeavour to demonstrate to the Stock
WAIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–7 8–


--- page 89 ---
Exchange’s satisfaction that Ms. Sun, having had the benefit of the assistance of
Ms. Chan for the immediately preceding three years, has acquired the relevant
experience (within the meaning of Note 2 to Rule 3.28 of the Listing Rules) such
that a further waiver from Rules 3.28 and 8.17 of the Listing Rules will not be
necessary. Our Company understands that the Stock Exchange will revoke the
waiver if Ms. Chan ceases to provide assistance to Ms. Sun during the three-year
period.
WAIVER IN RELATION TO CONTINUING CONNECTED TRANSACTIONS
We have entered into, and expect to continue, certain transactions that will constitute
partially exempt and non-exempt continuing connected transactions of our Company under
the Listing Rules upon Listing. Accordingly, we have applied to the Stock Exchange for,
and the Stock Exchange has granted, waivers from strict compliance with Chapter 14A of
the Listing Rules in respect of the continuing connected transactions as disclosed in
‘‘Connected Transactions — Partially Exempt Continuing Connected Transaction — 2.
Comprehensive Services Framework Agreement’’ and ‘‘Connected Transactions —
Non-Exempt Continuing Connected Transaction — 3. IT and Consulting Services
Framework Agreement’’. For more details, please refer to section headed ‘‘Connected
Transactions’’ in this prospectus.
CONSENT IN RELATION TO ALLOCATION OF OFFER SHARES TO CONNECTED
CLIENT OF THE CONNECTED SYNDICATE
Paragraph 5(1) of Appendix F1 to the Listing Rules provides that, without the prior
written consent of the Stock Exchange, no allocations will be permitted to ‘‘connected
clients’’ of the overall coordinator(s), any syndicate member(s) or any distributor(s).
Hong Tai Securities Limited has been appointed by our Company as one of the Joint
Bookrunners, Joint Lead Manager s, Underwriters and CMIs (the ‘‘ Connected Syndicate ’’).
Hong Tai International III LPF (‘‘ Hong Tai ’’) has agreed to be a cornerstone investor
in the Global Offering. The Connected Syndicate is the investment manager of Hong Tai.
Accordingly, Hong Tai is a connected client (the ‘‘ Connected Client ’’) and the participation
of the Connected Client as a cornerstone investor in the Global Offering would constitute
an allocation to a connected client of a syndicate member. Based on the information
provided by the Connected Client, the Connected Client is owned as to 42.6% by Zhu
Jianhua ( 朱建華) as a limited partner and as to 57.4% by o ther eight limited partners (none
of which owns more than 20% interest in the Connected Client) and each of the limited
partners and their respective ultimate ben eficial owner(s) is independent from the
Connected Syndicate. Each of Hong Tai, the Connected Syndicate and their respective
ultimate beneficial owner(s) is an Independent Third Party, and is not a connected person
(as defined under the Listing Rules) of our Company. For further information on Hong Tai,
p l e a s er e f e rt ot h es e c t i o nh e a d e d‘ ‘ C o r n e r stone Investors — Our Cornerstone Investors —
Hong Tai’’ in this prospectus.
WAIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–7 9–


--- page 90 ---
We have applied to the Stock Exchange for, and the Stock Exchange has granted us, its
consent pursuant to paragraph 5(1) of Appendix F1 to the Listing Rules for the Connected
Client to participate as a cornerstone inv estor in the Global Offering subject to the
following conditions:
(a) the Offer Shares to be allocated to the Connected Client, to the best of the Joint
Sponsors’ knowledge and belief, will be held on a discretionary basis on behalf of
independent third parties;
(b) the cornerstone investment agreemen t of the Connected Client does not contain
any material terms which are more favora ble to it than those in other cornerstone
investment agreement(s);
(c) no preferential treatment has been, nor will be, given to the Connected Client by
virtue of its relationship with the Connected Syndicate (other than the assured
entitlement under a cornerstone investm ent agreement for the Connected Client);
(d) the Connected Syndicate has not participated in the decision-making process or
relevant discussions as to the selection of the Connected Client as a cornerstone
investor and the allocation of securities to it;
(e) each of our Company, the Overall Coordinators, the Connected Syndicate and the
Connected Client has provided the Stock Exchange a written confirmation in
accordance with Chapter 4.15 of the Guide; and
(f) details of the allocation have been di sclosed in this prospectus and will be
disclosed in the allotment results announcement of our Company.
WAIVER FROM STRICT COMPLIANCE WITH THE LISTING RULES
–8 0–


--- page 91 ---
DIRECTORS
Name Residential Address Nationality
Executive Directors:
Mr. Lu Yao ( 鹿遙) Room 202, Unit 1, Building 7
No. 22, Jingsong Third Road
Shibei District
Qingdao, Shandong
PRC
Chinese
Mr. Zhang Zhiquan ( 張志全) Room 704, Building 5
Jingmao International Apartment
Baliqiao South Road
Tongzhou District, Beijing
PRC
Chinese
M s .L iT i a n( 李甜) Room 702, Unit 3
Building 45, Zuoan Fengdu
No. 237 Jinsong 7th Road
Laoshan District, Qingdao
Shandong, PRC
Chinese
M r .W a n gH e p i n g(王合平) Room 202, Unit 2, No. 1
Ningan Road
Shibei District
Qingdao, Shandong
PRC
Chinese
Independent non-executive
Directors:
Ms. Fang Qiaoling ( 房巧玲) Room 401, Unit 3, No. 48
Yunxi Road
Shibei District
Qingdao, Shandong
PRC
Chinese
Mr. Chung Wai Man ( 鍾偉文) Flat G, 13/F, Block 5
Park Central
9 Tong Tak Street
Tseung Kwan O
New Territories
Hong Kong
Chinese
Ms. Ng Sin Kiu ( 吳先僑)F l a t E , 3 8 / F , B l o c k 1 6
Ocean Shores
Tseung Kwan O
New Territories
Hong Kong
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 1–


--- page 92 ---
SUPERVISORS
Name Residential Address Nationality
M r .Z h uR o n g w e i(朱榮偉) Room 201, Unit 1, Building 2
N o .6 7 7 ,W e n c h a n gR o a d
Licang District
Qingdao, Shandong
PRC
Chinese
Ms. Wang Jiesi ( 王杰斯) Room 602, Unit 2, Building 1
Lyucheng Lanan North Area
No. 11, Lingchuan Road
Licang District
Qingdao, Shandong
PRC
Chinese
Ms. Wang Yangyang ( 王陽陽) Room 502, Unit 1, Building No. 27
No. 70, Hushan Road
Licang District
Qingdao, Shandong
PRC
Chinese
Further information about our Directors, Supervisors and other senior management
members are set out in ‘‘Directors, Supervisors and Senior Management’’.
PARTIES INVOLVED
Joint Sponsors
(in alphabetical order)
CITIC Securities (Hong Kong) Limited
(a licensed corporation under the SFO to engage in
type 4 (advising on securities) and type 6 (advising on
corporate finance) regulated activities)
18/F, One Pacific Place
88 Queensway
Hong Kong
Ping An of China Capital (Hong Kong) Company
Limited
(a licensed corporation under the SFO to engage in
type 6 (advising on corporate finance) regulated
activity)
Units 3601, 07 & 11–13
36/F The Center
99 Queen’s Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 2–


--- page 93 ---
Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners,
Joint Lead Managers and CMIs
(in alphabetical order)
China PA Securities (Hong Kong) Company Limited
(a licensed corporation under the SFO to engage in
type 1 (dealing in securities) and type 4 (advising on
securities) regulated activities)
Units 3601, 07 & 11–13
36/F The Center
99 Queen’s Road Central
Hong Kong
CLSA Limited
(a licensed corporation under the SFO to engage in
t y p e1( d e a l i n gi ns e c u r i t i e s ) ,t y p e4( a d v i s i n go n
securities) and type 7 (providing automated trading
services) regulated activities)
18/F, One Pacific Place
88 Queensway
Hong Kong
Joint Bookrunners, Joint Lead
Managers and CMIs
(in alphabetical order)
China PA Securities (Hong Kong) Company Limited
Units 3601, 07 & 11–13
36/F The Center
99 Queen’s Road Central
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong
Fosun International Securities Limited
Suite 2101–2105
21/F, Champion Tower
3 Garden Road
Central
Hong Kong
Hong Tai Securities Limited
Units 1803–1804
18/F, Infinitus Plaza
199 Des Voeux Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 3–


--- page 94 ---
Patrons Securities Limited
Unit 3214
32/F, Cosco Tower
183 Queen’s Road Central
Sheung Wan
Hong Kong
Joint Lead Managers and CMIs
(in alphabetical order)
China PA Securities (Hong Kong) Company Limited
Units 3601, 07 & 11–13
36/F The Center
99 Queen’s Road Central
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong
Fosun International Securities Limited
Suite 2101–2105
21/F, Champion Tower
3 Garden Road
Central
Hong Kong
Hong Tai Securities Limited
Units 1803–1804
18/F, Infinitus Plaza
199 Des Voeux Road Central
Hong Kong
Patrons Securities Limited
Unit 3214
32/F, Cosco Tower
183 Queen’s Road Central
Sheung Wan
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 4–


--- page 95 ---
China Industrial Securities International Capital
Limited
32/F, Infinitus Plaza
199 Des Voeux Road Central
Sheung Wan
Hong Kong
Eddid Securities and Futures Limited
21/F, Citic Tower 1
Tim Mei Avenue
Central
Hong Kong
Fortune (HK) Securities Limited
Units No. 4102–06
41/F, COSCO Tower
183 Queen’s Road Central
Hong Kong
ICBC International Securities Limited
37/F, ICBC Tower
3 Garden Road
Hong Kong
Tiger Brokers (HK) Global Limited
1/F, No. 308 Des Voeux Road Central
Sheung Wan
Hong Kong
Legal Advisers to our Company As to Hong Kong law
Fangda Partners
26/F, One Exchange Square
8 Connaught Place
Central
Hong Kong
As to the PRC law
Fangda Partners
27/F, North Tower, Beijing Kerry Centre
1 Guanghua Road, Chaoyang District
Beijing
PRC
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 5–


--- page 96 ---
Legal Advisers to the Joint Sponsors
and the Underwriters
As to Hong Kong law
Norton Rose Fulbright Hong Kong
38/F, Jardine House
1 Connaught Place
Central, Hong Kong
As to the PRC law
Grandall Law Firm (Shanghai)
27/F, Garden Square
9 6 8W e s tB e i j i n gR o a d
Shanghai
PRC
Auditor and Reporting Accountants KPMG
Certified Public Accountants
Public Interest Entity Auditor
registered in accordance with the Accounting and
Financial Reporting Council Ordinance
8th Floor, Prince’s Building
10 Chater Road
Central
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Room 2504, Wheelock Square
N o .1 7 1 7W e s tN a n j i n gR o a d
Shanghai
PRC
Receiving Bank Bank of Ch ina (Hong Kong) Limited
1 Garden Road
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 6–


--- page 97 ---
Registered Office No. 187 Jinshui Road
Licang District
Qingdao, Shandong
PRC
Headquarters N o .1 ,H a i e rR o a d
Laoshan District
Qingdao, Shandong
PRC
Principal Place of Business in
Hong Kong
5/F, Manulife Place
348 Kwun Tong Road
Kowloon, Hong Kong
Company’s Website
https://www.haierbx.net
(Note: the information on this website does not form
part of this prospectus)
Joint Company Secretaries Ms. Chan Sau Ling ( 陳秀玲) (HKCGI, CGI)
5/F, Manulife Place
348 Kwun Tong Road
Kowloon, Hong Kong
Ms. Sun Yanlu ( 孫艷露)
Room 202, Unit 2, Building 12
No. 3184, Heilongjiang Middle Road
Licang District
Qingdao, Shandong
PRC
Authorised Representatives Mr. Lu Yao ( 鹿遙)
Room 202, Unit 1, Building 7
No. 22, Jingsong Third Road
Shibei District
Qingdao, Shandong
PRC
Ms. Chan Sau Ling ( 陳秀玲) (HKCGI, CGI)
5/F, Manulife Place
348 Kwun Tong Road
Kowloon, Hong Kong
Audit Committee Mr. Chung Wai Man ( 鍾偉文) (Chairman)
Ms. Fang Qiaoling ( 房巧玲)
Ms. Ng Sin Kiu ( 吳先僑)
CORPORATE INFORMATION
–8 7–


--- page 98 ---
Remuneration Committee Ms. Fang Qiaoling （房巧玲）(Chairlady)
Mr. Chung Wai Man ( 鍾偉文)
M s .L iT i a n( 李甜)
Nomination Committee Mr. Lu Yao ( 鹿遙) (Chairman)
Ms. Ng Sin Kiu ( 吳先僑)
Ms. Fang Qiaoling ( 房巧玲)
H Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Compliance Adviser Ping An of China Capital (Hong Kong) Company
Limited
(a licensed corporation under the SFO to engage in
type 6 (advising on corporate finance) regulated
activity)
Units 3601, 07 & 11–13
36/F The Center
99 Queen’s Road Central
Hong Kong
Principal Bank China Construction Bank Corporation
Qingdao Haier Road Branch
Zhonghan Street, Haier Road
Laoshan District
Qingdao, Shandong Province
PRC
CORPORATE INFORMATION
–8 8–


--- page 99 ---
This and other sections of this prospectus contain information relating to the industry
in which we operate. Certain information and statistics set forth in this section have been
extracted from the Frost & Sullivan Report i ssued by Frost & Sullivan, an independent
market research agency, which we commissioned, and from various official government
publications and other publicly available publications. Information and statistics from
official government sources have not been independently verified by us, the Joint Sponsors,
the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, and the
Joint Lead Managers, any of the Underwriters, any of our or their respective directors,
officers or representatives or any other person involved in the Global Offering and no
representation is given as to their accuracy.
We have commissioned Frost & Sullivan , an independent mar ket research and
consulting company, to conduct an analysis of, and to prepare a report on China Insurance
Intermediary Industry. The re port prepared by Frost & Sullivan for us is referred to in this
prospectus as the Frost & Sullivan Report. We have agreed to pay a total fee of
RMB650,000 to Frost & Sullivan for the preparation of the report, which our directors
believe reflects market rates for reports of this type. Frost & Sullivan is a global consulting
company founded in 1961 in New York and has over 40 global offices with more than 2,000
industry consultants, market research analysts, technology analysts and economists.
The Frost & Sullivan Report was undertaken through both primary and secondary
research obtained from various sources using intelligence collection methodologies. Primary
research involved discussing the status of the industry with certain leading industry
participants across the industry value chain and conducting interviews with relevant parties
to obtain objective and factual data and prospective predictions. Secondary research
involved reviewing information, data and publications from publicly available sources,
including official data and announcements from government agencies, and company
reports, independent research reports and d ata based on Frost & Sullivan’s own data base.
In compiling and preparing the Frost & Su llivan Report, Frost & Sullivan has adopted
the following assumptions: (i) the social, economic and political environment in the globe is
likely to remain stable in the forecast period; and (ii) industry key drivers are likely to drive
the industry in the forecast period.
Our Directors have confirme d that, after taking reasona ble care, Frost & Sullivan is an
independent professional market research agency, and the sources of information used in
this section, which are extracted from the Frost & Sullivan Report, are reliable and not
misleading. There is no adverse change in the market information since the date of the Frost
& Sullivan Report which may qualify, contradi ct or have impact on th e information of this
section.
INDUSTRY OVERVIEW
–8 9–


--- page 100 ---
OVERVIEW OF CHINA INSURANCE INDUSTRY
Definitions and Classifications of Insurance
Insurance is a contract, represented by a policy, in which a policyholder receives
financial protection or reimbursement against losses from specific contingencies or perils.
An insurance company provides the insured with financial coverage or reimbursement in
return for the payment of a premium. Insuranc e was originally intended to provide a secure
and reliable protection; it has since been ex tended to become a protection mechanism, a
basic means of risk management in a marke t economy, and an important pillar of the
financial and social security systems. Insu rance funds constitute a significant source of
capital within the financial market. Insurance serves not only as a safety net for social
security system, but also as a critical pillar o f the social security system. By collecting
premiums, insurance companies accumulate substantial funds that can be invested in the
financial market, providing financial support to other economic sectors. Furthermore,
insurance can compensate for the shortcomings of social security systems, offering
individuals a higher level of protection.
Insurance products can be divided into two major categories: (i) life insurance; and (ii)
property and casualty insurance.
Life insurance provides comprehensive coverage safeguarding an individual’s
longevity, physical health, and various life e vents including death, disability, illness, old
age, and accidents that may occur throughout the duration of the insurance policy.
Moreover, if the insured individual survives until a specified time, insurance benefits are
also granted. Life and health insurance can be further divided into life & annuity insurance
(e.g., whole life insurance, term life insurance, annuity insurance, etc.), health insurance
(e.g., critical illness insurance, medical insura nce, etc.) and accident insurance (e.g., traffic
accident insurance, travel insurance, etc.).
Property and casualty insurance provides coverage for the losses and damages caused
by natural disasters or accidents to the insured property and related interests as stipulated
in the insurance contract. Property and casualty insurance mainly includes property damage
insurance (e.g., corporate property insurance, household property insurance, etc.), liability
insurance (e.g., employer’s liability insurance, product liability insurance, etc.), and credit
insurance. In addition, automobile insurance is one of the most representative types of
property and casualty insurance. Automobile insurance targets th e vehicle itself, third-party
liabilities and vehicle passenger s, covering compensation resp onsibilities for personal injury
or property damage caused by natural disasters or accidents to the vehicle.
Market Size of China Insurance Industry
Primary insurance is a type of insurance which the insurance company directly bears
the liability for damages against t he policyholders’ insured risks.
INDUSTRY OVERVIEW
–9 0–


--- page 101 ---
The primary insurance premium in China has experienced a relatively slow growth over
the past few years, which is mainly attributed to the impact of COVID-19 pandemic. Signs
of the pandemic’s impact began to emerge in 2020, with the growth rate in the life insurance
sector slowing from a 13.8% year-on-year (YOY) growth rate in 2019 to a 7.5% YOY
growth rate in 2020. Similarly, the growth rate in the property and casualty insurance sector
also slowed from an 8.2% YOY growth rate in 2019 to a 2.4% YOY growth rate in 2020.
This trend continued into 2021, with the life insurance sector experiencing a slowdown. Life
premium collected decreased from RMB3, 332.9 billion in 2020 to RMB3,322.9 billion in
2021, resulting in a YOY growth rate of -0. 3%. Likewise, the property and casualty
insurance sector also experienced a slowdown, with property and casualty insurance
premium collected decreasing from RMB1,1 92.9 billion in 2020 to RMB1,167.1 billion in
2021, with a YOY growth rate of -2.2%. The d ecline in the insurance industry can be
attributed to the elastic demand for insurance product in the event of a pandemic.
Individuals and families, considering the voluntary nature of life insurance purchases, may
have prioritised immediate financial needs, leading to a pause or reduction in insurance
payments. The decrease in property and casualty insurance sector was primarily driven by a
decline in the automobile insurance segment . In 2020, automobile insurance accounted for
69.1% of the property and casualty insurance sector, but due to reduced travel needs, it
accounted for 66.6% in 2021.
However, as the impact of the pandemic subsides and society returns to normal, China
insurance industry exhibited positive gro wth in 2022 and 2023. The primary insurance
premium in China reached RMB5.1 trillion i n 2023, representing a CAGR of 4.7% from
2019. The premium of life insurance and property and casualty insurance in China reached
RMB3.8 trillion and RMB1.4 trillion in 2023, respectively.
Looking ahead, there are several factors that indicate a positive outlook for future
growth in the insurance industry. The insurance industry is expected to experience higher
growth due to demographic shifts toward an ageing society in China, increased disposable
income, and rising demand for insurance coverage in areas such as health insurance,
annuity, and retirement planning. On the other hand, China primary insurance premium
collected still lags that of other developed coun tries. For example, insurance density (i.e.
insurance premium per capita) in China in 2022 was US$489, which was significantly lower
than the per capita premium collected in Japan, France, the U.K., and the U.S. It was only
18.2% of that of Japan (US$2,690), 13.7% of that of France (US$3,578), 10.2% of that of
the U.K. (US$4,781), and 5.5% of that of the U.S. (US$8,885).
As the result of abovementioned factors, it is expected that the primary insurance
premium growth rate of insurance companies will continue to improve. The premium of
primary insurance in China is expected to re ach RMB7.2 trillion in 2028, representing a
CAGR of 7.0% from 2024. The premium of life insurance and property and casualty
insurance in China in 2028 is expected to inc rease to RMB5.3 trillion and RMB1.9 trillion,
respectively.
INDUSTRY OVERVIEW
–9 1–


--- page 102 ---
Market Size of the Primary Insurance Premium of China Insurance Industry
by Insurance Product Type, 2019–2028E
0.0
4.3
3.1
1.2
4.5
3.3
1.2
4.5
3.3
1.2
4.7
3.4
1.3
5.1
3.8
1.4
5.5
4.0
1.5
5.9
4.3
1.6
6.3
4.6
1.7
6.7
4.9
1.8
7.2
1.9
5.3
2019 2020 2021 2022
CAGR 2019–2023
Premium of Life Insurance
Premium of Property and
Casualty Insurance
Premium of Primary Insurance
CAGR 2024E–2028E
5.0% 7.1%
4.0% 6.6%
4.7% 7.0%
2023 2024E 2025E 2026E 2027E 2028E
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
RMB Trillion
Source: National Financial Regulatory Administration, Frost & Sullivan
OVERVIEW OF CHINA INSURANCE INTERMEDIARY INDUSTRY
Definitions and Classifications of Insurance Intermediary
Insurance intermediaries play a vital role in the insurance industry by connecting
insurance companies and insurance clients. These entities serve as intermediaries between
insurance companies and clients, offering a range of services. Insurance intermediaries
distribute insurance products to clients, provide insurance consulting, scheme design, and
insurance product comparison. They assist clients in insurance applications, claims
settlement, and other related processes.
In term of function, insurance intermediaries generally include insurance agency
companies, insurance brokera ge companies, and insurance adjustment companies. Since
insurance adjustment companies usually deal with claims assessment and do not provide
advice on insurance policies, insurance intermediaries in the ‘‘Industry Overview’’ section
only encompass both insurance agency companies and insurance brokerage companies.
According to the Insurance Law, insurance agency companies are institutions that
collect commissions from the insurance companies based on the authorisation of the
insurance company and handle insurance business on their behalf within the scope
authorised by the insurance companies. On th e other hand, insurance brokerage companies
are institutions facilitating the conclusion of insurance contracts between policyholders and
insurers in the best interest of the policyholde rs, while also collecting commissions for their
services.
INDUSTRY OVERVIEW
–9 2–


--- page 103 ---
Difference Between Insurance Agency Companies and Insurance Brokerage Companies in
China
The definitions provided by the ‘‘Insur ance Law of the People’s Republic of China
(2009)’’ (《中華人民共和國保險法》) offer a clear legal distinction between insurance agency
companies and insurance broke rage companies, detailed definitions of these two types of
entities are listed below:
. Insurance agency companies are institutions which, based on the entrustment of
an insurance company, collect commissions from the insurance company and
handle insurance business within the scope authorised by the insurance company.
. Insurance brokerage companies are instit utions which, based on the interests of
the insurance clients, provide intermediary services for the establishment of
insurance contracts between the insurance clients and the insurance company, and
legally collect commissions.
In addition to the above definitory differences, these two types of entities can be
further differentiated based on other factors such as insurance products, targeted clients,
licence and registration and legally obligated duties:
1. Insurance Products
a. Insurance agency companies operate under the direct commission of
insurance companies, handling insurance business within the authorised
scope. They offer products from specific insurance companies they represent.
b. Insurance brokerage companies operate in the interests of the insurance
clients, providing a range of products from multiple insurance companies to
best meet clients’ needs.
2. Targeted Clients
a. Insurance agency companies target insurance clients or specific market
segments that align with their partne red insurance companies’ offerings.
b. Insurance brokerage companies serve a broad spectrum of clients, from
household clients to large corporations.
3. Licence and Registrations
a. Insurance agency companies must obtain insurance intermediary licences
(《保險中介許可證》) from the NFRA and its local counterparts with the
business scope of conducting insura nce agency business, meeting the
conditions prescribed by the insurance regulatory authority.
INDUSTRY OVERVIEW
–9 3–


--- page 104 ---
b. Similarly, insurance brokerage comp anies need to meet stringent conditions
and obtain insurance intermediary licences ( 《保險中介許可證》)f r o mt h e
NFRA and its local counterparts with the business scope of conducting
insurance brokerage business.
4. Legally Obligated Duties
a. insurance agency companies are obligated to their partnered insurance
companies, ensuring compliance with u nderwriting guidelines and accurate
representation of products.
b. insurance brokerage companies must act in the best interests of the insurance
clients, offering impartial advice and ensuring a variety of options.
Besides above factors, below is a non-exhaustive list of policies and regulations
outline the guiding principles and respon sibilities of these two types of entities:
. The Insurance Law: Provides the f oundational legal framework
distinguishing agents and brokers.
. Provisions on the Regulation of Insurance Agents 《保險代理人監管規定》:
Specific regulations governin g insurance agency companies.
. Provisions on the Regulation of Insurance Brokers 《保險經紀人監管規定》:
Detailed regulations ensuring brokers act in the best interest of their clients.
Insurance companies in China generally do not engage directly in the insurance
brokerage business for several key reasons:
1. Regulatory Restrictions: Chinese regulations typically require a clear
separation between insurance providers and brokers to prevent conflicts of
interest. This separation ensures that brokers can provide impartial advice to
clients without being influenced by the interests of insurance companies.
2. Conflict of Interest: If insurance companies were to operate as brokers, it
would create a conflict of interest. Brokers are meant to act in the best
interest of their clients, offering them the best available policies from a range
of insurers. An insurance company acting as a broker might prioritise its own
products, compromising the objectivity required in brokerage services.
3. Market Structure: The structure of the insurance market in China supports
the existence of independent brokers. These brokers play a crucial role in
distributing insurance products and pro viding advisory services, which can
be more effectively managed by independent entities specialising in
brokerage.
INDUSTRY OVERVIEW
–9 4–


--- page 105 ---
4. Focus on Core Business: Insurance companies prefer to focus on their core
business of underwriting and risk man agement. Engaging in brokerage would
require them to develop a different set of skills and capabilities, which might
distract from their primary functions and strategic objectives.
Value Chain Analysis of China Insurance Intermediary Industry
The value chain of the insurance intermediary industry in China mainly consists of
insurance companies, insurance intermediaries and insurance clients.
In the upstream of the insurance intermediary industry, insurance companies provide
insurance products directly or through insur ance intermediaries to clients. Insurance
companies can also be divided into life insurance companies and property and casualty
insurance companies based on their products.
The midstream of the insurance intermedia ry industry is the ins urance intermediary
companies. Insurance intermediaries (including insurance agencies like the Group and
insurance brokers) play a critical role in the industry by leveraging their unique position to
promote industry growth and better serve clients. As a link between insurance companies
and clients, insurance intermediaries provide advice and support to clients, helping them
choose policies that meet their specific needs and budgets. In addition, they also assist
insurance company partners at the upstream i n promoting, selling and designing insurance
products leveraging their industry experienc e, network as well as digital capabilities.
Insurance clients are the final component of the insurance industry value chain. They are
the end-users of insurance products and require financial protection provided by insurance
policies. Insurance clients can be corporate an d household clients. They purchase insurance
policies directly from insurance comp anies or through intermediaries.
In order to facilitate the sales of insuran ce products underwritten by upstream
insurance company partners, insurance interme diaries offer insuranc e products to clients
under direct sales and indirect sales through their trained insurance agents and referral from
their strategic channel partners. Insurance agents are provided with the insurance
knowledge, training and IT support by insurance intermediaries and then communicate
with insurance clients to understand their need and suggest suitable insurance products.
Commissions will be paid to insurance agents for successful purchase of insurance products
by clients. Leveraging the network advantage of strategic channel partners, large
population of corporate and household insurance clients will be reached, expanding the
overall client base of the insurance intermediaries. Strategic channel partners will be paid
referral fees for successful purchase of insurance products by clients. Moreover, with the
advancement of technology, innovative insurance intermediaries are using big data analysis,
intelligent recommendations and other digital t ools to provide recommendations on existing
suitable insurance products to their clients based on their preference and selection. By
continuously improving their operations and services, insurance intermediaries with strong
technological capabilities will help to build an integrated insurance e cosystem, driving the
development of the whole insurance industry.
INDUSTRY OVERVIEW
–9 5–


--- page 106 ---
Co-operation with strategic channel partners is a common industry practise in the PRC
insurance intermediary market. Leveraging the network of strategic channel partners, large
population of corporate and household insurance clients could be reached, resulting in the
expansion of the overall client base of the insurance intermediaries. Meanwhile, the wide
range of average referral fee rates to strategic channel partners is common in the insurance
intermediary industry. Such referral fee is ge nerally negotiated between the contracting
parties on a case-by-case basis, taking into account factors such as the type of insurance
products, the intensity of market competition and the contribution of the strategic channel
partners.
Value Chain of Insurance Intermediary Industry
Comprehensive Insurance Intermediatory Solution Market
Originators Underwriters Issuers
Insurance
Agencies
Insurance
Brokers
Fragmented
Service
Providers
Life Insurance
Brokers
Life Insurance
Agencies
Property and Casualty
Insurance Brokers
Property and Casualty
Agencies
Technological Capabilities
Insurance Intermediaries Sources of Clients
Direct Sales
Insurance Agents
Referral from
Strategic Channel
Partners
Insurance Clients
Corporate
Clients
Household
Clients
Insurance Companies
Source: Frost & Sullivan
Market Size of China Insurance Intermediary Industry
In recent years, China insurance intermediary industry has experienced a constant
growth. In terms of underwriting premium, the market size of China insurance intermediary
industry increased from RMB 540.2 billion in 2019 to approximately RMB832.3 billion in
2023, with a CAGR of 11.4%. In contrast to developed countries like the U.S., where
insurance intermediaries account for over 50% of total underwriting premiums, in China,
their share is less than 20%. This disparity indicates that the insurance intermediary
industry in China is still in its nascent stage of development. With the standardised and
orderly development of the insurance industry, it is expected that China insurance
intermediary industry will maintain a steady g rowth trend in the future. It is estimated that
by 2028, the scale of underwriting premium in China insurance inte rmediary industry will
reach RMB1,505.5 billion, representing a CAGR of 12.8% from 2024.
INDUSTRY OVERVIEW
–9 6–


--- page 107 ---
Market Size of China Insurance Intermediary Industry
by Underwriting Premium, 2019–2028E
0
540.2 565.0 643.5
722.5
832.3
928.8
1,048.2
1,188.2
1,340.1
1,505.5
2019 2020 2021 2022
CAGR 2019–2023E
Underwriting Premium of Insurance
Intermediary Industry
CAGR 2024E–2028E
11.4% 12.8%
2023E 2024E 2025E 2026E 2027E 2028E
200
400
600
800
1,000
1,200
1,400
1,600
RMB Billion
Source: China Insurance Yearbook, Frost & Sullivan
Note: The ‘‘China Insurance Yearbook’’ is publishe d by the National Financial Regulatory
Administration and is generally updated in the fourth quarter of each year. It contains the
insurance industry data in China of the previous ye ar. Therefore, the latest available ‘‘China
Insurance Yearbook’’ has not yet included the 2023 data.
Market Drivers of China Insurance Intermediary Industry
Continuously Rising Income Level and Ageing Population Improves Insurance Awareness
Due to the effective policies that support the local economy and labour market, the per
capita disposable income in China has in creased from RMB30.7 thousand in 2019 to
RMB39.2 thousand in 2023, indicating a CAGR of 6.3%. It is noteworthy that the
middle-income class accounts for around 30% of the total population in China. Compared
to other clients, the middle-income class clie nts have a stronger awareness of insurance and
a higher ability to make payments. Furthermo re, middle-income class clients also have
greater demands for indemnification and diver sity of insurance products, which drives the
rigid demand for health, accident, pension, and other insurance products, supporting the
development of insurance intermediary indust ry. Also, as people’s wealth levels rise and
their appetite for risk grows, their attitude towards insurance products has shifted from
passive consumption to active consumption, fur ther stimulating the increase in the market
size of insurance products and the insurance intermediary industry. Against the backdrop of
changing consumer sentiment, China insurance density (i.e. insurance premium per capita)
has reached US$489 in 2022, but it is still lower than other developed countries around the
world, such as the U.S. ($8,885), the U.K. (US$4,781), and Japan (US$2,690). In addition,
China insurance depth (i.e. ratio of total insurance premium to GDP) is only 3.9%, far
lower than 11.6% in the U.S., 10.5% in the U.K. and 8.2% in Japan. The low insurance
penetration and insurance density in China reflect the broad development opportunity of
China insurance industry.
INDUSTRY OVERVIEW
–9 7–


--- page 108 ---
Besides, China has now officially become an ageing society, with population growth
slowing down. In 2023, more than 216 million p eople in China were aged 65 or above, which
accounted for 15.4% of the total population. Against the backdrop of an ageing
population, an increasin g number of families are paying attention to their risk
management strategies and pension security. This provides a broad development space
for insurance products and relevant insurance intermediary services. To address the
challenge of the elderly being unfamiliar wit h the purchase process and product selection,
insurance companies are expanding their sales channel network and combining it with an
intermediary sales mode to reach people who need insurance. Additionally, insurance
companies are consistently designing and promoting innovative insurance products, such as
annuity insurance, long-term care insurance, di sability insurance, based on market demand.
These products not only provide protection p lans for families in need but also optimise the
product structure of insurance companies, promoting the sustainable development of the
insurance and insurance intermediary industry.
Improved Regulatory Environment Drives the O rderly and Sustainable Growth in the Industry
With the introduction of policies such as t he Guiding Opinions of the China Banking
and Insurance Regulatory Commission on Promoting the High-quality Development of the
Banking and Insurance Industry ( 《中國銀保監會關於推動銀行業保險業高質量發展的指導
意見》), the government has proposed building a new insurance intermediary industry
system that focuses on technology, capabilit ies, and talents. This involves adopting
emerging technologies such as AI, big data, cloud computing, blockchain, and biometric
identification to improve service quality, re duce costs, and enhance business management.
Mobile Internet-based services and Internet financial platforms are encouraged, along with
strengthened cybersecurity capabilities. Insu rance intermediaries are increasingly using
online platforms for promotion and service deliv ery, collaborating with industry partners,
and employing insurance technology for preci se marketing and customer interaction. The
goal is to provide insurance solutions, improve service quality and efficiency, and build
resilient relationships with clie nts. Additionally, there is a sig nificant focus on developing
talent through recruitment and continuou s professional development in technology,
finance, and customer service, fostering a culture of innovation. This approach aims to
create a sustainable, high-quality industry that can adapt to market changes and provide
exceptional service. In addition, the Administrative Measures for Insurance Sales Practises
(《保險銷售行為管理辦法》) require full-chain regulation of insurance sales activities from
pre-sale, during sale, to post-sale stages for insurance intermediary companies. To realise
institutional reform, it is necessary to establish an innovative regulatory system for the
entire insurance intermediary industry to ensure the orderly and healthy development of
insurance intermediary enterprises. On the other hand, policies such as the Notice on
Strengthening the Management of Intermediary Channel Business of Insurance Companies
(《關於加強保險公司中介渠道業務管理的通知》) and the Notice of the General Office of the
China Banking and Insurance Regulatory Co mmission on Printing and Distributing the
Regulatory Measures for the Informatisation Work of Insurance Intermediaries ( 《中國銀保
監會辦公廳關於印發保險中介機構信息化工作監管辦法的通知》) aim to optimise insurance
intermediary channels, establish a qualificat ion, business and file management system with
clear rights and responsibilit ies, strengthen the managemen t of insurance companies with
cooperative intermediary channels, pay attention to the compliance and internal audit of
INDUSTRY OVERVIEW
–9 8–


--- page 109 ---
the insurance intermediary industry, and improve the informatisation work and
management level of insurance intermediary enterprises. With the implementation of
these policies and relevant regu lations and rules, China insuran ce intermediary industry has
raised further requirements for insurance intermediary companies in terms of workforces
and internal management systems. The above su pervisions have acceler ated the elimination
of unqualified insurance inte rmediary enterprises and laid a solid foundation for the
sustainable development of the insurance intermediary industry.
Increasing Adoption of Internet in China Promoted Development of Insurance Intermediary
Industry
The widespread use of the Internet has changed the way insurance intermediaries
interact with their clients, opening up new opportunities for the provision of insurance
services. As at the end of 2023, the number of Internet users in China reached 1.092 billion,
with an Internet penetration rate of 77.5%. One of the primary benefits of China expanding
Internet adoption is the hei ghtened accessibility to ins urance services. With the
proliferation of online platforms, insu rance clients now have the convenience of
comparing various insurance products and se rvices, thereby facilitating the increased
popularity of insurance offeri ngs. Moreover, the growing prevalence of the Internet has led
to enhanced efficiency and swiftness in insura nce services. Insurance intermediaries can now
expedite the processing of insurance applications and claims, reducing the time and effort
required for clients to secure insurance coverage. This improvement contributes to an
enhanced overall client experience, rendering insurance products more appealing to
potential clients. Furthermore, the Internet presents insurance intermediaries with novel
avenues to connect with clients through digital marketing and advertising. Leveraging
online platforms and social media channels, insurance intermediaries can engage a broader
customer base, promoting their insurance products and services to a larger audience.
Consequently, this heightene d visibility contributes to the in creased awareness and uptake
of insurance products among consumers.
Market Drivers of China Insurance Intermediary Industry Relating to Corporate Clients
Insurance products for corporate clients are designed to protect businesses from
various operational risks. These insurance pr oducts are primarily utilised by companies to
safeguard their ventures and ensure smooth operations. There are several types of insurance
products provided to meet the specific needs of corporate clients. For example, corporate
property insurance provides coverage for a company’s physical assets against natural
disasters and vandalism. Employer’s liabili ty insurance protects businesses from the
financial burden of lawsuits filed by employees fo r job-related injuries or illnesses. Product
liability insurance is crucial for manufacturin g businesses, covering damages caused by their
products to consumers.
INDUSTRY OVERVIEW
–9 9–


--- page 110 ---
The market drivers of China insurance inte rmediary industry relating to corporate
clients are as follows:
More Complex Operational Risks Introduced by Economic Growth
The continuous economic expansion in Chin a has significantly contributed to the
demand for comprehensive risk management so lutions from corporate clients, thereby
driving the need for insurance intermediary services. As the economy grows, businesses
are scaling up their operations, investing in new ventures, and entering new markets,
both domestically and internationally. This growth introduces a variety of complex
operational risks, including financial, operational, strategic, and compliance-related
challenges. Insurance interm ediaries play a crucial role in helping businesses navigate
these risks by offering expert advice and suitable insurance solutions. They assess the
unique risk profiles of different industrie s and companies, reco mmending appropriate
coverage to protect against potential losses.
Rising Awareness of Risk Management of Corporations in China
In recent years, there has been a growing a wareness among corporations in China
about the importance of robust risk management and insurance solutions to safeguard
their assets, employees, and operations. Th is heightened awareness is driven by several
factors, including increased exposure to global business practises and a more volatile
business environment. Corporations are r ecognising that effective risk management
goes beyond merely purchasing insurance; it involves a proactive approach to
identifying, assessing, and mitigating pot ential risks before they materialise. This
shift in mindset has led to increased engagem ent with insurance intermediaries who are
seen as valuable partners in this proce ss. Moreover, as companies place greater
emphasis on corporate governance and soc ial responsibility, having a robust risk
management framework becomes a key component of their overall strategy. Insurance
intermediaries contribute to this by provid ing insights into best practises and helping
companies align their risk management effo rts with broader corporate objectives.
Development Trend of China Insurance Intermediary Industry
Increasing Demand for Insurance Intermediaries to Meet the Needs of Corporate and
Household Clients
With digital capabilities, insurance interme diaries can offer cost-effective insurance
portfolio, thereby minimising the risk of under-insurance or over-insurance for corporate
and household clients in China, as follows:
Corporate Clients: Insurance intermediaries assist insurance companies to meet the
needs of businesses of all sizes and industries by offering advice on corporate insurance
products. With the expansion and complexit y of business, companies are increasingly
seeking diverse insurance coverage to address their evolving risk management needs. This is
where insurance intermediaries step in, facilitat ing businesses in finding suitable insurance
solutions. By collaborating with insurance companies, insurance intermediaries provide
corporate clients with comprehensive coverage. Moreover, the development of industries in
INDUSTRY OVERVIEW
–1 0 0–


--- page 111 ---
China has led to diverse risks, necessitati ng a wider range of insurance policies. For
example, manufacturing companies may need insurance coverage against machine failure,
while technology companies may require c overage against cyber risks. To meet the
increasing demand for insurance services, ins urance intermediaries work with insurance
companies in China to offer bespoke corporate insurance products, enabling businesses to
mitigate the risk of under or over-insurance.
Household Clients: As the population ages and income levels increase, household
clients are increasingly seeking insurance solu tions at different stages of their lives. This
includes insurance products that address th e risks and challenges faced by young families,
seniors, and retirees. Also, household insu rance clients are increasingly aware of the
importance of insurance in protecting thems elves and their families from the financial
consequences of unexpected events. In order to meet the growing demand for insurance
services, China insurance intermediary companies have begun to introduce insurance
packages digitally.
More Insurance Options and Diversification of Insurance Technology
In line with the development of macro-economic environment, insurance options are
estimated to increasingly reach out towards wealth management product. The demand for
wealth management products is increasingly oriented towards safety, stability, and
profitability, with insurance products idea lly positioned to meet these requirements.
Insurance institutions are distinguished by t heir focus on generating long-term returns on
funds. They excel in offering investment portfolios to diverse customer segments,
addressing long-term wealth needs with s tability and reliability. Hence, utilising
insurance as a wealth management tool will play a proactive role in advancing the
development of the insurance intermediary ind ustry. Meanwhile, it will facilitate the steady
appreciation of social wealth derive d from insurance intermediaries.
In addition, millennials exhibit common c haracteristics such as a pursuit of high
product quality, cost-effectiveness, and pur chasing efficiency. Being the predominant
cohort raised in the Internet era, they ar e accustomed to accessing a wide array of
information online and are more open to tryin g various Internet-based services. With
millennials increasingly assuming influentia l roles in society and becoming significant
decision-makers, they demonstrate a preference for purchasing insurance products and
services through online channels. This trend is driving the rapid growth of Internet-based
insurance intermediaries.
This evolution entails developing comprehe nsive services that integrate insurance with
finance, health, and pension services, thereb y actualising ecological insurance solutions.
INDUSTRY OVERVIEW
–1 0 1–


--- page 112 ---
Within the insurance intermediary industry, participants will persist in consolidating
resources from the insurance sector, forging deep partnerships across the industry chain,
and striving for innovation in this new era.
Development of Digitally-enable d Insurance Intermediaries
Digitally-enabled insurance intermediaries are increasingly harnessing cutting-edge
technologies such as artificial intelligence, b ig data analytics, cloud computing, and digital
process automation (DPA) to facilitate seamles s transactions between insurance companies
and their clientele. Through integrated systems, these intermediaries offer a unified data
perspective, empowering employees to make in formed decisions and efficiently execute
services across the entire business spectrum, from client onboarding to underwriting and
claims processing. Utilising DPA, these inte rmediaries streamline workflows, expedite
claims processing, enhance team productivity through automation, and elevate client
satisfaction levels. DPAs ensure compliance w ith legal obligations throughout the policy
management process, track data and risk information, and ensure adherence to external
regulations and internal comp any protocols. Adopting a DPA approach to underwriting
enables the coordination of information, eliminating the need for manual searches across
various systems, thus boosting efficiency and exp editing policy issuance. Digitalisation aids
insurance clients in onboarding onto the platform by providing accessible quotes and terms
and conditions across multiple devices, laying a robust foundation for enduring
relationships. By collecting and securely extr acting information from various systems and
external sources like IoT devices, these insuranc e intermediaries assist insurance companies
in fraud detection, investigation, and prevention.
Digitally-enabled insurance intermediaries are driving transformative changes in the
insurance industry, making it more responsive to client expectations. Compared to
traditional counterparts, technologically-driven insurance intermediaries achieve more
efficient and thorough supervision through digital means, thereby enhancing business
profitability and steering the industry towa rds heightened operational efficiency and
profitability. Consequently, dig itally-enabled insurance intermediaries are poised to shape
the future of the insurance intermediary industry, leveraging technology to streamline
processes, enhance client experiences, and deliver more efficient and cost-effective services,
ultimately surpassing competitors within the industry.
Entry Barriers of China Insurance Intermediary Industry
Technology and Talent Barrier
The insurance intermediary industry is fa cing significant barriers in leveraging
technology and attracting skilled professionals. To enhance their support for insurance
companies and clients, insurance intermediaries need t o utilise technologies such as big
data, artificial intelligence (AI), and facial recognition to improve their operations and
services. This requires significant investment in technology and a readiness to embrace new
tools and platforms. Additionally, to fully un derstand the business and the needs of their
clients, insurance intermediaries must attract knowledgeable talent with expertise in areas
INDUSTRY OVERVIEW
–1 0 2–


--- page 113 ---
such as risk management, insurance policy analysis, and client servicing. Without
investment in technology and talent acquisiti on, insurance intermediaries may fall behind
their competitors and fail to keep pace with the evolving demands of the insurance industry.
Product Innovation Barrier
The comprehensiveness of product coverage and the construction of related product
and service systems are important foundations for insurance intermediaries to expand their
business. Insurance intermediaries wit h robust product innovation capability are
well-positioned to address the needs of clients, mitigating market risks and
demonstrating proactive competitiveness. Companies with sustainable development
advantages in the insurance intermediary market can serve clients by providing pre-sales
and after-sales services at different stages. N ew entrants generally find it difficult to cover
various types of property and casualty insurance as well as life insurance businesses,
hindering their ability to establish a com prehensive system and innovate products
effectively. As a result, they face the product innovation barrier within the industry.
Regulatory Barrier
The insurance intermediary industry operates under stringent compliance and
regulatory scrutiny. For example, the infor mation systems of insurance intermediary
companies which conduct Internet insurance business are mandated to obtain Level 2
cybersecurity certification or higher. In addition, many provisions stipulate that the
insurance intermediary industry must possess corresponding business qualifications and
capabilities when cooperating with insurance c ompanies. The Administrative Measures for
Insurance Sales Practises ( 《保險銷售行為管理辦法》) outline comprehensive regulations
governing insurance sales activities from pre-s ale, during sale to post-sale stages, aiming to
standardise practises across the industry. Th e Implementing Measures for Administrative
Licencing and Record-filing of Insurance Intermediaries ( 《保險中介行政許可及備案實施辦
法》) concerning the licencing of various types of insurance intermediary businesses, further
enhancing regulatory oversight and administrative practises within the insurance
intermediary market. Moreover, the Measures for the Regulation of Internet Insurance
Business ( 《互聯網保險業務監管辦法》) impose stringent regulations on the insurance
intermediary industry, aiming to uphold indus try integrity and safeguard client interests.
Therefore, insurance intermediaries must posse ss security certification qualifications and
regulatory capabilities to enter and operate within the market.
Partnership Barrier
The success of insurance intermediaries in th e industry depends on their ability to build
and maintain strong relationships with upstream insurance companies and downstream
insurance clients. This necessitates that inter mediaries cultivate a sterling reputation,
possess profound industry expertise, and foster extensive professional networks. By
leveraging these assets, intermediaries can a deptly guide clients through the intricacies of
insurance policies, ensuring they obtain the p roducts that best suit their needs. However, in
the absence of these vital resources, insuranc e intermediaries may encounter barriers in
establishing themselves in the industry and com peting effectively with established industry
leaders.
INDUSTRY OVERVIEW
–1 0 3–


--- page 114 ---
Threats and Challenges Analysis of China Insurance Intermediary Industry
Downward Pressure on the Global Economy
The global economic slowdown has directly affected China export-oriented economy,
leading to a decrease in consumer spending. This downturn has had a negative impact on
the insurance intermediary industry, espec ially for insurance products that are closely
related to international trade. In addition, the Chinese economy is transforming from an
export- and investment-driven economy to a consumption- and service-driven economy. In
this transitional phase, insurance intermediaries must adapt their business models to
alleviate the downward pressure from the gl obal economy and cater more effectively to a
market dominated by individual consumers. This adaptation necessitates a deepened
understanding of insurance products and a n enhanced ability to anticipate and fulfil
customer needs.
Stricter Requirements for the Standardisation of Insurance Intermediaries
The escalating regulatory demands pose numerous challenges for insurance
intermediary institutions. Firstly, heightened industry thresholds necessitate increased
investment in personnel training and the enhancement of management systems,
consequently elevating operational costs. Secondly, as regulatory policies become more
stringent, insurance intermediary institutions must continually adjust to new rules and
requirements. This not only tests the institut ion’s adaptability but also has the potential to
impact the speed and efficiency of its business development. Finally, the mounting
regulatory requirements for insurance in termediaries lead to intensified industry
competition. Insurance intermediaries capable of swiftly adapting to new regulations and
delivering superior quality services are more likely to gain market recognition, while those
lagging behind may face the risk of elimination.
The Uncertainty of Policy Changes
Policy adjustments and reforms can indeed p resent challenges to the operations of
insurance intermediary companies. For instance, the Guiding Opinions on the
Implementation of the Comprehensive Reform of Automobile Insurance ( 《實施車險綜合
改革的指導意見》) issued by the CBIRC, which came into effect in September 2020, resulted
in a reduction in premiums paid to insurance companies. This, in turn, led to a decrease in
the average commission rate of automobile in surance products. Such policies have the
potential to impact the revenue and profitability of insurance intermediary companies,
causing short-term fluctuations in their businesses.
Average Salary Analysis of Employees in China Insurance Intermediary Industry
With the development of overall economy and improvements in living standards,
China average annual salary of employees in i nsurance intermediary industry has kept an
upward trend over the past few years. The ongoing optimisation of the insurance
intermediary sales force, coupled with reforms aimed at enhancing efficiency through staff
reduction, supports the increase in salaries within the industry. Furthermore, as the
insurance sector places greater emphasis on pro fessionalism, career-oriented development,
INDUSTRY OVERVIEW
–1 0 4–


--- page 115 ---
and the standardisation of sales personnel, t he requirements for individuals working in
insurance sales are steadily rising. From 2019 to 2023, the average annual salary of
employees in insurance intermediary indu stry increased from RMB119.8 thousand to
RMB168.8 thousand, illustrating a CAGR of 8.9%. The slight drop in average annual
salary in 2023 was mainly due to the reduction in high-salary employees with over RMB240
thousand annually and the slowdown in economic recovery. Amidst intensified market
competition and economic uncertainties in 2 023, some insurance intermediary companies
began to prioritize cost control to navigate market fluctuations, which led to reduced
investments in employee salaries, ultimate ly affecting the salary levels of employees,
especially those earning higher salaries. In the future, it is expected that the annual salary of
employees in China insurance intermediary industry will maintain a steady increase and
reach RMB238.6 thousand in 2028, representing a CAGR of 6.7% from 2024.
Average Salary of Employees in China Insurance Intermediary Industry, 2019–2028E
0
119.8 133.4
147.0
173.0 168.8
184.0
202.4
218.6 231.7 238.6
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
20
40
60
80
100
120
140
160
180
200
220
240
RMB Thousand
CAGR 2019–2023
Average Annual Salary of Employees in Insurance
 Intermediary Industry
CAGR 2024E–2028E
8.9% 6.7%
Source: Frost & Sullivan
Competitive Landscape Analysis of China Insurance Intermediary Industry
The insurance intermediary industry in Ch ina, as depicted by the end-of-2022 data and
insights from the latest ‘‘China Insurance Yearbook’’ published in December 2023, presents
a highly competitive and fragmented market landscape. There were 2,215 insurance
intermediary companies in China by the end of 2022, including 1,721 insurance agencies.
INDUSTRY OVERVIEW
–1 0 5–


--- page 116 ---
In 2022, our company achieved an insurance business income, income derived from
commissions earned by distributing insuranc e products on behalf of insurance companies
based on policyholder premiums, of RMB130 .7 million, positioning us 78th among all
insurance agencies in China.
Ranking of Insurance Agencies in China by Insurance Business Income, 2022
Ranking Company Name
Insurance
Business Income
(RMB Million)
1 Ant Insurance Agency Limited 6,651.0
2 Ping An Chuangzhan Insurance Sales and Service Co., Ltd.
Subsidiary of Ping An Insurance (Group) Company of China, Ltd.
(HKEX: 2318, SSE: 601318)
5,522.7
3 Datong Insurance Sales & Services Company Ltd. 3,751.7
4 PICC Auto Insurance Sales and Service Co., Ltd.
Subsidiary of PICC Property and Casualty Company Limited
(HKEX: 2328)
3,080.5
5 Baotong Insurance Agency Co., Ltd. 2,994.3
……
78 Our Company 130.7
Source: China Insurance Yearbook, Frost & Sullivan
Note: The market share of each company cannot be provided due to the following reasons: 1) the China
Insurance Yearbook only provides rounded figur es for the insurance business income of each
company, with no disclosure of the total insuranc e business income of all insurance agencies in
China; and 2) the list of insurance agencies in the China Insurance Yearbook may not be
exhaustive.
Key Successful Factor Analysis of China Insurance Intermediary Industry
Technological Capabilities
In the dynamic China insurance intermediary industry, technological capabilities serve
as a critical success factor. Advanced technological infrastructure allows for the leveraging
of data analytics, artificial intelligence, and d igital platforms, enhancing service delivery,
risk assessment, and client engagement. The em phasis on technological compliance, driven
by regulations such as the Regulatory Measures for the Informatisation Work of Insurance
Intermediaries ( 《保險中介機構信息化工作監管辦法》) introduced in 2021, underscores the
industry’s shift towards a m ore technology-driven mode l. Such capabilities enable
companies to streamline opera tions, offer superior client se rvice, and quickly adapt to
market and regulatory changes, securing a competitive edge in a rapidly evolving
marketplace.
INDUSTRY OVERVIEW
–1 0 6–


--- page 117 ---
Full-Cycle Service Capabilities
The ability to provide a comprehensive su ite of services throughout the entire
insurance value chain is another key to success in the China insurance intermediary
industry. This includes everything from ris k assessment and product selection to policy
administration and claims management, offering clients a seamless, end-to-end experience.
Full-cycle service capabilities, rooted in a dee p understanding of client needs and the ability
to offer suitable solutions, ensure high levels of client satisfaction and retention. This
holistic approach to service provision enhances a company’s reputation and client loyalty,
setting it apart in a competitive environment.
Distribution Capabilities
Robust distribution capabilit ies are vital for achieving widespread market access and
deep penetration in the China insurance intermediary sector. An expansive sales network,
including strong relationships with insurance companies, insurance agents, and strategic
channel partners, enables efficient promotion and distribution of a diversified product
portfolio to both corporate and household insurance clients.
Operating Under Regulatory Guidance
Strict regulatory compliance is essential for operating successfully in the China
insurance intermediary market. A proactive approach to aligning with regulatory directives,
such as those aimed at rectifying the ‘‘scattere d’’ problem among insurance intermediaries,
mitigates legal risks and reinforces market st anding. Adherence to the stringent standards
set forth by authorities like the NFRA ensures o perational legitimacy and builds trust with
clients and partners. This focus on regulatory compliance not only protects companies from
potential legal challenges but also establishe s a foundation of trust and reliability, crucial
for long-term success in the industry.
INDUSTRY OVERVIEW
–1 0 7–


--- page 118 ---
REGULATIONS RELATED TO FOREIGN INVESTMENT
Pursuant to Foreign Investment Law of PRC ( 《中華人民共和國外商投資法》), which
was promulgated by the NPC and came into effect on 1 January 2020, and the Regulations
on Implementing the Foreign Investment Law of PRC ( 《中華人民共和國外商投資法實施條
例》), which were promulgated by the State Council in December 2019 and came into effect
on 1 January 2020, the State Council shall promulgate or approve a list of special
administrative measures for access of forei gn investments, or the Negative List. The
Foreign Investment Law grants national treatm ent to foreign-invested entities, except for
those investing in the industries specified in the Negative List.
Pursuant to the Measures for Information Reporting on Foreign Investment ( 《外商投
資信息報告辦法》), which was jointly promulgated by the MOFCOM and the SAMR on 30
December 2019 and became effective on 1 January 2 020, where a foreign investor carries out
investment activities in China directly or indirectly, the foreign investor or the
foreign-invested enterprise shall submit t he investment information to the competent
commerce department.
REGULATIONS RELATED TO IN SURANCE AGENCY BUSINESS
Principal Regulatory Authority and Related Institution Reform
On 10 March 2023, the First Session of the Fourteenth National People’s Congress
approved the Decision on Reform Plan for Party and State Institutions ( 《黨和國家機構改革
方案》). The plan stipulates, among others, that the State will establish the NFRA on the
basis of the CBIRC, and delegate the PBOC’s dail y regulatory responsib ilities for financial
holding companies and other financial groups and financial consumer protection
responsibilities as well as the CSRC’s invest or protection respons ibilities into it. Upon
the establishment of the NFRA, the CBIRC will no longer be retained. The plan further
provides to deepen the reform of local financial supervision system by establishing a local
financial supervision system mainly composed of local agencies dispatched by the central
financial supervision department. The reform tasks at the central level and the local level
aim to be completed by the end of 2023 and by the end of 2024 respectively.
The NFRA was officially established on 18 May 2023 and has replaced the CBIRC to
become the new insurance regulatory body in China.
Pursuant to the Provisions on the Functions, Structure, and Staffing of the National
Financial Regulatory Administration ( 《國家金融監督管
理總局職能配置、內設機構和人員
編制規定》) promulgated by the General Office of the Central Committee of the Communist
Party of China, General Office of the State Co uncil and implemented on 29 October 2023,
the functions of the NFRA include, among others:
. implementing unified supervision and admin istration of the financial sector except for
the securities industry in accordance with laws and strengthening institutional
supervision, behavioural supervision, functional supervision, look-through
supervision and continuous supervision to maintain the legal and stable operation of
the financial sector;
REGULATORY OVERVIEW
–1 0 8–


--- page 119 ---
. implementing access management for insurance institutions in accordance with laws
and supervising their corporate governance, risk management, internal control, capital
adequacy, solvency, business conduct and information disclosure;
. conducting on-site inspections and off-site supervision of insurance institutions,
conducting risk and compliance assessments and investigating and imposing
punishment on violations of laws and regulations in accordance with laws; and
. carrying out look-through supervision of insurance institutions and formulating an
equity supervision system; examining and approving the modification of shareholders,
actual controllers and equity in accordance with laws and investing shareholders,
actual controllers, persons acting in concert and ultimate beneficiaries in accordance
with laws and taking relevant measures or imposing penalties on violations of laws and
regulations.
Regulatory and Legal Framework
The Insurance Law is the most important law in the regulatory and legal framework
for the PRC insurance industry, which was approved by the NPC Standing Committee on
30 June 1995 and became effective from 1 October 1995, and was most recently amended on
24 April 2015.
The Insurance Law covers general principles, insurance contracts, insurance
companies, insurance operati onal rules, supervision and regulation of the insurance
industry, insurance brokers and insurance agencies, legal liabilities and supplementary
provisions. According to relevant PRC laws and regulations, insurance intermediaries
include insurance brokers, insurance agencies and insurance adjustment companies.
According to the Insurance Law and other applicable laws and regulations, an insurance
broker is an institution that provides intermediary services for conclusion of an insurance
contract between a policyholder and an insurer for the benefit of the policyholder and
collects commissions in accordance with relevant laws; an insurance agency is an institution
that is entrusted by an insurer to handle insurance businesses within the scope authorised by
the insurer and collects commissions from the insurer; an insurance adjustment company is
an assessment institution that accepts entrus tment to carry out assessment, inspection,
identification, loss adjustment and related risk assessment for an insured object or event.
Haier Insurance Agency is a specialised insurance agency holding a currently effective
Insurance Intermediary Licence with the business scope of selling insurance products
nationwide, collecting insurance premiums an d investigating and settling losses related to
insurance business on an agency basis and o ther businesses approved by the insurance
regulatory authority.
In 2015, the Insurance Law was amended for the fourth time. Major amendments
include: (i) the abolishment of the requirement that the individuals engaging in insurance
sale for an insurance company, individual insurance agents, practitioners in insurance
agencies and insurance brokers shall obtain t he qualification certificates issued by the
insurance regulatory authorities, and instead stipulating that the aforesaid individuals
should be of good character and have the professional competence required for insurance
sales or practising insurance agency or insu rance brokerage respectively; and (ii) the
REGULATORY OVERVIEW
–1 0 9–


--- page 120 ---
abolishment of the requirements that the merger and divisions of corporates and any change
of the corporate structure, establishment of branch offices and dissolution of insurance
agencies and insurance brokerages shall be subject to the approval of the insurance
regulatory authority.
Since the promulgation and implementation of the Insurance Law in 1995, the
insurance supervision and regulatory authority has promulgated a series of departmental
rules and regulations and other regulatory documents pursuant to the Insurance Law,
which covered various aspects of insurance agency operations, including the market
admittance, internal governance, market behaviours and Internet insurance agency
business.
The relevant provisions regarding market admittance, internal governance, market
behaviours, Internet insurance agency business applicable to a specialised insurance agency
like Haier Insurance Agency are listed in detail below.
Market Admittance
Eligibility as a Shareholder in S pecialised Insurance Agency (
保險專業代理機構)
Pursuant to the Provisions on the Regulation of Insurance Agents ( 《保險代理人監管規
定》), promulgated by the CBIRC on 12 November 2020 and implemented on 1 January
2021, any entity or individual who falls under a ny of the following circumstances shall not
be eligible as a shareholder of a s pecialised insurance agency:
. whoever is sentenced to a criminal penalty or subject to any major administrative
punishment in the past five years;
. whoever is currently undergoing the investigation by the relevant authorities for
suspected involvement in a major illegal act or crime;
. whoever has been determined as a target of joint disciplinary action against dishonesty
by the relevant authority due to serious dishonesty and shall be subject to
corresponding disciplinary action in the field of insurance, or has any other bad
record of serious dishonesty in the past five years;
. whoever is prohibited from entry into any enterprise in accordance with laws and
administrative regulations; and
. any other circumstance under which whoe ver is deemed by the insurance regulatory
authority of the State Council not suitable to be a shareholder of a specialised
insurance agency under the principle of prudent regulation.
REGULATORY OVERVIEW
–1 1 0–


--- page 121 ---
The Implementing Measures for Administrative Licencing and Record-filing of
Insurance Intermediaries ( 《保險中介行政許可及備案實施辦法》) promulgated by the
CBIRC on 28 October 2021 and implemented on 1 February 2022, further specify the
following criteria for the shareholder of specialised insurance agencies that:
. such shareholder shall keep a good financial standing and be able to use its own true
and legitimate funds rather than bank loans or any other form of non-self-owned funds
to make external investments;
. for corporate shareholder, it shall have s ound corporate governance structure or
effective organisation management method, and good social reputation, credit records,
tax payment record and business managemen t; its net assets as the end of the preceding
year from the date of capital contribution or as the end of the preceding month from
the date of capital contribution if its period of existence is less than one year shall not
be negative, and the net assets and monetary funds as the end of the preceding month
from the date of capital contribution shall exceed such contribution amount; and
. any other prudential criteria stipulated by the CBIRC.
Application Requirements for Insurance Agency Business Permit
Based on the Insurance Law, the Provisions on the Regulation of Insurance Agents
and the Implementing Measures for Adminis trative Licencing and Record-filing of
Insurance Intermediaries, specialised insu rance agencies engaging in insurance agency
business within the PRC shall meet various requirements specified by the CBIRC and
obtain the relevant business permit.
Specifically, any applicant applying for conducting the insurance agency business shall
satisfy the follow requirements:
. it shall obtain a business licence in acco rdance with law and include the wording
‘‘insurance agency’’ in its name and shall not use the same trade name as the other
existing specialised insurance intermed iary, except for both of which have the same
actual controller;
. its registered capital has been fully paid up in cash and under custody in accordance
with the relevant provision of the CBIRC; the minimum registered capital of a national
specialised insurance agency is RMB50 millio n and of a regional specialised insurance
agency is RMB20 million;
. its business scope specified in the business licence is in compliance with the relevant
provisions of the CBIRC;
. it has adopted the articles of association that comply with the PRC Company Law and
the Insurance Law;
. its senior management personnel meet the co rresponding appointment qualification
requirements;
REGULATORY OVERVIEW
–1 1 1–


--- page 122 ---
. it shall set up the corporate governance structure and internal control system as
required by the CBIRC and shall have a scientific, reasonable and feasible business
model;
. it has a fixed domicile in line with its scale of business;
. it shall have been equipped with computer hardware and software facilities for its
business and finance affairs that conform to the provisions of the CBIRC;
. its risk tests shall meet the requirements; and
. any other requirements stipulated by the laws, administrative regulations and the
CBIRC.
Requirements for Establishing New Branches
Pursuant to the Provisions on the Regulation of Insurance Agents, a specialised
insurance agency which intends to establish a new branch to operate insurance agency
business shall meet the following criteria:
. the specialised insurance agency and its existing branches have not been subject to
criminal punishment or material administrative punishment within the past year;
. the specialised insurance agency and its existing branches are not currently subject to
investigation by the relevant author ities for alleged illegal act or crime;
. the specialised insurance agency and its existing branches have not been involved in
any collective appealing or class action lawsuit event of more than 30 people or any
abnormal collective surrender of insurance policies by more than 100 people within the
past year;
. the branches established within the past two years have not exited from the market
within one year of operation;
. the specialised insurance agency has a proper branch management system;
. the newly established branch shall have bus iness premises, business and financial
information management system and other fa cilities compatible with its businesses
which satisfy the requirements;
. the principal of a newly established branch s hall satisfy the corresponding appointment
qualification requirements; and
. any other conditions stipulated by the insurance regulatory authority under the State
Council.
REGULATORY OVERVIEW
–1 1 2–


--- page 123 ---
Furthermore, if a specialised insurance agency is identified by the relevant PRC
governmental authorities as a subject of joint punishment for dishonesty due to a serious
dishonest act and shall be punished in the insurance sector, or has any other bad record of
serious dishonesty within the past five years, it shall not establish a new branch to operate
insurance agency business.
Internal Governance
Deposit and Vocational Liability Insurance
Pursuant to the Insurance Law, insurance agencies shall make deposits or subscribe to
vocational liability insurance in line with provi sions specified by the insurance regulatory
institution under the State Council.
The Provisions on the Regulation of Insurance Agents further stipulate that specialised
insurance agencies shall subscribe to vocatio nal liability insurance or make deposit within
20 days after obtaining business permit. Furthermore, specialised insurance agencies shall
submit a copy of vocational liability insurance policy or deposit saving agreement and
original voucher for the payment of deposit to the insurance regulatory authority within 10
days after subscribing to vocational liability i nsurance or making deposit as well as register
the relevant information in the regulatory information system stipulated by the insurance
regulatory authority under the State Council.
Specialised insurance agencies shall make a deposit equivalent to 5% of registered
capital, and the amount should increase with any further increase in their registered capital.
Insurance agencies are prohibited from diverting the deposits except for the following
circumstances: (i) reduction in registered capi tal; (ii) revocation of business permit; (iii)
subscribing to legitimate voc ational liability insurance; or (iv) any other circumstances
specified by the CBIRC.
Specialised insurance agencies subscribing to v ocational liability insurance shall ensure
the policy remains effective and the policy cov erage for single incident not less than RMB1
million, any yearly accrued coverage not less than RMB10 million and not less than the
operating revenue generated from principal bus iness of the specialised insurance agencies in
the immediately preceding year.
Financial Management
The Provisions on the Regulation of Insuranc e Agents set forth certain requirements of
financial management for specialised insurance a gencies. For instance, specialised insurance
agencies shall set up special ledgers to record income and expenditure of insurance agency
business and shall engage an accounting firm at the end of each accounting year to audit the
financial status of the companie s, such as assets, liabilities, profits, etc., and submit the
relevant audit reports to the insurance regulatory authority within four months from the
end of each accounting year.
REGULATORY OVERVIEW
–1 1 3–


--- page 124 ---
Qualification for Directors, Supervisors and Senior Management
Pursuant to the PRC Company Law ( 《中華人民共和國公司法》), person falling under
any of the following circumstances may not act as the director, supervisor or senior
management: (i) devoid of or with restricted civil conduct ability; (ii) who was sentenced to
any criminal penalty for corruption, brib ery, embezzlement or misappropriation of
properties or destruction of the order of China socialist market-oriented economy, or
who was deprived of political rights due to crime, and such sentence has expired for no
more than five years, or who was granted probation, if no more than two years have passed
since the expiration of the probation period ; (iii) within three years after insolvency and
liquidation of an enterprise where the person acted as a director, factory manager or
manager and has been held accountable for the insolvency; (iv) within three years after an
enterprise where the person acted as legal repr esentative is revoked business licence and
ordered to shut down for violating law on which the person is held accountable; or (v) who
was listed as a dishonest person subject to enforcement by the people’s court due to failure
to pay off a large amount of unliquidated mature debts.
Pursuant to the Provisions on the Regulation of Insurance Agents and the
Implementing Measures for Administrativ e Licencing and Record-filing of Insurance
Intermediaries, senior management of special ised insurance agencies refer to the following
personnel: (i) general manager, vice general ma nager of specialised insurance agency; (ii)
principal leader in provincial branch institu tion of specialised insurance agency; and (iii)
other personnel who exercise important powers in the business management of the
company.
The senior management of specialised insura nce agencies shall ge nerally satisfy the
following requirements: (i) holding junior college degree or above, except for personnel who
have 10 or more years of financial work experience; (ii) having three or more years of
financial work experience or five or more years of economic work experience; (iii) having
the business management capacity required i n performing duties and being familiar with
insurance laws, administrative regulations and the relevant provisions of the insurance
regulatory authority under the State Counc il; and (iv) being honest and trustworthy and
having good conduct.
In addition, any person who falls under any of the following circumstances shall not be
appointed as a senior management of a specialised insurance agency or the principal leader
in charge of the branch other than th e provincial branch institution:
. having no capacity for civil conduct o r limited capacity for civil conduct;
. having been sentenced to any criminal penalty due to corruption, bribery,
encroachment of property, misappropriation of property or disrupting the socialist
market order and it is less than five years s ince the completion of the execution of the
penalty; or having been deprived of political rights due to any crime and it is less than
five years since the completion of the execution of the penalty;
REGULATORY OVERVIEW
–1 1 4–


--- page 125 ---
. serving as a director, factory director or manager of a bankrupt and liquidated
company or enterprise and being personally responsible for the bankruptcy of such
company or enterprise, where not more than three years have elapsed since the
completion of the bankruptcy and liquidation;
. having served as the legal representative of a company or enterprise whose business
licence has been revoked or which has been ordered to close down due to a violation of
law and being personally liable, and it is less than three years since the date of
revocation of the business licence;
. having served as the director, supervisor or senior officer of an insurance company or
insurance intermediary whose permit is revoked as a result of violation of laws and
being personally liable or having direct lead ership liability for the revocation of the
permit, and it is less than three years since the date of revocation of the permit;
. having served as a director, supervisor or senior officer of a financial institution whose
appointment qualifications have been revoked by the financial regulatory authorities
due to illegal or disciplinary offence and it is less than five years since the date of
revocation of appointment qualifications;
. having been barred from the financial industry by the financial regulatory authorities
for a certain period of time and such period has not expired yet;
. having been warned or fined less than two years by the financial regulatory authorities;
. having been investigated by the judicial authorities, disciplinary inspection authorities
or financial regulatory authorities;
. having failed to repay a relatively large amount of personal debt due;
. having been identified by the relevant State agencies as a subject of joint punishment
for dishonesty and shall be punished in the insurance sector due to a serious dishonest
conduct, or having other bad records of serious dishonest conduct within the past five
years; or
. any other circumstances stipulated by law s, administrative regulations and the
provisions of the insurance regulato ry authority under the State Council.
Specialised insurance agencies should file faithful application and materials in applying
for ratification of the qualifications of senior management by the CBIRC. The CBIRC may
investigate or interview such proposed senior management personnel to comprehensively
inspect their compliance awareness, risk p reference, business capacity and other
comprehensive qualities.
REGULATORY OVERVIEW
–1 1 5–


--- page 126 ---
Informatisation Management
Pursuant to the Regulatory Measures for the Informatisation Work of Insurance
Intermediaries 《保險中介機構信息化工作監管辦法》promulgated on 5 January 2021 by the
CBIRC and implemented on 1 February 2021 , insurance intermediaries including
specialised insurance agencies shall apply computers, communications, networks and
other modern information technologies to their business processing, operation management
and internal control, etc., for the purpose of continuously improving operational efficiency,
optimising the allocation of internal resources and improving the level of risk prevention,
namely the informatisation work. Such work shall be conducted in conformity with the
principles of unifying safety, reliability and e ffectiveness, consistency of technical routes
with the direction of business development an d matching the inform ation system with the
requirements of management.
Specifically, the duties that insurance intermediaries shall perform on informatisation
work including:
. implementing the laws, administrative regulations and technical standards on national
cybersecurity and information work as well as the regulatory systems of the CBIRC;
. developing the informatisation work plan to ensure consistency with the overall
business plan;
. formulating informatisation work system s, and establishing an informatisation
management mechanism with reasonable divis ion of duties, clarified responsibilities
and clear reporting relations;
. preparing informatisation budgets and ensuring the funds needed for the
informatisation work;
. carrying out the informatisation construction and ensuring the complete control of the
management power over the information systems and data;
. formulating the emergency response plans fo r informatisation emergencies, organising
emergency drills, and timely reportin g, rapid responding to and handling the
informatisation emergencies;
. cooperating with the CBIRC and its local branches in their supervision over and
inspection of informatisation work, truth fully providing the relevant documents and
materials and making rectification in according to the regulatory opinions;
. carrying out informatisation trainings, an d enhancing the staff members’ awareness of
informatisation, information securit y and utilising licensed software; and
. other informatisation duties as prescribed by the CBIRC.
REGULATORY OVERVIEW
–1 1 6–


--- page 127 ---
In addition, insurance intermediaries with legal person status shall designate one senior
manager to be in charge of the informatisation management work; set up informatisation
departments or positions with at least o ne full-time employee and build suitable
information system for operation manageme nt, financial management and personnel
management, etc. in light of their business scale and development needs.
Furthermore, insurance intermediaries sha ll submit a report on the informatisation
work to the local branch of the CBIRC to dem onstrate their inform ation management
mechanism and system status, the informat ion system procurement contract or the
intellectual property certificates and the c ompliance of the built information system.
Anti-money Laundering
Pursuant to the Notice of Strengthening Anti-money Laundering in Insurance Industry
(《關於加強保險業反洗錢工作的通知》) promulgated on 10 August 2010 and Administrative
Measures for Anti-money Laundering in Insurance Industry ( 《保險業反洗錢工作管理辦
法》) promulgated on 13 September 2011 by the CIRC and implemented on 1 October 2011,
the PRC insurance regulatory authority shall organise, coordinate and direct anti-money
laundering effort and insurance companie s, insurance asset management companies,
specialised insurance agencie s and insurance brokers shall materially improve anti-money
laundering related internal control competence on the basis of real-name policy issuance
and on the principle of complete and traceable customer data and consistent funds
operation.
The Notice of Strengthening Anti-money Laundering in Insurance Industry stipulates
that equity investments in insurance intermed iaries and equity structure changes therein
should be in line with relevant requirements on fund sources in anti-money laundering laws
and regulations of the PRC. Newly establis hed insurance intermediaries and branch
institutions and those restructured or reformed shall meet anti-money laundering criteria
including but not limited to establishment o f system for customer identity recognition,
customer identity and transaction record keeping, training and education, auditing,
confidentiality, internal control system and op eration protocols includ ing those facilitating
monitoring and inspection and administrative investigation, dedicated anti-money
laundering posts and job descriptions, manning and training for such posts, and other
requirements according to regulatory provisions.
Application materials for ratifying qualif ication of senior management of insurance
intermediaries should include statement by app lication disclaiming major administrative
penalty related to anti-money laundering for the past two years; if the applicant has any
work experience in an overseas financial i nstitution, statement disclaiming major
administrative penalty related to anti-mon ey laundering for the past two years in the
place of the financial institution. Senior management of insurance institutions and
intermediaries should conscientiously perform their anti-money laundering duties of their
purview. Principle leaders of insurance institutions and intermediaries shall take the
responsibility for effective implementation of anti-money laundering internal control
system. All insurance institutions and inte rmediaries should periodically collect and
consolidate anti-money laundering information, keep track of anti-money laundering
REGULATORY OVERVIEW
–1 1 7–


--- page 128 ---
initiatives, attach great importance to money laundering risk prevention and mitigation,
extend conscientious efforts in anti-money laundering training and education, to improve
anti-money laundering awareness and competence.
The Administrative Measures for Anti-money Laundering in Insurance Industry
provide that insurance companies carrying out insurance business via specialised insurance
agencies should include anti-money laundering provisions into cooperation agreement.
Specialised insurance agency and brokers should establish anti-money laundering internal
control system and prohibit equity inve stment with funds of illicit source. Senior
management of specialised insurance ag encies and brokers should be versed with
anti-money laundering laws and regulations.
Specialised insurance agencies and brokers should carry out anti-money laundering
training and education, properly manage major money laundering cases involving the
company, facilitate anti-money laundering m onitoring and inspection, administrative
investigation and investigation of criminal a ctivities involving money laundering, and keep
confidential any information related to lawful anti-money laundering initiatives.
Market Behaviours
Business Scope of Specialised Insurance Agency
Pursuant to the Provisions on the Regulation of Insurance Agents, the business scope
of specialised insurance agencies covers: se lling insurance products for the principal;
collecting premiums for the principal, conducting loss surveys and handle claims for
relevant insurance business for the principal; other businesses specified by the CBIRC.
Any specialised insurance agency operating outside of the relevant province,
autonomous region or municipality where it is registered should establish branch
institution. No branch institution of any sp ecialised insurance agent should operate
outside of the relevant province, autonomous region or municipality where it is registered.
No specialised insurance agency should conduct insurance agency activity beyond the
business scope and operation area of the relevant principals (insurance companies), unless
other specified by the CBIRC in case of cross region co-insurance, cross-region
underwriting or omnibus policy.
Specialised insurance agency should enter into written agent contract with its engaging
insurance company specifying rights and obligations of both sides along with other matters
before conducting insurance agency activities.
Practise Registration for Practitioners
The Provisions on the Regulation of Insurance Agents provide that a specialised
insurance agency shall employ insurance agency practitioners who are of good character. A
specialised insurance agency shall strength en management of recruitment of individual
REGULATORY OVERVIEW
–1 1 8–


--- page 129 ---
insurance agents and practitioners of insurance agencies, and formulate standardised and
unified recruitment policies, standards and pr ocesses. A specialised insurance agency may
not employ or entrust a person who:
. has been subject to criminal punishment due to corruption, bribery, encroachment of
property, misappropriation of property or disruption of the order of the socialist
market economy, and a five-year period has not elapsed since the completion of the
execution of the sentence;
. is barred from the financial industry by the financial regulatory authority for a certain
period of time and such period has not expired yet;
. has been identified by the relevant PRC governmental authorities as a subject of joint
punishment for dishonesty due to a serious dishonest conduct and shall be punished in
the insurance sector, or whoever has any other bad record of serious dishonest conduct
within the past five years; or
. falls under any other circumstances as stipul ated by laws, administrative regulations
and the provisions of the insurance regulatory authority under the State Council.
Before conducting the insurance agency activ ities, specialised insu rance agencies shall
complete practise registration for their prac titioners and manage practise registration
information by promptly registering person al information and scope of authorisation,
recording the information of p unishment, termination of engagement or entrustment.
Reward and Incentive
Pursuant to the Provisions on the Regulation of Insurance Agents, specialised
insurance agencies may not demand fee or purchase of insurance product as prerequisite for
employment, promise unreasonably high reward, or base reward primarily on the number of
directly or indirectly developed sales personnel.
Pursuant to the Notice on Strictly Regulating Incentive Measures of Specialised
Insurance Intermediaries ( 《關於嚴格規範保險專業中介機構激勵行為的通知》)p r o m u l g a t e d
on 15 November 2010 by the CIRC, specialised insurance intermediaries may only
implement equity incentive measures for sales personnel of more than two consecutive years
of practise experience within organisation, and may not arbitrarily expand the scope of
equity incentives for rapid business growth. In implementing incentives, specialised
insurance intermediaries shall not conduct deceptive or misleading promotion of
incentive programme, including exaggeration or arbitrarily promising uncertain earnings
from future listing; shall not induce sales personnel to purchase self-insurance or purchase
insurance with borrowings for incentives; shall not offer customer equity in name of
incentive as consideration for illicit interests. In addition, pursuant to the Notice on
Further Regulating Incentive Measures of Specialised Insurance Intermediaries ( 《關於進一
步規範保險專業中介機構激勵行為的通知》) promulgated on 28 February 2012 by the CIRC,
specialised insurance intermediaries shall only implement equity incentive measures in strict
accordance with relevant laws, regulations, an d the Notice on Strictly Regulating Incentive
Measures of Specialised Insurance Intermediaries, and shall not induce members of the
REGULATORY OVERVIEW
–1 1 9–


--- page 130 ---
general public to become salespersons, or induce salespersons or customers to purchase
insurance products not matching their actual insurance needs by means such as simply
equating equity incentive measures with the listing of a company or exaggerating the
benefits of a listing.
Services Provided by Specialised Insurance Agency and its Practitioners
Pursuant to the Basic Service Standard for Specialised Insurance Agencies ( 《保險專業
代理機構基本服務標準》) promulgated by the CIRC on 16 January 2013, specialised
insurance agencies should abide by laws, administrative regulations and relevant provisions
of the CBIRC in providing service, uphold the rights and interests of customers,
demonstrate honesty and goo dwill, professional competence and diligence with duty,
fulfil informing obligation, sufficiently discl ose relevant information and protect customer
privacy and business secrets. Practitioners shall possess good professional ethics and
competence. The statutory standard covers all the service stages which require that
specialised insurance agencies shall fully disclo se their legal positioning and business nature
and offer customer notifications upon their first contact with customers, be considerate and
diligent with pre-sales service, be thorough and detailed with sales services, be responsive
and efficient with post-sales service, be instr umental and timely in assisting customers with
claim and be timely and efficient with customer complaint.
The Provisions on the Regulation of Insurance Agents list the following actions that
insurance agencies and their practitioners shall not commit: (i) deceiving the insurer,
policyholder, the insured or beneficiary; (ii) concealing important information relating to
the insurance contract; (iii) obstructing the p olicyholder to perform whose disclosure
obligation or inducing whom not to perform his/h er disclosure obligation; (iv) offering or
promising to offer the policyholder, the insured or the beneficiary benefits other than those
stipulated in the insurance contract; (v) coercing, inducing or restricting the policyholder to
enter into an insurance contract by taking advantage of whose administrative power,
position, professional expediency or any other improper means; (vi) forging or altering an
insurance contract without authorisation, or providing false supporting materials for the
parties to an insurance contract; (vii) misappropriating, withholding or expropriating
insurance premiums or insurance money; (v iii) seeking improper benefits for other
institutions or individuals by taking advantage of his/her business; (ix) defrauding the
insurance benefits by colluding with the policyholder, the insured or beneficiary; or (x)
disclosing trade secrets of the insurer, the policyholder or the insured known in the business
activities.
Insurance Premium and Commission Collection
Pursuant to the Provisions on the Regulation of Insurance Agents, specialised
insurance agencies are allowed to collect insurance premium on the condition that a
separate premium collection account for settlement be opened. The requirement for
specialised insurance agencies to open a separate account also applies to the collection of
insurance commissions. In addition, specialised insurance agencies shall not directly deduct
insurance commission fro m the premiums collected.
REGULATORY OVERVIEW
–1 2 0–


--- page 131 ---
On 17 September 2015, the CIRC issued the Opinion of CIRC on Deepening the
Reform of the Insurance Intermediary Market ( 《中國保監會關於深化保險中介市場改革的
意見》) to require implementing the registration and filing system for insurance
intermediaries’ premium collection accounts and commission accounts.
Management of Insurance Sales
Pursuant to the Provisional Measures for Re trospective Administration of Insurance
Sales Practises ( 《保險銷售行為可回溯管理暫行辦法》) promulgated by the CIRC on 28 June
2017 and implemented on 1 November 2017, ‘‘retrospective administration of insurance
sales practises’’ means that insurance companies and insurance intermediaries record and
retain the key links involved in the insurance sa les process through co llecting audio-visual
materials and electronic data via audio and video recording or other technical means, so as
to ensure that sales practises can be replaye d, important information can be accessible and
liabilities can be identifiable. When selling ins urance products with natural persons as the
insurance policyholder, insu rance intermediaries shall carry out such retrospective
administration of insurance sales practises, with the exception of group insurance products.
Pursuant to the Administrative Measur es for Insurance Sales Practises ( 《保險銷售行為
管理辦法》) which were promulgated by the NFRA on 20 September 2023 and took effect on
1 March 2024, sales practises conducted by insu rance intermediaries (including insurance
agencies like us), whether through our in-house sales executives or insurance agents, for the
purpose of concluding insurance contracts as entrusted by or in cooperation with insurance
companies shall comply with the measures. Under the measures, insurance sales practises
are divided into three categor ies based on the stage when th e practises are conducted,
namely the pre-insurance sales practises, in-process insurance sales practises and
post-insurance sales practises. Such div ision expands the scope of insurance sales
practises to include, among others, activit ies such as creating an environment for the
conclusion of insurance contracts, preparing conditions and soliciting insurance contract
counterparties. The measures explicitly prohibit any other entities or individuals other than
insurance companies, insurance intermed iaries or insurance sales personnel from
conducting any insurance sales practises. Furthermore, the i nsurance intermediary shall
strengthen its management of all stage of the insurance sales practises. For instance, the
insurance sales promotion conducted by insu rance intermediaries shall not exceed in form
and substance the business scope specifie d in their business permits. Insurance
intermediaries shall not enter into insur ance contracts with policyholders using
mandatory tie-in sales, default checkboxes on its information systems or web pages.
Furthermore, an archives management system shall be established by insurance
intermediaries to properly preserve business files, accounting books, personnel files,
insurance materials as well as audio-visual materials and other archival materials generated
through retrospective management. These mea sures require insurance intermediaries to
perform sales management res ponsibilities by establishing an d improving management rules
for insurance sales, strengthening the management of the identities of insurance sales
personnel entrusted by them, etc. To ensure compliance with these measures, we need to
have better knowledge of and effectively man age our sales personnel, screen and optimise
REGULATORY OVERVIEW
–1 2 1–


--- page 132 ---
our sales personnel team, provide sales practise training courses to them from time to time
as well as regularly self-examine and evaluate the effectiveness and implementation of our
insurance sales management.
Our Directors are of the view that, after consulting the PRC Legal Advisers, we have
complied with the Administrative Measures fo r Insurance Sales Practises in all material
respects since its implementation, and such measures would not have any material adverse
effect on our business operations or financial performance on the basis that: (i) we have
taken various steps including, among others, (a) screening the insurance sales personnel: the
relevant candidates shall fill in an applicat ion form and provide information including
education background and work experiences. In order to screen the qualified insurance
sales personnel, we may verify their identific ations and academic qualifications as well as
conduct necessary background research. In ad dition, our insurance sales personnel shall
complete the practice registration and corre sponding identity authentication with the
competent governmental authorities before conducting insurance agency business; (b)
training the insurance sales personnel: we provide the insurance sales personnel with online
and offline trainings including, induction t rainings for new joiners with a focus on basic
knowledge of insurance industry and regulatory requirements, post-exam trainings designed
for further strengthening their insurance kno wledge and skills, other training sessions from
time to time covering industry laws and regul ations, professional e thics and compliance
requirements, with an aim to improve their serv ice qualities; (c) internal policies: we have
designed and implemented internal polic ies, such as the Management Measures for
Practitioners which set forth the basic entry requirements, restrictions, recruitment
procedures, training and management of the insurance sales personnel; the Business
Operation Management Policy which sets forth the management of the full-chain of
insurance sales activities covering customer profile survey, needs assessment, insurance plan
analysis, completing insurance purchase procedures, assisting with claims and renewal
arrangements, etc.; the Comprehensive Risk Management Measures which are designed to
address various potential risks identified in relation to our operations and setting forth
procedures to identify, analyse, categorise, mitigate and monitor various risks as well as
reporting hierarchy of risks identified in o ur operation. In addition, Haier Insurance
Agency has submitted the 2023 annual report to the local counterpart of the NFRA in
March 2024, which emphasised the relevant steps and efforts so as to satisfy relevant
requirements under the newly issued Administrative Measures for Insurance Sales Practises;
(ii) since the implementation of the Administrative Measures for Insurance Sales Practises
and up to the Latest Practicable Date, we had not been subject to any material
investigation, inquiry, penalty, litigation or legal proceedings due to violation of the
Administrative Measures for Insurance Sales Practises, nor had we received any
requirement from the PRC governmental aut horities to take rectification measures
pursuant to such new regulations; and (iii) we will closely monitor and assess further
regulatory developments regarding the insu rance sales practises and endeavour to comply
with the latest regulatory requirements in all material respects on an ongoing basis.
Based on (i) the above management measures, training and risk management policies
adopted by our Company; (ii) no enforcement a ction or rectification request has been made
by the PRC governmental authorities against our Company in relation to the
Administrative Measures for Insurance Sales Practises since its implementation and up to
REGULATORY OVERVIEW
–1 2 2–


--- page 133 ---
the Latest Practicable Date; and (iii) the Joint Sponsors’ discussion with the PRC Legal
Advisers as to our Company’s compliance with the Administrative Measures for Insurance
Sales Practises, the Joint Sponsors concur with the Directors’ view in relation to our
Company’s compliance with the Administrative Measures for Insurance Sales Practises in
all material respects sin ce its implementation.
Internet Insurance Agency Business
Internet Insurance Agency Qualifications
Pursuant to the Measures for the Regula tion of Internet Insurance Business ( 《互聯網
保險業務監管辦法》) promulgated by the CBIRC on 7 December 2020 and implemented on 1
February 2021, Internet insurance business s hall be carried out by insurance institutions
established in accordance with the law and no other organisation or individual may operate
Internet insurance business. In surance institutions including specialised insurance agencies
operating Internet insurance business, i.e. concluding insurance contracts and providing
insurance services based on network, shall observe relevant provisions and may not damage
legal rights and interests of insurance co nsumers or public interests. No insurance
institution may carry out Internet insurance business beyond the scope of business specified
in its insurance business permit. An insurance institution which conducts Internet insurance
business shall be subject to centralised operat ion and unified management by its head office
by establishing a unified and centralised business platform, business process and
management systems.
Insurance institutions including specialised insurance agencies which conduct Internet
insurance business along with its self-operated network platform shall meet the following
conditions:
. its service access place is located within the territory of the PRC. If its self-operated
network platform is a website or mobile app lication, it shall legally go through the
formalities for filing of Internet information services with the administrative
department for the Internet industry and obtain a filing number. If its self-operated
network platform is not a website or mobile ap plication, it shall comply with relevant
laws and regulations and meet the qualific ation requirements of the competent
department for the relevant industry;
. it has an information management system and core business system that can support its
Internet insurance business operation, whic h can be effectively isolated from its other
unrelated information systems;
. it has refined cybersecurity monitoring, information notification, emergency disposal
working mechanisms as well as such cybe rsecurity protection means as refined
perimeter protection, intrusion detection, data protection and disaster recovery;
. it implements the national classified cybers ecurity protection system, carries out filing
of cybersecurity classification, conducts classified protection evaluation on a regular
basis, and implements security protection measures for the corresponding class; in
terms of self-operated network platforms with insurance sales or insurance application
REGULATORY OVERVIEW
–1 2 3–


--- page 134 ---
function, as well as information manageme nt systems and core business systems that
support their operation, relevant self-ope rated network platforms and information
systems shall be under security protection of Class III or above;
. it has a legal and compliant marketing model, and has established an operation and
service system that meets the needs for Intern et insurance operation, complies with the
characteristics of Internet insurance users and supports its business coverage regions;
. it has established or designated its Inte rnet insurance business management
department staffed by appropriate professi onals, appointed a senior executive to act
as the principal in charge of its Internet insurance business, and designated the
principal of each self-operated network platform;
. it has a sound Internet insurance business management system and operating
procedures;
. it shall be a national specialised insuranc ei n t e r m e d i a r yw i t hi t so p e r a t i n ga r e an o t
limited to the province where the business lic ence of its head office is registered while
complying with the relevant provisions of the CBIRC on classified regulation of
specialised insurance intermediaries; and
. other conditions prescribed by the CBIRC.
In addition, the General Office of the CBIRC promulgated the Notice on Matters
Concerning Further Regulating Internet Personal Insurance Business of Insurance
Institutions ( 《關於進一步規範保險機構互聯網人身保險業務有關事項的通知》)o n1 2
October 2021, which applies to the Internet personal insurance business conducted by
insurance companies through their own online platforms or the online platforms of the
insurance intermediaries (including insuran ce agencies like us) entrusted by them. Pursuant
to this notice, when entrusting insurance intermediaries to conduct Internet personal
insurance business, insurance companies shall specify both parties’ rights and obligations,
cooperation period, dispute resolution meth ods, liabilities for breach of contract and
solutions for settling clients’ complaints and s hall select an insurance intermediary with a
nationwide business scope. Haier Insurance Agency currently holds a nationwide Insurance
Intermediary Licence, which enables us to be eligible to cooperate with the insurance
companies in this regard. In addition, the scope of Internet personal insurance products is
limited to accident insurance, health insurance (excluding nursing insurance), term life
insurance, ordinary life insurance (excluding term life insurance) with an insurance period
of over 10 years and ordinary annuity insurance with an insurance period of over 10 years,
as well as other personal insurance products specified by the CBIRC. This notice also
requires that insurance intermediaries (incl uding insurance agencies like us) carrying out
Internet personal insurance business shall hav e corresponding online operating capability
to support online insurance policy purchas ing, online underwriting and other online
services, including among others, online display of all required materials for consumers to
purchase insurance, providing comprehen sive online service portals for consumers’
consultation, inquiry, claims and complaints, etc. We have been equipped with the
corresponding technical and ope rational capabilities to ca rry out the Internet personal
insurance business in accordance with this notice. In addition, this notice further imposes
REGULATORY OVERVIEW
–1 2 4–


--- page 135 ---
restrictions on the expected surcharge rate (wh ich included, among others, commission rate
paid to insurance intermediaries like us) on Internet personal insurance products. For an
Internet personal insurance product with an insurance period of one year or less, the
expected surcharge rate shall not be higher than 35%; for an Internet personal insurance
product with an insurance period of more than one year, the expected surcharge rate in the
first year shall not be higher than 60%, and th e average surcharge rate shall not be higher
than 25%. As our Group’s Internet insurance business generates a very small portion of
revenue during the Track Record Period, our Directors confirm that the aforesaid
restrictions have limited impact on our Group’s business operations. Based on the
foregoing, the implementation of this notic e did not adversely affect our Group’s business
operations and financial performance in any material respect during the Track Record
P e r i o da n du pt ot h eL a t e s tP r a c t i c a b l eD a t e .
Information Disclosure
According to the Measures for the Regula tion of Internet Insurance Business,
insurance institutions operating Internet in surance business shall set up on its official
website online column dedicated to insurance information disclosure. The sales or details
display webpage of Internet insurance products shall include the following contents:
. the names of insurance products (clause names and publicity names), approval
document number for products subject to ex amination and approval, record-filing
number or product registrat ion number of products subject to record-filing, number of
reported documents or clause number;
. the insurance clauses and premiums (or link), with highlights and explanations of the
clauses on the exemption of insurance compan ies from liability, and highlights with the
conditions and procedures for claim settl ement, as well as the cooling-off period,
waiting period, fee deduction, surrender losses, cash value of insurance policies and
other key contents in insurance contracts in an appropriate way;
. if an insurance product is a new type of personal insurance product such as unit-linked
insurance and universal insurance, the relevant information shall be clearly indicated
in accordance with the relevant provisions o f the CBIRC on information disclosure for
new types of products, and words indicating uncertainties in boldface with a font size
not smaller than that of the product name;
. the obligation of truthful disclosure of the insurance applicant, and the consequences
of breach of the obligation;
. the statement on whether online services su fficiently covers all stages, and warnings of
possible inadequate services as the insurance institution may have no branches in the
place where the consumer or the insured matter is located;
. the method of payment of insurance premiums, and method of delivery of insurance
certificates and premium invoices;
REGULATORY OVERVIEW
–1 2 5–


--- page 136 ---
. other matters that directly affect the rights and interests of consumers and purchase
decisions.
Furthermore, the Measures for the Regulat ion of Insurance Business require that
insurance institutions shall, through the special column for disclosure of Internet insurance
information on the official website of Insur ance Association, promptly disclose the
information on their self-run network platforms, Internet insurance products, cooperative
sales channels, etc., so as to facilitat e inquiry and supervision by the public.
Pursuant to the Administrative Measures for the Disclosure of Information on
Personal Insurance Products ( 《人身保險產品信息披露管理辦法》), promulgated by the
CBIRC on 11 November 2022 and effective on 30 June 2023, no insurance intermediary
or any of its practitioners may revise information disclosure materials for insurance
products sold on an agency basis. The product information disclosure materials used by any
insurance intermediary or any of its pract itioners shall be consistent with product
information disclosure mater ials of the insurance company.
REGULATIONS RELATED TO INTERNET INFORMATION SERVICE
Pursuant to the Administrative Measures on Internet Information Services ( 《互聯網信
息服務管理辦法》) promulgated by the State Council on 25 September 2000 and revised on 8
January 2011 and the Administration Measures for the Filing of Not-for-profit Internet
Information Services ( 《非經營性互聯網信息服務備案管理辦法》) released on 8 February
2005 by the former Ministry of Information Industry and effective from 20 March 2005 and
further revised on 18 January 2024, Internet information services are classified into
‘‘for-profit Internet information services’’ and ‘‘not-for-profit Internet information
services’’. The for-profit Internet information service refers to service activities to provide
information or website design to online users for profit; the not-for-profit Internet
information service refers to service activ ities to provide online users open, shared
information on Internet free of charge. The n ational government has installed the filing
system for not-for-profit Internet informat ion service. The MIIT shall supervise and guide
the filing administration of not-for-profit Int ernet information services nationwide, while
the provincial communications administrati on shall take charge of the specific filing
administration work for not-for-profit Intern et information services . The operators to carry
out the not-for-profit Internet information s ervices shall perform the filing procedures with
the provincial communications adm inistration where it is located.
Whoever intends to provide n ot-for-profit Internet information service through the
websites visited via Internet domain names or through the websites which can only be
visited via IP address within the territory of the PRC shall go through filing procedures in
accordance with law. Such not-for-profit Intern et information service provider shall, when
its website is available, display its filing number at the central part on the bottom of its
home page and link the URL of the filing adminis tration system of the Ministry of Industry
and Information Technology of the PRC , or the MIIT, below the filing number for
consultation and check by the public. Furthermore, an annual review procedure is required
for the not-for-profit Internet information service provider to go through on the filing
administration system of the MIIT at a specified time each year.
REGULATORY OVERVIEW
–1 2 6–


--- page 137 ---
Mobile Internet application is subject to monitoring by the Administrative Provisions
on Mobile Internet Applicat ion Information Services ( 《移動互聯網應用程序信息服務管理
規定》) promulgated by the CAC, on 14 June 2022 and effective on 1 August 2022. Under
these provisions, the application providers sh all establish sound information content review
and management mechanism by erecting and improving measures such as user registration,
account management, information review, daily inspection and emergency disposal and be
staffed with professionals and technical abilit y appropriate to the service scale. Moreover,
the application providers shall not conduct acts such as false advertising and bundled
downloading, nor shall they employ machine or manual click farming services for instantly
boosting popularity in rankings, increasing q uantity and control the ratings or use illegal
and unhealthy information to induce users to download.
Pursuant to the Notice on Carrying out the Filing of Mobile Internet Applications ( 《關
於開展移動互聯網應用程序備案工作的通知》) promulgated by the MIIT and effective on 21
July 2023, an APP developer engaged in providin g Internet information services in the PRC
shall go through the filing formalities wit h the provincial-level communications
administration where it is located throug h its network access service provider or APP
distribution platform by means of online submission for application and inspection and
review via the National Management System for Fundamental Internet Resources (i.e.
ICP/IP address/domain name information filing management system). For apps that have
been launched before the issuance of this not ice, its developer shall complete such filing
formalities from September 2023 to March 2024.
In addition, for insurance institutions (including insurance companies and insurance
intermediaries) conducting Inte rnet insurance business, the M easures for the Regulation of
Internet Insurance Business reiterate the filin g requirements that if their self-operated
network platform is a website or mobile app lication, they shall go through the filing
procedures for Internet information service with the competent regulatory authorities.
As at the Last Practicable Date, our Grou p’s online platforms are mainly used as
auxiliary tools to facilitate the transaction process of our insurance clients and to provide
managerial service support to our insurance agents. Except for receiving commission
incomes generated from insurance companies fo r distribution of their insurance products to
the insurance clients in our Group’s insurance agency business, our Group does not receive
any usage fees or rewards from online users fo r using its online platforms. Our Group has
completed the required filing procedur es for our online platforms with Shandong
Communications Administration in accordan ce with the aforementioned applicable PRC
laws and regulations. Based on the foregoing and as advised by the PRC Legal Advisers, (i)
the operation of our Group’s online platforms does not constitute ‘‘for-profit information
services’’ as stipulated under the Administrati ve Measures on Internet Information Services
and therefore does not require an ICP licence; and (ii) Shandong Communications
Administration is the competent authority to complete the filing procedures for the online
platforms of our Group, considering that (a) the aforementioned PRC laws and regulations
provide that the online platform operators sha ll go through the filing formalities with the
provincial-level communications administration where it is located; and (b) Shandong
Communications Administration is the corresponding provincial communications
administration where our online platform operator is located, and according to the
REGULATORY OVERVIEW
–1 2 7–


--- page 138 ---
publicly available information on the official website of the Shandong Communications
Administration, its responsibilities and po wers include, among others, supervising local
telecommunications and information services market.
REGULATIONS RELATED TO CYBERSECURITY AND DATA SECURITY
The PRC government has proposed or promulgated a number of new measures and
regulations in recent years regardin g cybersecurity and data security.
The Administrative Measures for the Hierarchical Protection of Information Security
(《信息安全等級保護管理辦法》) promulgated by the Ministry of Public Security, the State
Secrecy Bureau, the State Cipher Code Admini stration and the former Information Office
of the State Council on 22 June 2007, divide the security protection of information systems
into five grades based on the degree of harm caused by the destruction of the information
system to the legitimate rights and interests of citizens, legal persons and other
organisations, social public order and public interests and the national security and
require the operators of information systems ranking Grade II or above to file an
application with the local competent public se curity authorities within 30 days since the
date when its security protection grade is det ermined or its information system is put into
operation.
On 1 July 2015, the NPC Standing Committee issued the National Security Law of the
PRC (《中華人民共和國國家安全法》), which came into effect on the same day. The National
Security Law provides that the state shall build a network and information security
guarantee system and improve network and inf ormation security protection capability to
realise the controllable security of the network information key technologies and critical
infrastructure and the information systems and data in important fields. In addition, a
national security review and supervision sys tem is required to be established to review,
among other things, foreign investment, key technologies and network information
technology products and services and other im portant activities that impact or are likely
to impact the national security of the PRC.
On 7 November 2016, the NPC Standing Committee promulgated the PRC
Cybersecurity Law ( 《中華人民共和國網絡安全法》) which came into effect on 1 June 2017
and applies to the construction, operation, ma intenance and use of networks as well as the
supervision and administration of cybersecurity in China. Network service providers who
do not comply with the PRC Cybersecurity Law may be subject to corrective orders,
warnings, fines, suspension of their businesses, shutdown of their websites, and revocation
of their business licences.
On 10 June 2021, the NPC Standing Committee promulgated the PRC Data Security
Law (《中華人民共和國數據安全法》), which took effect in September 2021. The PRC Data
Security Law provides for data security on entities and individuals carrying out data
processing activities. The PRC Data Security Law also introduces a data classification and
layered protection system based on the importance 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 individu als or organisations when such data is tampered
with, destroyed, leaked, or illegally acquired or used. The appropriate level of protection
REGULATORY OVERVIEW
–1 2 8–


--- page 139 ---
measures is required to be taken for each respective category of data. Violation of the PRC
Data Security Law may be subject to an order to cease illegal activities, warnings, fines,
suspension of business and revocation of bus iness licences or operating permits, and the
personnel directly in charge or other directly responsible personnel may be imposed with
fines.
On 30 July 2021, the State Council promulgated the Regulations on the Protection of
the Security of Critical Information Infrastructure ( 《關鍵信息基礎設施安全保護條例》),
effective on 1 September 2021. According to the regulations, a ‘‘critical information
infrastructure’’ refers to an important netwo rk facility and information system in important
industries such as, among others, public communications and information services, as well
as other important network facilities and info rmation systems that may seriously endanger
national security, the national economy, the people’s livelihood, or the public interests in
the event of damage, loss of function, or data leakage. The competent authorities shall
inform the relevant operators in a timely manner if such operators are determined as the
critical information infrastructure operators.
On 28 December 2021, the CAC, together with certain other PRC governmental
authorities, promulgated the Cybersecurity Review Measures ( 《網絡安全審查辦法》)t h a t
replaced the previous version and took effe ct from 15 February 2022. Pursuant to these
measures, the purchase of network products and services by a critical information
infrastructure operator or the data processing activities of a network platform operator that
affect or may affect national security will be subject to a cybersecurity review. In addition,
network platform operators wi th personal information of over one million users shall be
subject to cybersecurity review before listing abroad ( 國外上市). The competent
governmental authorities may also initiate a cybersecurity review against the operators if
the authorities believe that the network product or service or data processing activities of
such operators affect or may affect national security. The Cybersecurity Review Measures
provide that the relevant violators shall be subject to legal consequences in accordance with
the PRC Cybersecurity Law and the PRC Data Security Law.
On 14 November 2021, the CAC published the Administrative Regulations on Cyber
Data Security (Draft for Comments) ( 《網絡數據安全管理條例（徵求意見稿）》), which
provide the circumstances under which dat a processors shall apply for cybersecurity
review, including, among others, when (i) the data processors who process personal
information of at least one million users apply for a ‘‘foreign’’ listing ( 國外上市); and (ii) the
data processors’ listing in Hong Kong affects or m ay possibly affect national security. Data
processors processing persona l information of more than one million individuals shall also
comply with the provisions for processor of important data stipulated in the Draft
Regulations for important data processors. Da ta processors dealing with important data or
listing overseas ( 境外上市) should carry out an annual data security assessment by
themselves or by entrusting data security service agencies, and each year before 31 January
data security assessment report for the previou s year shall be submitted to the districted city
level cyberspace administration. As at the Latest Practicable Date, this draft has not been
formally adopted.
REGULATORY OVERVIEW
–1 2 9–


--- page 140 ---
In the meantime, the PRC regulatory author ities have also enhanced the supervision
and regulation on cross-border data transfer. On 7 July 2022, the CAC promulgated the
Measures for the Security Assessmen t of Cross-Border Data Transfer ( 《數據出境安全評估
辦法》), which took effect on 1 September 2022. Th ese measures require the data processor
providing data overseas and falling under specified circumstances apply for the security
assessment of cross-border data transfer by the n ational cybersecurity authority through its
local provincial counterpart. In addition, on 22 February 2023, the Provisions on the
Prescribed Agreement on Cross-Border Transfer of Personal Information ( 《個人信息出境標
準合同辦法》) were promulgated by the CAC, which took effect on 1 June, 2023. These
Provisions attach the prescribed template for cross-border transfer of personal information
that could be used to satisfy one of the conditions for cross-border transfer of personal
information under Article 38 of the Personal Information Protection Law and require that
personal information processor shall, within 10 working days from the effective date of the
prescribed agreement, make filings with the local provincial counterpart of cyberspace
administration. On 22 March 2024, the CAC re leased the Provisions on Promoting and
Standardising Cross-Border Data Transfer ( 《促進和規範數據跨境流動規定》), which set
forth the circumstances exempted from perf orming the security assessment or filing
procedures for cross-border data transfer and further clarify the thresholds and scenarios
for data processors to go through these proced ures as stipulated under the aforementioned
measures.
REGULATIONS RELATING TO PRIVACY PROTECTION
In recent years, PRC government authorities have enacted laws and regulations on
Internet use to protect personal information from any unauthorised disclosure. The PRC
Cybersecurity Law imposes certain data protection obligations on network operators,
including that network operators may not disclose, tamper with, or damage the personal
information that they have collected, or provide the personal information to others without
obtaining consent from the persons whose information is collected. Moreover, network
operators are obligated to delete unlawfully collected information and to amend incorrect
information.
The Several Provisions on Regulating th e Market Order of Internet Information
Services (《規範互聯網信息服務市場秩序若干規定》), issued by the MIIT on 29 December
2011 and effective on 15 March 2012, stipulate that Internet information service providers
may not collect any user personal informati on or provide any such information to third
parties without the consent of a user, unless otherwise stipulated by laws and administrative
regulations. An Internet information service pr ovider is also required to properly store user
personal information, and in case of any leak or likely leak of the user personal
information, the Internet information serv ice provider must take immediate remedial
measures and, when serious consequences have been caused or may be caused, make an
immediate report to the telecommunications regulatory authority and cooperate with the
relevant authorities in investigation.
Pursuant to the Decision on Strengthening the Protection of Online Information ( 《關
於
加強網絡信息保護的決定》), issued by the NPC Standing Committee in 2012, and the
Order for the Protection of Telecommunication and Internet User Personal Information
REGULATORY OVERVIEW
–1 3 0–


--- page 141 ---
(《電信和互聯網用戶個人信息保護規定》), issued by the MIIT in 2013, any collection and use
of a user’s personal information must abide by the principles of legality, rationality and
necessity, explicitly state the purpose, manners and scopes of the information collection and
uses, obtain the consent of the user and shall not violate the provisions of laws and
regulations and the agreement with the users. Any violation of these laws and regulations
may subject the Internet information service p rovider to warnings, fines, confiscation of
illegal gains, revocation of licences, cancella tion of filings, closedown of websites or even
criminal liabilities.
Pursuant 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 ( 《最高人民法院、最高人
民檢察院、公安部關於依法懲處侵害公民個人信息犯罪活動的通知》) issued and effective on
23 April 2013 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 ( 《最高人民法院、最高人民檢察院關
於辦理侵犯公民個人信息刑事案件適用
法律若干問題的解釋》) issued on 8 May 2017 and
effective on 1 June 2017, the following activities may constitute the crime of infringing upon
a citizen’s personal information: (i) providin g a citizen’s personal information to specified
persons or releasing a citizen’s personal info rmation online or through other methods in
violation of relevant national provisions; (ii) providing legitimately collected information
relating to a citizen to others without such citizen’s consent (unless the information is
processed, not traceable to a s pecific person and not recovera ble); (iii) collecting a citizen’s
personal information in violation of applicab le rules and regulations when performing a
duty or providing services; or (iv) collecting a citizen’s personal information by purchasing,
accepting or exchanging such information in vio lation of applicable rules and regulations.
In addition, the Opinions of the Supreme People’s Court, the Supreme People’s
Procuratorate, and the Ministry of Public Security on Several Issues Concerning the
Application of Criminal Procedures in Handlin g of Criminal Cases Involving Information
Networks ( 《最高人民法院、最高人民檢察院、公安部關於辦理信息網絡犯罪案件適用刑事
訴訟程序若干問題的意見》), which took effect on 1 September 2022, further provide
detailed procedures on facilitat ing the handling of criminal cases of (i) refusing to perform
the obligation of managing the security of th e information networks, (ii) illegally using the
information networks, or (iii) assisting in t he criminal activities of the information
networks.
With respect to the security of information collected and used by mobile apps,
pursuant to the Announcement of Conducting Special Supervision against the Illegal
Collection and Use of Personal Information by Apps ( 《關於開展App違法違規收集使用個人
信息專
項治理的公告》), which was issued by the CAC, the MIIT, the Ministry of Public
Security, and the SAMR on 23 January 2019, app operators shall collect and use personal
information in compliance with the PRC Cyber security Law and shall be responsible for the
security of personal information obtained from users and take effective measures to
strengthen personal information protection. Furthermore, app operators shall not force
their users to make authorisation by means of default, bundling, suspending installation or
use of the app or other similar means and shall not collect personal information in violation
of laws and regulations or breach of user agreements. Such regulatory requirements were
REGULATORY OVERVIEW
–1 3 1–


--- page 142 ---
emphasised by the Notice on the Special Rectification of Apps Infringing upon User’s
Personal Rights and Interests ( 《關於開展APP侵害用戶權益專項整治工作的通知》) issued by
MIIT on 31 October 2019. On 28 November 2019, the CAC, the MIIT, the Ministry of
Public Security and the SAMR jointly issued the Methods of Identifying Illegal Acts of
Apps to Collect and Use Personal Information ( 《App違法違規收集使用個人信息行為認定
方法》). This regulation further illustrates certa in common illegal practises of app operators
in terms of personal information protection and specifies acts of app operators that will be
considered as ‘‘collection and use of personal information without users’ consent’’.
On 28 May 2020, the National People’s Congress adopted the Civil Code ( 《民法典》),
which came into effect on 1 January 2021. Pursuant to the Civil Code, the personal
information of a natural person shall be protected by the law. Any organisation or
individual shall legally obtain such person al information of others when necessary and
ensure the safety of such information, and sh all not illegally collect, store, use, process or
transmit personal information of others, or illegally buy or sell, provide or make public
personal information of others.
On 20 August 2021, the NPC Standing Committee promulgated the PRC Personal
Information Protection Law ( 《中華人民共和國個人信息保護法》) ,w h i c ht o o ke f f e c to n1
November 2021. Pursuant to the Personal I nformation Protection Law, ‘‘personal
information’’ refers to any kind of informat ion related to an identified or identifiable
individual as electronically or otherwise recorded but excluding the anonymised
information. The processing of personal information includes the collection, storage, use,
processing, transmission, provision, disclosure and deletion of personal information. The
Personal Information Protection Law applies to the processing of personal information of
natural persons within the territory of the PRC , as well as personal information processing
activities outside the territory of PRC, for the purpose of providing products or services to
natural persons located within China, for analysing or evaluating the behaviours of natural
persons located within China, or for other circumstances as prescribed by laws and
administrative regulations. A personal information processor may process the personal
information of this individual only under the following circumstances: (i) where consent is
obtained from the individual; (ii) where it is necessary for the execution or performance of a
contract to which the individual is a party, or where it is necessary for carrying out human
resource management pursuant to employment rules legally adopted or a collective contract
legally concluded; (iii) where it is necessary for performing a statutory responsibility or
statutory obligation; (iv) where it is necessary in response to a public health emergency, or
for protecting the life, health or property safety of a natural person in the case of an
emergency; (v) where the personal information is processed within a reasonable scope to
carry out any news reporting, supervision by public opinions or any other activity for public
interest purposes; (vi) where the personal information, which has already been disclosed by
an individual or otherwise legally disclosed, is processed within a reasonable scope; or (vii)
any other circumstance as provided by laws or administrative regulations. In principle, the
consent of an individual must be obtained for the processing of his or her personal
information, except under the circumstances of the aforementioned items (ii) to (vii). Where
personal information is to be processed based on the consent of an individual, such consent
shall be a voluntary and explicit indication of intent given by such individual on a fully
REGULATORY OVERVIEW
–1 3 2–


--- page 143 ---
informed basis. If laws or administrative regu lations provide that the processing of personal
information shall be subject to the separate consent or written consent of the individual
concerned, such provisions shall prevail.
REGULATIONS RELATED TO ALGORITHMS
On 31 December 2021, the CAC and certain other PRC governmental authorities
promulgated the Provisions on the Administration of Algorithm Recommendation for
Internet Information Services ( 《互聯網信息服務算法推薦管理規定》), which took effect on 1
March 2022. These provisions require that algorithmic recommendation service providers
shall inform users in a conspicuous manner of their provision of algorithmic
recommendation services, and publicise the basic principles, purposes, and main
operating mechanisms of algorithmic recommen dation services in an appropriate manner.
Where algorithm recommendation service p roviders sell goods or provide services to
consumers, they shall protect consumers’ ri ghts to fair transactions, and shall not use
algorithms to implement unreasonably differential treatment in transaction prices and other
transaction conditions based on consumers’ preferences, transaction habits, and other
characteristics and other illegal acts.
REGULATIONS RELATED TO INTELLECTUAL PROPERTY
Patent
Patents in the PRC are principally protected under the Patent Law of the PRC ( 《中華
人民共和國專利法》) promulgated by the NPC Standing Committee on 12 March 1984 and
most recently amended on 17 October 2020 and effective as at 1 June 2021. The Chinese
patent system adopts a first-to -file principle. To be patentable, an invention or a utility
model must meet three criteria: novelty, inven tiveness and practicability. The duration of a
patent right is 10 years, 15 years or 20 years from the date of application, depending on the
type of patent right.
Copyright
Copyright in the PRC, including copyrig hted computer software, is principally
protected under the Copyright Law of the PRC ( 《中華人民共和國著作權法》)p r o m u l g a t e d
by the NPC Standing Committee on 7 September 1990 and most recently amended on 11
November 2020 and effective as at 1 June 2021 and r e l a t e dr u l e sa n dr e g u l a t i o n s .U n d e rt h e
Copyright Law of the PRC, the term of protection for copyrighted computer software is 50
years. The Regulation on the Protection of the Right to Communicate Works to the Public
over Information Networks ( 《信息網絡傳播權保護條例》), as most recently amended by the
State Council on 30 January 2013, provides specific rules on fair use, statutory licence, and
a safe harbour for use of copyrights and copyright management technology and specifies
the liabilities of various entities for violati ons, including libraries and Internet service
providers.
REGULATORY OVERVIEW
–1 3 3–


--- page 144 ---
The Computer Software Copyright Registration Measures ( 《計算機軟件著作權登記辦
法》), promulgated by the National Copyright Administration on 20 February 2002, regulate
registrations of software copyrights, exclusive licencing contracts for software copyrights
and assignment agreements. The National Copyri ght Administration administers software
copyright registration and the Copyright Protection Centre of China is designated as the
software registration authority. The Copy right Protection Centre of China grants
registration certificates to the computer software copyrights applicants which meet the
relevant requirements.
Trademark
Registered trademarks are protected under the Trademark Law of the PRC ( 《中華人民
共和國商標法》) promulgated by the NPC Standing Committee on 23 August 1982 and most
recently revised on 23 April 2019 and effective as at 1 November 2019 and related rules and
regulations. Trademarks are registered with t he State Intellectual Property Office. Where
registration is sought for a trademark that is identical or similar to another trademark
which has already been registered or given preliminary examination and approval for use in
the same or similar category of commodities or services, the application for registration of
this trademark may be rejected. Trademark re gistrations are effective for a renewable
ten-year period, unless otherwise revoked.
Domain Name
Domain names are protected under the Administrative Measures on Internet Domain
Names (《互聯網域名管理辦法》) promulgated by the MIIT on 24 August 2017 and effective
as at 1 November 2017. Domain name registrations are handled through domain name
service agencies established under the relevant regulations, and applicants become domain
name holders upon successful registration.
REGULATIONS RELATED TO TAXATION AND FOREIGN EXCHANGE
For more details, please refer to the section headed ‘‘Appendix III — Taxation and
Foreign Exchange’’ in this prospectus.
REGULATIONS RELATED TO ANTI-UNFAIR COMPETITION
Competition among business operators is generally governed by the Anti-unfair
Competition Law of the PRC ( 《中華人民共和國反不正當競爭法》), or the Anti-unfair
Competition Law, which was promulgated by the NPC Standing Committee on 2 September
1993, and most recently amended on 23 April 2019. Pursuant to the Anti-unfair
Competition Law, when trading on the market, operators must abide by the principles of
voluntariness, equality, fair ness, and honesty and observe laws and business ethics. Acts of
operators constitute unfair competition where they contravene the provisions of the
Anti-unfair Competition Law and disturb market competition with a result of damaging the
lawful rights and interests of other operators or consumers. Furthermore, improper market
activities including infringing on the business secrets of others, conducting false or
REGULATORY OVERVIEW
–1 3 4–


--- page 145 ---
misleading publicity through advertising or other means are in violation of the law and may
result in imposition of fines, confiscation of ga ins derived from such violation, and in severe
circumstances, revocation of business licences.
REGULATIONS RELATED TO EMPLOYMENT, SOCIAL INSURANCE AND
HOUSING FUND
Regulations on Employment
The major PRC laws and regulations that g overn employment relationship are the
Labour Law of the PRC ( 《中華人民共和國勞動法》) promulgated by the NPC Standing
Committee on 5 July 1994 and latest amended and effective on 29 December 2018, the
Labour Contract Law of the PRC ( 《中華人民共和國勞動合同法》)p r o m u l g a t e db yt h eN P C
Standing Committee on 29 June 2007 and latest amended on 28 December 2012 and
effective on 1 July 2013, and the Implementation Rules of the Labour Contract Law of the
PRC ( 《中華人民共和國勞動合同法實施條例》) promulgated by th e State Council and
effective on 18 September 2008. Pursuant to t he aforementioned laws and regulations,
labour relationships between employers and employees must be executed in written form.
The laws and regulations above impose stringent requirements on the employers in relation
to entering into fixed-term employment contracts, hiring of temporary employees and
dismissal of employees. As prescribed under the laws and regulations, employers shall
ensure their employees have the right to rest and the right to receive wages no lower than
the local minimum wages. Employers must establish a system for labour safety and
sanitation that strictly abides by state sta ndards and provide relevant education to its
employees. Violations of the Labour Contract Law of the PRC and the Labour Law of the
PRC may result in the imposition of fines and o ther administrative liabilities and/or incur
criminal liabilities in the case of serious violations.
Regulations on Social Insurance
Pursuant to the Social Insurance Law of the PRC ( 《中華人民共和國社會保險法》),
which was promulgated by the NPC Standing Committee on 28 October 2010 and amended
on 29 December 2018, enterprises and institutions in the PRC shall provide their employees
with welfare schemes covering pension insurance, unemployment insurance, maternity
insurance, occupational injury insurance, medical insurance and other welfare plans. The
employer shall apply to the local social insurance agency for social insurance registration
within 30 days from the date of its establishm ent. And it shall, within 30 days from the date
of employment, apply to the social insurance agency for social insurance registration for the
employee. Any employer who violates the regulations above shall be ordered to make
correction within a prescribed time limit; if the employer fails to rectify within the time
limit, the employer and the person(s)-in-char ge who is/are directly liable and other directly
liable personnel will be fined. Meanwhile, t he Interim Regulation on the Collection and
Payment of Social Insurance Premiums ( 《社會保險費徵繳
暫行條例》)p r o m u l g a t e db yt h e
State Council on 22 January 1999 and revised on 24 March 2019 prescribes the details
concerning the collection and payment of social insurance.
REGULATORY OVERVIEW
–1 3 5–


--- page 146 ---
Regulations on Housing Provident Fund
According to the Regulation on the Administration of Housing Provident Fund ( 《住房
公積金管理條例》), which was implemented on 3 April 1999 and latest revised on 24 March
2019, any newly established entity shall make deposit registration at the housing
accumulation fund management centre within 30 days as at its establishment. After that,
the entity shall open a housing accumulation fu nd account for its employees in an entrusted
bank. Within 30 days as at the date an employee is recruited, the entity shall make deposit
registration at the housing accumulation fund management centre and go through the
formalities of opening housing provident fund accounts on behalf of its employees. Any
entity that fails to make deposit registrati on of the housing accumulation fund or fails to
open a housing accumulation fund account for its employees shall be ordered to complete
the relevant procedures within a prescribed time limit. Any entity failing to complete the
relevant procedure within the time limit will be fined RMB10,000 to RMB50,000. Any
entity that fails to make payment of housing provident fund within the time limit or has a
shortfall in payment of housing provident fund will be ordered to make the payment or
make up the shortfall within the prescribed time limit, otherwise, the housing provident
management centre is entitled to apply for compulsory enforcement with the People’s
Court.
REGULATIONS RELATED TO OVERSEAS SECURITIES OFFERING AND LISTING
AND FULL CIRCULATION
On 17 February 2023, the CSRC promulgated the Overseas Listing Trial Measures,
which took effect from 31 March 2023. The Overseas Listing Trial Measures reformed the
regulatory regime for overseas securities offe ring and listing by domestic companies, into a
filing-based system.
Pursuant to the Overseas Listing Trial Measures, no overseas offering and listing shall
be made under any of the following circumstances: (i) where such securities offering and
listing is explicitly prohibited by provisions in laws, administrative regulations and relevant
state rules; (ii) where the intended securities offering and listing may endanger national
security as reviewed and determined by competent authorities under the State Council in
accordance with law; (iii) where the domesti c company intending to make the securities
offering and listing, or its controlling shareholders and the actual controller, have
committed crimes such as corruption, bribery, embezzlement, misappropriation of property
or undermining the order of socialist marke t economy during the latest three years; (iv)
where the domestic company intending to make the securities offering and listing is
suspected of committing crimes or major violations of laws and regulations, and is under
investigation according to law, and no conclu sion has yet been made thereof; and (v) where
there are material ownership disputes over equity held by the domestic company’s
controlling shareholder or by other shareho lders that are controlled by the controlling
shareholder and/or actual controller.
REGULATORY OVERVIEW
–1 3 6–


--- page 147 ---
Initial public offerings or listings in overseas markets shall be filed with the CSRC
within three business days after the relevant ap plication is submitted overseas. The Overseas
Listing Trial Measures also require subseq uent reports to be filed with the CSRC upon the
occurrence of any of the material events after an issuer has offered and listed securities in an
overseas market, such as (i) change of control; (ii) investigations or sanctions imposed by
overseas securities regulatory agencies or other relevant compe tent authorities; (iii) change
of listing status or transfer of listing segment; (iv) voluntary or mandatory delisting. Where
an issuer’s main business undergoes material changes after overseas offering and listing, and
is therefore beyond the scope of business stat ed in the filing documents, such issuer shall
submit to the CSRC an ad hoc report and a relevant legal opinion issued by a domestic law
firm within three business days after occurrence of the changes.
Furthermore, according to the Overseas Li sting Trial Measures and their related
guidelines, ‘‘Full circulation’’ represents th e shareholders of domestic unlisted shares of
domestic companies, which directly offer and lis t securities in overseas markets, converting
its domestic unlisted shares into shares listed and traded on an overseas trading venue. The
term ‘‘domestic unlisted shares’’ refers to shares offered by a domestic company but not
listed or quoted for trading on any domestic trad ing venues. ‘‘Full circulation’’ shall comply
with relevant regulations of the CSRC and the shareholders of domestic unlisted shares
shall entrust the domestic company to report t he ‘‘Full circulation’’ with CSRC by filing
materials on certain key issues, including wh ether the ‘‘Full circulation’’ has fulfilled
adequate internal decision-making proced ures, necessary inte rnal approvals and
authorisations, and whether the ‘‘Full circulation’’ involves approval or filing procedures
set out in the laws and regulations and policies for state-owned asset administration,
industry supervision and fore ign investment, and if so, whether such approval or filing
procedures have been performed.
Failure to fulfil filing procedures or offer ing and listing securities in an overseas
market in violation of the forgoing prohibitive provisions may subject PRC domestic
companies to order rectification, warnin gs and a fine of RMB1 million to RMB10 million.
Controlling shareholders and actual controlle rs of the domestic company that organise or
instruct the aforementioned violations s hall be imposed a fine of RMB1 million to RMB10
million. Directly liable persons-in-charge an d other directly liable persons shall be each
imposed a fine of RMB0.5 million to RMB5 million.
Furthermore, on 24 February 2023, the CSRC, together with certain other PRC
governmental authorities, promulgated the Provisions on Strengthening Confidentiality
and Archives Administration of Overseas Securities Offering and Listing by Domestic
Companies (the ‘‘Confidentiality and Archives Administration Provisions ’’) (《關於加強境內企
業境外發行證券和上市相關保密和檔案管理工作的規定》), which came into effect on 31
March 2023. According to the Confidentialit y and Archives Administration Provisions,
PRC domestic companies that directly or indirectly conduct overseas offerings and listings,
shall strictly abide by applicable PRC laws and regulations on confidentiality when
providing or publicly disclosi ng, either directly or through t heir overseas listed entities,
documents and materials to securities services providers such as securities companies and
accounting firms or overseas regulators in the p rocess of their overseas offering and listing.
In the event such documents or materials contain state secrets or working secrets of
REGULATORY OVERVIEW
–1 3 7–


--- page 148 ---
government agencies, the PRC domestic companies shall first obtain approval from
competent authorities according to law, and f ile with the secrecy administrative department
at the same level; in the event that such docum ents or materials, if leaked, will jeopardise
national security or public interest, the PRC domestic companies shall strictly fulfil relevant
procedures stipulated by applicable nation al regulations. The PRC domestic companies
shall also provide a written statement of the sp ecific state secrets and sensitive information
provided when providing documents and mater ials to securities companies and securities
service providers, and the securities compan ies and securities service providers shall
properly retain such written statements for inspection. Furthermore, the Confidentiality
and Archives Administration Provisions also provide where overseas securities regulators
and relevant competent overseas authorities request to inspect, investigate or collect
evidence from PRC domestic companies concerning their overseas offering and listing or
their securities firms and securities service pro viders that undertake securities business for
such PRC domestic companies, such inspection, investigation and evidence collection must
be conducted under a cross-border regulatory cooperation mechanism, and the CSRC or
other competent authorities of the PRC government will provide necessary assistance
pursuant to bilateral and multilateral coop eration mechanism. Domestic companies,
securities firms and securities service pro viders shall first obtain approval from the
CSRC or other competent PRC authorities before cooperating with the inspection and
investigation by the overseas securities re gulators or competent overseas authority or
providing documents and materials requested in such inspection and investigation.
REGULATORY OVERVIEW
–1 3 8–


--- page 149 ---
OUR HISTORY
Overview
Our Company was established in March 2017. We acquired Haier Insurance Agency
which has been engaging in the provision of insurance agency services in 2017. Haier
Insurance Agency was permitted to engage in insurance agency business in Shandong
province by CIRC since its establishment in 2001 and was approved to conduct insurance
agency business nationwide in September 2017. In November 2019, our Company was
accredited as a ‘‘High-tech Enterprise’’ ( 高新技術企業) by Science Technology Department
of Qingdao ( 青島市科學技術局), Qingdao Department of Finance ( 青島市財政局)a n d
Qingdao Tax Service of STA ( 國家稅務總局青島市稅務局).
Over our course of development and leveragi ng on our ecosystem, digital capabilities,
diverse insurance client base and insurance p roducts offering and experienced management
team, we have developed as an insurance agency service and solution provider in the PRC
distributing a wide range of insurance product s covering (i) property insurance products,
(ii) life and health insurance products, (iii) ac cident insurance products and (iv) automobile
insurance products, to both corporate and household insurance clients. In 2022, according
to Frost & Sullivan, we ranked 78th among all insurance agencies in China in terms of
insurance business income reported based on the latest China Insurance Yearbook
published by the National Financial Regulatory Administration. During the Track
Record Period, our revenue increased fr om RMB120.0 million in 2021 to RMB174.0
million in 2023, representing CAGR of 20.4% during the same period, and from RMB53.4
million for 4M2023 to RMB58.6 million for 4M2024 and our net profit increased from
RMB27.0 million in 2021 to RMB39.0 million in 2023, representing a CAGR of 20.2%, and
further from RMB13.4 million in 4M2023 to RMB14.8 million in 4M2024. During the
Track Record Period, we had connected with: (i) over 70 insurance companies as our
customers, covering the top three insurance groups in the PRC in terms of market
capitalisation; (ii) insurance agents acros s Shandong, Hebei, Henan and Jilin provinces; and
(iii) 20 strategic channel partners, and we had di stributed insurance products to over 20,000
corporate insurance clients and 368,000 household insurance clients. Our Group has further
developed our business to provide IT services to insurance company partners, insurance
intermediaries and other companies. In view of the insurance clients base we gained from
insurance agency business, the derived cro ss-selling opportunities drove us to provide
consulting services including HR consulting services and marketing and promotion service.
HISTORY AND DEVELOPMENT
–1 3 9–


--- page 150 ---
OUR BUSINESS MILESTONES
The following is a summary of our Group’s key business development milestones:
Year Milestone
2017 We acquired Haier Insurance Agency
Haier Insurance Agency was granted the nationwide Insurance
Intermediary Licence issued by the CBIRC and has been authorised
to conduct insurance agency business in all areas of the PRC.
We began providing insurance agency services to insurance clients
other than Haier Group insurance clients and expanded our insurance
product portfolio to cover life and health insurance products and
accident and automobile insurance products.
We introduced our online platform s, including our ‘‘Quan Zhanggui
(全掌櫃)’’ APP and our WeChat official account.
2018 We completed financing from Qingdao Haichuanghui and raised an
aggregate amount of RMB10.0 million.
We launched our mini programme ‘‘Quan Zhanggui Claim Centre ( 全
掌櫃理賠中心)’’ on the WeChat platform.
2019 We were accredited ‘‘High-tech Enterprise’’ ( 高新技術企業) by Science
Technology Department of Qingdao ( 青島市科學技術局), Qingdao
Department of Finance ( 青島市財政局) and Qingdao Tax Service of
STA ( 國家稅務總局青島市稅務局).
We completed our series A financing from Qingdao Haizhongjie and
raised an aggregate amoun t of RMB10.0 million (the ‘‘ Series A
Financing ’’).
2020 We introduced the ‘‘Online Signing’’ ( 在線簽約)t h a th a st h ef u n c t i o n
for recruitment of insurance agent s and the ‘‘Palm Insurance Policy’’
(掌上保單) that has function for management of insurance policies on
our online platforms.
Zhongmiao Caizhi was established and engaged in the provision of
HR consulting services.
We were awarded ‘‘2020 Qingdao High-tech High-growth Enterprises’’
(2020青島高科技高成長企業) by Qingdao Civil Economics Development
Bureau ( 青島民營經濟發展局), Qingdao Haichuanghui Technology
Co., Ltd. ( 青島海創匯科技有限公司) and Beijing Greatwall Institute
for Enterprise Strategy ( 北京市長城企業戰略研究所).
HISTORY AND DEVELOPMENT
–1 4 0–


--- page 151 ---
Year Milestone
2021 We completed our series B financing from Qingdao Haixinsheng and
Qingdao Haichuangying and raised an aggregate amount of
RMB131.6 million (the ‘‘ Series B Financing ’’).
We were awarded ‘‘Shandong Province Gazelle Enterprise’’ ( 山東省瞪
羚企業) by Ministry of Industry and Information Technology of
Shandong Province ( 山東省工業和信息化廳), Shandong Local
Financial Regulatory Bureau ( 山東省地方金融監督管理局)a n d
Jinan Branch of the People’s Bank of China ( 中國人民銀行濟南分
行) and named on the ‘‘List of 2020 GEI China Potential Unicorn
Enterprise’’ (2020 年GEI中國潛在獨角獸企業名單)b yG r e a t w a l l
Enterprise Institute ( 長城戰略諮詢).
2022 We introduced our Corporate Insurance Interactive Service Platform
(企業保險交互服務平台).
2023 We were awarded ‘‘2022 Qingdao New Economic Potential
Enterprises’’ (2022 年青島市新經濟潛力企業) and ‘‘2023 Municipal
Service Industry Innovative Demonstration Enterprise’’ (2023 年市級
服務業創新型示範企業) by the Development and Reform Commission
of Qingdao ( 青島市發展和改革委員會).
OUR GROUP COMPANIES
Our Company
Establishment of our Company in March 2017
Our Company was established under its former name, Qingdao Quanzhanggui
Technology Co., Ltd. ( 青島全掌櫃科技有限公司), by Qingdao Haiyinghui as a limited
liability company in the PRC on 16 March 2017 with an initial registered capital of
RMB50,000, and was wholly owned by Qingdao Haiyinghui. Our Company has been
primarily engaged in the provision of IT services upon establishment and expanded into the
business of insurance agency business following our acquisition of Haier Insurance Agency
in December 2017 and the business of consulting services over the course of our
development.
Qingdao Haiyinghui was established as a limited liability company in the PRC on 23
February 2017, with its principal business being investment holding. As at the Latest
Practicable Date, it was wholly-owned by Qingdao Haichuanghui Investment, which was
ultimately controlled by Haier Group through Qingdao Haichuanghui IoT.
HISTORY AND DEVELOPMENT
–1 4 1–


--- page 152 ---
Capital Increase in December 2017
On 14 December 2017, the registered capi tal of our Company was increased from
RMB50,000 to RMB56.0 million, which was co ntributed by Qingdao Haiyinghui at a
consideration of RMB58.9 million and for the pur pose of the acquisition of Haier Insurance
Agency. For more details, please refer to the paragraph headed ‘‘Acquisition of Haier
Insurance Agency’’ in this section. Upon completion of the aforesaid capital increase, our
Company remained wholly owne d by Qingdao Haiyinghui.
Capital Increase in May 2018
On 10 May 2018, the registered capital of our Company was increased by RMB24.0
million from RMB56.0 million to RMB80.0 millio n, which was contributed by Shanghai
Zhaoqi at a consideration of RMB25.2 million with reference to, among others, the agreed
valuation of RMB84 million based on the price -to-earnings ratio of our Company agreed
between us and Shanghai Zhaoqi and the revenue of our Group recorded for the year ended
31 December 2017, and future prospects o f our Company. Upon completion of the
aforesaid capital increase, our Company was owned as to 70.00% by Qingdao Haiyinghui
and 30.00% by Shanghai Zhaoqi.
Shanghai Zhaoqi was established as a limit ed partnership in the PRC on 1 February
2018 by employees of our Group as a platform to promote our Group’s long-term
sustainable development by better aligning the employees’ interests with our Group’s
interest. Details on Shanghai Zhaoqi, its partners and the capital contributions attributable
to the partners as at the Latest Practicable Date are set out below:
Partners of Shanghai Zhaoqi Role
Capital
contributions
subscribed
for % of interest
(RMB’000)
Qingdao Haichuang
(1) General partner 10.0 0.20
Mr. Zhang (2) Limited partner 1,570.0 31.40
Beijing Quanzhanggui (3) Limited partner 1,430.0 28.60
Mr. Lu (2) Limited partner 1,360.0 27.20
Mr. Wang (2) Limited partner 250.0 5.00
Ms. Li (2) Limited partner 100.0 2.00
M r .Z h uR o n g w e i(朱榮偉)(4) Limited partner 10.0 0.20
Ms. Wang Yangyang ( 王陽陽)(5) Limited partner 10.0 0.20
Other 9 employees (6) Limited partner 260 5.20
Total 5,000.0 100.00
Notes:
1. Qingdao Haichuang is a company established as a limited liability company in the PRC on 13 October
2017 and is wholly owned by Mr. Lu as at the Latest Practicable Date.
HISTORY AND DEVELOPMENT
–1 4 2–


--- page 153 ---
2. Mr. Zhang, Mr. Lu, Mr. Wang and Ms. Li are our Direct ors. For more details, please refer to the section
headed ‘‘Directors, Supervisors and Senior Management’’ in this prospectus.
3. Beijing Quanzhanggui is a company established as a limited liability company in the PRC on 28 April 2016
and is owned as to 70% by Mr. Zhang and 30% by Li Jia ( 李佳), spouse of Mr. Zhang, as at the Latest
Practicable Date.
4. Mr. Zhu Rongwei ( 朱榮偉) is our Supervisor.
5. Ms. Wang Yangyang ( 王陽陽) is our Supervisor.
6. Each of these employees owns not more than 5% of the interest of Shanghai Zhaoqi.
Capital Increase in October 2018
On 24 October 2018, the registered capital of our Company was increased by RMB8.0
million from RMB80.0 million to RMB88.0 mi llion, which was contributed by Qingdao
Haichuanghui at a consideration of RMB10.0 million with reference to, among others, the
then net assets value and future prospects of our Company. Upon completion of the
aforesaid capital increase, our Company was owned as to 63.64% by Qingdao Haiyinghui,
27.27% by Shanghai Zhaoqi and 9.09% by Qingdao Haichuanghui.
Qingdao Haichuanghui was established as a limited partnership in the PRC on 20
December 2016 and was primarily engaged in investment management. As at the Last
Practicable Date, Qingdao Haichuanghui was owned (i) as to 1.00% by Qingdao
Haichuanghui Venture as the general partner, which is controlled by Haier Group; (ii) as
to 49.50% by Qingdao Haichuanghui Investment as a limited partner which is controlled by
Haier Group; and (iii) as to 49.50% by Qingd ao Ronghai Guotou Equity Investment Fund
Co., Ltd. ( 青島融海國投股權投資基金有限公司)( ‘ ‘Qingdao Ronghai ’’) as a limited partner
which is ultimately controlled by Qingdao Li Cang District State-owned Enterprise Service
Centre ( 青島市李滄區國有企業服務中心)( ‘ ‘Qingdao Li Cang ’’) (an Independent Third
Party). Qingdao Li Cang is a gover nment-affiliated institution ( 事業單位法人)u n d e rt h e
l o c a lp e o p l e ’ sg o v e r n m e n to fL iC a n gD i s t r i c to fQ i n g d a o( ‘ ‘Li Cang Government ’’).
Qingdao Li Cang is a social service organis ation established by the state by utilising
state-owned assets to promote social welfare, as well as serving as an investment platform of
Li Cang Government. Therefore, Qingdao Haic huanghui is ultimately controlled by Haier
Group, both of which are our Controlling Shareholder.
Series A Financing
On 19 September 2019, the registered capital of our Company was increased by
RMB2.9 million from RMB88.0 million to RMB90.9 million, which was contributed by
Qingdao Haizhongjie at a consideration of RMB10.0 million with reference to, among
others, the agreed valuation of RMB300 million b ased on the price-to-earnings ratio of our
Company agreed between us and Qingdao Haizhongjie and the revenue of our Group
recorded for the year ended 31 December 2018, fu ture prospects of our Company, including
the rapid business growth in 2018, and the proposed strategic benefits of motivating the
employees and insurance agents by aligning their interest with our Company through
equity.
HISTORY AND DEVELOPMENT
–1 4 3–


--- page 154 ---
Qingdao Haizhongjie was established as a limited partnership in the PRC on 12 April
2017 by our employees and insurance agents. As at the Latest Practicable Date, the general
partner of Qingdao Haizhongjie is Qingdao Haichuang. For more details on the
background of Qingdao Haizhongjie, please refer to the paragraph headed ‘‘Pre-IPO
Investments’’ in this section.
Upon completion of the capital increase on 24 October 2018 and the aforementioned
Series A Financing on 19 September 2019, the shareholding structure of our Company was
as follows:
Shareholders
Registered
capital
subscribed for
Equity interest
in our Company
(RMB) (%)
Qingdao Haiyinghui 56,000,000 61.58
Shanghai Zhaoqi 24,000,000 26.39
Qingdao Haichuanghui 8,000,000 8.80
Qingdao Haizhongjie 2,933,300 3.23
Total 90,933,300 100.00
Series B Financing
On 4 January 2021, the registered capital of our Company was increased by RMB0.6
million from RMB90.9 million to RMB91.5 mi llion, which was contributed by Qingdao
Haixinsheng at a consideration of RMB5.0 m illion with reference to the valuation of our
Group as at 30 April 2020 based on a valuation report prepared by an independent valuer
based on the approach, the valuation approach of which is considered to be the more
appropriate by the independent valuer in view of our Group’s business nature and our
future business prospects.
On 5 February 2021, the registered capital of our Company was increased by RMB14.4
million from RMB91.5 million to RMB105.9 millio n, which was contributed by Qingdao
Haichuangying at a consideration of RMB126 .6 million with reference to the valuation of
our Group as at 30 April 2020 based on a valuation report prepared by an independent
valuer based on the approach, the valuation approach of which is considered to be the more
appropriate by the independent valuer in view of our Group’s business nature and our
future business prospects. For more details on the background of Qingdao Haixinsheng and
Qingdao Haichuangying, please refer to the paragraph headed ‘‘Pre-IPO Investments’’ in
this section.
HISTORY AND DEVELOPMENT
–1 4 4–


--- page 155 ---
Upon completion of the Series B Financing on 5 February 2021, the shareholding
structure of our Company was as follows:
Shareholders
Registered
capital
subscribed for
Equity interest
in our Company
(RMB) (%)
Qingdao Haiyinghui 56,000,000 52.88
Shanghai Zhaoqi 24,000,000 22.66
Qingdao Haichuangying 14,394,000 13.59
Qingdao Haichuanghui 8,000,000 7.56
Qingdao Haizhongjie 2,933,300 2.77
Qingdao Haixinsheng 568,300 0.54
Total 105,895,600 100.00
Our Subsidiaries
Since the establishment of our Company in 2017, we have sought to expand our
presence in the PRC and further our business development. We have acquired or established
various subsidiaries to (i) manage and expand our sales network; and (ii) explore new
insurance-related business.
The details of our subsidiaries are set out as follows:
No. Company Name
Date of
Establishment
Place of
Establishment Principal Activity
1. Haier Insurance Agency 17 December 2001 PRC Insurance agency
services
2. Zhongmiao Caizhi 11 Septe mber 2020 PRC HR consulting
services
3. Yunhai Lianji
Technology
16 August 2021 PRC Advisory services
4. Zhongmiao Shujin 31 December 2021 PRC Investment holding
OUR CORPORATE HISTORY AND DEVELOPMENT
Acquisition of Haier Insurance Agency
Haier Insurance Agency was established a s a limited liability company in the PRC on
17 December 2001 with an initial registered capital of RMB6.0 million. Upon its
establishment, Haier Insurance Agency was a n indirect wholly-own subsidiary of Haier
Group. Haier Insurance Agency primarily engages in providing insurance agency services.
HISTORY AND DEVELOPMENT
–1 4 5–


--- page 156 ---
It was permitted to engage in insurance agency business in Shandong province by CIRC
since its establishment and obtained its nat ionwide Insurance Inte rmediary Licence on 15
September 2017, pursuant to which it has been approved to conduct insurance agency
business nationwide. On 11 May 2017, Mr. Lu was approved by the Qingdao Regulatory
Bureau of the CIRC to serve as the general manager of Haier Insurance Agency.
On 22 December 2017, our Company acquired the entire equity interest of Haier
Insurance Agency from Qingdao Haier V enture Capital Consulting Co., Ltd. ( 青島海爾創業
投資諮詢有限公司), a wholly-owned subsidiary of Haier Group, at a consideration of
RMB58.8 million, which was determined with reference to a valuation report of Haier
Insurance Agency and the additional registe red capital of RMB44.0 million issued by Haier
Insurance Agency in April 2017. The considera tion was fully settled on 20 December 2017,
and Haier Insurance Agency has been our wholly -owned subsidiary since the completion of
the aforesaid acquisition.
Establishment of Zhongmiao Caizhi
Zhongmiao Caizhi was established as a limited liability company in the PRC on 11
September 2020 with a registered capital o f RMB2.0 million. Since its establishment,
Zhongmiao Caizhi has been wholly owned by our Company and has been principally
engaged in providing HR consulting services.
Establishment of Yunhai Lianji Technology
During the Track Record Period, we started t o expand our insurance agency business
by setting up branch offices in Hebei province under Haier Insurance Agency and explore
business opportunities including provision of corporate management and training services.
Over the course of development of our Hebei business, we recognised the importance of
local expertise and connections in effectively penetrating new markets and therefore decided
to set up Yunhai Lianji Technology with Hebei Zhongbao in order to capture the business
opportunities in Hebei province. Hebei Zhongbao is a limited partnership established in the
PRC on 7 July 2021, which is owned as to 28.00% by Yuan Hailian ( 袁海蓮)a sg e n e r a l
partner and 15.00% by each of Yang Baowei ( 楊寶偉)a n dZ h a oC u i h o n g(趙翠紅)( Y u a n
Hailian, Yang Baowei and Zhao Cuihong, collectively the ‘‘ Core Hebei Partners ’’), 12.00%
by each of Liu Chenguang ( 劉晨光), Liu Tonggang ( 劉銅鋼)a n dG a oQ u n( 高群)a n d6 . 0 0 %
by Wang Yanqiu ( 王艷秋) as limited partners. Each of the Core Hebei Partners has over 15
years of experience in the insurance industry in Hebei province, and we considered that the
expertise, experience and business network of the Core Hebei Partners, combined with their
deep understanding of the local market dynamics, allow them to provide valuable insights
and advice to our Group in order to capture the business opportunities in Hebei province.
By leveraging their advisory services, we may identify growth opportunities and navigate
challenges and barriers arising from our business expansion in Hebei province. The Core
Hebei Partners subsequently became employees of our Group and are responsible for the
business development of our insurance agency business in Hebei province. We believe that
they can actively contribute to our business o p e r a t i o ni nH e b e ip r o v i n c ea n dw o r kc l o s e l y
with our management team to develop and implement effective business strategies.
HISTORY AND DEVELOPMENT
–1 4 6–


--- page 157 ---
Moreover, the joint venture can fully align t heir interests and effo rts with our business
plans, and the alignment of interest and expertise creates a strong foundation for the joint
venture and enhances the chances of achieving mutual success.
Under this background, Yunhai Lianji Technology was established as a limited
liability company in the PRC on 16 August 2 021 with an initial registered capital of
RMB3.0 million and was held as to 51.00% by our Company and 49.00% by Hebei
Zhongbao. While it was initially anticipated that Yunhai Lianji Technology would provide
intra group advisory services to Hebei branch offices of Haier Insurance Agency and other
advisory services to other third party companies in Hebei province, Yunhai Lianji
Technology experienced delay in the development of advisory services to other third party
companies, primarily due to the impact of the COVID-19 pandemic, which had disrupted
many businesses globally and caused us to re-evaluate the market conditions and the
development plans of Yunhai Lianji Technology in light of the post-pandemic market
situation. As a result, Yunhai Lianji Technology had only commenced a limited scope of
business on the provision of advisory serv ices to our branch offices in Hebei province
during the Track Record Period. As at the Latest Practicable Date, Yunhai Lianji
Technology’s assets mainly included the capital contribution made by our Group and Hebei
Zhongbao and did not have liabilities other th an amount due to Haier Insurance Agency.
On 11 March 2022, our Company transferred our entire equity interest in Yunhai
Lianji Technology to Zhongmiao Shujin. Upon completion of the aforesaid transfer,
Yunhai Lianji Technology has become an indirect non-wholly owned subsidiary of our
Company and was owned as to 51.00% by Zhongmiao Shujin and 49.00% by Hebei
Zhongbao.
Establishment of Zhongmiao Shujin
Zhongmiao Shujin was established as a limited liability company in the PRC on 31
December 2021 with a registered capita l of RMB10.0 million. Zhongmiao Shujin is
primarily engaged in the investment holdin g and has been wholly owned by our Company
since its establishment.
Conversion into a Joint Stock Company with Limited Liability
Pursuant to the shareholders’ resolution and the promoters’ agreement dated 6 March
2023, the then shareholders of our Company agreed to convert our Company into a joint
stock company with limited liability with a registered capital of RMB105,895,600
(105,895,600 shares with a nominal value of RMB1.0 each).
Upon completion of the registration with the Qingdao Municipal Administration for
Market Regulation ( 青島市市場監督管理局) on 14 March 2023, our Company was renamed
as Zhongmiao Innovation Technology (Qingdao) Co., Ltd. ( 眾淼創新科技（青島）股份有限
公司). The then shareholders and their respectiv e equity interest in our Company remained
unchanged immediately before and after the conversion of our Company into a joint stock
company with limited liability.
HISTORY AND DEVELOPMENT
–1 4 7–


--- page 158 ---
On 17 June 2024, our Company was renamed as Zhongmiao Holdings (Qingdao) Co.,
Ltd. ( 眾淼控股（青島）股份有限公司).
VOTING RIGHTS ENTRUSTMENT AGREEMENT WITH QINGDAO HAICHUANGKE
As at the Latest Practicable Date, Qingdao Haichuanghui IoT was held as to 51.20%
by Haier Group and 48.80% by Qingdao Haich uangke. Qingdao Haichuangke is a limited
partnership established in the PRC on 16 September 2014, with corporate management
consulting, business information consulting and investment management consulting as its
principal business activities. As at the Lat est Practicable Date, the general partner of
Qingdao Haichuangke was controlled by Mr. Zhang Ruimin, one of the founders of Haier
Group.
In the view of optimising the corporate governance structure of Qingdao
Haichuanghui IoT and further enhancing the consistency of the overall development
strategy of the relevant parties, Haier Group and Qingdao Haichuangke entered into a
voting rights entrustment agreement whereby the entire voting rights of Qingdao
Haichuanghui IoT has been entrusted to Haier Group, on 18 December 2023 (i.e. date of
incorporation of Qingdao Haichuanghui IoT) . As such, Haier Group is entitled to exercise
the entire 100% voting rights in Qingdao Haichuanghui IoT through its indirect interest
and an irrevocable voting righ ts entrustment arrangement.
The salient terms of the voting rights en trustment agreement are as follows:
Voting rights
entrustment:
Qingdao Haichuangke, the general partner of which was
controlled by Mr. Zhang Ruimin, has irrevocably entrusted
Haier Group to exercise all the voting rights corresponding
to 48.80% of Qingdao Haichuanghui IoT’s shares held by it
(the ‘‘Target Shares ’’)
During the term, Haier Group has the right to exercise the
following rights corresponding to the Target Shares in
accordance with the articles of association of Qingdao
Haichuanghui IoT:
(i) convene and attend Qingdao Haichuanghui IoT’s
shareholders’ meeting; and
(ii) exercise the voting rights on all matters that require
discussions and resolutions at the shareholders’
meeting in accordance with the relevant laws or the
articles of association of Qingdao Haichuanghui IoT
The voting rights entrustment is not subject to any
exceptions
HISTORY AND DEVELOPMENT
–1 4 8–


--- page 159 ---
Changes in Target
Shares:
If the number of shares held by Qingdao Haichuangke
decreases, it will not affect th e voting rights entrustment
arrangements with respect to the remaining Target Shares;
and if the number of shares held by Qingdao Haichuangke
increases, the voting rights entrustment arrangements shall
apply to the new shares held by Qingdao Haichuangke
unless both parties agree otherwise
Term: From the effective date of the agreement until all of the
Target Shares have been disposed by Qingdao Haichuangke
Termination: (i) In the event of the following and upon written request
of Qingdao Haichuangke:
a. Serious breach of laws and regulations and serious
breach of the articles of association of Qingdao
Haichuanghui IoT by Haier Group
b. Any act of Haier Group to the material detriment
of Qingdao Haichuanghui IoT or Qingdao
Haichuangke
(ii) As mutually agreed by both parties
Right to dividends: This agreement shall not affect the right to dividend entitled
by Qingdao Haichuangke
Restriction(s): During the term, Qingdao Haichuangke shall not dispose of
the Target Shares (including transferring or establishing
pledges on the Target Shares, etc.) without prior written
c o n s e n to fH a i e rG r o u p
HISTORY AND DEVELOPMENT
–1 4 9–


--- page 160 ---
PRE-IPO INVESTMENTS
Overview of the Pre-IPO Investments
Our Company obtained several rounds of investments from the Pre-IPO Investors
through subscriptions for new registered capital of our Company between September 2019
and February 2021. For more details, please refer to the paragraphs headed ‘‘Our Group
Companies — Our Company — Series A Financin g’’ and ‘‘— Series B Financing’’ in this
section.
The principal terms and details of the Pre-IPO Investments are set out below:
Series A Financing Series B Financing
Investors Qingdao Haizhongjie Qingdao Haixinsheng Qingdao Haichuangying
Date of agreement (and
supplemental agreement):
6 September 2019
(as supplemented by
supplemental agreements
dated
6S e p t e m b e r2 0 1 9a n d1 7
March 2023)
20 May 2020
(as supplemented by
supplemental
agreements dated 20
May 2020 and 17
March 2023)
16 January 2021 (as
supplemented by a
supplemental
agreement dated 17
March 2023)
Consideration: RMB10.0 million RMB5.0 million RMB126.6 million
Date of full settlement of
consideration:
18 January 2023
(Note 1) 23 December 2020 28 January 2021
Basis of determination of
consideration:
The consideration was
determined with reference
to, among others, the
agreed valuation based on
the price-to-earnings ratio
of our Company agreed
between us and Qingdao
Haizhongjie and the
revenue of our Group
recorded for the year
ended 31 December 2018,
the future prospects of
our Company including
the rapid business growth
in 2018, and the proposed
strategic benefits of
motivating the employees
and insurance agents by
aligning their interest with
our Company through
equity.
The consideration was determined with reference to
the valuation of our Group as at 30 April 2020
b a s e do nav a l u a t i o nr e p o r tp r e p a r e db ya n
independent valuer, which was considered to be
the more appropriate by the independent valuer in
view of our Group’s business nature and our
future business prospects.
HISTORY AND DEVELOPMENT
–1 5 0–


--- page 161 ---
Series A Financing Series B Financing
Investors Qingdao Haizhongjie Qingdao Haixinsheng Qingdao Haichuangying
Cost per Share: Approximately RMB3.41
(equivalent to HK$3.73)
Approximately RMB8.80
(equivalent to
HK$9.64)
Approximately
RMB8.80
(equivalent to
HK$9.64)
Discount/(premium) to the
mid-point of the indicative
Offer Price range:
Approximately 56.63%
(Note 2)
Approximately
(12.09)% (Note 2)
Approximately
(12.09)% (Note 2)
Shareholding in our Company
immediately after the
Pre-IPO Investment but
before the Global Offering:
Approximately 2.77% Approximately 0.54% Approximately 13.59%
Shareholding in our Company
immediately after
completion of the Global
Offering:
Approximately 2.08% Approximately 0.40% Approximately 10.20%
Notes:
1. Having considered that the investment by Qin gdao Haizhongjie is made by our core employees and
insurance agents and without affecting the norma l operation and liquidity of our Group, more time
was given to Qingdao Haizhongji e for collection of fund for the investment and the relevant
consideration had been fully settled immediatel y prior to our conversion into a joint stock company
in March 2023.
2. The original agreement for Series A Financing was signed in September 2019. As such, the
consideration was determined with reference t o the agreed valuation of our Group of approximately
RMB300 million, taking into acc ount, among others, the then latest available financial information
for the year ended 31 December 2018. On the other hand, the original agreement for Series B
Financing was signed in May 2020 and January 2021 respectively. As such, the consideration was
determined with reference to the valuation of our Group of RMB790 million based on a valuation
report prepared by an independent valuer, taking to account, among others, t he then latest available
financial information for the year ended 31 Decem ber 2019 and the four months ended 30 April 2020
and the business prospects of our Group. Since our Group recorded a substantial growth in revenue
from 2018 to 2019, the valuation for Series B Financing is higher that than of Series A, and that
discount to the mid-point of the indicative Offe r Price range of Qingdao Haizhongjie under Series A
Financing is 56.63% and premium to the mid-point of the indicative Offer Price range of Qingdao
Haixinsheng and Qingdao Haichuangyi ng under Series B Financing is 12.09%.
HISTORY AND DEVELOPMENT
–1 5 1–


--- page 162 ---
Strategic benefits to our
Company:
At the time of the Pre-IPO Investments, our Directors were of
the view that (i) our Company would benefit from the additional
capital provided by the Pre-IPO Investors and their knowledge
and experience; and (ii) the Pre-IPO Investments demonstrated
the Pre-IPO Investors’ confidence in the operation and
development of our Group.
Lock-up: All existing Shareholders (including the Pre-IPO Investors) shall
not dispose of any of the Shares held by them within the 12
months following the Listing as required under the applicable
PRC law. Each registered Shareholder of our Company (i.e.
Qingdao Haichuanghui, Qingdao Haichuangying, Qingdao
Haixinsheng, Qingdao Haiyinghui, Qingdao Haizhongjie and
Shanghai Zhaoqi) has respectively issued an undertaking on 25
May 2023 in accordance with the PRC Company Law,
confirming that they will not transfer or require the Company
to repurchase the Shares held by them within the 12 months
following the Listing.
Use of proceeds: The proceeds are intended to be used to support the working
capital needs of our Group. As at the Latest Practicable Date,
the net proceeds received by us from the Pre-IPO Investments
had not been fully utilised.
Public float: All Shares held by the Pre-IPO Investors will not be counted
towards the public float for the purpose of the Listing Rules, as
(i) Qingdao Haichuang, which is wholly owned by Mr. Lu, our
executive Director, is the general partner of each of Qingdao
Haizhongjie and Qingdao Haixinsheng, and (ii) Qingdao
Haichuangying is expected to be a substantial shareholder
immediately after completion of the Global Offering.
Each of the Pre-IPO Investors had been gran ted certain special rights relating to our
Company by our Company and/or certain Shareholders, including but not limited to
pre-emption rights and repurchase rights, all of which ceased to be effective on 17 March
2023 when we entered into supplemental agr eements with each of the Pre-IPO Investors.
Information about the Pre-IPO Investors
Qingdao Haizhongjie
Qingdao Haizhongjie was established as a limited partnership in the PRC on 12 April
2017. As at the Latest Practicable Date, Qingdao Haizhongjie was owned as to 0.10% by
Qingdao Haichuang as its general partner, as to 53.10% by Qingdao Yunmiaoyue
Management Consulting Partne rship (Limited Partnership) ( 青島雲淼岳管理諮詢合夥企業)
(‘‘Qingdao Yunmiaoyue ’’) (owned as to 0.0021% by Qingdao Haichuang as its general
partner and 99.9979% by 33 employees of our Group at the material time as its limited
HISTORY AND DEVELOPMENT
–1 5 2–


--- page 163 ---
partners) and 46.80% by 29 individuals as its limited partners. These individual partners of
Qingdao Haizhongjie and Qingdao Yunmiaoyue include our employees and insurance
agents at the material time, and each of them ultimately owns less than 10% of the
partnership interest of Qingdao Haizhongjie. Qingdao Haizhongjie decided to invest in our
Group as Qingdao Haizhongjie was optimistic in our growth potential and future business
prospects. By investing our Company through Qingdao Haizhongjie, which holds/will hold
approximately 2.77% and 2.08% of the total i ssued share capital of our Company as at the
Latest Practicable Date and immediatel y after completion of the Global Offering
respectively, the employees and insurance agents, being the ultimate beneficial owners of
Qingdao Haizhongjie, are able to enjoy the increase in the value of our Company, in form of
Qingdao Haizhongjie’s entitlement to our Company’s dividends and the enhanced market
value of our Shares held by Qingdao Haizhongjie. Accordingly, our Directors believe that
the employees and insurance agents would devote more time and resources for the business
growth of our Company as a whole in the expected return of the aforesaid personal gain and
that the investment from Qingdao Haizhongjie has contributed greater motivation for the
employees and insurance agents by aligning their interest with us through equity and the
materialisation of such benefits can be proved by the high retention rate of over 95% of
these employees and insurance agents as at th e Latest Practicable Date and the outstanding
business performance achieved by some of them. For instance, two of our employees, each
holding approximately 1.00% indirect interest in Qingdao Haizhongjie, generated an
aggregate GWP of approximately RMB34.5 m illion in 2023 and two insurance agents, each
holding approximately 3.5% and 0.5% interes t in Qingdao Haizhongjie, generated, along
with their teams an aggregate GWP of RMB6.3 million in 2023. In addition, our Company
would benefit from the additional capital from their investment and it could also help to
promote our Group’s long-term sustainable development by better aligning selected
individuals’ interests with our interest. Deta ils on Qingdao Haizhongjie, its partners and the
capital contributions attribut able to the partners as at the La test Practicable Date are set
out below:
Partners of Qingdao Haizhongjie Role
Capital
contributions
subscribed for
%o f
interest
(RMB’000)
Qingdao Haichuang
(1) General partner 10.0 0.10
Qingdao Yunmiaoyue (2) Limited Partner 5,310.0 53.10
Other 23 employees and insurance agents (3) Limited partner 2,950.0 29.50
Fei Hongxia ( 費紅霞)(4) Limited partner 900.0 9.00
Yuan Hailian ( 袁海蓮)(5) Limited partner 200.0 2.00
Zhao Cuihong ( 趙翠紅)(5) Limited partner 200.0 2.00
Liu Tonggang ( 劉銅鋼)(5) Limited partner 200.0 2.00
Yang Baowei ( 楊寶偉)(5) Limited partner 150.0 1.50
Wang Yanqiu ( 王艷秋)(5) Limited partner 80.0 0.80
Total 10,000.0 100.00
HISTORY AND DEVELOPMENT
–1 5 3–


--- page 164 ---
Notes:
1. Qingdao Haichuang is a company established as a limited liability company in the PRC on 13 October
2017 and is wholly owned by Mr. Lu as at the Latest Practicable Date.
2. Qingdao Yunmiaoyue is a limited partnership esta blished in the PRC on 20 April 2023 and is owned by
Qingdao Haichuang as to 0.0021% as its general partner. As at Latest Practicable Date, the limited
partners of Qingdao Yunmiaoyue are 33 individuals, among which 11.30%, 9.42%, 7.34% and 5.64% of
the partnership interest were held by Gao Hui ( 高暉), Zhang Yanxin ( 張艷新), Mr. Wang and Zhang
Chunjian ( 張春劍), respectively, and other 29 individuals incl uding employees at the material time, each of
whom owns not more than 5% of the partnership in terest of Qingdao Yunmiaoyue, including Zhu
Rongwei and Wang Yangyang each holding 1.88% of the partnership interest.
3. Each of these individuals are our employees and ins urance agents at the mater ial time who owns not more
than 5% of the partnership interest of Qingdao Haizhongjie.
4. Fei Hongxia ( 費紅霞) is our employee.
5. Yuan Hailian ( 袁海蓮), Zhao Cuihong ( 趙翠紅), Liu Tonggang ( 劉銅鋼), Yang Baowei ( 楊寶偉) and Wang
Yanqiu ( 王艷秋) owns 28.00%, 15.00%, 12.00%, 15.00% and 6.00% equity interest in Hebei Zhongbao,
respectively, which in turn owns 49% equity inte rest in Yunhai Lianji Technology, all of who are
employees of our Group.
Qingdao Haixinsheng
Qingdao Haixinsheng was established as a limited partnership in the PRC on 16 April
2020 and was owned as to 99.80% by Yang Yimin ( 楊宜民)( ‘ ‘Mr. Yang ’’) as its limited
partner and 0.20% by Qingdao Haichuang as its general partner as at the Latest Practicable
Date. Mr. Yang is an entrepreneur operating his own insurance adjustment company. With
his over 15 years of experience in the insurance adjustment industry, Mr. Yang is also
experienced in the insurance intermediary industry in the PRC. With the understanding of
the importance of the intermediary role of insurance adjusters in the industry, the Company
commenced to contact insurance adjustment co mpanies since 2020 for establishing network
and became acquainted with Mr. Yang under such circumstances. Mr. Yang decided to
invest in our Group as he is optimistic in our growth potential, future business prospects
and the industry in general. Our Directors believe that Mr. Yang’s over 15 years of
experience in the insurance adjustment indu stry can provide us with valuable experience
and insights and may assist our Group in expanding our reach to larger population of
insurance clients. To the best knowledge and belief of our Directors and having made all
reasonable enquiries, Mr. Yang is an Independent Third Party.
Qingdao Haichuangying
Qingdao Haichuangying was established by employees of Haier Group at the material
time as a limited partnership in the PRC on 3 December 2020 and is principally engaged in
investment in equity investment. Qingdao Haichuangying decided to invest in our Group as
Qingdao Haichuangying was optimistic in our growth potential and future business
prospects. Our Directors believe that the investment amount made by Qingdao
Haichuangying allows our Group to carry out selective investments and acquisitions in
insurance intermediary and finance technology industry to further accelerate the
HISTORY AND DEVELOPMENT
–1 5 4–


--- page 165 ---
development of our Group’s business and strengthen our competitiveness. Due to the
outbreak of COVID-19, such benefit has not been materialised and is expected to be
materialised after Listing.
The table below sets forth the shareholdin g of Qingdao Haichuangying as at the Latest
Practicable Date:
Shareholders of Qingdao Haichuangying Role
%o f
interest
Qingdao Haizhi Huiying Equity Investment Management
Co., Ltd. ( 青島海智匯贏股權投資管理有限公司)
(‘‘Qingdao Haizhi Huiying ’’)
(1)
General Partner 0.50
Qingdao Haichuangying No. 4 Management Consulting
Enterprise (Limited Partnership) ( 青島海創贏肆管理諮
詢企業（有限合夥）)( ‘ ‘Haichuangying No. 4 ’’)(2)
Limited Partner 29.61
Qingdao Haichuangying No. 1 Management Consulting
Enterprise (Limited Partnership) ( 青島海創贏壹管理諮
詢企業（有限合夥）)( ‘ ‘Haichuangying No. 1’’ )(2)
Limited Partner 27.64
Qingdao Haichuangying No. 2 Management Consulting
Enterprise (Limited Partnership) ( 青島海創贏貳管理諮
詢企業（有限合夥）)( ‘ ‘Haichuangying No. 2 ’’)(2)
Limited Partner 21.32
Qingdao Haichuangying No. 5 Management Consulting
Enterprise (Limited Partnership) ( 青島海創贏伍管理諮
詢企業（有限合夥）)( ‘ ‘Haichuangying No. 5 ’’)(2)
Limited Partner 13.03
Qingdao Haichuangying No. 3 Management Consulting
Enterprise (Limited Partnership) ( 青島海創贏叁管理諮
詢企業（有限合夥）)( ‘ ‘Haichuangying No. 3 ’’)(2)
Limited Partner 7.90
Total 100.00
Notes:
1. Qingdao Haizhi Huiying is a limited liability c ompany established in the PRC on 18 July 2017 and is
owned by Zhang Ruimin ( 張瑞敏), who is one of the founders of Haier Group, as to 51.10% and owned by
each of three individuals as to 16.30%, a ll of which are employees of Haier Group.
2. Each of Haichuangying No. 1, Haichuangying No. 2 , Haichuangying No. 3, Haichuangying No. 4 and
Haichuangying No. 5 is limited partnership establ ished in the PRC in 2020 with Qingdao Haichuangying
Management Consulting Co., Ltd. ( 青島海創贏管理諮詢有限公司) as the general partner, which is in turn
controlled by Zhang Ruimin ( 張瑞敏)a sa tt h eL a t e s tP r a c t i c a b l eD a t e .
HISTORY AND DEVELOPMENT
–1 5 5–


--- page 166 ---
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
and endorsement of the performance, management and prospects of our Group.
Compliance with Pre-IPO Investment Guidance
Based on (i) the consideration for the Pre- IPO Investments has been settled more than
28 clear days before the date of our first submission of the listing application to the Stock
Exchange; and (ii) all the special rights granted to the Pre-IPO Investors have been
terminated with immediate effect, the Joint Sp onsors confirm that the Pre-IPO Investments
are in compliance with Chapter 4.2 of the Guide.
COMPLIANCE WITH PRC LAWS AND REGULATIONS
All the abovementioned capital increases and equity transfers of our Company and our
subsidiaries are effective, legally complete d, duly settled and in compliance with the PRC
laws and regulations, and all permits, authorisations, approvals and consents necessary for
the above transactions have been obtained from the relevant PRC governmental
authorities.
PUBLIC FLOAT
So far as our Directors are aware, immediately following the completion of the Global
Offering (assuming the Over-allotment Option is not exercised), the Shares held by our core
connected persons, representing 75.00% of the total issued share capital of our Company,
will not be counted towards the public float for the purpose of Rule 8.08 of the Listing
Rules after the Global Offering. Details of these core connected persons are set out below:
. Qingdao Haiyinghui and Qingdao Hai chuanghui, being our Controlling
Shareholders, are core connected persons of our Company, holding
approximately 39.66% and 5.67% of the total issued share capital of our
Company;
. Shanghai Zhaoqi and Qingdao Haichuangying, being our substantial
shareholders, are core connected persons of our Company, holding
approximately 17.00% and 10.19% of the total issued share capital of our
Company; and
. Qingdao Haizhongjie and Qingdao Haixin sheng, being the close associates of Mr.
Lu, our executive Director, by virtue of Qingdao Haichuang, which is wholly
owned by Mr. Lu, being the general partner of each of Qingdao Haizhongjie and
Qingdao Haixinsheng. Qingdao Haizh ongjie and Qingdao Haixinsheng are core
connected persons of our Company, holding approximately 2.08% and 0.40% of
the total issued share capital of our Company.
As such, the public float shareholding immediately following the completion of the
Global Offering (assuming Ov er-allotment Option is not exercised) is 25.00%.
HISTORY AND DEVELOPMENT
–1 5 6–


--- page 167 ---
CORPORATE STRUCTURE
Corporate Structure as at the Latest Practicable Date
The following chart sets forth our corporate structure as at the Latest Practicable
Date:
52.88% 22.66% 0.54% 2.77% 13.59%
100% 100% 100%
51.00%
7.56%
100% 49.50% 1.00%(4)
100%
100%
100%
100%
Our Company
Haier Insurance
Agency Zhongmiao Caizhi Zhongmiao Shujin
Yunhai Lianji
Technology(12)
Qingdao
Haiyinghui
Shanghai
Zhaoqi(6)(7)
Qingdao
Haixinsheng(6)(8)(9)
Qingdao
Haizhongjie(6)(9)(10)
Qingdao
Haichuangying (9)(11)
Qingdao
Haichuanghui
Qingdao
Haichuanghui IoT
Qingdao
Haichuanghui
Investment
Haichuanghui
Holding
Ningbo Meishan
Qingdao
Haichuanghui
Venture
51.20%48.80%
Haier Group(1)(5)Qingdao
Haichuangke(3)
(2)
Notes:
1. According to the articles of association of Haier Group, the nature of Haier Group is an urban
collectively-owned enterprise. The property of Hai er Group is collectively owned by the working masses,
subject to joint work, with distribution according to w ork as the principal distribution method. In light of
its enterprise nature, Haier Group has no shareholder. According to the articles of association of Haier
Group, without the approval of the relevant decisi on-making power organ of Haier Group, no entity or
individual has the right to dispose of, occupy such collective properties or infringe on the relevant
legitimate rights and interests of the collective properties in any ot her ways. The employee assembly ( 職工
代表大會) is the highest power organ of Haier Group, which enjoys the power to elect and dismiss
management personnel, decide on Haier Group’s articl es of association, the profits distribution plan for
Haier Group’s employees and other major issue s in Haier Group’s operation and management.
HISTORY AND DEVELOPMENT
–1 5 7–


--- page 168 ---
2. On 18 December 2023 (i.e. date of incorporation of Qingdao Haichuanghui IoT), Haier Group and
Qingdao Haichuangke entered into a voting rights entr ustment agreement whereby the entire voting rights
of Qingdao Haichuanghui IoT has been entrusted t o Haier Group. As at the Latest Practicable Date,
Haier Group holds 51.20% of the equity interest of Qi ngdao Haichuanghui IoT, and is also entitled to
exercise the remaining 48.80% voting rights in Qingda o Haichuanghui IoT through an irrevocable voting
rights entrustment arrangement. As at the Latest Practicable Date, Qingda o Haichuanghui IoT holds
100% of Qingdao Haichuanghui Investment an d in turn holds 100% of Qingdao Haiyinghui.
3. As at the Latest Practicable Date, Qingdao Haichua ngke is ultimately controlled by Mr. Zhang Ruimin,
one of the founders of Haier Group.
4. As at the Latest Practicable Date, Qingdao Haichuanghui is owned as to 1.00% by Qingdao Haichuanghui
Venture as the general partner and 49.5% by Qingda o Haichuanghui Investment as a limited partner.
Therefore, as at the Latest Practicable Date, Qingdao Haichuanghui was held, directly or indirectly, as to
(i) 50.5% in aggregate by Qingdao Haichuanghui Invest ment, which is ultimately controlled by Haier
Group, and (ii) 49.5% by Qingdao Ronghai, which i s ultimately controlled by Qingdao Li Cang, an
Independent Third Party. Qingdao Li Cang is an government-affiliated institution ( 事業單位法人) under
the Li Cang Government. Qingdao Li Cang is a social service organisation established by the state by
utilising state-owned assets to promote social welfa re, as well as serving as an investment platform of Li
Cang Government.
Despite Qingdao Ronghai has an interest in our Company through its 49.5% interest in Qingdao
Haichuanghui along with Haier Group, Qingdao Rongha i and its beneficial owners (Qingdao Ronghai
Capital and Qingdao Li Cang) (Qingdao Ronghai Capital and Qingdao Li Cang together with Qingdao
Ronghai, collectively ‘‘ Li Cang Organisation ’’) are not considered as part of our Controlling Shareholders
in the circumstance of the case. For th e detailed analysis, please refer to t he section headed ‘‘Relationship
with Our Controlling Shareholde rs — Our Controlling Shareholders — Li Cang Organisation not
considered as our Controlling Sha reholders’’ in this prospectus.
5. As at the Latest Practicable Date, Haier Group was entitled to exercise the voting rights attached to
approximately 60.44% of the tota l issued share capital of our Company through Qingdao Haichuanghui
IoT, Qingdao Haichuanghui Investment, Haic huanghui Holding, Ningbo Meishan, Qingdao
Haichuanghui Venture, Qingdao Hai yinghui and Qingdao Haichuanghui.
6. As at the Latest Practicable Date, Shanghai Zhaoqi , Qingdao Haizhongjie and Qingdao Haixinsheng were
owned as to 0.20%, 0.10% and 0.20% by Qingdao Haichua ng, respectively, being their general partner.
Qingdao Haichuang is a company established as a lim ited liability company in the PRC on 13 October
2017 and is wholly owned by Mr. Lu as at the Latest Pra cticable Date. As such, all of Shanghai Zhaoqi,
Qingdao Haizhongjie and Qingdao Haixins heng are ultimately controlled by Mr. Lu.
7. Shanghai Zhaoqi is a limited partnership which i s owned by Mr. Lu, Mr. Zhang, Ms. Li, Mr. Wang, Mr.
Zhu Rongwei ( 朱榮偉), Wang Yangyang, Beijing Quanzhanggui and other 9 employees as its limited
partners (as to 27.20%, 31.40%, 2.00%, 5.00%, 0. 20%, 0.20%, 28.60% and 5.20%), all of whom are our
employees and as to 0.20% by its general partner being Qingdao Haichuang, a limi ted liability company
wholly owned by Mr. Lu.
8. Qingdao Haixinsheng is a limited partners hip which is owned as to 99.8% by Yang Yimin ( 楊宜民)a st h e
limited partner and as to 0.2% by Qingdao Haichuang as its general partner, a limited liability company
wholly owned by Mr. Lu.
9. Qingdao Haichuangying, Qingdao Haizhongjie and Qi ngdao Haixinsheng are our Pre-IPO Investors. For
more details, please refer to the paragraph hea ded ‘‘Pre-IPO Investments’’ in this section.
HISTORY AND DEVELOPMENT
–1 5 8–


--- page 169 ---
10. Qingdao Haizhongjie was establis hed as a limited partnership which is owned as to 53.10% by Qingdao
Yunmiaoyue (owned as to 0.0021% by Qingdao Haichuang as its general partner and 99.9979% by 33
employees of our Group at the material time as its limi ted partners) and 46.80% by 29 individuals as its
limited partners, all of whom are our employees and insurance agents, and as to 0.10% by its general
partner, Qingdao Haichuang, a limited l iability company wholly owned by Mr. Lu.
11. As at the Latest Practicable Date, Qingdao Haichuangying is owned as 29.61% by Haichuangying No. 4,
27.64% by Haichuangying No. 1, 21.32% by Haic huangying No. 2, 13.03% by Haichuangying No. 5,
7.90% by Haichuangying No. 3 as limited partners, and 0.5% by Qingdao Haizhi Huiying as its general
partner. Qingdao Hai zhi Huiying is owned by Mr. Zhang Ruimin ( 張瑞敏), who is one of the founders of
Haier Group, as to 51.10% and owned by each of three individuals as to 16.30%, all of which are
employees of Haier Group. Each of Haichuangying No . 1, Haichuangying No. 2, Haichuangying No. 3,
Haichuangying No. 4 and Haichuangying No. 5 is limited partnership established in the PRC in 2020 with
Qingdao Haichuangying Management Consulting Co., Ltd. ( 青島海創贏管理諮詢有限公司) as the general
partner, which is in turn controlled by Zhang Ruimin ( 張瑞敏)a sa tt h eL a t e s tP r a c t i c a b l eD a t e .A ss u c h ,
Qingdao Haichuangying is ultimate ly controlled by Mr. Zhang Ruimin.
12. Yunhai Lianji Technology is owned as to 51.00% by Zhongmiao Shujin and 49.00% by Hebei Zhongbao,
which is a limited partnership which is owned as to 28.00% by Yuan Hailian ( 袁海蓮) as general partner
and 15.00% by each of Yang Baowei ( 楊寶偉) and Zhao Cuihong ( 趙翠紅), 12.00% by each of Liu
Chenguang ( 劉晨光), Liu Tonggang ( 劉銅鋼) and Gao Qun ( 高群) and 6.00% by Wang Yanqiu ( 王艷秋)a s
limited partners, all of which are our employees. For more details, please refer to the paragraph headed
‘‘Our Corporate History and Development — Establis hment of Yunhai Lianji Technology’’ in this section.
HISTORY AND DEVELOPMENT
–1 5 9–


--- page 170 ---
Corporate Structure Immediately Following the Global Offering
The following chart sets forth our corporate structure immediately after completion of
the Global Offering, assuming the Over-allotment Option is not exercised:
17.00% 0.40% 2.08% 10.19%
100% 100% 100%
51.00%
25.00%
Our Company
Haier Insurance
Agency Zhongmiao Caizhi Zhongmiao Shujin
Yunhai Lianji
Technology(12)
Shanghai
Zhaoqi(6)(7)
Qingdao
Haixinsheng(6)(8)(9)
Qingdao
Haizhongjie(6)(9)(10)
Qingdao
Haichuangying (9)(11)
Other public
Shareholders
39.66% 5.67%
100% 49.50% 1.00% (4)
100%
51.20%48.80%
100%
100%
100%
Qingdao
Haiyinghui
Qingdao
Haichuanghui
Qingdao
Haichuanghui IoT
Qingdao
Haichuanghui
Investment
Haichuanghui
Holding
Ningbo Meishan
Qingdao
Haichuanghui
Venture
Haier Group(1)(5)Qingdao
Haichuangke(3)
(2)
Note: For more details, please refer to the notes unde r the paragraph headed ‘‘Corporate Structure —
Corporate Structure as at the Latest Practicable Date’’ in this section.
HISTORY AND DEVELOPMENT
–1 6 0–


--- page 171 ---
OVERVIEW
We are an insurance agency service and solution provider in the PRC, dedicated to
distributing a wide range of insurance product s covering (i) property insurance products,
(ii) life and health insurance products, (iii) ac cident insurance products and (iv) automobile
insurance products, to both corporate and household insurance clients. In 2022, according
to Frost & Sullivan, we ranked 78th among all insurance agencies in China in terms of
insurance business income reported based on the latest China Insurance Yearbook
published by the National Financial Regulatory Administration. According to Frost &
Sullivan, the China insurance intermediary in dustry has experienced constant growth and
will maintain a steady growth trend, and the s cale of underwriting premium in the industry
is expected to grow at a CAGR of 12.8% between 2024 and 2028, reaching RMB1,505.5
billion in 2028. Our total revenue incre ased from RMB120.0 million for FY2021 to
RMB174.0 million for FY2023, representi ng a CAGR of 20.4%, and from RMB53.4 million
for 4M2023 to RMB58.6 million for 4M2024.
We have an ecosystem where we collaborate and cooperate with different industry
participants including insurance company partners, which are our customers, insurance
agents and strategic channel partners to promote and distribute insurance products from
our insurance company partners to corporate and household insurance clients. Leveraging
our sales channels, we promote and distribute insurance products underwritten by
insurance companies to insurance client s and receive commission from insurance
companies for successful purchase of their i nsurance products by our insurance clients.
Our services cover major stages of insurance business including assistance on risk
assessment and product selection, confirmation of insurance policy, premium payment,
policy administration and insurance claims. Ou r sales channels comprise (i) sales through
insurance agents (whom we engage to promote and distribute insurance products to mainly
our household insurance clients, in return fo r commissions we paid for successful purchase
of insurance products by insurance clients), (ii) referral from strategic channel partners
(through whom a large population of corporate and household insurance clients are
referred, in return for referral fees we paid fo r successful purchase of insurance products by
insurance clients) and (iii) direct sales. At th e upstream end, we provide insurance agency
services to our insurance company partners and expand their insurance client base, whilst at
the downstream end, we distribute insurance products to our corporate and household
insurance clients and enhance their user experience.
Through our access to a comprehensive mix of insurance products and our in-depth
understanding and analysis of the risk portfolios in different scenarios, we are able to
provide insurance solutions and recommend different combinations of existing insurance
products with different premium rates offered by our insurance company partners to our
insurance clients, taking into account their particular needs and risk exposure with an aim
to maximise their insurance claim coverage in the cost-effective manner. We provide
insurance knowledge, training and IT support to our insurance agents, to facilitate their
distribution of insurance products to our insurance clients. We also provide IT services and
consulting services as an extension of our insurance agency business, to various participants
in our ecosystem, including insurance companies, insurance intermediaries and other
companies from different industries. Duri ng the Track Record Period, we had connected
BUSINESS
–1 6 1–


--- page 172 ---
with: (i) over 70 insurance companies as our customers, covering the top three insurance
groups in the PRC in terms of market capitalisation; (ii) insurance agents across Shandong,
Hebei, Henan and Jilin provinces; (iii) 20 st rategic channel partners, and (iv) we had
distributed insurance products to over 20,000 corporate insurance clients and 368,000
household insurance clients. The diagram below illustrates our business model and our
ecosystem:
Provide IT and consulting services
Four major categories
of insurance products
Our Group
Online
platforms
Corporate Insurance
Interactive Service Platform
ਕ̨̻
“Quan Zhanggui
(Ό౛ᓞ)”
APP
Enhance
user experience
Expand
insurance client base
Automobile
AccidentProperty
Life and
health
Insurance
companies
Insurance
intermediaries
Other companies in
different industries
Purchase insurance products
Network
Resources
& referrals
Provide insurance
knowledge,
training & IT
support
Distribution
of insurance
products
Insurance agents
Direct distribution of insurance products
Strategic
channel partners
Corporate and
household
insurance clients
Provide insurance products
Provide insurance agency services
Since our establishment in 2017, we have developed our online platforms, including
our ‘‘Corporate Insurance Interactive Service Platform ( 企業保險交互服務平台)’’, our
‘‘Quan Zhanggui ( 全掌櫃)’’ APP, our WeChat official account and WeChat mini
programme ‘‘Quan Zhanggui Claim Centre ( 全掌櫃理賠中心)’’, to enhance user
experience of our insurance clients and provide comprehensive service support to our
insurance agents. For details of their functionalities, please refer to the paragraph headed
‘‘Our Online Platforms’’ in this section. For FY2021, FY2022, FY2023, 4M2023 and
4M2024, revenue attributable to our insurance agency business amounted to RMB116.1
million, RMB130.7 million, RMB155.7 million, RMB51.6 million and RMB54.8 million,
respectively.
We extended and developed our IT services by leveraging on our IT technology and
knowhow accumulated over years in view of the inherent commonality between the
digitalised solutions we developed for our insurance agency business and the digitalised
solutions demanded by our customers. We offer IT services to various participants in our
ecosystem, including companies in insurance industry and companies from different
industries, by designing and developing dig italised solutions based on their needs. For
FY2021, FY2022, FY2023, 4M2023 and 4M2024, revenue attributable to our IT services
amounted to RMB1.3 million, RMB15.0 million, RMB15.8 million, RMB1.0 million and
RMB3.2 million, respectively.
BUSINESS
–1 6 2–


--- page 173 ---
In view of the insurance clients base we gained from our insurance agency business, the
derived cross-selling opportunities drove us t o provide consulting services including HR
consulting services and marketing and promotion services, which have gradually become
one of our business segments. In particular, we provide advice to our customers on human
resource management and recruitment strategi es, and provide recruitment services directly
to locate, attract and identify suitable tale nts for our customers. Based on our marketing
and promotion capabilities accumulated in the insurance agency business and the insurance
client base we have access to, we also provide marketing and promotion services to our
customers, including the design of promotional materials and advertisements, etc. For
FY2021, FY2022, FY2023, 4M2023 and 4M2024, revenue attributable to our consulting
services amounted to RMB2.7 million, RMB2.7 million, RMB2.5 million, RMB0.7 million
and RMB0.6 million, respectively.
The following table sets out the breakdown of our Group’s total revenue by business
segments for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
(unaudited)
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
Insurance agency business 116,056 96.7 130 ,721 88.1 155,748 89.5 51,630 96.6 54,802 93.4
IT services 1,264 1.1 14,953 10.1 15,782 9.1 1,046 2.0 3,218 5.5
Consulting services (Note) 2,654 2.2 2,724 1.8 2,4 81 1.4 749 1.4 624 1.1
Total 119,974 100.0 148,398 100.0 174, 011 100.0 53,425 100.0 58,644 100.0
Note: Consulting services mainly incl ude HR consulting services (amounting to RMB1.4 million, RMB2.4
million, RMB1.8 million, RMB0.7 million and RMB0.4 million, representing 1.2%, 1.6%, 1.0%, 1.4%
and 0.7% of our total revenue during the years ended 31 December 2021, 2022 and 2023 and the four
months ended 30 April 2023 and 2024, respectively) and marketing and promotion services (amounting
to RMB1.3 million, RMB0.3 million, RMB0.7 mi llion, RMB26 thousand and RMB0.2 million,
representing 1.0%, 0.2%, 0.4%, 0.0% and 0.4% of our total revenue during the years ended 31
December 2021, 2022 and 2023 and the four months ended 30 April 2023 and 2024, respectively).
BUSINESS
–1 6 3–


--- page 174 ---
OUR STRENGTHS
We believe the following strengths contribute to our success:
Insurance agency service and solution provider with considerable growth
We are an insurance agency service and solution provider recording rapid growth in
our insurance agency business during the Track Record Period. In particular, the GWP that
we facilitated increased from RMB666.4 million in 2021 to RMB1,018.4 million in 2022,
and further to RMB1,259.1 million in 2023, with a CAGR of 37.5%, and further from
RMB377.1 million for 4M2023 to RMB426.4 million for 4M2024. Our total revenue
increased from RMB120.0 million in 2021 to RMB148.4 million in 2022, and further to
RMB174.0 in 2023, with a CAGR of 20.4%, and from RMB53.4 million for 4M2023 to
RMB58.6 million for 4M2024, whilst we recorded an increase of net profit from RMB27.0
million in 2021 to RMB36.3 million in 2022, an d further to RMB39.0 million in 2023, at a
CAGR of 20.2%, and from RMB13.4 million for 4M2023 to RMB14.8 million for 4M2024.
In particular, our premium persistency ratio of life and health insurance products was over
95% for FY2023 and 4M2024, which indicated that the insurance clients are satisfied with
our services and/or insurance products offered by our insurance company partners. In 2022,
according to Frost & Sullivan, we ranked 78t h among all insurance agencies in China in
terms of insurance business income reported b ased on the latest China Insurance Yearbook
published by the National Financial Regulatory Administration.
According to Frost & Sullivan, the Chinese i nsurance intermediary industry is still in
its nascent stage of development compared with other developed countries. Coupled with
the continuously rising income level and ageing population which improves insurance
awareness, the insurance intermediary indust ry in China has experien ced constant growth
and is expected to maintain a steady growth tre nd, with the scale of underwriting premium
in the industry expected to grow at a CAGR of 12.8% between 2024 and 2028, reaching
RMB1,505.5 billion in 2028. We believe we are we ll-positioned to seize substantial market
opportunities in this fast growing industry leveraging on our ecosystem with a stable
relationship with our insurance company partners and strategic cooperation with insurance
agents and strategic channel partners, digital capabilities, wide range of insurance products
offering to both corporate and household insurance clients and experienced management
team.
Ecosystem creating mutual benefits
We have an ecosystem based on the concept o f ‘‘Collaboration and Creating Mutual
Benefits’’. Leveraging our professional knowledge and digital capabilities, we have
connected a large number of insurance compani es, insurance agents, strategic channel
partners and insurance clients. With stable cooperative relationships with over 70 insurance
companies, we can provide corporate and household insurance clients with a wide range of
insurance product portfolio. Through cooperation with insurance agents and strategic
channel partners and their sales network, we can reach a larger base of insurance clients at a
relatively lower cost, allowing insurance clie nts to purchase a variety of insurance products
at relatively better terms with better user experience.
BUSINESS
–1 6 4–


--- page 175 ---
With the broadening of our insurance client base and established trust and
relationship, we expect an increasing number of insurance companies, insurance agents
and strategic channel partners will join our ecosystem to enjoy mutual benefits created
therein and all participants will be able to enjoy their respective values and benefits created
therefrom (including insurance premiums obtained by insurance companies, diversified
insurance products available to insurance c lients, commissions and referral fees earned by
insurance agents and strategic channel partners, respectively), leading to a more robust
ecosystem.
Digital capabilities
Since our establishment in 2017, we have developed our online platforms, including
our ‘‘Corporate Insurance Interactive Service Platform ( 企業保險交互服務平台)’’, our
‘‘Quan Zhanggui ( 全掌櫃)’’ APP, our WeChat official account and WeChat mini
programme ‘‘Quan Zhanggui Claim Centre ( 全掌櫃理賠中心)’’, to enhance user
experience of our insurance clients and provide comprehensive service support to our
insurance agents. For details of their functionalities, please refer to the section headed
‘‘Business — Our Online Platforms’’ in this prospectus.
Our online tools have improved our insurance clients’ experience in purchasing
insurance products. As at 30 April 2024, our online platforms had over 241,000 registered
users (including both insurance agents and insurance client), among which, more than
111,000 insurance clie nts had utilised ‘‘Palm Insurance Policy’’ ( 掌上保單)f u n c t i o no no u r
APP and we maintained more than 299,000 insura nce policies that either purchased from us
and/or other third parties. Since we introduced our online platforms and up to 30 April
2024, our online platforms had processed or submitted more than 40,000 insurance claims
and had successfully sent more than 139,000 not ifications to household insurance clients to
renew their insurance policies.
Our digital capabilities are evidenced by our i nvitation from the Insurance Association
of Qingdao ( 青島市保險行業協會) to demonstrate our insurance business related digitalised
solutions in 2022, the accreditation as ‘‘High-tech Enterprise’’ ( 高新技術企業) in 2019 and
‘‘Shandong Province Gazelle Enterprise’’ ( 山東省瞪羚企業) in 2021, the recognition by
Shandong Bigdata Association ( 山東省大數據協會) of our developed IT system (i.e.
Automatic Identification Platfo rm for Car Insurance Policies ( 車險保單自動識別平台)) for
its leading position in China in May 2023 and the selection by Shandong Provincial
Department of Industry and Information Technology ( 山
東省工業和信息化廳)o ft h es a m e
system (i.e. Automatic Identification Platform for Car Insurance Policies ( 車險保單自動識
別平台)) as one of the high-end software products under The 7th Batch of Shandong
Province’s First Version of High-End Software Product List ( 第七批山東省首版次高端軟件
產品名單公示) in November 2023.
BUSINESS
–1 6 5–


--- page 176 ---
Wide range of insurance products offered to both our corporate and household insurance
clients
Our insurance agency services strategically target both corporate and household
insurance client markets, as contrasted with mo st of the insurance inte rmediary companies
in the PRC which mainly focus on household insurance clients. During the Track Record
Period, our insurance products were distributed to over 20,000 corporate insurance clients
and 368,000 household insurance clients, contributing approximately 35.7%, 38.4%, 41.3%
and 48.0% (in respect of corporate insurance clients) and 64.3%, 61.6%, 58.7% and 52.0%
(in respect of household insurance clients) of the revenue generated from our insurance
agency business respectively. Such strategy allows us to strengthen our insurance client base
and diversify our business by broadening our income stream. In particular, we expect to (i)
seize the growing market opportunities from corporate insurance clients, the demand of
which is rapidly growing as we believe that th e risk management awareness of corporations
has been increasing, (ii) derive a steady income stream attributable to household insurance
clients in relation to life and health insurance products purchased by them in the future, and
(iii) reduce the risk of our performance volatilit y in the event of business downturn of either
segment.
Further, we are able to build and maintain a rich insurance product portfolio offered
to insurance clients. During the Track Record Period, our insurance products covered four
major categories including property, life and health, accident and automobile insurance
products, covering mainstream insurance p roducts in the market according to Frost &
Sullivan.
Our Directors consider it critical for u s to have access to a wide range of insurance
products in order to provide better options to our insurance clients and maintain our
competitiveness and growth in the market.
We have an experienced management team
We have an experienced management team with a diversified background in different
industries including business management, insurance, IT and accounting. Mr. Lu, our
Chairman, executive Director and general manager, has over 15 years of experience in
corporate and business management and human resources and over five years of experience
in the insurance intermediary industry. Mr. Zhang, our executive Director and deputy
general manager, has over 20 years of experience in the insurance industry and has rich
practical experience in scalable insurance companies. Mr. Wang, our executive Director and
chief technology officer, has over 15 year s of experience in software research and
development. Ms. Li, our executive Director and chief financial officer, has over 10 years of
experience in accounting. Led by Mr. Lu, our management team has facilitated our
C o m p a n yt os e i z et h em a r k e to p p o r t u n i t i e sa n da c h i e v er a p i dg r o w t hi no u ri n s u r a n c e
agency business.
BUSINESS
–1 6 6–


--- page 177 ---
OUR STRATEGIES
We intend to strengthen and expand our business by implementing the following
strategies:
Expand our insurance client coverage, strengthen our relationship with insurance company
partners and enhance training support to our insurance agents
The China insurance intermediary industry has experienced constant growth.
According to Frost & Sullivan, the China insur ance intermediary industry will maintain a
steady growth trend, and the scale of underwriting premium in the industry is expected to
grow at a CAGR of 12.8% between 2024 and 2 028, reaching RMB1,505.5 billion in 2028.
To capitalise on the anticipated growth in China, we strive to expand our geographical
coverage by setting up 30 to 36 branch offices in locations such as Hebei, Henan, Anhui,
Hubei, Chongqing, Shanghai a nd Beijing and engaging, among o thers, additional quality
insurance agents to expand our insurance client coverage in these locations. Currently, there
is no specific plan on the exact number of insurance agents to be engaged, which will depend
on several factors such as market demand, population density, competition and regulatory
requirements in each location and will be determined after we have conducted feasibility
studies in respect of the relevant locations.
In accordance with relevant laws and regulati ons, our offline sales activities are limited
to the geographical locations of our branches as filed with the NFRA. In particular, we are
first required to set up a provincial-level branch in the relevant province before setting up
branches in cities under such province. The provincial-level branch is responsible for
managing such matters as the application for approvals and submission of relevant reports
and other materials to the regulatory aut horities for the other branches in the same
province, managing and supervising, among others, the personnel, business operation,
training and marketing of the other branches within that province. Meanwhile, there is no
material difference in the operation flow, processes and costs for the insurance agency
business between the provincial-level branch and other branches in that province. In
formulating our geographical expansion strategy, we adopt a holistic approach in assessing
the market demand of the target locations, taking into account various factors, including
population size, GDP, purchasing power of the population, insurance market size, and
market dynamics of the target locations.
We consider having multiple local branch o ffices allows us to expand our insurance
client base, establish stronger relationships with insurance company partners, distribute
suitable insurance products that align the de mands and tailored to the specific needs and
preference of insurance clients in each locatio n and enhance our visibility and recognition as
an insurance agency company, thereby increa sing our market presence and credibility. As
we generally enter into contracts with our insurance company partners primarily in
Shandong during the Track Record Period, our Directors believe that the aforesaid
geographical expansion would strengthen our relationship with insurance company partners
in the expanded regions.
BUSINESS
–1 6 7–


--- page 178 ---
We believe that the rapid growth of our insurance agency business in Shandong
province serves as a strong foundation for our business expansion in other locations in the
PRC. Since our establishment, we have accumulated industry knowhow, deep
understanding of the insurance clients’ marke ts and digital capabilities, all of which can
be leveraged to penetrate into other locatio ns in the PRC as we are expected to replicate our
successful business model and adapt it to suit the specific needs and preferences of each
location. Moreover, our Directors believe that some of our insurance company partners and
strategic channel partners which have business presence in other locations are interested in
exploring business opportunities with our Group. While we generated most of our revenue
from Shandong province during the Track Record Period, the expansion into these regions
is well supported by the expected continuous growth of the overall insurance market in
China, the regional market demand as identif ied, and our aforesaid ability to seize the
business opportunity to capture market share in those provinces and cities.
In addition, in view of our anticipated geographical expansion and our aim to maintain
good quality of our services, we intend to provide systematic trainings to our insurance
agents by establishing training centre(s) and organising regular trainings for our insurance
agents. In particular, we plan to systematically organise training on a regular basis and
prepare the relevant training materials on topics, such as insurance product knowledge,
insurance claims knowledge and processing, techniques in effective communication,
marketing and promotion and our business process and after-sales and claims processing
procedures. Such training centre(s) is expe cted to differentiate from and supplement the
online training provided via our APP, particularly on specific skills as sales and
communication, which are harder to train via non face-to-face channel and are crucial
for insurance agents to effectively engage wit h insurance clients, understand their needs and
convey the value of insurance products distributed by us. Our Directors believe that by
training centre(s), we can provide comprehensive and interactive training programmes for
our insurance agents.
We believe our plan to expand our geographical coverage by setting up 30 to 36 branch
offices is feasible and supported by sufficient demand on the following grounds:
1. We believe that there is a vast number of locations in the PRC where we can
successfully open new branch offices gradually upon Listing. In the first year
upon Listing, we expect to open approximately 10 additional branch offices in
Hebei, Henan and Hubei. In the second year upon Listing, we expect to open
approximately 10 to 13 additional branch offices in Hebei, Henan, Hubei, Anhui
and Shanghai. In the third year upon Listing, we expect to open approximately 10
to 13 additional branch offices in Hen an, Hubei, Anhui, Shanghai, Beijing and
Chongqing;
2. We have considered various factors in selecting these locations for expansion
including the primary insurance premium, population size and spending capacity.
In 2023, Henan ranked 8th with primary insurance premium of approximately
RMB240.0 billion, Hebei ranked 9th with primary insurance premium of
approximately RMB213.6 billion, and Hubei followed closely at 10th with
primary insurance premium of approximately RMB211.8 billion. These locations
BUSINESS
–1 6 8–


--- page 179 ---
recorded high primary insurance premium primarily due to their large population
size, leading to the their substantial contributions to the insurance sector in the
PRC and market potential. Additionally , Beijing and Shanghai, being the major
cities in the PRC which have relatively mature insurance markets, ranked 5th and
7th with primary insurance premium of approximately RMB320.5 billion and
RMB247.1 billion, respective ly. The strong market pres ence and higher spending
capacity of residents in these cities contribute to the elevated premiums and make
them attractive targets for our expansion efforts;
3. Furthermore, we believe that our successful business model in Shandong province,
which has enabled us to thrive in a competitive environment, will serve as a
blueprint for success in expanding into the relevant locations using the same
business model and structure. In particular, by leveraging our online platforms,
wide range of insurance products offering to both corporate and household
insurance clients and stable business rela tionship with over 70 insurance company
partners, we can replicate our achievem ents in the new markets with our in-depth
industry and insurance product knowledge. We expect to further collaborate with
our insurance company partners to distribute suitable insurance products that
align the demands and preference in each of the new markets; and
4. The management team of our Group will continue to review and optimise our
expansion plan on a quarterly basis. In addition, we will engage an industry expert
to conduct feasibility studies in respect o f the relevant locations to gain insight
into such markets before opening a bra nch office. The feasibility studies will
cover, among other things, (i) market size and demographics; (ii) type of insurance
clients; (iii) competition landscape; (iv) locations of branch offices to be set up;
and (v) revenue and cost structure.
Continue to strengthen our digital capabilitie s and further develop our IT services offerings
In view of the potential enhancement and tr ansformation technological capabilities
brought to insurance intermediary companies, our Directors believe that it is a market trend
for insurance intermediaries to increasingly le verage technologies to facilitate transactions
between insurance companies and insurance clie nts. Technological capabilities is considered
a key successful factor for insurance agency se rvices providers as more and more insurance
clients tend to seek higher quality services, which necessitates the use of advanced
technologies and intelligent service system s. Advanced technologica l infrastructure can
enhance service delivery, risk assessment, and client engagement, which in turn enables
insurance agency service providers to streamline operations, offer superior client services,
and quickly adapt to market and regulatory changes, securing a competitive edge in a
rapidly evolving marketplace.
In light of the aforesaid market trend, we w ill continue to invest in upgrading the core
business system as a fully functional business system which supports centralised operations,
upgrading our Corporate Insurance Interactive Service Platform ( 企業保險交互服務平台)
by strengthening the AI functions, and upgrading the insurance claims system, the AI
service system, intelligent contract manage ment system, insurance policy management
BUSINESS
–1 6 9–


--- page 180 ---
system, the online training system and insurance marketing and sales system gradually, and
further introduce AI-based tools covering the main stages of the insurance life cycle to
increase user efficiency and improve the intelligence level of our online platforms. For
example, we plan to introduce AI-based customer support tools which empower us to
accurately identify suitable insurance produ cts based on the requirements of our insurance
clients and upgrade the user interface of our APP and website to further improve the overall
user experience.
In addition, we intend to develop more new IT service products, some of which
leverage on the inherent commonality between the digitalised solutions we developed for
our insurance agency business and the digitalised solutions demanded by our customers,
allowing us to streamline the development process and ensure consistent quality of our IT
service products. Development of new IT se rvice products also allows us to reach out to
customers in new industries sharing similarity with the insurance related business and meet
their different needs, to deepen our understanding of different industry business scenarios,
and then continuously improve our technological product capabilities, and ultimately
achieve rapid and high-quality development of our IT service business.
Promote our brand awareness and market presence
It is our plan to continue to promote our brand awareness through advertising effort.
Our marketing and promotional campaign include placing of online advertisements
through mainstream traditional media platforms, as well as marketing campaigns through
emerging online user traffic portals, reputab le Internet terminals and media platforms to
promote our brand image. Specifically, we plan to initiate a series of marketing campaigns
on user traffic portals like WeChat, Weibo, Xiaohongshu ( 小紅書) and Douyin ( 抖音)t o
increase daily interaction with insurance clie nts through these social media platforms. We
will also study the ever-changing trends and preferences of our potential insurance clients to
tailor our promotional initiatives to better attract them to purchase insurance products
from us.
Selective investments and acquisitions in insurance intermediary and fintech industry
We intend to carry out selective investments an d acquisitions in insurance intermediary
and fintech industry to further accelerate the development of our business and strengthen
our competitiveness. When selecting the invest ment and acquisition targets, we will mainly
consider whether they can complement our business in terms of technical capabilities,
resource channels or talent teams. In particular, when selecting insurance intermediary
companies, we will consider their potential synergies with our existing business, the
locations of their branch offices, their finan cial performance and growth potentials and the
experience and background of their manageme nt team. When selecting fintech companies,
we will consider their R&D capabilities, thei r commercialised products, their financial
performance and growth potentials and the background of their management team. We
intend to invest in (i) insurance intermedia ry companies with professional insurance
capabilities, client network and/or Interne t marketing capabilitie s; and/or (ii) fintech
platforms which offer compatible functions to users that may be incorporated into our
online platforms to provide better user experience. According to Frost & Sullivan, China
BUSINESS
–1 7 0–


--- page 181 ---
had an estimated of over 2,000 insurance intermediary companies and 8,000 fintech
companies in 2022. We intend to finance the investments and acquisitions with the proceeds
from the Global Offering and our existing fin ancial resources. For more details on our use
of the proceeds from the Global Offering in ca rrying out selective investments and
acquisitions in the insurance intermediary and the fintech industry and selection criteria,
please refer to the section headed ‘‘Future Plans and Use of Proceeds — Use of Proceeds’’ in
this prospectus. As at the Latest Practicable Date, we had not identified any potential
investment or acquisition target nor entered into any binding commitment for any strategic
investments and acquisitions.
OUR BUSINESS MODEL
Our Ecosystem
We have an ecosystem where we collaborate and cooperate with different industry
participants including insurance company partners, which are our customers, insurance
agents and strategic channel partners to promote and distribute insurance products from
our insurance company partners to corporate and household insurance clients. Leveraging
our sales channels, we promote and distribute insurance products underwritten by
insurance companies to insurance client s and receive commission from insurance
companies for successful purchase of their i nsurance products by our insurance clients.
Our sales channels comprise (i) sales through insurance agents (whom we engage to promote
and distribute the insurance products to mainly our household insurance clients, in return
for commissions we paid for successful purchase of insurance products by insurance
clients), (ii) referral from strategic channel partners (through whom a large population of
corporate and household insurance clients are referred, in return for referral fees we paid
for successful purchase of insura nce products by insurance clie nts) and (iii) direct sales. The
diagram below illustrates our bus iness model and our ecosystem:
Provide IT and consulting services
Four major categories
of insurance products
Our Group
Online
platforms
Corporate Insurance
Interactive Service Platform
ਕ̨̻
“Quan Zhanggui
(Ό౛ᓞ)”
APP
Enhance
user experience
Expand
insurance client base
Automobile
AccidentProperty
Life and
health
Insurance
companies
Insurance
intermediaries
Other companies in
different industries
Purchase insurance products
Network
Resources
& referrals
Provide insurance
knowledge,
training & IT
support
Distribution
of insurance
products
Insurance agents
Direct distribution of insurance products
Strategic
channel partners
Corporate and
household
insurance clients
Provide insurance products
Provide insurance agency services
BUSINESS
–1 7 1–


--- page 182 ---
Leveraging our professional knowledge an d digital capabilities, we have connected a
large number of insurance companies, insura nce agents, strategic channel partners and
insurance clients. We expect that with the expansion of our insurance client base and the
increased trust in us, there will be more insurance companies, insurance agents and strategic
channel partners joining our ecosystem in the future.
We are dedicated to provide the following value propositions to our ecosystem
participants:
. Insurance company partners. At the upstream end, we provide the insurance agency
services to our insurance company partners by promoting and distributing insurance
products underwritten by them to insurance clients and receive commission from them
for successful purchase of their insurance products by our insurance clients, thereby
expanding their insurance client base. We also provide supports on product
customisation when needed in order to meet insurance clients’ specific needs and
budget, thereby further diversifying the product mix and improving the operational
efficiency of our insurance company partne rs. In addition, we also provide IT services
to them where we design and develop insurance business related digitalised solutions
based on the digitalised solutions utilised in our insurance agency business, thereby
improving their operational efficiency.
. Insurance agents. We engage individual insurance agents to promote and distribute the
insurance products (mainly life and health insurance products) underwritten by our
insurance company partners to mainly our household insurance clients, and we pay
commissions to insurance agents for succe ssful purchase of insurance products
conducted by them. Insurance knowledge , training and IT support are provided to
our insurance agents to facilitate their di stribution of insurance products to our
insurance clients with our online platform. In particular, our online platforms improve
the service efficiency of the insurance agen ts and facilitate their management function,
with a real-time overview of their team members’ status and performance assessment.
Our insurance agents are able to have access to a wide range of the insurance product
offerings offered by our insurance company partners which they can provide to the
insurance clients. Our insurance agents proac tively communicate wit h insurance clients
to understand their needs and identify insurance products that are suitable to them.
. Strategic channel partners. We cooperate with strategic channel partners to expand our
reach to large population of corporate and household insurance clients, and we pay
referral fees to strategic channel partners for successful purchase of insurance products
underwritten by our insurance company partners by insurance clients through us.
Through these cooperations, we can leverage their networks and increase our insurance
client base.
. Insurance clients. Our insurance clients include both household and corporate
insurance clients. In order to better serve our insurance clients, we provide a wide
range of insurance products offering, assist our insurance clients on major stages of
insurance business including risk assessment and product selection, confirmation of
insurance policy, premium payment, polic y administration and insurance claims and
BUSINESS
–1 7 2–


--- page 183 ---
enhance their user experience with our online platforms. We offer insurance products
to our household insurance clients mainly through our insurance agents and referral
from our strategic channel partners and we offer insurance products to our corporate
insurance clients mainly under direct sales and referral from our strategic channel
partners.
. Insurance intermediaries and other companies from different industries. We provide IT
services to insurance intermediaries and other companies from different industries
where we design and develop digitalised solutions based on their needs. We also
provide HR consulting services and marketing and promotion service to companies
from different industries, these services include recruitment related process and
strategies and design promotional materials and advertise.
Our Business
Our business mainly consists of three segments: (i) insurance agency business; (ii) IT
services and (iii) consulting services.
The following table sets forth a breakdown of revenue, gross profit and gross profit
margin by business segments for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Insurance Agency business 116,056 45,154 38.9 130,721 58,241 44.6 155,748 64,007 41.1 51,630 23,767 46.0 54,802 22,589 41.2
IT services 1,264 807 63.8 14,953 7,267 48.6 15,782 9,170 58.1 1,046 674 64.4 3,218 1,866 58.0
Consulting services
(Note) 2,654 2,088 78.7 2,724 1,751 64.3 2,481 1,336 53.8 749 435 58.1 624 384 61.5
Total 119,974 48,049 40.0 148,398 67,259 45.3 174,011 74,513 42.8 53,425 24,876 46.6 58,644 24,839 42.4
Note: Consulting services mainly include (a) HR consulti ng services (amounted to RMB1.4 million, RMB2.4
million, RMB1.8 million, RMB0.7 million and RMB0.4 million, representing 1.2%, 1.6%, 1.0%, 1.4%
and 0.7% of our total revenue during the years ended 31 December 2021, 2022 and 2023 and the four
months ended 30 April 2023 and 2024, respectively) and (b) marketing and promotion services
(amounted to RMB1.3 million, RMB0.3 milli on, RMB0.7 million, RMB26 thousand and RMB0.2
million, representing 1.0%, 0.2%, 0.4%, 0.0% and 0.4% of our total revenue during the years ended 31
December 2021, 2022 and 2023 and the four months ended 30 April 2023 and 2024, respectively).
BUSINESS
–1 7 3–


--- page 184 ---
The following table sets forth a breakdown of revenue, gross profit and gross profit
margin attributable to each type of insuranc e clients of our insurance agency business for
the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Household insurance clients 74,641 20,820 27.9 80,498 23,874 29.7 91,478 21,573 23.6 27,189 8,189 30.1 28,487 5,507 19.3
Corporate insurance clients 41,415 24,334 58.8 50,223 34,367 68.4 64,270 42,434 66.0 24,441 15,578 63.7 26,315 17,082 64.9
— Haier Group insurance clients 18,288 13,377 73.1 23,809 17,923 75.3 24,100 17,681 73.4 7,088 5,154 72.7 9,107 6,680 73.4
— Non-Haier Group insurance
clients 23,127 10,957 47.4 26,414 16,444 62.3 40,170 24,753 61.6 17,353 10,424 60.1 17,208 10,402 60.4
Total 116,056 45,154 38.9 130,721 58,241 44.6 155,748 64,007 41.1 51,630 23,767 46.0 54,802 22,589 41.2
Note: The revenue, gross profit and gross profit margin are derived from the commi ssion income generated
from insurance companies for distribution of the ir insurance products to the underlying insurance
clients.
The following table sets forth a breakdown of revenue, gross profit and gross profit
margin of our IT services by type of customers for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Haier Group and its affiliated companies 577 284 49.2 6,042 3,681 60.9 8,732 4,870 55.8 75 43 57.3 1,665 968 58.1
Non-Haier Group 687 523 76.1 8,911 3,586 40.2 7,050 4,300 61.0 971 631 65.0 1,553 898 57.8
Total 1,264 807 63.8 14,953 7,267 48.6 15,782 9,170 58.1 1,046 674 64.4 3,218 1,866 58.0
(i) insurance agency business
We are an insurance agency service and solution provider. Leveraging our sales
channels, we promote and distribute a wide range of insurance products covering (i)
property insurance products, (ii) life and health insurance products, (iii) accident
insurance products, and (iv) automobile insu rance products, which are underwritten by
insurance companies to both household and corporate insurance clients and receive
commission from insurance companies for successful purchase of their insurance
products by our insurance clients. Our commissions are generally calculated based on a
percentage of the premium of insurance products distributed by us. The commission
rates differ for each insurance company partner and vary depending on the type of
insurance products. For details of our commi ssion rates, please refer to the paragraph
headed ‘‘Insurance Products that We Distribute — Commission rates for insurance
products we distributed’’ in this section.
BUSINESS
–1 7 4–


--- page 185 ---
Our services cover major stages of insurance business including assistance on risk
assessment and product selection, confirmation of insurance policy, premium payment,
policy administration and insurance claim s. For details of our operation flow and
processes for our insurance agency business, please refer to the paragraph headed ‘‘Our
Insurance Agency Business Operation’’ in this section.
Our sales channels comprise (i) sales th rough insurance agents (whom we engage
to promote and distribute the insurance products to mainly our household insurance
clients, in return for commissions we pa id for successful purchase of insurance
products by insurance clients), (ii) referral f rom strategic channel partners (through
whom a large population of corporate and household insurance clients are referred, in
return for referral fees we paid for successful purchase of insurance products by
insurance clients) and (iii) direct sales. At the upstream end, we provide the insurance
agency services to our insurance company partners and expand the insurance client
base for them, whilst at the downstream end, we distribute insurance products to our
corporate and household insurance clients and enhance their user experience.
We enhance user experience of our insu rance clients and improve service
efficiency of our insurance agents with our online platforms, including our
‘‘Corporate Insurance Interactive Service Platform ( 企業保險交互服務平台)’’, our
‘‘Quan Zhanggui ( 全掌櫃)’’ APP, our WeChat official account and WeChat mini
programme ‘‘Quan Zhanggui Claim Centre ( 全掌櫃理賠中心)’’. For details of their
BUSINESS
–1 7 5–


--- page 186 ---
functionalities, please refer to the paragraph headed ‘‘Our Online Platforms’’ in this
section. The diagram below illustrates the business flow and revenue source of our
insurance agency business:
Insurance agency business
Commissions
Provide
insurance
agency service
Insurance premiums
Underwritten insurance products
Commission
income
Provide
insurance
agency
serviceInsurance
companies
Referral fees
Direct sales
Resources &
referrals
Insurance
agents
Strategic
channel
partners
Distribution
of insurance
products
Network
Cash flow Business activitiesBusiness activities
Corporate and
household
clients (Note)
Our Group
Note: Include Haier Group and its affiliated companies as c orporate insurance clients and employees of Haier
Group and their respective family members as household insurance clients
(ii) IT services
We have successfully introduced digitalised solutions that cover the main
processes of insurance business. Having recognised the demand for digitalised
solutions among participants in our ecosystem and leveraging our accumulated IT
technology and knowhow developed in the course of our insurance business, we
extended our services to offer IT services to insurance company partners, insurance
intermediaries and companies from different industries such as financial institutions by
designing and developing digitalised solutions based on their needs. During the
software/system development stage, we closely communicate with our customers to
ensure that the design and specifications ar e satisfactory and conduct software/system
testing to ensure proper functionality. Once the software/system is completed, we will
conduct a final review and testing phase an d deliver the accomplished software/system
upon confirmation by the customer. After delivery, we may, depending on the terms of
the agreement, offer ongoing support and provide warranty for a specified period of
time to ensure that the software/system co ntinues to function properly and meet the
BUSINESS
–1 7 6–


--- page 187 ---
customer’s requirements. If the customers request for software/system upgrade(s), we
will prepare a new project plan and provide them with our quotation for additional
works.
The major software/systems we developed include insurance marketing and sales
system, insurance claims system, online training system, insurance intermediary core
business system and AI service system. For de tails of our digitalised solutions and their
key functions, please refer to the paragraph headed ‘‘IT Services’’ in this section. By
offering such digitalised solutions, we helped our customers improve their operation
efficiency. Our experience in developing online platforms has enabled us to expand our
IT service offerings by providing insuranc e business related digitalised solutions to
insurance company partners and insurance intermediaries during the Track Record
Period. We believe that the provision of IT services helps our Group attain business
diversification through deployment of our available resources and, by building closer
relationships with players in the relevan t industries, which may provide further
business opportunities to our insurance agency business in the future, increases our
market penetration and foster our further development in insurance agency business.
We generally provide our IT services on the project basis for a fixed service fee or fixed
daily rate (for IT projects which we assign our R&D staff on site), taking into account
the complexity of the software/system developed, allocation of staff (including the
seniority of staff assigned on site), duration of the agreement, ownership of the IP right
and other costs such as server fees. Our service fee is usually paid by progress
instalments with reference to the payment schedule as set out in agreements. The
diagram below illustrates the business flow and revenue source of our IT services:
IT services
Provide IT services
Service fee
Insurance
companies
Insurance
intermediaries
Companies
from different
industries (Note)
Our Group
Cash flow Business activitiesBusiness activities
Note: Include Haier Group and its affiliated companies as customers
BUSINESS
–1 7 7–


--- page 188 ---
(iii) Consulting services
To further expand our reach to larger population of household and corporate
clients that have needs for the insurance products distributed by us and to enhance the
cross-selling opportunities (whether from c orporates which engaged us in provision of
HR consulting services or their employees), we provide HR consulting services to
corporate customers, including provision of advice on human resource management
and recruitment strategies, and recruitment services. We source candidates from our
growing talent pool and attract other job applicants through providing HR solutions
covering the main process of recruitment including talent sourcing, job posting, resume
screening, interview and selection proces s. Based on industry-specific skills and
qualifications, recruitment timeline and skill set required for a job position, we will
locate, attract and identify the right talent for our customers.
Based on our marketing and promotion capabilities accumulated in the insurance
agency business and the insurance client base we have access to, we also provide
marketing and promotion service to corporate customers include insurance company
partners as ancillary and value-added services. In the ordinary and usual course of our
insurance agency business, we are req uired to promote insurance products
underwritten by our insurance company partners through provision of marketing
and promotion services to increase their brand awareness and the recognition and
understanding of their insura nce products. The diagram below illustrates the business
flow and revenue source of our consulting services:
Consulting services
Provide HR consulting
services
Service fee
Provide marketing and
promotion services
Service fee
Companies
from different
industries (Note)
Insurance
companies
Our Group
Cash flow Business activitiesBusiness activities
Note: Include Haier Group and its affiliated companies as customers
BUSINESS
–1 7 8–


--- page 189 ---
I N S U R A N C EP R O D U C T ST H A TW ED I S T R I B U T E
We cooperate with major insurance companies in the PRC to promote and distribute a
wide range of insurance products underwritten by them. We had cooperation with over 70
insurance companies covering the top three insurance groups in the PRC in terms of market
capitalisation during the Track Record Period, allowing us to build and maintain a rich
insurance product portfolio that we can distrib ute to insurance clients. Through offering a
comprehensive mix of insurance products, we have accumulated a large base of insurance
clients and are able to provide them with broad selections and adequate options to choose
from in order to serve their protection needs in different scenarios and at different life
stages. Through our established relationship w ith our insurance company partners and thus
access to a comprehensive mix of insurance products and our in-depth understanding and
analysis of the risk portfolios in different scenarios, we are able to provide insurance
solutions and recommend different combinations of existing insurance products with
different premium rates offered by our insurance company partners to our insurance clients,
taking into account their particular needs and risk exposure with an aim to maximise their
insurance claim coverage in th e cost-effective manner. For example, the long-distance
transportation is more prone to substantial loss caused by fire or rollover of the trucks,
extra-large trucks is more prone to accidents of automobile scratch whilst the short-distance
transportation is more prone to cargo damage of medium level caused by traffic accidents.
We would, taking into account their needs and risk exposure, recommend the suitable
combinations of insurance products as insurance solution to our insurance clients.
BUSINESS
–1 7 9–


--- page 190 ---
We primarily distribute four categories of insurance products: (i) property insurance
products; (ii) life and health insurance product s; (iii) accident insurance products; and (iv)
automobile insurance products. These insura nce products are underwritten by insurance
company partners directly, and we are not a party to the insurance policy or other
agreements with the purchasers of the policies. The diagram below sets forth our diversified
insurance product portfolio:
Accident
Property Life and health
Automobile
Our diversified insurance product portfolio
Corporate and
household
insurance clients
To provide insurance products with
comprehensive protections
Third-party liability
Vehicle damage
Medical Critical illness
Travel
Traffic accident Comprehensive accident
Vehicle passenger
Whole lifeCargo transportation
Corporate property
Employer’s liability
Product liability
Compulsory
Annuity
Aviation
The table below sets forth the categories of insurance products we offered and the
GWP and commission income received from o ur insurance company partners for the
years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate
RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % %
Property insurance products 228,554 39,658 34.2 17.4 290,994 47,620 36. 4 16.4 334,332 59,806 38.4 17.9 117,189 22,910 44.4 19.5 119,574 25,733 47.0 2 1.5
Life and health insurance products 176,086 48,332 41.6 27.4 223,853 36,156 27.7 16.2 228,817 33,757 21.7 14.8 92,051 12,958 25.1 14.1 78,133 8,102 14. 8 10.4
Accident insurance products 55,465 16,171 13.9 29.2 82,116 24,096 18.4 2 9.3 84,121 27,830 17.9 33.1 28,505 7,741 15.0 27.2 24,034 9,162 16.7 38.1
Automobile insurance products 206,276 11,895 10.3 5.8 421,411 22,849 17.5 5.4 611,851 34,355 22.1 5.6 139,343 8,021 15.5 5.8 204,646 11,805 21.5 5.8
Total 666,381 116,056 100.0 17.4 1,018,374 130,721 100.0 12.8 1,259 ,121 155,748 100.0 12.4 377,088 51,630 100.0 13.7 426,387 54,802 100.0 12.9
BUSINESS
–1 8 0–


--- page 191 ---
(i) Property insurance products
The property insurance products we distribute can mainly be divided into three
types: (a) liability insurance products; (b) cargo transportation insurance products;
and (c) corporate property insurance products, details of which are as follows:
(a) Liability insurance products are primarily (i) product liability and (ii)
employer’s liability insurance products. Product liability insurance covers the
risk of third-party property damage or personal injury caused by accidents
during the use of the insured’s products due to defects in design,
manufacturing, and other factors. Em ployer’s liability insurance is a type
of liability insurance that covers the ris k of economic compe nsation liability
that the insured, i.e. the employer, should bear according to law or
employment contracts for injuries, d isabilities, deaths, or occupational
diseases suffered by employees during their employment when engaged in
business activities. The insurance lia bility of employer’s liability insurance
includes the economic compensation l iability that the employer should bear
according to law for employees and rel ated legal expenses in accidents. The
main causes of such compensation incl ude various accidental work-related
injuries and occupational diseases.
(b) Cargo transportation insurance produ cts we distribute refer to the insurance
that covers the loss of goods caused by natural disasters or accidents during
transportation. Cargo transportati on insurance can be divided into two
categories: (i) foreign marine cargo transportation insurance and (ii)
domestic cargo transportation insurance.
(c) Corporate property insurance product s refer to the property insurance that is
applicable to various enterprises, associations, government agencies and
public institutions and covers the insured’s property losses caused by fire,
other natural disasters, and accidents.
Our insurance clients of property insurance products mainly consist of corporate
insurance clients.
(ii) Life and health insurance products
The life and health insurance products we distribute can mainly be divided into
two types: (a) life insurance products; and (b) health insurance products, details of
which are as follows:
(a) Life insurance products mainly incl ude (i) whole life insurance; and (ii)
annuity insurance. For whole life insurance, it refers to an insurance that the
insurer shall settle the insurance benef its whenever the insured passes away,
upon the execution of the insurance contract. Annuity insurance refers to a
type of life insurance that pays surviv al insurance benefits in instalments
according to the time interval specif ied in the insurance policy, with the
survival of the insured as the payment condition. Annuity insurance can be
BUSINESS
–1 8 1–


--- page 192 ---
divided into many types according to different standards, and the premium
can be paid by lump-sum payment and annual payment. Annuity insurance
products can be structured with i nvestment and wealth management
components that provide regular in come to insurance clients, typically
during retirement.
(b) Health insurance products mainly include (i) critical illness insurance; and
(ii) medical insurance. Critical illness insurance refers to insurance in which
insurance companies pay the insured amount according to the insurance
contract for major illnesses (such as ma lignant tumours, severe sequelae of
cerebral infarction, etc.) or when the insured reaches a certain disease state or
undergoes a certain surgery as defined in the insurance policy during the
insurance period. Medical insurance is a type of insurance in which the
insurance companies compensate for t he reasonable and necessary medical
expenses incurred by the insured for the treatment of illness.
Unlike other categories of insurance produc ts, life and health insurance products
generally require periodic payment of premiums, typically annually, during a
pre-determined payment period ranging from three to 30 years in general.
Short-term life and health insurance products generally provide for lower
commission rates as they generate revenue stream for insurance companies for a
shorter period of time as compared with long-term life and health insurance products.
Meanwhile, we receive commission income within the premium payment period in
accordance with the terms of the contracts between the insurance company partners
and us. Once we distribute a life and health insurance policy with periodic payment
schedule, it can bring us a steady flow of commission revenue throughout the renewal
term as long as the insurance client fulfils his or her premium payment commitment
and continuously renews the policy. Since the life and health insurance products are
primarily long-term, which require more ef fort to be sold and distributed, and that
they are able to bring a steady flow of revenue to insurance companies throughout the
term under the normal circumstances that the insurance policy is renewed, to
incentivise insurance agency companies t o distribute life and health insurance
products, the first-year commission rate fo r life and health insurance products, as
agreed by us and our insurance company partners, is in line with the industry practise,
typically higher than other years throughout the payment period of the insurance
clients, and the average commission rates for renewing existing policies for long-term
life and health insurance products are generally lower than the first-year commission
rates.
Our insurance clients of life and health insurance products mainly consist of
household insurance clients. For certain life and health insurance products, a 15-day
cooling-off period is offered to household insurance clients as such products generally
require payment of premiums over a perio d of time, which complies with applicable
PRC laws and regulations and allows them to review or cancel their policy within this
timeframe without penalty. Such cooling- off period may not be applicable to other
categories of insurance products.
BUSINESS
–1 8 2–


--- page 193 ---
(iii) Accident insurance products
The accident insurance products we distribute provide guaranteed benefit in the
event of injury, death or disability of the insured as a results of an accident, or a
reimbursement of medical expenses to the insured in connection with an accident,
during the coverage period, which usually is one year or a shorter period. The accident
insurance products we distribute include : (a) comprehensive accident insurance
products mainly cover various accidents; (b) aviation accident insurance products
mainly cover aviation accidents; (c) travel accident insurance products mainly cover
accidents that occur during travel; and (d) traffic accident insurance products mainly
cover traffic accidents.
Our insurance clients of accident insurance products consist of household and
corporate insurance clients.
(iv) Automobile insurance products
The automobile insurance products we distribute can mainly be divided into four
categories: (a) compulsory insurance, (b) v ehicle damage insurance, (c) third-party
liability insurance, and (d) vehicle passenger insurance. Details of which are as follows:
(a) Compulsory insurance is an insuranc e under mandatory responsibility which
requires the insurance company partners to indemnify for any personal injury
and property damage of the vehicle’s passengers and victims other than the
insured in the event of a road traffic accident of the insured vehicle within the
liability limit.
(b) Vehicle damage insurance covers the insured vehicle’s da mages, within the
liability limit, due to collision, overturn ing, and other natural disasters (not
including earthquakes) or accidents during the use of the insured vehicle by
the insured or qualified drivers authorised by the insured. It is an insurance
that indemnifies any damage s on the insured’s vehicle.
(c) Third-party liability insurance cove rs the amount that exceeded the liability
limit for each sub-item of the compulso ry insurance for a vehicle traffic
accident, which the insured should pay, according to law for personal injury
or property damage suffered by third p arties due to occurrence of accidents
that occur during the use of the insured vehicle by the insured or qualified
drivers authorised by the insured.
(d) Vehicle passenger insurance, also know n as vehicle seat insurance, is related
to the passenger and covers the liability of the insured, according to law for
any personal injury due to occurrence accidents during the use of the insured
vehicle by the insured or qualified drivers authorised by the insured.
Our insurance clients of automobile insurance products mainly consist of
household insurance clients.
BUSINESS
–1 8 3–


--- page 194 ---
Commission rates for insurance products we distributed
We receive commissions from our insurance company partners for successful
distributions of their insurance products to insurance clients through us. The
commission rates for the various categories of insurance products charged by our
Group and the market rate during the Track Record Period are as follows:
Category of insurance
products Range of commission rate of insurance products
B a s e do nt h e
agreements entered
into with insurance
company partners
Average
commission rate
during Track
Record
Period
(Note)
Average market
commission rate
Property 0%–70% 16%–22% 10%–40%
Life and health 0%–141% 10%–28% 10%–50%
Accident 0%–80% 27%–38% 10%–35%
Automobile 0%–30% 5%–6% 5%–20%
Note: The average commission rate during the Track R ecord Period is calculated on the basis of
commission income of the type of insurance product of the respective years/period divided by
GWP of such type of insurance product of the same period.
The commission rates charged by our Group are determined between us and our
insurance company partners based on the type of insurance products concerned, the
insurance period to which the commission rate related to (for example, the first-year
commission rates of long-term life and health insurance products are generally higher), the
expectation of the insurance company partners on profits taking into account the expected
claim ratios, insurance clients’ demand for ins urance products in the market, requirements
set by the industry association, regulatory requirements and governmental policies and
other factors that affect our insurance company partners at the relevant time. We also
compare the commission rates with that offered by other insurance company partners to
ensure that the commission rates are fair and represent the market price.
The wide range of commission rates are ma inly determined based on the internal
underwriting policy requirements of the insu rance companies. Frost & Sullivan is of the
view that the wide range of commission ra tes is in line with the industry norms. For
insurance products with higher claim ratios that may result in losses for insurance
companies, the commission rates are genera lly lower, and may be even zero for certain
ancillary insurance product s with minimal insurance premium. We may agree to a zero
commission rate for such insurance products having considered (i) the ancillary nature of
such insurance products and that we are able to earn commission from other insurance
products sold along with such ancillary one , and (ii) the importance of providing
comprehensive insurance products to insurance clients and maintaining good
relationships with insurance company partners. On the other hand, insurance products
such as life and health insurance products that require more efforts to be distributed or with
BUSINESS
–1 8 4–


--- page 195 ---
lower claim ratios that insurance companies are keen on developing due to their
profitability and ability to bring a steady f low of revenue to insurance companies
throughout the term as long as the insurance policy is renewed, the first-year commission
rates are generally higher and, in some occasions, even over 100% for the first year. For
instance, the commission rate we charged for lo ng-term health insurance products generally
consists of mainly first-year handling fee, sale s bonus, business promotion and cooperation
bonus, the combination of which could exceed 10 0% for the first year. Generally, we are not
required to return any commission received from our insurance company partners if a
household insurance client does not renew its policy for life and health insurance products.
However, we may be required to return a port ion of the commission received from the
insurance company partners if we fail to maintain the required percentage of renewal at the
13th month during the term of insurance polic ies. For details of our historical return of
commission received from the insurance company partners, please refer to the paragraph
headed ‘‘Our Customers — Salient terms of agreements with insurance company partners’’
in this section.
The insurance products we distributed can also be categorised as (i) non-Internet
insurance products, which accounted for more than 98% of our revenue of our insurance
agency business during the Tra ck Record Period, and (ii) Internet insurance products.
Non-Internet insurance products refers to the purchase transaction of insurance policy of
which involves manual involvement to certain extent, despite the utilisation of our online
platforms, whilst Internet insurance pro ducts refers to the purchase transaction of
insurance policy of which is self-serviced by our insurance clients through our APP
without manual involvement. Sales channel of non-Internet insurance products comprise (i)
sales through insurance agents, (ii) referral from strategic c hannel partners and (iii) direct
sales, whilst sales channel of Internet insurance products comprise only direct sales. Please
refer to the paragraph headed ‘‘Our Insurance A gency Business Operation’’ in this section
for operation flow and process for our insurance agency business.
The following table sets forth the GWP and commission income generated from
insurance company partners for distribution of their insurance products for each of Internet
insurance products and non-Internet insurance products for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Non-Internet insurance products 661,483 114,049 98.3 1,013,768 129,577 99.1 1,254,661 154,846 99.4 375,570 51,197 99.2 425,164 54,547 99.5
Internet insurance products 4,898 2,007 1.7 4,606 1,144 0.9 4,460 902 0.6 1,518 433 0.8 1,223 255 0.5
Total 666,381 116,056 100.0 1,018,374 130,721 100.0 1,259,121 155,748 100.0 377,088 51,630 100.0 426,387 54,802 100.0
BUSINESS
–1 8 5–


--- page 196 ---
OUR INSURANCE CLIENTS
We define our insurance clients as purchasers of the insurance products that are
underwritten by our insurance company partners and distributed by us, which include (i)
corporate insurance clients and (ii) household insurance clients.
The table below sets forth the GWP we fac ilitated, commission income we generated
from our insurance company partners for distribution of their insurance products and the
average commission rate by type of insurance clients for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate
RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % %
Household insurance clients 429,127 74,641 64.3 17.4 708,461 80,498 61.6 1 1.4 901,435 91,478 58.7 10.1 251,178 27,189 52.7 10.8 304,550 28,487 52.0 9 .4
Corporate insurance clients 237,254 41,415 35.7 17.5 309,913 50,223 38. 4 16.2 357,686 64,270 41.3 18.0 125,910 24,441 47.3 19.4 121,837 26,315 48.0 2 1.6
— Haier Group insurance clients 152,484 18,288 15.8 12.0 192,856 23,809 18. 2 12.3 190,960 24,100 15.5 12.6 50,578 7,088 13.7 14.0 59,792 9,107 16.6 15. 2
— Non-Haier Group insurance
clients 84,770 23,127 19.9 27.3 117,057 26,414 20.2 22.6 166,726 40,170 25.8 24.1 75,332 17,353 33.7 23.0 62,045 17,208 31.4 27.7
Total 666,381 116,056 100.0 17.4 1,018,374 130,721 100.0 12.8 1,259 ,121 155,748 100.0 12.4 377,088 51,630 100.0 13.7 426,387 54,802 100.0 12.9
Notes: Commission income represents commission received from insurance company partners for
distribution of their insurance products to co rporate and household insurance clients.
(i) Household insurance clients
Our target household insurance clients are high net worth individuals, middle class
and/or their respective family members. We be lieve that we can provide them with one-stop
insurance experience that will retain them to be our household insurance clients so that we
can serve them for their life-long insurance needs.
Through our ‘‘Quan Zhanggui ( 全掌櫃)’’ APP, we offer easy interpretation and
presentation of insurance policy terms to help our insurance agents promote and distribute
insurance products and assist household insurance clients in making informed decisions
when purchasing insurance products.
During the Track Record Period, commission income generated from distribution of
insurance products to our hou sehold insurance clients were RMB74.6 million, RMB80.5
million, RMB91.5 million and RMB28.5 million, resp ectively, representing approximately
64.3%, 61.6%. 58.7% and 52.0% of the revenue generated from our insurance agency
business during the same periods.
(ii) Corporate insurance clients
Our target corporate insurance clients are sm all and medium-sized enterprises that are
principally engaged in the manufacturing, construction engineering, logistics and
transportation, trading and/or human resources industry. These corporate insurance
clients usually require specific insurance policies covering a wide range of insurance
products according to their corporate profiles and business scenarios. As their businesses
BUSINESS
–1 8 6–


--- page 197 ---
generally have different risk exposures, they often encounter difficulties in sourcing
cost-effective and suitable off-the-shelf insurance products for their business operations. In
order to offer suitable insurance products, we proactively communicate with them to
understand their business operations and industry, then select and recommend a list of
suggested insurance products, which are suitable for their business needs and requirements
to them. Leveraging our experience in providin g insurance agency services for enterprises in
these industries, we assist our corporate insurance clients in selecting the insurance products
suitable to them.
For the years ended 31 December 2021, 2022 and 2023 and the four months ended 30
April 2024, commission income generated from distribution of insurance products to our
corporate insurance clients were RMB41 .4 million, RMB50.2 million, RMB64.3 million and
RMB26.3 million, respectively, represent ing approximately 35.7%, 38.4%, 41.3% and
48.0% of the total revenue generated from our insurance agency business during the same
periods, respectively.
We are the designated insurance agency service and solution provider to handle all
insurance related matters for Haier Group in the PRC. With stable commission income
derived from insurance company partners attributable to Haier Group insurance clients,
our business relationship with Haier Group insurance clients has contributed to the stable
growth of our Group. During the Track Record Period, commission income attributable to
Haier Group insurance clients represented approximately 15.8%, 18.2%, 15.5% and 16.6%
of our total commission income respectively. During the Track Record Period, the average
commission rate for the distribution of insurance products to Haier Group is substantially
lower than that to non-Haier Group corporate insurance clients as the property insurance
products purchased by Haier Group mainly cove r corporate property and product liability
insurance, which generally have lower co mmission rates while the property insurance
products purchased by non-Haier Group corporate insurance clients mainly cover cargo
transportation and employer’s liability insur ance, which have higher commission rates. For
more details on our relationship with Haier Group, please refer to the sections headed
‘‘Relationship with Our Controlling Shareho lders — Business relationship with Haier
Group’’ and ‘‘Connected Transactions’’ in this prospectus.
The pricing and other material terms of insurance products purchased by corporate
insurance clients are generally determined by our insurance company partners on a case by
case basis, taking into account various factors such as the level of risks encountered in the
business scenario of insurance clients, their e stimated claim ratios based on industry and/or
historical record and business scale. Hence, corporate insurance clients operating in
industries with lower risks and estimated clai m ratios may benefit from more advantageous
terms or lower premiums for specific insurance products, and companies with larger
business scale or reputation may have better terms in purchase specific insurance products.
Save for the above, there is no material difference in the pricing and other material terms of
the insurance products distributed to Haier Group insurance clients and corporate
insurance clients referred by Haier Group and those of the other independent corporate
insurance clients.
BUSINESS
–1 8 7–


--- page 198 ---
OUR INSURANCE AGENCY BUSINESS OPERATION
The below diagram sets forth the operation flow and processes for our insurance
agency business:
Utilising online platforms with ongoing communication with human insurance consultants
Self-serviced on online platforms without manual involvement
Internet
insurance
products
Product
selection
Completion of
order form
System
check
Premiums
payment
Issue of
insurance
policy
Policy
administration
Insurance
claims
Insurance
claims
Product
selection
Completion of
order form
Preliminary
system check
Manual
final check
Manual
underwriting
decision by
insurance
company
Issue of
insurance
policy
Premiums
payment
Policy
administration
Non-Internet
insurance
products
(i) Non-Internet insurance products
. Insurance client identification, risk assessment and product selection. Our sales
channels comprise (i) sales through insur ance agents, where our insurance agents
approach the insurance clients and facilit ate them on the transaction process, (ii)
referral from strategic channel partners, where insurance clients are referred to us
and (iii) direct sales where our corporate in surance clients directly approach us to
purchase insurance products, including Haier Group insurance clients.
Our cooperation with a large number of i nsurance company partners allows us to
build and maintain a rich insurance product portfolio that we can offer to
insurance clients. With our rich insurance product portfolio, we can provide
insurance products with comprehensive protection according to the needs of our
insurance clients. Unlike purchasing insurance product directly from the
insurance company, we are able to of fer to our insurance clients a mix of
insurance underwritten by multiple ins urance company partners, which broaden
the choices of insurance products for insurance clients and meet the needs of our
insurance clients. Our online platforms provide product information that is
reader-friendly and easy to interpret to fa cilitate their product selection. We also
carry out risk assessment to ensure that they can obtain the right coverage.
For household insurance clients, we mainly engage individual insurance agents to
facilitate household insurance clients t o make informed decisi ons when selecting
insurance products. Each insurance a gent is required to complete mandatory
trainings on subjects, such as insuranc e products knowledge and other industry
compliance requirements such as the Insurance Law. If the household insurance
clients have questions after reading the product information or require other
BUSINESS
–1 8 8–


--- page 199 ---
insurance policies, they can seek advice f rom our insurance agents before selecting
an insurance product. Our insurance agents are capable of not only answering
basic questions on insurance products, but also analysing clients’ risk profile and
insurance needs, providing recommendat ions with respect to insurance products,
and assisting insurance clients with insurance planning. After conducting a
thorough assessment on the risks of the household insurance clients, our
insurance agents recommend insurance products or insurance portfolio that
provide comprehensive protection to the household insurance clients.
. Confirmation of insurance policy. After selecting a particular insurance product,
insurance clients are required to complete an order form, which requires them to
fill in information such as name, address, e-mail address and other contact details
and details of the beneficiaries; and confirm the terms and starting date of the
insurance policies. We have self-developed an insurance system that digitalises the
underwriting process with data analytic al technology. Our system checks the
completeness of the information by verifying that each required field of the form
is completed with proper information and transfers the information to the
insurance companies for verification. For each insurance product, we include the
underwriting criteria set by our insurance company partners into our system,
which allows the system to automatically evaluate whether an insurance client is
eligible for the insurance product based on a list of conditions. As an insurance
intermediary, we are only involved in the d istribution of insurance products and
are not involved in the development, pric ing and underwriting of the insurance
products and do not own any intellectual property rights relating to the insurance
products. We do not make underwriting decisions, bear any underwriting risks or
have any discretion to decide which insurance company should underwrite which
products (if any). Our system optimises the insurance experience for the insurance
clients as it reduces the amount of paper work involved in purc hasing insurance
products and the time required to communicate with a human insurance
consultant, and offers much faster digitalised policy processing. In addition, the
codified criteria enables the assessment of a wide variety of pre-existing
conditions, resulting in more accurate evaluation of an insurance client’s
eligibility and reducing the rate of reject ion by our insurance company partners.
We will also conduct a manual check on the information provided by the
insurance clients on the system and ensure that they are eligible to purchase the
relevant insurance products.
Upon receiving the information, our insurance company partners’ systems
automatically analyse the eligibility o f the insurance application according to
their pre-set criteria. The insurance companies’ systems generally revert with
underwriting decisions within minutes. Such approval from our insurance
company partners also act as an authoris ation for us to finalise the insurance
policy on their behalf.
BUSINESS
–1 8 9–


--- page 200 ---
. Premium Payment. Insurance clients either pay the insurance premium directly to
our insurance company partners, or upon the authorisation of our insurance
company partners to us, pay the insurance premium to us, which are deposited in
a separate premium collection account, on an agency basis, for our onward
payment to our insurance company partners to settle the outstanding premium
without any charges in accordance with th e relevant laws and regulations in the
PRC. Depending on the terms of the agreement we entered into with our
insurance company partners, we generally reconcile the amount of premiums
collected on behalf of our insurance company partners with them on a monthly
basis and transfer the premiums to them within one month after collection. As
advised by Frost & Sullivan, this is generally in line with industry practice and
provides operational efficiency for transactions between insurance companies and
insurance agency companies. Pursuant to the Provisions on the Regulation of
Insurance Agents ( 《保險代理人監管規定》), our Group as a specialised insurance
agency which has obtained the Insurance Intermediary Licence with business
scope covering ‘‘collection of insurance premiums on an agency basis’’ is permitted
to collect insurance premiums on an agency basis. The Directors confirm that the
collection of premiums on behalf of insurance company partners, and the holding
of such premiums in our separate premium collection account, is in full
compliance with the relevant laws and reg ulations and the relevant contractual
terms. With our ‘‘Quan Zhanggui ( 全掌櫃)’’ APP, we notify insurance clients
and/or insurance agents regarding premium due dates on a timely basis.
. Policy administration. Our online platforms offer po licy management tools that
enable users to view and manage their insurance policies. For more details on the
management tools, please refer to the pa ragraph headed ‘‘Our Online Platforms’’
in this section.
. Insurance claims. We act as the insurance clients’ trusted point of contact when
risks covered by insurance policies rea lise. We assist insurance clients in the
insurance claim and settlement proces s but do not make claim decisions as an
insurance intermediary. We have self-developed a claim system that automates the
whole insurance claim and settlement process. After receiving an insurance claim
application from an insurance client, our system lists out the documents and
information required to be provided by the insurance client to support the claim.
Upon receipt of the documents and information, our system checks the
completeness of the application by verifying that all required documents and
information are provided properly and completely. Our system then submits the
claim to our insurance company partners on behalf of the insurance client, and we
handle communications with our insurance company partners. Our expertise in
the insurance industry equips us with a clear understanding in the claim
requirements set by our insurance company partners, thus allowing us to
effectively help insurance clients prepare all necessary documents and
information. Our insurance clients can track the claim settlement progress
through our online platforms. For more details on our claim system, please refer
to the paragraph headed ‘‘Our Online Platforms — Claim application and
settlement system’’ in this section.
BUSINESS
–1 9 0–


--- page 201 ---
. Insurance renewal. We will send out renewal notices to insurance clients,
reminding them that their policy is set to expire soon. The insurance clients will
then review their policy and decide whether they want to renew it or make any
changes to their coverage. If they decide to renew, they will typically need to
provide updated information and make premium payment. For life and health
insurance products, the renewal process is slightly different than other categories
of insurance as the life and health insurance products we distributed are
purchased for a specific term ranging from three to 30 years in general. If they
decide to renew, they will typically need to make premium payment according to
the payment schedule.
(ii) Internet insurance products
By placing online advertisement on social media and promoting the awareness of our
brand, potential insurance clients will log int o our online platforms, complete an order form
and confirm the terms of the insurance policies without the involvement of our offline sales
team or insurance agents. Upon our system initial check on the completeness of the
information, insurance clients will be directed to the insurance company partners through
our system for final evaluation and payment of the insurance premiums before our
insurance company partners issuing the insurance policy. Save as above, the operation flow
for Internet insurance products are generally in line with that of non-Internet insurance
products. Our Group’s Internet insurance products do not cover automobile insurance
products. Apart from the above, there is no material difference in terms of insurance
products offered and the insurance company roles between the Internet insurance products
and non-Internet insurance products.
BUSINESS
–1 9 1–


--- page 202 ---
OUR ONLINE PLATFORMS
We primarily rely on the offline business for our insurance agency business and utilise
our online platforms to facilitate the transa ction process for our offline insurance agency
business. Our online platforms cater to different insurance clients, with an APP designed for
household insurance clients and a website designed for corporate insurance clients. The
purpose of these online platforms is to provide a u ser-friendly and streamlined experience to
our insurance clients, including simplifying the process of purchasing insurance products,
efficiently managing insurance policies and facilitating the submission and processing of
insurance claims. Our APP also provides comprehensive service support to our insurance
agents for development of thei r business. For instance, our insurance agents can find
suitable insurance products for their insurance clients with the product comparison
function on our APP. During the Track Record Period, we had not charged insurance
clients or insurance agents any fees for using th e after-sale services an d functions provided
by our online platforms.
In addition, our APP also offer a small selection of Internet insurance products, which
can be purchased online directly, and the transaction process is self-serviced through our
online platforms without manual involvement. However, the commission income generated
from the distribution of Internet insurance products only accounted for less than 2% of the
revenue of our insurance agency business during the Track Record Period because Internet
insurance products are currently not our primary focus, but rather additional offerings for
product diversification purposes.
Our online platforms can be accessed on the Internet and mobile Internet, including
our website, APP, WeChat official account and WeChat mini programmes. As at 30 April
2024, our online platforms had over 241,000 registered users (including both insurance
agents and insurance clients). The following sets out the details and functions of each of our
online platforms.
Corporate Insurance Interactive Service Platform ( 企業保險交互服務平台)
We operate our Corporate Insurance Interactive Service Platform ( 企業保險交互服務
平台)a t
partner.haierbx.net , through which we offer different types of insurance products
mainly for corporate insurance clients including policy selection, product purchase and
policy management.
BUSINESS
–1 9 2–


--- page 203 ---
Our platform provides a variety of insurance products which are commonly purchased
by corporate insurance clients i n the PRC, particularly the employee’s liability and accident
insurance products. Corporate insurance clients can select insurance companies and
insurance proposal on the website, fill in the relevant information and purchase the
insurance policy online. Upon submitting of the relevant information, our platform will
provide real-time feedback on the underwriting results from different insurance companies
and estimate the premium amount required for the relevant insurance products. If
corporate insurance clients require other insurance products according to their corporate
profiles and business scenarios, they can submit their requests and basic information
through our website, and our sales executive will communicate with them to understand
their business operations and industry and recommend a range of suitable insurance
portfolios and products for corporate insurance clients to choose from, based on their
business needs and requirements. Our corporate insurance clients may also review their
policy and make changes to the policy information when needed subsequent to the
purchase. We also communicate with corporate insurance clients offline when needed and
provide recommendations with respect to insu rance products and assistance in insurance
planning. Below sets forth the flowchart for the utilisation of our platform by corporate
insurance clients:
CORPORATE INSURANCE CLIENTS
Corporate Insurance Interactive Service Platform
Policy consolidation and management
 Insurance claims(Note 2)
Quan Zhanggui Claim Centre
(a WeChat mini-programme)
• Insurance claim
submission
• Insurance claim
management
• Assignment of
service specialists
for handling
• Keeping track of
status of claim
process
• Policy enquiry
• Change of policy
 information
Product
selection
cti
Communication
with sales executives(Note 1)
Product purchase
online
Product
recommendation
Information
filling-in
Notes:
1. Communication with our sales executives offli ne to follow up on the product recommendation and
purchase of insurance products.
2. In some occasions, our insurance clients may handl e the insurance claims directly with the insurance
companies without utilisation of our online platf orm, with or without our a ssistance, depending on
the need of our insurance clients.
BUSINESS
–1 9 3–


--- page 204 ---
Our Directors believe our platform is able to enhance the overall insurance purchase
experience for corporate insurance clients wit h the aforesaid features and large variety of
options of insurance products from different insurance companies for corporate insurance
clients to choose from in an efficient manner. Particularly for corporate insurance clients
with limited business scales, resources and bargaining power, which often face challenges in
finding suitable insurance products, our platform aims to streamline the process and offer
cost-effective solutions based to their business requirements and budget constraints.
Our ‘‘Quan Zhanggui ( 全掌櫃)’’ APP
We have developed our ‘‘Quan Zhanggui ( 全掌櫃)’’ APP and established our official
account on the WeChat platform since 2017. Our two mini programmes on the WeChat
platform were launched in 2018 and 2021, respectively. Through our WeChat official
account, users can access the same interface of and enjoy the same functions as our ‘‘Quan
Zhanggui ( 全掌櫃)’’ APP while our mini programmes on the WeChat platform cover
specific features such as management of ins urance policies and claims application and
settlement.
Our APP is primarily tailored for household in surance clients and insurance agents.
Our APP provides household insurance clients with a user-friendly and streamlined
experience, including simplifying the process of purchasing insurance products, efficiently
managing insurance policies and facilitatin g the submission and processing of insurance
claims. Our APP also provides insurance agents with comprehensive service support for
development of their business, which can facilitate the transaction from insurance premium
quotes to receipt of underwriting decisions for them to better serve their insurance clients
and thus drive their sales and our Group’s commission income. Our Directors believe that
by equipping insurance agents with the APP, our Group can provide a user-friendly and
streamlined experience to our insurance clients.
BUSINESS
–1 9 4–


--- page 205 ---
Below sets forth the flowcharts for each of household insurance clients and insurance
agents on their utilisation of our APP:
HOUSEHOLD INSURANCE CLIENTS
INSURANCE AGENTS
Product
selection
WeChat Official Account/Quan Zhanggui APP
WeChat Official Account/Quan Zhanggui APP
Communication
with insurance agents(Note 1)
Product purchase
online
Product
recommendation
Online
trainings
Performance
management
Online
Signing of
agency
contract
Facilitate
transaction
Policy consolidation and management
 Insurance claims(Note 2)
A claim assistance function on
WeChat Official Account/Quan Zhanggui APP
Palm Insurance Policy
(a function on  “Quan Zhanggui” APP)
• Insurance claim
submission
• Insurance claim
management
• Keeping track of
status of claim
process
• Policy
enquiry
• Reminder of
policy
renewals
Information
filling-in
• Real-time insurance
premium of quotes
• Side-by-side product
comparison
• Online submission of
insurance applications
• Receipt of underwriting
decision
Notes:
1. Communication with our insurance agents offl ine to follow up on the product recommendation and
purchase of insurance products.
2. In some occasions, our insurance clients may handl e the insurance claims directly with the insurance
companies without utilisation of our online platf orm, with or without our a ssistance, depending on
the need of our insurance clients.
BUSINESS
–1 9 5–


--- page 206 ---
Our ‘‘Quan Zhanggui’’ ( 全掌櫃) APP provides insurance related content aimed at
enhancing insurance clients’ awareness of insurance needs and improving the knowledge
and expertise of insurance agents. Our insurance agents and in-house sales executives would
usually repost insurance related content as published on our APP on other social media
platforms, upon potential insurance users clicking and granting permission, our APP could
collect information such as their name, the clicke d articles, the clicking time and article tags
and we would utilise data analysis engines to an alyse such collected information and thus
the potential insurance products such potenti al insurance users might be interested, and
share such data with our insurance agents and in-house sales executives for them to
accurately identify the insurance clients’ n eed. Our APP also allows our insurance agents to
serve household insurance clients conveniently throughout the transaction process. They
can obtain real-time insurance premium quotes, submit insurance applications and receive
the relevant insurance company partner’s underwriting decisions via our APP, which
automatically interacts with the systems o f the insurance company partners that we
collaborate with, allowing us to transmit esse ntial insurance clients’ information to the
insurance company partners and to receive updates from them regarding the insurance
transaction including underwriting decisions in a timely manner.
Functions designed for insurance agents
Our APP provides a variety of functions to facilitate the transaction process of
insurance agents, including a product comparison function which aggregates insurance
products from multiple insurance companies and allow users to compare them side-by-side.
This can help them find the most suitable produc ts for their clients based on their specific
situation.
In order to provide our insurance agents with comprehensive and efficient management
system, our APP offers management functions to empower them to manage their team
comprising only insurance agents registered with the NFRA under our Group and engaged
by us on an exclusive basis, as well as performance digitally and on a real-time basis.
Moreover, our insurance agents can review their own performance, achieving a
self-monitoring mechanism.
Our insurance agents can also benefit greatly from the ‘‘Online Signing’’ ( 在線簽約)
function on our APP to sign their agency contract with us electronically, which is
cost-effective as the signing is independent of location and time.
In addition, we provide regular training to our insurance agents and from time to time
require them to take tests or read our recommended articles through our APP to enhance
their awareness of the insurance products we distribute, related laws and policies and
marketing techniques and to ensure that they have a solid understanding of insurance
products and provide high quality insurance agency services to insurance clients.
BUSINESS
–1 9 6–


--- page 207 ---
Management of insurance policies for household insurance clients
The ‘‘Palm Insurance Policy’’ (掌上保單) function on our APP provides a practical tool
for users to consolidate and manage all the existing insurance policies of household
insurance clients and their families. Insurance c lients can import insurance policies (whether
the insurance products are purchased via our Group or not) into the system. After
successful upload of the insurance policies, they can manage all the insurance policies over
our platform, and our system will send reminders for policy renewals. With the reminder
functions, our Company believes our APP is a ble to facilitate our insurance clients in
renewing their insurance policy upon expiry and increase their stickiness to our APP, which
in turn helps us in maintaining a certain percentage of renewal rate at the 13th month
during the term of the insurance policy as required by some of our insurance company
partners for certain life and health insurance products, thus reaching the key performance
indicators set by our insurance company part ners. Notably, our premium persistency ratio
of life and health insurance products was over 95% for FY2023 and 4M2024. Since we
introduced our online platforms and up to 30 April 2024, more than 111,000 insurance
clients had utilised the ‘‘Palm Insurance Policy’’ ( 掌上保單)f u n c t i o no no u rA P Pa n dw e
assisted in managing more than 299,000 insurance policies that either purchased from us
and/or other third parties. In addition, since we introduced our online platforms and up to
30 April 2024, our online platforms had successf ully sent more than 139,000 notifications to
household insurance clients to renew their insurance policies. The screenshots below
illustrate the key functions and features:
Insurance policy information Importing insurance policy
BUSINESS
–1 9 7–


--- page 208 ---
Claim application and settlement system for corporate and household insurance clients
Our mini programme ‘‘Quan Zhanggui Claim Centre ( 全掌櫃理賠中心)’’ allows our
corporate insurance clients to submit insurance claims online. Insurance clients can submit
insurance claims directly thro ugh the system by providing the required information and
documents. After the claim is submitted, t he system automatically assigns a service
specialist of the relevant insurance company partners to handle the claim, and insurance
clients can manage and keep track of the status of insurance claims through visiting our
system in a timely manner. The screenshots belo w illustrate the features and functions of the
mini programme:
Users can submit insurance claims directly by
providing the required information and
documents.
The system automatically assigns service
specialists of the relevant insurance company
partner to handle the insurance claims, and
users can keep track of the status of the entire
process.
Users can manage all insurance claims
submitted from time to time.
Digitalised insurance claim system
Similarly, the claim assistance function on our APP allows our household insurance
clients to submit their insurance claims online, manage their insurance claims and keep
track of status of claim process.
Since we introduced our online platforms and up to 30 April 2024, our online
platforms, including our APP and mini programme, had processed or submitted more than
40,000 insurance claims.
BUSINESS
–1 9 8–


--- page 209 ---
IT SERVICES
We extended and developed our IT services business by leveraging on our IT
technology and knowhow accumulated over years in view of the inherent commonality
between the digitalised solutions we developed for our insurance agency business and the
digitalised solutions demanded by our customers. We offer IT services to insurance-related
companies initially and subsequently to companies from different industries such as finance,
education and technology, by designing and developing digitalised solutions based on their
needs. Our IT services offering includes insurance related systems such as insurance claims
system, insurance intermediary core busine ss system and AI service system providing
certificate recognition and document processing services.
As we expanded our IT services business, we extended our IT services offering, such as
online training system, certificate recognit ion service, document processing service and
computer visual recognition services, to companies from different industries. For example,
in 2022, a non-banking financial institution of Haier Group selected our Group for the
p r o v i s i o no fI Ts e r v i c e st oi nr e l a t i o nt ot h ed evelopment of a finance related marketing and
business system having considered the regulated nature of both industries and the perceived
similarity between the insurance related marketing and business system utilised and
developed by our Group for its insurance agency business and the system required to be
developed by the customer for its business operations.
During the Track Record Period, we had developed for customers various
software/systems to support their business operations. The table below sets forth the key
functions of major software/system we have developed:
Software/System Key functions Target customers
Insurance marketing
and sales system
A system which supports sale of
online products and general
insurance services and provides
tools for business and provision
of services including policy
management, policy renewal
notifications, insurance premium
quotations etc.
Insurance companies,
insurance agency
companies, insurance
brokerage companies
and online insurance
companies
BUSINESS
–1 9 9–


--- page 210 ---
Software/System Key functions Target customers
Insurance claims
system
A system designated for insurance
claims and arbitration services,
including professional insurance
claims, tracking of the full
insurance claims process and
online closed-loop reporting and
claims process. The platform
utilises AI-OCR technology to
quickly collect and automatically
identify claims materials,
improving the speed of claims
process and operational efficiency
Insurance companies
and insurance
intermediaries
Online training
system
A training and examination
platform that is suitable for
various scenarios such as
on-the-job training, qualification
certification and knowledge
learning and supports
personalised training plans and
examination question bank. The
platform provides diversified
training and examination modes,
full tracking of the training
process, training effectiveness
dashboard and analysis of
learning time, which provide data
support for the quality and
teaching results of the courses for
employees, save training time and
improve training results
Companies or
organisations which
require online
training services for
employees
Insurance
intermediary core
business system
A cloud-based core system for
insurance providers that
comprehensively covers the three
areas as required by industry
regulatory measures: personnel
management, business
management and financial
management and provides
support for the insurance
intermediary industry to
strengthen compliance, improve
business efficiency and
accumulate data
Insurance
intermediaries
BUSINESS
–2 0 0–


--- page 211 ---
Software/System Key functions Target customers
AI service system A system which provides AI based
services, including the following
functions:
. certificate recognition service
which, combined with AI-OCR
technology, supports different
types of cards and certificates,
such as ID cards, bank cards,
driving licences and passports
. document processing service
which, utilising OCR and NLP
technologies, provides content
recognition, information
extraction and text comparison
of complex document such as
insurance policies and
contracts
Companies and
organisations that
require certificate and
document
recognition,
document
management and AI
testing
. computer visual recognition
services which, based on
computer vision technology,
combined with deep learning
algorithms and algorithm
modules, provides visual
detection, 3D measurement
and defect detection services
We will continue to expand our IT se rvice offerings going forward.
BUSINESS
–2 0 1–


--- page 212 ---
Our Project Cycle and Operation Flow
The below diagram sets forth the typical project cycle and operation flow and
processes for our provision of IT services:
Signing of
contracts
Identification of
business
opportunities
Project review
& design of
project plan
After-sales and
support
services
DeliverySoftware and
system
development
. Identification of business opportunities. We identify potential customers and
understand their needs, business objectives and challenges before we can
formulate and customise digitalised solutions to them. In particular, our sales
and marketing team approaches insurance companies, insurance
intermediaries and companies from different industries to identify their
needs. For IT services projects of Hai er Group, we submit solutions and
quotations through Haier Group’s IT service procurement platform, which is
open to approved suppliers, and we have to compete with other independent
service providers. For FY2021, FY2022, FY2023 and 4M2024, we submitted
20, 37, 15 and 7 solutions and quotations for provision of IT services to Haier
Group, with tender success rate of 35%, 19%, 27% and 43%, respectively.
. Project review and design of project plan. Once we identify a potential project,
we will commence preliminary work and perform technical and assessment
on the specifications and requirements of the projects, such as the estimated
time required, the availability of our workforce and the complexity of
software/system to be developed. If we consider that a project is
commercially viable, we will prepare a project plan based on the
specification and requirements of the potential customers and provide them
with our quotation.
. Signing of contracts. If our quotation is accepted, we will enter into formal
contract with the customers.
. Software and system development. We design and develop digitalised
solutions based on our customers’ requirements. During the
software/system development sta ge, we closely communicate with our
customers from time to time to ensure that the design and specifications
BUSINESS
–2 0 2–


--- page 213 ---
are satisfactory, and conduct software /system testing, during which small
testable parts of an application will be individually and independently
scrutinised to ensure proper functionality.
. Delivery. Once the software/system is co mplete, we will conduct a final
review and testing phase and, upon confirmation with the customer, will
deliver the accomplished software/sy stem on-site or via electronic means.
. After-sales services. After delivery, we may, depending on the terms of the
agreement, offer ongoing support and provide warranty for a specified
period of time (usually ranging from s ix months to two years) to ensure that
the software/system continues to function properly and meet the customer’s
requirements. If the customers request for software/system upgrade(s), we
will prepare a new project plan and provide them with our quotation for
additional works.
Terms of Agreements with Customers
As a general practise, we entered into agreements with our customers on a
project-by-project basis during the Track Record Period. The salient terms of such
agreements typically included:
Scope : We design and develop software/system on a project
basis. We generally set out the details of our scope of
services or particular deliverables to be provided by
us. For certain IT projects, we assign our R&D staff
on site to provide IT services, and the nature of these
IT services may vary and include software/system
development, technical support and other IT related
tasks.
Terms : Depending on the complexity of the software/system
to be developed.
Service fee : A fixed amount or fixed daily rate (for IT projects
which we assign our R&D staff on site) as mutually
agreed having considered the complexity of the
software/system developed, allocation of staff
(including the seniority of staff assigned on site),
duration of the agreement, ownership of the IP right,
other costs such as server fees, generally payable by
instalments upon signing of the agreement and after
confirmation of acceptance of the software/system
by our customers.
BUSINESS
–2 0 3–


--- page 214 ---
Intellectual
property
: The IP right of the software/system is generally set
out in the agreement and varies depending on the
type of software/system.
After sales services : We may, depending on the terms of the agreement,
provide warranty for a specified period of time
(usually ranging from six months to two years).
The following table sets forth the number of IT projects by band of revenue
recognised during the Track Record Period:
Band of revenue recognised
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
Less than RMB100,000 1 9 12 7 7
RMB100,000 or above to less than
RMB500,000 1 13 10 — 9
RMB500,000 or above to less than
RMB1,000,000 1 — 5 1 1
More than RMB1,000,000 — 6 5 — —
Total 3 28 32 8 17
For the years ended 31 December 2021, 2022 and 2023 and the four months ended
30 April 2023 and 2024, the average service fees received per IT project were
approximately RMB0.4 million, RMB0.5 million, RMB0.5 million, RMB0.1 million
and RMB0.2 million, respectively.
During the Track Record Pe riod, we further extended and developed our IT
services by leveraging on our IT technology and knowhow accumulated over years in
view of the inherent commonality between the digitalised solutions we developed for
our insurance agency business and the digitalised solutions demanded by our
customers. As such, we offered IT services to various participants in our ecosystem,
including companies in insurance-related industries such as insurance companies and
an insurance intermediary company as well as companies from different industries, by
designing and developing digitalised solutions based on their needs. In addition, we
submitted solutions and quotations on Haier Group’s IT service procurement platform
for providing IT services to Haier Group, which is generally open to approved
suppliers, and we have to compete with other independent service providers. Before
submitting such solutions and quotations, we identified the needs for IT services of
Haier Group and assessed whether we had the capability to provide such IT services.
As we became more competent to provide IT services, we submitted more solutions and
quotations for providing IT services through Haier Group’s IT service procurement
platform. In 2022, we were selected as the ser vice provider for two subsidiaries of Haier
Group and, through independent tendering processes, obtained several IT projects.
BUSINESS
–2 0 4–


--- page 215 ---
The following table sets forth the number of customers by industry type under our
IT services during the Track Record Period:
For the year ended 31 December
For the four months ended
30 April
Industry 2021 2022 2023 2023 2024
Insurance-related industries 1 4 7 1 4
Other industries (Note) 21 61 7 71 1
Total 3 20 24 8 15
Note: Other industries include finance, education and technology sectors.
CONSULTING SERVICES
We offer consulting services which include HR consulting services and marketing and
promotion services.
We provide HR consulting services to corporate customers, including provision of
advice on human resource management and recruitment strategies, and recruitment
services. We source candidates from our gr owing talent pool and attract other job
applicants through providing comprehensive HR solutions covering the main process of
recruitment including talent sourcing, job posting, resume screening, interview and selection
process. According to the customers’ industry , recruitment timeline and skill set required
for a job position, we will loca te, attract and identify the rig ht talent for our customers.
During the Track Record Period, we have succe ssfully placed candidates for positions
including IT engineers, R&D staff and other business related managers for our customers.
Our talent pool is formed mainly through our online recruitment efforts, as well as
leveraging the networks and referrals of our s taff to identify potential candidates. For
FY2021, FY2022, FY2023, 4M2023 and 4M2024, we provided HR consulting services to
13, 25, 24, 15 and 11 customers from different in dustries including industrial Internet, home
appliance and technology sectors, and revenue attributable to our HR consulting services
amounted to RMB1.4 million, RMB2.4 million, RMB1.8 million and RMB0.4 million,
representing 1.2%, 1.6%, 1.0% and 0.7% of our total revenue for the years ended 31
December 2021, 2022 and 2023 an d the four months ended 30 A pril 2024, respectively.
We provide marketing and promotion services to corporate customers which include
insurance company partners as value-added services. In the ordinary and usual course of
our insurance agency business, we are require d to promote insurance products underwritten
BUSINESS
–2 0 5–


--- page 216 ---
by our insurance company partners through provision of marketing and promotion services
to increase their brand awareness and the recognition and understanding of their insurance
products. During the Track Record Period, revenue attributable to our marketing and
promotion services amounted to RMB1.3 million, RMB0.3 million. RMB0.7 million and
RMB0.2 million, representing 1.0%, 0.2%, 0.4% and 0.4% of our total revenue for the
years ended 31 December 2021, 2022 and 2023 an d the four months ended 30 April 2024,
respectively.
The table below sets forth the revenue generated from our consulting services by types
of customers for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue from consulting services Revenue Revenue Revenue Revenue Revenue
RMB’000 % RMB’000 % RMB’ 000 % RMB’000 % RMB’000 %
Haier Group and its affiliated
companies 790 29.8 2,346 86.1 1,460 58.8 723 96.5 285 45.7
Non-Haier Group 1,864 70.2 378 13.9 1,021 41.2 26 3.5 339 54.3
Total 2,654 100.0 2,724 100.0 2,481 100.0 749 100.0 624 100.0
The following table sets forth the number of customers/projects by industry type under
our marketing and promotion services during the Track Record Period:
For the year ended 31 December
For the four months ended
30 April
Industry 2021 2022 2023 2023 2024
Insurance-related industries 1 1 3 1 2
Other industries (Note) 533 —1
T o t a l 64613
Note: Other industries include home appliance and technology sectors.
Pricing of our services
We generally negotiate the pricing with our customers on a case-by-case basis. Our
pricing basis and payment terms are determined based on various factors such as the
organisational size, job nature and other specifications of our customers, the allocation of
our time and human resources to provide the required consulting services.
BUSINESS
–2 0 6–


--- page 217 ---
OUR DIGITAL CAPABILITIES AND RESEARCH AND DEVELOPMENT
Our IT system is an essential component of our operations and supports our entire
transaction processes. We developed our IT sy stems and relevant software and applications
on our own, which include our online platforms. The following sets out the key components
of our technology systems:
. Automated systems. We maintain the following automated management process and
systems throughout the provision of insurance agency business:
— Our insurance client system is fully integrated with our ‘‘Quan Zhanggui ( 全掌櫃)’’
APP. The system comprises functions inc luding online training, contracting,
personnel management, marketing and business development, insurance mall,
insurance policy management, performance management, management measures
and other functions and tools. We imbedded modules with functions including
premium calculation implementation an d underwriting rule verification that
automatically interact with insurance company partners we collaborate with into
our APP and our system. Our advanced image recognition technology improves
the efficiency of the underwriting process. In addition, we also developed artificial
intelligence capabilities such as machi ne learning, deep learning, and natural
language processing (NLP) to optimise product features quickly to increase
customer acceptance.
— Our insurance interaction system connects our insurance company partners with
insurance clients and achieve product standardisation, scenario customisation and
system digitalisation based on the experience accumulated on our platform.
— Our claims system carries out efficient t ime-based review and calculation, which
shortens the entire insurance claim process. The system conducts business analysis
of the information such as the identity of the insured, category of insurance
products, insurance company partners and time, and output statistical
visualisation dashboards to further quantify risk control. During the process of
insurance claims, our AI technologies such as computer vision (CV), optical
character recognition (OCR) and natural language processing (NLP) enhanced
the entire interaction process to be faster and more efficient, which significantly
improved the user satisfaction rate.
BUSINESS
–2 0 7–


--- page 218 ---
. Data analytics capabilities. We utilise a data analytics engine to analyse the behaviour
and insurance data of our insurance clients to accurately identify potential insurance
purchasers, recommend insurance products and reach other key performance
indicators as requested by the insurance company partners:
— Prior to accepting a potential insurance client’s purchase of insurance products,
we utilise the risk control system with big data analysis to check whether the
potential insurance client is named on any blacklist, which allows us to protect the
interest of our insurance company partners against fraud risk.
— Our digitalised operational platform prov ides an accurate data support capability,
such as visualised configuration of indica tor libraries, visualisation dashboards,
and multidimensional report, for operational management and comprehensive
review of our business operations.
. Data security. We maintain an effective cyber security system to monitor and manage
the traffic to our system on a real-time basi s. For our daily operation, we collect and
store certain personal information of our insurance clients. We retrieve such
information only upon user’s consent and store all data in an encrypted format. We
also implement multiple layers of security measures to insulate our data from
unauthorised access and use sophisticated security protocols for communications
among applications. Data collected in the course of our business is stored on our
database secured by firewall subject to additional encryption and decryption
procedures.
. Stability. We have adopted various IT safety measures to enhance our information
safety management, including firewalls, data encryption and intrusion detection. We
utilise data centres and maintain data redundancy through a real-time multi-layer data
backup system to ensure the reliability of our network. We have implemented a
disaster recovery programme which enables us to react appropriately in an emergency
and instantly transfer our data to a back-up data centre if needed. We manage our IT
and network system risks by strengthening the security of our IT system through
establishing dual-system operation.
BUSINESS
–2 0 8–


--- page 219 ---
During the Track Record Period, we have been continuously increasing our research
and development expenses. Our research and development efforts mainly focus on
developing digital solutions for insurance industry using advanced technologies in areas
such as AI and data analytics. As at the Latest Practicable Date, we (i) were granted three
invention patents in the PRC; (ii) had 49 compu ter software copyrights in the PRC, and (iii)
was in the progress of registering six patents in the PRC. During the Track Record Period,
our research and development costs amount ed to approximately RMB4.7 million, RMB6.8
million, RMB7.1 million and RMB2.8 million, re presenting approximately 3.9%, 4.6%,
4.1% and 4.8% of our revenue respectively, the portion of which is in line with that of
comparable insurance intermediary companies with digital capabilities according to Frost &
Sullivan. We have a team of experienced engine ers dedicated to research and development.
As at 30 April 2024, we had 51 R&D staff, representing approximately 41.8% of our total
number of employees. Such employees have an average of over six years of experience in the
IT industry, covering areas such as Internet in formation technology, mobile applications
technology and big data computing technology, over 70% of them obtained bachelor’s or
higher degrees. Our research and development department is led by Mr. Wang, our
executive director and chief technology officer, who has over 15 years of experience in
software research and development. For more details on biographical details of Mr. Wang,
p l e a s er e f e rt ot h es e c t i o nh e a d e d‘ ‘ D i r e c t ors, Supervisors and Senior Management — Board
of Directors — Executive Directors’’ in this prospectus.
SALES AND MARKETING
We promote and distribute insurance products mainly through (i) insurance agents; (ii)
strategic channel partners; an d (iii) direct sales. We had built a sales network consisting of
insurance agents across Shandong, Hebei, He nan and Jilin provinces and strategic channel
partners during the Track Record Period. I n order to comply with the relevant laws and
regulations and better serve our insurance clients, we set up branch offices at locations
where we conduct and plan to conduct our insurance agency business.
The table below sets forth the number of branch offices by geographical areas as at 30
April 2024 and the Latest Practicable Date:
Number of branch offices
Locations
As at
30 April
2024
As at
the Latest
Practicable Date
Shandong Province 10 10
Hebei Province 3 4
Jilin Province 1 1
Henan Province 1 1
Total 15 16
BUSINESS
–2 0 9–


--- page 220 ---
The table below sets forth the breakdown of GWP and the commission income for
different insurance products distributed by our Group by sales channel for our insurance
agency business for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Insurance agents 164,650 49,709 42.8 166,304 27,930 21.3 195,327 28,962 18.6 89,623 12,666 24.5 75,338 7,740 14.1
— Life and health insurance products 153,874 46,159 39.8 163,456 27,245 20.8 193,995 28,625 18.4 89,232 12,568 24.3 74,509 7,521 13.7
— Property insurance products 7,906 2,954 2.5 814 266 0.2 420 125 0.1 55 19 0.0 496 138 0.3
— Accident insurance products 1,633 504 0.4 1,499 382 0.3 912 212 0.1 336 79 0.2 333 81 0.1
— Automobile insurance products 1,237 92 0.1 535 37 0.0 — — 0.0 — — 0.0 — — 0.0
Strategic channel partners 318,986 44,892 38.7 588,729 69,254 53.0 823,721 94,232 60.5 227,925 30,647 59.4 282,841 36,059 65.8
— Property insurance products 64,592 17,792 15.3 97,662 23,526 18.0 137,503 33,060 21.2 64,685 15,307 29.6 55,288 15,297 27.9
— Accident insurance products 49,391 15,300 13.2 70,239 22,920 17.5 74,392 26,819 17.2 23,897 7,319 14.2 22,907 8,957 16.3
— Automobile insurance products 205,003 11,800 10.2 420,828 22,808 17.5 611,826 34,353 22.1 139,343 8,021 15.5 204,646 11,805 21.5
— Life and health insurance products — — — — — — — — — — — 0.0 — — 0.0
Direct sales 182,745 21,455 18.5 263,341 33,537 25.7 240,073 32,554 20.9 59,540 8,317 16.1 68,208 11,003 20.1
— Property insurance products 156,056 18,912 16.3 192,518 23,828 18.2 196,409 26,621 17.1 52,449 7,584 14.7 63,790 10,298 18.8
— Life and health insurance products 22,212 2,173 1.9 60,397 8,911 6.8 34,822 5,132 3.3 2,819 390 0.8 3,624 581 1.1
— Accident insurance products 4,441 367 0.3 10,378 794 0.7 8,817 799 0.5 4,272 343 0.7 794 124 0.2
— Automobile insurance products 36 3 0.0 48 4 0.0 25 2 0.0 — — 0.0 — — 0.0
Total 666,381 116,056 100.0 1,018,374 130,721 100.0 1,259,121 155,748 100.0 377,088 51,630 100.0 426,387 54,802 100.0
The following table sets forth the number of participants in our sales network as at the
dates indicated:
As at 31 December
As at
30 April
20242021 2022 2023
Insurance agents 11,435 8,634 6,730 6,630
Strategic channel partners 10 10 12 12
In-house sales executives 51 64 53 45
BUSINESS
–2 1 0–


--- page 221 ---
The following table sets forth the movements in the number of our (i) insurance agents;
(ii) strategic channel partners; and (iii) in-house sales executives during the Track Record
Period:
(i)
Insurance
agents
(ii)
Strategic
channel
partners
(iii)
In-house
sales
executives
As at 1 January 2021 1 2 , 1 3 71 03 9
Addition during the year 1,845 2 18
Reduction during the year (2,547) (2) (6)
As at 1 January 2022 1 1 , 4 3 51 05 1
Addition during the year 1,157 3 24
Reduction during the year (3,958) (3) (11)
As at 1 January 2023 8 , 6 3 41 06 4
Addition during the year 3,262 2 11
Reduction during the year (5,166) (—) (22)
As at 31 December 2023 6 , 7 3 01 25 3
Addition during the period 88 2 —
Reduction during the period (188) (2) (8)
As at 30 April 2024 6 , 6 3 01 24 5
BUSINESS
–2 1 1–


--- page 222 ---
During the Track Record Period, the number of our strategic channel partners
remained stable with moderate change in com positions, including the addition of five top
five suppliers, Supplier B (commenced collaboration in 2021), Supplier D (commenced
collaboration in 2022), Supplier F (commenced collaboration in 2022), Supplier I
(commenced collaboration in 2024) and Supplier H (commenced collaboration in 2021),
which referred insurance clients to us to purchase insurance products. As a result, our
referral fees to strategic channel partner s increased from RMB31.9 million in 2021, to
RMB50.1 million in 2022, and further to RMB68.2 million in 2023, and further from
RMB19.8 million for 4M2023 to RMB25.7 million for 4M2024, primarily due to the overall
increase in our commission income attributable to strategic channel partners during the
Track Record Period.
The number of our insurance agents, on the other hand, experienced fluctuations
during the Track Record Period primarily beca use we had ceased our business relationship
with insurance agents who did not meet our requirements from time to time having
considered (i) their performan ce; (ii) our business needs; (iii) the relevant market conditions
(including the impact by the COVID-19); and (iv) the relevant requirements imposed by the
insurance industry association. In July 2023, the Insurance Association of Qingdao issued
the Qingdao Insurance Sales Practitioners Self-Discipline Code ( 青島市保險銷售從業人員自
律公約) (the ‘‘Code ’’), which aims to maintain order in the insurance market, regulate the
business practises of member units, protect the interests of insurance clients and promote
the healthy development of the insurance industry in Qingdao. As a result of the
introduction of the Code, insurance agents are required to undergo specific training and
sign certain undertakings to qualify as insurance agents in Qingdao. As some of our
insurance agents confirmed that they would not be able to meet these requirements, we
ceased our business relationship with them, leading to the reduction of the number of our
insurance agents from 8,634 as at 31 Decem ber 2022 to 6,730 as at 31 December 2023 and
6,630 as at 30 April 2024 (notwithstanding that the number of insurance agents slightly
increased to 6,687 as at the Latest Practicab le Date), which is in line with the decreasing
trend in the market. Our Directors believe that there has been a notable decline in the
overall number of insurance agents within the industry as a consequence of standardisation
and optimisation efforts. Specifically, the number of insurance agents within the industry
decreased from 5.9 million in 2021 to 5.2 mi llion by the first half of 2022, and further
decreased to below 3.0 million in 2023. For insu rance agents that expressed intention to
comply with the relevant requirements, we are providing them with additional time to
complete the necessary requirements as se t out under the Code and will cease business
relationship with them if they fail to do so. While we expect our number of insurance agents
will continue to decrease in the second half of 2024 in view of the ongoing optimisation of
our insurance agents pool conducted in compliance with the Code, we do not expect such
reduction in number will have any material financial and operational impact on our Group
as the key factor affecting our financial and operational performance remains the
performance of the remaining insurance agents who can generate revenue for our
insurance agency business. Despite the decrease in the number of insurance agents, our
overall financial performance had not been si gnificantly affected during the Track Record
Period as our overall revenue reached RM B120.0 million in 2021, RMB148.4 million in
2022 and RMB174.0 million in 2023, represen ting a CAGR of 20.4% and RMB53.4 million
for 4M2023 and RMB58.6 million for 4M2024. Thi s is mainly contributed by our diversified
BUSINESS
–2 1 2–


--- page 223 ---
product portfolio and sales channels, which allow us to respond to changing market and
mitigate risk by reducing reliance on any single category of insurance products or sales
channel.
The number of our in-house sales executives increased from 51 as at 31 December 2021
to 64 as at 31 December 2022. However, the number of our in-house sales executives
decreased to 53 as at 31 December 2023, and further dropped to 45 as at 30 April 2024 as we
began to optimise our in-house sales executive team for our household insurance business
since 2023 due to the declining performance of th e distribution of life and health insurance
products. Despite these challenges, we maintain a positive outlook on potential increase in
commission income from the distribution of life and health insurance products in the near
future, taking into account the resumption of sales activities of our insurance agents and the
gradual economic recovery following the impact of the COVID-19. As at 30 April 2024, our
Group had 45 in-house sales executives, 38 of which are individual insurance sales
practitioners registered with the NFRA under our Group. The remaining in-house sales
executives are responsible for other admin istrative work that does not require selling
insurance products directly.
Insurance Agents
Our insurance agents are individual insurance sales practitioners with professional
knowledge and experience in different insurance products. During the Track Record Period,
our insurance agents primarily distributed life and health insurance products. The following
table sets the geographical breakdown by provinces of the insurance agents by number,
GWP and commission income in relation to life and health insurance products during the
Track Record Period:
For the year ended 31 December/As at 31 December For the four months ended 30 April/As at 30 April
2021 2022 2023 2023 2024
Locations
Number of
insurance
agents
GWP
attributable
to insurance
agents
Commission
income
attributable
to insurance
agents
Number of
insurance
agents
GWP
attributable
to insurance
agents
Commission
income
attributable
to insurance
agents
Number of
insurance
agents
GWP
attributable
to insurance
agents
Commission
income
attributable
to insurance
agents
Number of
insurance
agents
GWP
attributable
to insurance
agents
Commission
income
attributable
to insurance
agents
Number of
insurance
agents
GWP
attributable
to insurance
agents
Commission
income
attributable
to insurance
agents
(RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000)
Shandong Province 10,141 147,638 43,211 7,402 154,806 24,995 5,103 177,338 23,040 2,485 82,736 10,389 4,978 64,203 5,516
Hebei Province 163 837 258 873 2,588 1,003 1,179 11,101 5,077 919 3,774 1,929 1,209 8,094 1,860
Jilin Province 1,126 5,201 2,560 331 5,705 1,203 401 5,251 377 391 2,695 246 397 2,159 139
Henan Province 5 198 130 28 357 44 47 305 131 34 27 4 46 53 6
Total 11,435 153,874 46,159 8,634 163,456 27,245 6,730 193,995 28,625 3,829 89,232 12,568 6,630 74,509 7,521As at 30 April 2024, we maintained business r elationship with over 6,000 insurance
agents. During the Track Record Period, none of the insurance agents was our top five
supplier and none of the insurance agents contributed over 1% of the total purchase for
each year/period. As such, we do not rely on any individual insurance agent, and there
would not be any material adverse impact on our Group should our Group terminate
business relationship with any single insurance agent. In addition, our Directors believe
that despite the notable decline in the overal l number of insurance agents from 5.9 million
in 2021 to below 3.0 million in 2023, there is st ill a considerable amoun t of insurance agents
BUSINESS
–2 1 3–


--- page 224 ---
available in the market, which provides us with enough flexibility to find suitable
replacement swiftly if need arises and ensures that we are not overly dependent on any
single insurance agent.
Our insurance agents are individual insuran ce sales practitioners registered with the
NFRA under us and are engaged by us on an exclusive basis. By virtue of their registration
status, they are subject to the governance of relevant regulations of the NFRA and are
eligible to and may engage in the sales of insurance products we distribute. We select our
insurance agents based on various criteria, including their reputation, industry experience,
operational track record and previous rel ationship with us. We monitor the services
provided by our insurance agents through reviewing: (i) the rate of insurance clients who
subsequently terminate the insurance policy unilaterally; and (ii) the attendance of our
training and completion of our test on our APP. For details on the fluctuation of the
number of our insurance agents and the impact of the Code on our Group, please refer to
the paragraph headed ‘‘Sales and Marketin g’’ in this section. During the Track Record
Period, our insurance agents had distributed insurance products to more than 12,000
insurance clients each year.
In addition, we enter into insurance representative agreements with all our external
insurance agents and register them with the NFRA. Salient terms of the insurance agent
agreements include:
Services : Our insurance agents shall promote and distribute insurance
products we carry to potential insurance clients in the name of
u sa n do nb e h a l fo fu sw i t h i nt h es c o p eo fa u t h o r i s a t i o no na n
exclusive basis.
Location : Our insurance agents may only promote and distribute
insurance products in cities where our Group has completed
the establishment procedures in accordance with the relevant
laws and regulations.
Fees and payment : We pay commissions t o our insurance agents for successful
purchase of insurance products by insurance clients. We
generally pay them commissions on a monthly basis.
Terms : Our insurance representative agreements generally have a term
of three years.
Termination : The agreement may be terminated by mutual agreement
between our Group and insurance agents. We may terminate
the agreement unilaterally with cause, including material
breach of the agreement, loss of qualification, illegal
behaviour, fraud or otherwise failure to meet our
assessments and standards. The insurance agents may
terminate the agreement unilaterally if our breach of
agreement has caused significant impact on them to the
extent that the purpose of the agreements cannot be achieved.
BUSINESS
–2 1 4–


--- page 225 ---
The commission rates paid by us to our ins urance agents are usually positively
correlated with the commission rates received by us from our insurance company partners
to ensure that our Group retains a sufficient a nd acceptable spread as profit margin for our
insurance agency business. For the years e nded 31 December 2021, 2022 and 2023 and 30
April 2024, the average commission rates we paid to insurance agents were approximately
52.8%, 51.1%, 50.0% and 48.0%, respectively, which were relatively stable.
Strategic Channel Partners
Our strategic channel partners generally have network with access to large number of
potential insurance clients that may be introduced to us. Since 2017, we have commenced
collaboration with strategic channel partne rs to expand our insurance client base. Some
strategic channel partners have network in the human resources and corporate consulting
industry, which often work closely with corp orates and individuals to provide a range of
services and have day-to-day access with large n umber of potential insurance clients, while
other strategic channel partners, due to their business natures, often have access to large
number of potential insurance clients that maybe introduced to us. For example, our
strategic channel partners which are engaged in the human resources industry have access to
companies which have demand for insurance such as employer’s liability insurance products
given the nature of their business. We occasionally collaborate with our strategic channel
partners to organise marketing events for potential insurance clients to attend. By
leveraging their experience, resources, network and event organised, we are able to expand
our reach to large population of corporate an d household insurance clients in different
industries. Our business process with strategic channel partners begins with these strategic
channel partners referring potential insurance clients that are in need of insurance products.
Our in-house sales executives then approach and engage these insurance clients directly to
discuss their insurance needs. Upon receipt of commission from our insurance company
partners, we will pay referral fees to the strategic channel partners for successful purchase
of insurance products by insurance clients.
During the Track Record Period, we had c ooperation with 20 strategic channel
partners, which mainly referred insurance clients to purchase property, accident and
automobile insurance products. The table be low sets forth the breakdown of GWP and the
commission income for different insuranc e products distributed by our Group to the
insurance clients referred by our strategic channel partners for our insurance agency
business for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income GWP
Commission
income
Percentage
of
commission
income
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Property insurance products 64,592 17,792 39.6 97,662 23,526 34.0 137,503 33,060 35.0 64,685 15,307 49.9 55,288 15,297 42.4
Accident insurance products 49,391 15,300 34.1 70,239 22,920 33.1 74,392 26,819 28.5 23,897 7,319 23.9 22,907 8,957 24.9
Automobile insurance products 205,003 11,800 26.3 420,828 22,808 32.9 611,826 34,353 36.5 139,343 8,021 26.2 204,646 11,805 32.7
318,986 44,892 100.0 588,729 69,254 100.0 823,721 94,232 100.0 227,925 30,647 100.0 282,841 36,059 100.0
BUSINESS
–2 1 5–


--- page 226 ---
For the years ended 31 December 2021, 2022 and 2023 and the four months ended 30
April 2024, our strategic channel partners had referred more than 6,000, 9,000, 11,000 and
9,000 corporate insurance clients and 81,000, 145,000, 206,000 and 75,000 household
insurance clients, respectively, to purchase in surance products from us. The table below sets
forth the number of strategic channel partners by geographical areas as at 30 April 2024 and
the Latest Practicable Date:
Number of strategic channel partners
Locations
As at
30 April
2024
As at
the Latest
Practicable Date
Shandong Province 11 11
Anhui Province 1 1
Total 12 12
In selecting our strategic channel partners, we mainly take into account their business
nature, understanding of the industry, operational scale and geographical presence. We
require our strategic channel partners to obtain business licence required to conduct their
relevant business.
BUSINESS
–2 1 6–


--- page 227 ---
The following table sets forth the details of our top five strategic channel partners in each year/period during the Track Record
Period:
For the year ended 31 December 2021
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement
of business
relationship
Background of commencement of
business relationship
Approximate
amount of
commission income
attributable to
the strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
1 Supplier A This strategic channel partner
is registered in Qingdao, the
PRC, in 2015 and has a
registered capital of RMB2
million. It is a comprehensive
human resources service
provider, which offers
services such as personnel
agency, labour dispatch,
outsourcing, recruitment,
employee health management
and business consulting
2020 Through participation in seminars held
by HR association, Mr. Lu connected
with this strategic channel partner
and commenced business cooperation
where it refers insurance clients to us
for purchase of insurance products.
Its clients include government
agencies, businesses, universities and
automobile sales and service points.
With a track record of serving over
6,000 companies and providing
services to more than 300,000
individuals, it has access to a large
number of potential insurance clients
that may be introduced to us
28,406 20,574 72.4 Automobile insurance
products, property
insurance products
and accident
insurance products
2 Supplier B This strategic channel partner
is a state-owned company
registered in Qingdao, the
PRC, in 2017 and has a
registered capital of RMB5
million. It is a subsidiary of a
well-known radio and
television group in Qingdao
and is principally engaged in
human resources services and
training services
2021 To the best knowledge of our Directors,
our Group approached this strategic
channel partner to commence our
cooperation leveraging its
shareholders’ business network in
different industries. Its clients include
government agencies, public
institutions and state-owned
enterprises. With the ability to reach
a wide number of employees and
individuals, it has access to a large
number of potential insurance clients
that may be introduced to us
7,173 7,001 97.6 Automobile insurance
products and accident
insurance products
BUSINESS
–2 1 7–


--- page 228 ---
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement
of business
relationship
Background of commencement of
business relationship
Approximate
amount of
commission income
attributable to
the strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
3 Haier Group Subsidiaries and affiliated
companies of Haier Group,
including three strategic
channel partners: (i) a
company principally engaged
in provision of supply chain
management solution and
logistic service with registered
capital of RMB590.6 million;
registered in Qingdao, the
PRC in 2000; (ii) a company
principally engaged in freight
services with registered
capital of RMB10 million;
registered in Qingdao, the
PRC in 2019 and (iii) a
company principally engaged
in sales of household
appliances with registered
capital of RMB9 million;
registered in Qingdao, the
PRC in 2013
2018 We decided to cooperate with this
strategic channel partner and its
subsidiaries leveraging their business
network and nature of their
businesses, which cover different
scenarios that require purchase of
insurance products. For example, it
operates a platform with over 5,000
after-sales distribution points and a
fleet of over 500 delivery service
vehicle, which allows it to refer
insurance clients to purchase property
insurance products
8,504 3,944 46.4 Property insurance
products
BUSINESS
–2 1 8–


--- page 229 ---
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement
of business
relationship
Background of commencement of
business relationship
Approximate
amount of
commission income
attributable to
the strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
4 Supplier G This strategic channel partner
is registered in Qingdao, the
PRC, in 2017 and has a
registered capital of RMB10
million. It is principally
engaged in the operation of
human resources services and
employment risk management
platforms, which collect
clients’ risk management
needs and recommends risk
management solutions
2019 To the best knowledge of our Directors,
this strategic channel partner learned
about our business and approached us
for cooperation. Due to its business
nature, it understands risks associated
with employment, allowing it to
identify potential insurance clients
that may be introduced to us
351 305 86.9 Property insurance
products
5 Supplier H This strategic channel partner
is registered in Qingdao, the
PRC, in 2021 and has a
registered capital of RMB1.5
million. It is principally
engaged in human resources
services and training services
2021 This strategic channel partner was
referred by a job candidate from our
HR consulting services, and we found
o u tt h a ti tc a nr e f e ri n s u r a n c ec l i e n t s
that are in need of insurance
products. It collaborates with schools
to provide professional skills training
and labour dispatch services to
different enterprises, which face
business risks related to labour
dispatch and have insurance needs
313 162 51.8 Property insurance
products
BUSINESS
–2 1 9–


--- page 230 ---
For the year ended 31 December 2022
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement
of business
relationship
Background of
commencement of
business relationship
Approximate
amount of
commission income
attributable to the
strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
1 Supplier A This strategic channel
partner is registered in
Qingdao, the PRC, in 2015
and has a registered capital
of RMB2 million. It is a
comprehensive human
resources service provider,
which offers services such
as personnel agency, labour
dispatch, outsourcing,
recruitment, employee
health management and
business consulting
2020 Through participation in seminars held
by HR association, Mr. Lu connected
with this strategic channel partner
and commenced business cooperation
where it refers insurance clients to us
for purchase of insurance products.
I t sc l i e n t si n c l u d eg o v e r n m e n t
agencies, businesses, universities and
automotive sales and service points.
With a track record of serving over
6,000 companies and providing
services to more than 300,000
individuals, it has access to large
number of potential insurance clients
that may be introduced to us
38,888 26,513 68.2 Automobile insurance
products, property
insurance products
and accident
insurance products
2 Supplier B This strategic channel
partner is a state-owned
company registered in
Qingdao, the PRC, in 2017
and has a registered capital
of RMB5 million. It is a
subsidiary of a well-known
radio and television group
in Qingdao and is
principally engaged in
human resources services
and training services
2021 To the best knowledge of our Directors,
our Group approached this strategic
channel partner to commence our
cooperation leveraging its
shareholders’ business network in
different industries. Its clients include
government agencies, public
institutions and state-owned
enterprises. With the ability to reach
a wide number of employees and
individuals, it has access to large
number of potential insurance clients
that may be introduced to us
17,449 16,152 92.6 Automobile insurance
products and accident
insurance products
BUSINESS
–2 2 0–


--- page 231 ---
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement
of business
relationship
Background of
commencement of
business relationship
Approximate
amount of
commission income
attributable to the
strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
3 Haier Group Subsidiaries and affiliated
companies of Haier Group,
including three strategic
channel partners: (i) a
company principally
engaged in provision of
supply chain management
solution and logistic service
with registered capital of
RMB590.6 million;
registered in Qingdao, the
PRC in 2000; (ii) a
company principally
engaged in freight services
with registered capital of
RMB10 million; registered
in Qingdao, the PRC in
2019 and (iii) a company
principally engaged in sales
of household appliances
with registered capital of
RMB9 million; registered in
Qingdao, the PRC in 2013
2018 We decided to cooperate with this
strategic channel partner and its
subsidiaries leveraging their business
network and nature of their
businesses, which cover different
scenarios that require purchase of
insurance products. For example, it
operates a platform with over 5,000
after-sales distribution points and a
fleet of over 500 delivery service
vehicle, which allows it to refer
insurance clients to purchase property
insurance products
7,666 3,411 44.5 Property insurance
products
4 Supplier D This strategic channel
p a r t n e ri sr e g i s t e r e di n
Qingdao, the PRC, in 2014
and has a registered capital
of RMB10 million. It is
principally engaged in
provision of human
resources services such as
personnel agency, labour
dispatch, project
outsourcing, personnel
recruitment, corporate
training and business
consulting
2022 Through participation in seminars held
by HR association, Mr. Lu connected
with this strategic channel partner
and commenced business cooperation
where it refers insurance clients to us
for purchase of insurance products.
Its clients include branch stations of a
reputable oil and gas company in the
PRC, universities and automotive
repair shops. Due to its business
nature, it has access to a large
number of potential insurance clients
that may be introduced to us
2,230 2,064 92.6 Automobile insurance
products and accident
insurance products
BUSINESS
–2 2 1–


--- page 232 ---
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement
of business
relationship
Background of
commencement of
business relationship
Approximate
amount of
commission income
attributable to the
strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
5 Supplier F This strategic channel
p a r t n e ri sr e g i s t e r e di n
Tianjin, the PRC, in 2021
and has a registered capital
of RMB10 million. It is
principally engaged in
provision of software
outsourcing, network
technology and enterprise
management consulting
services
2022 This strategic channel partner was
referred by our staff in a branch
office, and we found out that it can
refer insurance clients that are in need
of insurance products. Its clients
include enterprises in the automobile
and second-hand car industries, which
have demand for automobile
insurance products that may be
introduced to us
1,201 1,113 92.7 Automobile insurance
products and accident
insurance products
BUSINESS
–2 2 2–


--- page 233 ---
For the year ended 31 December 2023
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement of
business
relationship
Background of commencement of
business relationship
Approximate
amount of
commission income
attributable to the
strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
1 Supplier A This strategic channel
partner is registered in
Qingdao, the PRC, in 2015
and has a registered capital
of RMB2 million. It is a
comprehensive human
resources service provider,
which offers services such
as personnel agency, labour
dispatch, outsourcing,
recruitment, employee
health management and
business consulting
2020 Through participation in seminars held
by HR association, Mr. Lu connected
with this strategic channel partner
and commenced business cooperation
where it refers insurance clients to us
for purchase of insurance products.
I t sc l i e n t si n c l u d eg o v e r n m e n t
agencies, businesses, universities and
automotive sales and service points.
With a track record of serving over
6,000 companies and providing
services to more than 300,000
individuals, it has access to a large
number of potential insurance clients
that may be introduced to us
56,332 38,292 68.0 Automobile insurance
products, property
insurance products
and accident
insurance products
2 Supplier B This strategic channel
partner is a state-owned
company registered in
Qingdao, the PRC, in 2017
and has a registered capital
of RMB5 million. It is a
subsidiary of a well-known
radio and television group
in Qingdao and is
principally engaged in
human resources services
and training services
2021 To the best knowledge of our Directors,
our Group approached this strategic
channel partner to commence our
cooperation leveraging its
shareholders’ business network in
different industries. Its clients include
government agencies, public
institutions and state-owned
enterprises. With the ability to reach
a wide number of employees and
individuals, it has access to a large
number of potential insurance clients
that may be introduced to us
14,906 13,868 93.0 Accident insurance
products and
automobile insurance
products
BUSINESS
–2 2 3–


--- page 234 ---
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement of
business
relationship
Background of commencement of
business relationship
Approximate
amount of
commission income
attributable to the
strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
3 Supplier D This strategic channel
p a r t n e ri sr e g i s t e r e di n
Qingdao, the PRC, in 2014
and has a registered capital
of RMB10 million. It is
principally engaged in
provision of human
resources services such as
personnel agency, labour
dispatch, project
outsourcing, personnel
recruitment, corporate
training and business
consulting
2022 Through participation in seminars held
by HR association, Mr. Lu connected
with this strategic channel partner
and commenced business cooperation
where it refers insurance clients to us
for purchase of insurance products.
Its clients include branch stations of a
reputable oil and gas company in the
PRC, universities and automotive
repair shops. Due to its business
nature, it has access to a large
number of potential insurance clients
that may be introduced to us
13,714 12,873 93.9 Accident insurance
products and
automobile insurance
products
4 Haier Group Subsidiaries and affiliated
companies of Haier Group,
including three strategic
channel partners: (i) a
company principally
engaged in provision of
supply chain management
solution and logistic service
with registered capital of
RMB590.6 million;
registered in Qingdao, the
PRC in 2000; (ii) a
company principally
engaged in freight services
with registered capital of
RMB10 million; registered
in Qingdao, the PRC in
2019 and (iii) a company
principally engaged in sales
of household appliances
with registered capital of
RMB9 million; registered in
Qingdao, the PRC in 2013
2018 We decided to cooperate with this
strategic channel partner and its
subsidiaries leveraging their business
network and nature of their
businesses, which cover different
scenarios that require purchase of
insurance products. For example, it
operates a platform with over 5,000
after-sales distribution points and a
fleet of over 500 delivery service
vehicle, which allows it to refer
insurance clients to purchase property
insurance products
5,786 1,081 18.7 Property insurance
products
BUSINESS
–2 2 4–


--- page 235 ---
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement of
business
relationship
Background of commencement of
business relationship
Approximate
amount of
commission income
attributable to the
strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
5 Supplier F This strategic channel
p a r t n e ri sr e g i s t e r e di n
Tianjin, the PRC, in 2021
and has a registered capital
of RMB10 million. It is
principally engaged in
provision of software
outsourcing, network
technology and enterprise
management consulting
services
2022 This strategic channel partner was
referred by our staff in a branch
office, and we found out that it can
refer insurance clients that are in need
of insurance products. Its clients
include enterprises in the automobile
and second-hand car industries, which
have demand for automobile
insurance products that may be
introduced to us
865 810 93.6 Accident insurance
products and
automobile insurance
products
BUSINESS
–2 2 5–


--- page 236 ---
For the four months ended 30 April 2024
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement of
business
relationship
Background of commencement of
business relationship
Approximate
amount of
commission income
attributable to the
strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
1 Supplier A This strategic channel
partner is registered in
Qingdao, the PRC, in 2015
and has a registered capital
of RMB2 million. It is a
comprehensive human
resources service provider,
which offers services such
as personnel agency, labour
dispatch, outsourcing,
recruitment, employee
health management and
business consulting
2020 Through participation in seminars held
by HR association, Mr. Lu connected
with this strategic channel partner
and commenced business cooperation
where it refers insurance clients to us
for purchase of insurance products.
I t sc l i e n t si n c l u d eg o v e r n m e n t
agencies, businesses, universities and
automotive sales and service points.
With a track record of serving over
6,000 companies and providing
services to more than 300,000
individuals, it has access to a large
number of potential insurance clients
that may be introduced to us
20,971 14,079 67.1 Automobile insurance
products, property
insurance products
and accident
insurance products
2 Supplier B This strategic channel
partner is a state-owned
company registered in
Qingdao, the PRC, in 2017
and has a registered capital
of RMB5 million. It is a
subsidiary of a well-known
radio and television group
in Qingdao and is
principally engaged in
human resources services
and training services
2021 To the best knowledge of our Directors,
our Group approached this strategic
channel partner to commence our
cooperation leveraging its
shareholders’ business network in
different industries. Its clients include
government agencies, public
institutions and state-owned
enterprises. With the ability to reach
a wide number of employees and
individuals, it has access to a large
number of potential insurance clients
that may be introduced to us
6,016 5,624 93.5 Accident insurance
products and
automobile insurance
products
BUSINESS
–2 2 6–


--- page 237 ---
Rank
Strategic
channel partner
Background of the strategic
channel partner
Year of
commencement of
business
relationship
Background of commencement of
business relationship
Approximate
amount of
commission income
attributable to the
strategic
channel partner
Approximate
amount of
referral fees
Average rate of
referral fees
Major type(s) of
insurance products
purchased by insurance
clients referred
(RMB’000) (RMB’000) (%)
3 Supplier D This strategic channel
p a r t n e ri sr e g i s t e r e di n
Qingdao, the PRC, in 2014
and has a registered capital
of RMB10 million. It is
principally engaged in
provision of human
resources services such as
personnel agency, labour
dispatch, project
outsourcing, personnel
recruitment, corporate
training and business
consulting
2022 Through participation in seminars held
by HR association, Mr. Lu connected
with this strategic channel partner
and commenced business cooperation
where it refers insurance clients to us
for purchase of insurance products.
Its clients include branch stations of a
reputable oil and gas company in the
PRC, universities and automotive
repair shops. Due to its business
nature, it has access to a large
number of potential insurance clients
that may be introduced to us
4,205 3,966 94.3 Accident insurance
products and
automobile insurance
products
4 Supplier I This strategic channel
p a r t n e ri sr e g i s t e r e di n
Qingdao, the PRC, in 2023
and has a registered capital
of RMB5 million. It is
principally engaged in
labour and human
resources
2024 This strategic channel partner was
referred by a contact in a life and
health insurance company partner. Its
clients include construction
companies, manufacturing companies
and automobiles sales companies.
With the ability to reach a wide
number of employees and individuals,
it has access to a large number of
potential insurance clients that may
be introduced to us
1,525 1,467 96.2 Accident insurance
products and
automobile insurance
products
5 Supplier H This strategic channel
p a r t n e ri sr e g i s t e r e di n
Qingdao, the PRC, in 2021
and has a registered capital
of RMB1.5 million. It is
principally engaged in
human resources services
and training services
2021 This strategic channel partner was
referred by a job candidate from our
HR consulting services, and we found
o u tt h a ti tc a nr e f e ri n s u r a n c ec l i e n t s
that are in need of insurance product.
It collaborates with schools to
provide professional skills training
and labour dispatch services to
different enterprises, which face
business risks related to labour
dispatch and have insurance needs
990 262 26.5 Property insurance
products
BUSINESS
–2 2 7–


--- page 238 ---
We enter into collaboration agreements wi th our strategic channel partners. The
salient terms and conditions of such agreements are generally as follows:
Services : Our strategic channel part ners shall provide referral services
and introduce insurance clients to purchase insurance products
through us on a non-exclusive basis, and/or organise seminars
and trainings, and we shall provide insurance products.
Fees and payment : We pay referral fees to our strategic channel partners for
successful purchase of insuranc e products by insurance clients
and service fees for marketing activities such as the
organisation of marketing events.
Terms : Our collaboration agreements generally have a term of one to
three years.
Confidentiality : Both parties have the obligation to keep confidential of all
business secrets obtained from the other party during the
cooperation.
Liability for
breach
: Either party is obligated to in demnify the other party for any
losses resulting from breach of the agreement.
We generally make reference to the type of insurance products, the number and type of
insurance clients and the synergy brought to our Group in determining the referral fees
rates we provide to our strategic channel partners to ensure that our Group retains a
sufficient and acceptable spread as profit marg in for our insurance agency business. For the
year ended 31 December 2021, 2022 and 2023 and the four months ended 30 April 2024, the
average referral fee rates we paid to strategic channel partners were approximately 71.1%,
72.4%, 72.3% and 71.3%, respectively, which were relatively stable.
The table below sets out the average referral fee rates to our strategic channel partners
by category of insurance products during the Track Record Period:
For the year ended 31 December
For the
four months
ended
30 April
20242021 2022 2023
Property Insurance products 38.0% 34.6% 33.7% 40.8%
Accident insurance products 89.4% 91.3% 92.8% 93.3%
Automobile insurance
products 97.3% 92.3% 93.6% 94.2%
BUSINESS
–2 2 8–


--- page 239 ---
The average referral fee rates we paid to strategic channel partners for automobile
insurance products and traffic accident related accident insurance products are significantly
higher than other insurance products because these are products with lower level of
complexity, and the market for such products are more competitive, resulting in higher
referral fees paid to strategic channel partn ers to incentivise them to make referral of
insurance clients to purchase such products.
Our Directors believe that co-operation wi th strategic channel partners is a common
industry practise in the PRC insurance inter mediary market. Leveraging the network of
strategic channel partners, large population of corporate and household insurance clients
could be reached, resulting in the expansion of the overall client base of the insurance
intermediaries. Meanwhile, the wide range of a verage referral fee rate s to strategic channel
partners is common in the insurance intermediary industry. Such referral fee is generally
negotiated between the contracting parties on a case-by-case basis, taking into account
factors such as the type of insurance products, the intensity of market competition and the
contribution of the strategic channel partners.
Direct Sales
Under our direct sales channel, we distribute insurance products directly to insurance
clients through our in-house sales executives. Our in-house sales executives are primarily
responsible for handling the distribution of insurance products to these insurance clients
without the need to liaise with our insurance a gents or strategic channel partners. The
insurance clients under our direct sales cha nnel mainly include Haier Group insurance
clients, which contributed to over 70% of our commission income generated through this
sales channel. We also distributed insurance products to (i) Haier Group’s employees and
their family members pursuant to a life and health insurance programme designed for them
and (ii) other non-Haier Group insurance clients sourced by our in-house sales executives.
We also generate a very small portion of revenue through distribution of Internet insurance
products (i.e. insurance products the purchase transaction of which is self-serviced through
our APP without manual involvement).
OUR CUSTOMERS
Our customers for our insurance agency bus iness are insurance companies in the PRC,
which we consider as our ‘‘insurance compa ny partners’’. In the PRC insurance market,
local branches of insurance companies generally have the authority to enter into contracts
in their own names with insurance intermedia ries. In general, we enter into contracts and
maintain business relationships with our in surance company partners at the local level
primarily in Shandong, the PRC. We may also e nter into contracts with our insurance
company partners in the PRC with regard to certain domestic reinsurance purchased by
overseas insurance companies in relation to property insurance products of overseas
operation of Haier Group, with RMB as the settlement currency. During the Track Record
Period, we had established business relationships with over 70 insurance companies in the
PRC. As at 31 December 2021, 2022 and 2023 and 30 April 2024, our Group had
cooperation with 45, 41, 46 and 40 insurance company partners, respectively. As insurance
companies may offer different insurance products and/or insu rance policies from time to
BUSINESS
–2 2 9–


--- page 240 ---
time, we may not renew contracts with all existing insurance company partners when they
expire and may seek collaborations with new insurance company partners based on the
market trends and demands. However, cha nges in the number of insurance company
partners did not have any material financial and operational impact on our Group as we
recorded an increase of revenue generated from our top five customers in each year/period
during the Track Record Period from RMB90. 1 million in 2021 to RMB97.0 million in 2022
and further to RMB114.1 million in 2023, and from RMB36.1 million for 4M2023 to
RMB41.3 million for 4M2024. For the detailed a nalysis on the relationship with our major
customers, please refer to the paragraph headed ‘‘Our Customers — Reliance on Major
Customers’’ in this section.
The table below sets forth the movement in the number of our insurance company
partners during the Track Record Period:
FY2021 FY2022 FY2023 4M2024
Balance as at the beginning of
the year/period 43 45 41 46
Addition during the year/
period 9 3 16 4
Reduction during the year/
period (7) (7) (11) (10)
Balance as at the end of the
y e a r / p e r i o d 4 54 14 64 0
We cooperate with our insurance company partners to offer their insurance products
and solutions. We need to keep the growth of our business, brand influence and risk
management capabilities so as to strengthen t he cooperation with our existing insurance
partners while attracting more insurance companies to build cooperative relationships with
us. We consider that given our role as an insurance agency service and solution provider is
to facilitate insurance company partners to pro mote market penetration of their products,
and that insurance company partners only incur costs in the form of commissions to us
upon successful distributions of their insuranc e policies to insurance clients, and in view of
our established market positioning and sales coverage network, we had not experienced any
material difficulties in promoting our insurance agency services and expanding our
insurance client base during the Track Record Period.
Salient terms of agreements with insurance company partners
Type of insurance
products and
scope
: The insurance company partner entrusts us to distribute
insurance products, collect insurance premiums and carry
out other business as approved by the NFRA, and generally
specifies the types of insurance products we are authorised to
distribute on their behalf.
Location : We distribute the insurance products in the regions or cities as
set out in the agreement.
BUSINESS
–2 3 0–


--- page 241 ---
Services : We promote and distribute the insurance products that we are
authorised to distribute and promote. We are required to
perform our duties, including the duty to disclose relevant
provisions of the insurance policy to the insurance clients.
We instruct insurance clients t o fill in relevant information
correctly and collect the documents required by insurance
company partners, and pass on completed information and
required documents to the insurance company partner.
We may be authorised by our insurance company partners to
collect the insurance premium from the insurance clients,
which are deposited in a separate premium collection account,
on an agency basis for the onward payment to our insurance
company partners, in which case, insurance clients either pay
the insurance premium directly to our insurance company
partners or, upon the authorisation of our insurance company
partners to us, pay the insurance premium to us for our
onward payment to our insurance company partners in
accordance with the relevant laws and regulations in the PRC.
Fees and payment : The commission rates are generally set out in the agreements
and vary depending on the type of insurance products.
Qualification : We shall be qualified t o conduct business as an insurance
agency.
Anti-Money
Laundering
: We shall identify the insurance client and provide identity
information in accordance with relevant anti-money
laundering laws and regulations.
Terms : Our insurance agency agreements generally have a term of one
year.
Termination : Either party may terminate the agreement with prior written
notice generally. The insurance company partners may
terminate the agreement with cause, including but not
limited to our breach of laws and regulations, unauthorised
changes of insurance term and forgery of documents and
information.
Whilst we hold an insurance intermedia ry licence, which allows us to conduct
insurance agency business and set up branch offices nationwide in China, the distribution of
insurance products by us and our insurance agents through offline channels are restricted to
the geographical region where we are authorised by our insurance company partners to
distribute insurance products and the location of the branch office which our insurance
agents are registered according to the relev ant laws and regulations in the PRC. Given that
BUSINESS
–2 3 1–


--- page 242 ---
the majority of our branch offices are situated in Shandong province, we primarily enter
into contracts and maintain business relationship with insurance company partners at the
local level primarily in Shandong province, and most of our insurance agents are located in
Shandong province.
The amounts of premiums collected from in surance clients on an agency basis were
approximately RMB206.3 million, RMB253. 6 million, RMB279.0 million and RMB75.4
million for the years ended 31 December 2021, 2022 and 2023 and the four months ended 30
April 2024, respectively, representing 31.0%, 24.9%, 22.2% and 17.7% of the total GWP
we facilitated for the corresponding years and period, respectively. During the Track
Record Period, we generally reconcile the amount of premiums collected on behalf of our
insurance company partners with them on a monthly basis and transfer the premiums to
them within one month after collection. We had not charged any additional fee for the
collection and payment of premium services du ring the Track Record Period. Our Directors
believe that such collection and payment of premium arrangement is not uncommon in the
insurance intermediary industry, which can facilitate the process of insurance purchase
between insurance companies and insurance clients. In addition, according to the internal
policy of Haier Group, in order to better and more efficiently manage the process for
purchasing insurance, Haier Group corpor ate insurance clients are required to make
premium payment to a separate premium coll ection account of our Group, as restricted
cash, which will then be transferred to the insurance company partners to settle the
outstanding premium without any charges.
The commission rates charged by our Group are determined between us and our
insurance company partners based on the type of insurance products concerned, the
insurance period to which the commission rate related to (for example, the first-year
commission rates of long-term life and health insurance products are generally higher), the
expectation of the insurance company partners on profits taking into account the expected
claim ratios, insurance clients’ demand for ins urance products in the market, requirements
set by the industry association, regulatory requirements and governmental policies and
other factors that affect our insurance company partners at the relevant time. For life and
health insurance products, some of our insurance company partners may require us to
maintain a certain percentage of renewal rate at the 13th month during the term of the
insurance policy, and if we fail to meet such requirement, we may be required to return a
portion of the commission we received from the insurance company partners based on the
terms of the agreements, which may affect the overall commission rates charged by our
Group for distribution of life and health insurance products. During the Track Record
Period and from 1 May 2024 up to the Latest Pra cticable Date, our Group had returned nil,
nil, RMB0.1 million, nil and nil of commission received as a result of any failure to
maintain the required percentage of renewal at the 13th month during the term of insurance
policies, respectively, and such return of commission did not have any material adverse
impact on the overall commission rates charg ed by our Group for distribution of life and
health insurance products.
BUSINESS
–2 3 2–


--- page 243 ---
Top Customers
Our customers are the insurance companies in the PRC. For the years ended 31
December 2021, 2022 and 2023 and the four mon ths ended 30 April 2024, the aggregate
revenue generated from our top five customers in each year/period during the Track Record
Period amounted to RMB90.1 million, RMB9 7.0 million, RMB114.1 million and RMB41.3
million, respectively, representing 75.0%, 6 5.5%, 65.6% and 70.3% of our total revenue,
respectively. For the same periods, revenue ge nerated from our largest customer amounted
to RMB42.0 million, RMB56.5 million, RMB62.8 million and RMB18.6 million,
respectively, representing 35.0%, 38.1%, 36.1% and 31.7% of our total revenue for the
same periods, respectively. For more details, please refer to the section headed ‘‘Risk
Factors — Risks Relating to Our Business — We are subject to customer concentration
risk. Our growth and revenue could be materially and adversely affected if we lose any
significant customer, or if any significant cu stomer fails to cooperate with us at anticipated
levels’’ in this prospectus for further details of customer concentration risks. The credit
period we granted to our top five customers in each year/period during the Track Record
Period are generally within three months.
The following table sets forth the details of our top five customers in each year/period
during the Track Record Period:
For the year ended 31 December 2021
Rank Customer Background of the customer
Year of
commencement
of business
relationship
Major services
provided by us
Major categories
of insurance
products distributed
Approximate
amount of
revenue
Approximate
percentage of
our total
revenue
Range of
commission rate
of insurance
agency services
Average
commission
rate of
insurance
agency
services
(RMB’000) (%) (%)
1 Customer A Customer A consists of (i) Ping An
Property & Casualty Insurance
C o m p a n yo fC h i n a ,L t d .(中國平安
財產保險股份有限公司), a company
registered in Shenzhen, the PRC in
2002 with existing registered capital
of RMB21 billion and one of the
largest property and casualty
insurance companies covering more
than 30 provinces in the PRC,
whose parent company is listed on
the Stock Exchange (stock code:
2318) and Shanghai Stock Exchange
(stock code: 601318); and (ii)
affiliated and related companies of
this listed group
2017 Insurance agency
services, IT
services and
consulting
services
Property insurance
products, accident
insurance
products and
automobile
insurance
products
42,046 35.0 1.0%–70.0% 14.5
2 Customer B A life and health insurance company
covering more than 10 provinces
and municipalities in the PRC with
registered capital of RMB5 billion;
registered in Hangzhou, the PRC in
2007
2018 Insurance agency
services
Life and health
insurance
products and
accident insurance
products
18,364 15.3 6.8%–126.0% 29.8
3 Customer C An insurance company listed on the
Stock Exchange and Shanghai
Exchange primarily engaged in
integrated insurance financial
business with registered capital of
RMB44.2 billion;registered in
Beijing, the PRC in 1949
2018 Insurance agency
services
Property insurance
products, accident
insurance
products and
automobile
insurance
products
11,853 9.9 0.0%–40.0% 22.8
BUSINESS
–2 3 3–


--- page 244 ---
Rank Customer Background of the customer
Year of
commencement
of business
relationship
Major services
provided by us
Major categories
of insurance
products distributed
Approximate
amount of
revenue
Approximate
percentage of
our total
revenue
Range of
commission rate
of insurance
agency services
Average
commission
rate of
insurance
agency
services
(RMB’000) (%) (%)
4 Customer D A comprehensive insurance company
covering more than 15 provinces
and municipalities in the PRC with
registered capital of RMB2.9
billion; registered in Beijing, the
PRC in 2002
2017 Insurance agency
services
Life and health
insurance
products and
accident insurance
products
10,720 8.9 12.1%–135.3% 39.9
5 Customer E Customer E consists of (i) Sunshine
Property and Casualty Insurance
Co., Ltd. ( 陽光財產保險股份有限公
司), a company registered in
Beijing, the PRC in 2005 with
existing registered capital of
RMB5.7 billion and a subsidiary of
one of the largest insurance
companies covering more than 30
provinces in the PRC, which is
listed on the Stock Exchange (stock
code: 6963); and (ii) affiliated and
related companies of this listed
group
2018 Insurance agency
services
Property insurance
products, accident
insurance
products,
automobile
insurance
products and life
and health
insurance
products
7,095 5.9 0.0%–120.0% 13.9
Top five customers
in aggregate
90,078 75.0
BUSINESS
–2 3 4–


--- page 245 ---
For the year ended 31 December 2022
Rank Customer Background of the customer
Year of
commencement
of business
relationship
Major services
provided by us
Major categories
of insurance
products distributed
Approximate
amount of
revenue
Approximate
percentage of
our total
revenue
Range of
commission rate
of insurance
agency services
Average
commission
rate of
insurance
agency
services
(RMB’000) (%) (%)
1 Customer A Customer A consists of (i) Ping An
Property & Casualty Insurance
C o m p a n yo fC h i n a ,L t d .(中國平安
財產保險股份有限公司), a company
registered in Shenzhen, the PRC in
2002 with existing registered capital
of RMB21 billion and one of the
largest property and casualty
insurance companies covering more
than 30 provinces in the PRC,
whose parent company is listed on
the Stock Exchange (stock code:
2318) and Shanghai Stock Exchange
(stock code: 601318); and (ii)
affiliated and related companies of
this listed group
2017 Insurance agency
services and IT
services
Accident insurance
products,
property
insurance
products,
automobile
insurance
products and life
and health
insurance
products
56,537 38.1 0.8%–80.0% 12.6
2A X A T i a n p i n g
Property & Casualty
Insurance Co., Ltd.
(安盛天平財產保險
有限公司)
A PRC subsidiary of a global
insurance company covering more
than 15 provinces in the PRC with
registered capital of RMB846.2
million; registered in Shanghai, the
PRC in 2004
2021 Insurance agency
services and IT
services
Automobile
insurance
products,
property
insurance
products, accident
insurance
products and life
and health
insurance
products
13,616 9.2 3.0%–49.0% 8.9
3 Customer B A life and health insurance company
covering more than 10 provinces
and municipalities in the PRC with
registered capital of RMB5 billion;
registered in Hangzhou, the PRC in
2007
2018 Insurance agency
services
Life and health
insurance
products and
accident insurance
products
9,601 6.5 7.0%–133.0% 14.3
4 Customer C An insurance company listed on the
Stock Exchange and Shanghai
Exchange primarily engaged in
integrated insurance financial
business with registered capital of
RMB44.2 billion; registered in
Beijing, the PRC in 1949
2018 Insurance agency
services
Property insurance
products, accident
insurance
products and
automobile
insurance
products
8,834 6.0 2.0%–35.0% 24.6
5 Haier Group Subsidiaries and affiliated companies
of Haier Group
2017 IT and consulting
services
N/A 8,388 5.7 N/A N/A
Top five customers
in aggregate
96,976 65.5
BUSINESS
–2 3 5–


--- page 246 ---
For the year ended 31 December 2023
Rank Customer Background of the customer
Year of
commencement
of business
relationship
Major services
provided by us
Major categories
of insurance
products distributed
Approximate
amount of
revenue
Approximate
percentage of
our total
revenue
Range of
commission rate
of insurance
agency services
Average
commission
rate of
insurance
agency
services
(RMB’000) (%) (%)
1 Customer A Customer A consists of (i) Ping An
Property & Casualty Insurance
C o m p a n yo fC h i n a ,L t d .(中國平安
財產保險股份有限公司), a company
registered in Shenzhen, the PRC in
2002 with existing registered capital
of RMB21 billion and one of the
largest property and casualty
insurance companies covering more
than 30 provinces in the PRC,
whose parent company is listed on
the Stock Exchange (stock code:
2318) and Shanghai Stock Exchange
(stock code: 601318); and (ii)
affiliated and related companies of
this listed group
2017 Insurance agency
services, IT
services and
consulting
services
Accident insurance
products,
automobile
insurance
products,
property
insurance
products and life
and health
insurance
products
62,847 36.1 0.0%–85.0% 12.7
2A X A T i a n p i n g
Property & Casualty
Insurance Co., Ltd.
(安盛天平財產保險有
限公司)
A PRC subsidiary of a global
insurance company covering more
than 15 provinces in the PRC with
registered capital of RMB846.2
million; registered in Shanghai, the
PRC in 2004
2021 Insurance agency
services and IT
services
Automobile
insurance
products, accident
insurance
products,
property
insurance
products and life
and health
insurance
products
15,342 8.8 1.0%–42.0% 8.3
3 Customer F A subsidiary of one of the largest
property and life insurance
companies in the PRC whose parent
company is listed on the Stock
Exchange, Shanghai Stock
Exchange and London Stock
Exchange; with registered capital of
RMB19.9 billion, registered in
Shanghai, the PRC in 2001
2017 Insurance agency
services
Property insurance
products,
automobile
insurance
products, life and
health insurance
products and
accident insurance
products
12,544 7.2 0.0%–50.0% 9.5
4 Customer G A subsidiary of one of the largest
insurance companies in the PRC
whose parent company is listed on
the Stock Exchange, Shanghai
Stock Exchange; with registered
capital of RMB18.8 billion,
registered in Beijing, the PRC in
2006
2017 Insurance agency
services and IT
services
Property insurance
products, accident
insurance
products, life and
health insurance
products and
automobile
insurance
products
12,483 7.2 0.0%–42.0% 28.8
5 Customer E Customer E consists of (i) Sunshine
Property and Casualty Insurance
Co., Ltd. ( 陽光財產保險股份有限公
司), a company registered in
Beijing, the PRC in 2005 with
existing registered capital of
RMB5.7 billion and a subsidiary of
one of the largest insurance
companies covering more than 30
provinces in the PRC, which is
listed on the Stock Exchange (stock
code: 6963); and (ii) affiliated and
related companies of this listed
group
2018 Insurance agency
services, IT
services and
consulting
services
Property insurance
products, accident
insurance
products,
automobile
insurance
products and life
and health
insurance
products
10,924 6.3 0.0%–69.3% 17.3
Top five customers
in aggregate
114,140 65.6
BUSINESS
–2 3 6–


--- page 247 ---
For the four months ended 30 April 2024
Rank Customer Background of the customer
Year of
commencement
of business
relationship
Major services
provided by us
Major categories
of insurance
products distributed
Approximate
amount of
revenue
Approximate
percentage of
our total
revenue
Range of
commission rate
of insurance
agency services
Average
commission
rate of
insurance
agency
services
(RMB’000) (%) (%)
1 Customer A Customer A consists of (i) Ping An
Property & Casualty Insurance
C o m p a n yo fC h i n a ,L t d .(中國平安
財產保險股份有限公司), a company
registered in Shenzhen, the PRC in
2002 with existing registered capital
of RMB21 billion and one of the
largest property and casualty
insurance companies covering more
than 30 provinces in the PRC,
whose parent company is listed on
the Stock Exchange (stock code:
2318) and Shanghai Stock Exchange
(stock code: 601318); and (ii)
affiliated and related companies of
this listed group
2017 Insurance agency
services, IT
services and
consulting
services
Accident insurance
products,
automobile
insurance
products,
property
insurance
products and life
and health
insurance
products
18,619 31.7 0.0%–85.2% 13.1
2 Customer G A subsidiary of one of the largest
insurance companies in the PRC
whose parent company is listed on
the Stock Exchange, Shanghai
Stock Exchange; with registered
capital of RMB18.8 billion,
registered in Beijing, the PRC in
2006
2017 Insurance agency
services
Property insurance
products, accident
insurance
products and
automobile
insurance
products
8,691 14.8 0.0%–38.0% 35.4
3 Customer F A subsidiary of one of the largest
property and life insurance
companies in the PRC whose parent
company is listed on the Stock
Exchange, Shanghai Stock
Exchange and London Stock
Exchange; with registered capital of
RMB19.9 billion, registered in
Shanghai, the PRC in 2001
2017 Insurance agency
services
Property insurance
products,
automobile
insurance
products and
accident insurance
products
5,046 8.6 0.0%–70.0% 8.8
4A X A T i a n p i n g
Property & Casualty
Insurance Co., Ltd.
(安盛天平財產保險有
限公司)
A PRC subsidiary of a global
insurance company covering more
than 15 provinces in the PRC with
registered capital of RMB846.2
million; registered in Shanghai, the
PRC in 2004
2021 Insurance agency
services
Automobile
insurance
products, accident
insurance
products,
property
insurance
products and life
and health
insurance
products
4,673 8.0 0.0%–44.5% 8.5
5 Customer C An insurance company listed on the
Stock Exchange and Shanghai
Exchange primarily engaged in
integrated insurance financial
business with registered capital of
RMB44.2 billion; registered in
Beijing, the PRC in 1949
2018 Insurance agency
services, IT
services and
consulting
services
Property insurance
products, accident
insurance
products and life
and health
insurance
products
4,237 7.2 5.0%–28.6% 21.3
Top five customers
in aggregate
41,266 70.3
BUSINESS
–2 3 7–


--- page 248 ---
Our Directors confirmed that save for Haier Group and matter specified under the
section headed ‘‘Underwriting — Joint Sponsors’ Independence’’ in this prospectus, (i) all of
our top five customers in each year/period during the Track Record Period do not have
other past or present relationships with our Group, our Shareholders, Directors,
Supervisors or senior management or any of t heir respective associates and (ii) none of
our Directors, Supervisors, their respective close associates or any Shareholders (which to
the best knowledge of our Directors owns more than 5% of the issued share capital of our
Company) had any interest in any of our five largest customers during the Track Record
Period.
During the Track Record Period and up to the Latest Practicable Date, there were no
litigations or arbitration or disputes bet ween us and our major customers which have a
material and adverse impact on our business operation or financial condition.
Reliance on major customers
We derived a significant portion of our revenue from a small number of insurance
company partners, including, in particular, Customer A, which was our top customer
during the Track Record Period, with respect to our insurance agency services, IT and
consulting service. For the years ended 31 December 2021, 2022 and 2023 and the four
months ended 30 April 2024, our revenue attributable to Customer A amounted to
approximately RMB42.0 million, RMB56. 5 million, RMB62.8 million and RMB18.6
million, respectively, which accounted for a pproximately 35.0%, 38.1%, 36.1% and 31.7%
of our total revenue for the corresponding period, respectively. This concentration of our
major customers is mainly due to the fact th at the insurance market in the PRC is highly
concentrated, where the top 10 insurance providers in the PRC accounted for
approximately over 60% of the market share in 2023. Therefore, as advised by Frost &
Sullivan, it is common that an insurance age ncy company in the PRC would have certain
degree of customer concertation as they prefer to provide insurance agency services to a few
top insurance company partners.
As at the Latest Practicable Date, we had maintained over five years of business
relationship with most of our top five customers in each year/period during the Track
Record Period. In particular, Customer A has been an insurance company partner of Haier
Insurance Agency prior to the establishment of our Company, and our Group has
maintained business relationship with Custo mer A since the incorporation of our Company.
We generally enter into agreement with insurance company partners each year during
the Track Record Period with terms as set out the paragraph headed ‘‘Our Customers —
Salient terms of agreements with insurance company partners’’ in this section, and there has
been no material change in the terms with insurance company partners since the
commencement of business relationship and the terms of which are of normal commercial
BUSINESS
–2 3 8–


--- page 249 ---
terms. Despite such customer concentration, our Directors are of the view that there is no
material reliance on our existing major customers and we are capable of sustaining our
services in the future, primarily because:
. according to Frost & Sullivan, in contrast to insurance intermediary industry, the
insurance industry in China is highly concentrated, with top ten insurance
companies accounting for over 60% of the insurance industry in terms of premium
collected in 2023. Thus, it is not uncommon for insurance agency services
providers like us in the PRC to generate major proportion of revenues from one or
a few sizeable and reputable insurance company partners due to high
concentration of the insurance market in the PRC and the potential preferences
of our insurance clients towards the brand perception and product offerings of the
few sizeable insurance company partners; while we distribute insurance products
of a relatively large number of insurance companies, the composition and
contribution of our major insurance company partners towards our revenue are
inevitably ultimately affected by the c hoices and preferences of our insurance
clients towards the brand perception, pricing and product offerings of different
insurance companies; and
. as an insurance agency service provider, a stable relationship with our existing
major insurance company partners is critical for providing better options to our
insurance clients, ensuring access to a wide range of insurance products and
maintaining our competitiveness and growth in the market. As such, our Directors
consider our stable relationship with the insurance company partners as our
strength as an insurance agency service provider to obtain better terms for the
insurance products we distribute on their behalves.
In addition, our Directors are of the view that it is highly unlikely for our business
relationship with our existing insurance company partners to materially adversely change or
terminate in the foreseeable future because we do not consider there to be reasonable
grounds for our insurance company partners to do so. Cooperation with our Group
increases the potential for our insurance company partners to reach out to a broader
insurance client base and to sell more insuranc e policies, and consistent revenue brought to
the insurance companies. Moreover, our Group had been providing high-quality insurance
agency services and solutions, which was proved by the growth of our business during the
Track Record Period, and there had not been any disagreement or termination of business
between us and our major insurance company partners during the Track Record Period. In
the worst and very unlikely scenario that our r elationship may be changed, we are still able
to mitigate such exposure taking account of our abilities to diverse our customer bases and
explore new marketing opportunities as mentioned above.
BUSINESS
–2 3 9–


--- page 250 ---
OUR SUPPLIERS
Our suppliers primarily consist of: (i) insura nce agents; (ii) strategic channel providers;
(iii) IT services providers; and (iv) other su ppliers such as risk management and training
service providers for insurance and consult ing services. We generally enter into legally
binding agreements with our suppliers for a term of one year to three years, and we typically
settle payment with our suppliers through bank transfer on a periodic basis.
Top Suppliers
For the years ended 31 December 2021, 2022 and 2023 and the four months ended 30
April 2024, purchases from our five largest suppliers in each year/period during the Track
Record Period amounted to RMB42.1 mi llion, RMB58.6 million, RMB74.4 million and
RMB26.8 million, respectively, accounting for 58.5%, 72.2%, 74.7% and 79.3% of our
total purchases, respectively, while purchase from our largest supplier amounted to
RMB26.5 million, RMB31.9 million, RMB45.3 m illion and RMB15.5 million, respectively,
accounting for 36.8%, 39.3%, 45.6% and 45.8% of our total purchases, respectively. The
credit term granted to us by our top five supp liers in each year/period during the Track
Record Period are generally within one month.
BUSINESS
–2 4 0–


--- page 251 ---
The tables below set forth a summary of our five largest suppliers in each year/period
during the Track Record Period:
For the year ended 31 December 2021
Rank Supplier Background of the supplier
Year of
commencement
of business
relationship
Major services/
products provided
to us
Approximate
amount of
purchase
Approximate
percentage of
our total
purchase
(RMB’000) (%)
1 Supplier A This supplier is registered in Qingdao, the PRC,
in 2015 and has a registered capital of RMB2
million. It is a comprehensive human resources
service provider, which offers services such as
personnel agency, labour dispatch, outsourcing,
recruitment, employee health management and
business consulting
2020 Referral services
and other services
26,482 36.8
2 Supplier B This supplier is a state-owned company registered
in Qingdao, the PRC, in 2017 and has a
registered capital of RMB5 million. It is a
subsidiary of a well-known radio and television
group in Qingdao and is principally engaged in
human resources services and training services
2021 Referral services 7,176 10.0
3 Haier Group Subsidiaries and affiliated companies of Haier
Group, including three strategic channel
partners: (i) a company principally engaged in
provision of supply chain management solution
and logistic service with registered capital of
RMB590.6 million; registered in Qingdao, the
PRC in 2000; (ii) a company principally
engaged in freight services with registered
capital of RMB10 million; registered in
Qingdao, the PRC in 2019 and (iii) a company
principally engaged in sales of household
appliances with registered capital of RMB9
million; registered in Qingdao, the PRC in 2013
2017 Referral and other
services
4,204 5.8
4P i n g A n
Property &
Casualty
Insurance
Company of
China, Ltd.
(中國平安財產
保險股份有限
公司)
A company registered in Shenzhen, the PRC in
2002 with existing registered capital of RMB21
billion and one of the largest property and
casualty insurance companies covering more
than 30 provinces in the PRC, whose parent
c o m p a n yi sl i s t e do nt h eS t o c kE x c h a n g e( s t o c k
code: 2318) and Shanghai Stock Exchange
(stock code: 601318)
2017 Insurance products 3,370 4.7
5S u p p l i e r C
(1) A company principally engaged in business
management consulting, occupational training
and operation of PaaS-based platform with
registered capital of RMB390.3 million and
whose parent company is listed on NASDAQ;
registered in Beijing, the PRC in 2011
2020
Risk management and
referral services (3)
865 1.2
Top five suppliers
in aggregate
42,097 58.5
BUSINESS
–2 4 1–


--- page 252 ---
For the year ended 31 December 2022
Rank Supplier Background of the supplier
Year of
commencement
of business
relationship
Major services
provided to us
Approximate
amount of
purchase
Approximate
percentage of
our total
purchase
(RMB’000) (%)
1 Supplier A This supplier is registered in Qingdao, the PRC,
in 2015 and has a registered capital of RMB2
million. It is a comprehensive human resources
service provider, which offers services such as
personnel agency, labour dispatch, outsourcing,
recruitment, employee health management and
business consulting
2020 Referral services,
IT services and
other services
(2)
31,870 39.3
2 Supplier B This supplier is a state-owned company registered
in Qingdao, the PRC, in 2017 and has a
registered capital of RMB5 million. It is a
subsidiary of a well-known radio and television
group in Qingdao and is principally engaged in
human resources services and training services
2021 Referral services,
IT services and
other services
(2)
19,583 24.1
3 Haier Group Subsidiaries and affiliated companies of Haier
Group, including three strategic channel
partners: (i) a company principally engaged in
provision of supply chain management solution
and logistic service with registered capital of
RMB590.6 million; registered in Qingdao, the
PRC in 2000; (ii) a company principally
engaged in freight services with registered
capital of RMB10 million; registered in
Qingdao, the PRC in 2019 and (iii) a company
principally engaged in sales of household
appliances with registered capital of RMB9
million; registered in Qingdao, the PRC in 2013
2017 Referral services 3,776 4.7
4 Supplier D This supplier is registered in Qingdao, the PRC,
in 2014 and has a registered capital of RMB10
million. It is principally engaged in provision of
human resources services such as personnel
agency, labour dispatch, project outsourcing,
personnel recruitment, corporate training and
business consulting
2022 Referral services 2,064 2.5
5 Supplier E A company principally engaged in labour
dispatch services and human resources services
with registered capital of RMB2 million;
registered in Qingdao, the PRC in 2015
2022 Risk management
and training
services
(4)
1,325 1.6
Top five suppliers
in aggregate
58,618 72.2
BUSINESS
–2 4 2–


--- page 253 ---
For the year ended 31 December 2023
Rank Supplier Background of the supplier
Year of
commencement
of business
relationship
Major services
provided to us
Approximate
amount of
purchase
Approximate
percentage of
our total
purchase
(RMB’000) (%)
1 Supplier A This supplier is registered in Qingdao, the PRC,
in 2015 and has a registered capital of RMB2
million. It is a comprehensive human resources
service provider, which offers services such as
personnel agency, labour dispatch, outsourcing,
recruitment, employee health management and
business consulting
2020 Referral services,
IT services and
other services
(2)
45,322 45.6
2 Supplier B This supplier is a state-owned company registered
in Qingdao, the PRC, in 2017 and has a
registered capital of RMB5 million. It is a
subsidiary of a well-known radio and television
group in Qingdao and is principally engaged in
human resources services and training services
2021 Referral services 13,868 13.9
3 Supplier D This supplier is registered in Qingdao, the PRC,
in 2014 and has a registered capital of RMB10
million. It is principally engaged in provision of
human resources services such as personnel
agency, labour dispatch, project outsourcing,
personnel recruitment, corporate training and
business consulting
2022 Referral services 12,873 12.9
4 Haier Group Subsidiaries and affiliated companies of Haier
Group, including three strategic channel
partners: (i) a company principally engaged in
provision of supply chain management solution
and logistic service with registered capital of
RMB590.6 million; registered in Qingdao, the
PRC in 2000; (ii) a company principally
engaged in freight services with registered
capital of RMB10 million; registered in
Qingdao, the PRC in 2019 and (iii) a company
principally engaged in sales of household
appliances with registered capital of RMB9
million; registered in Qingdao, the PRC in 2013
2017 Referral services,
comprehensive
services and
utility service
1,529 1.5
5 Supplier F This supplier is registered in Tianjin, the PRC, in
2021 and has a registered capital of RMB10
million. It is principally engaged in provision of
software outsourcing, network technology and
enterprise management consulting services
2022 Referral services 810 0.8
Top five suppliers
in aggregate
74,402 74.7
BUSINESS
–2 4 3–


--- page 254 ---
For the four months ended 30 April 2024
Rank Supplier Background of the supplier
Year of
commencement
of business
relationship
Major services
provided to us
Approximate
amount of
purchase
Approximate
percentage of
our total
purchase
(RMB’000) (%)
1 Supplier A This supplier is registered in Qingdao, the PRC,
in 2015 and has a registered capital of RMB2
million. It is a comprehensive human resources
service provider, which offers services such as
personnel agency, labour dispatch, outsourcing,
recruitment, employee health management and
business consulting
2020 Referral services,
IT services
(2)
15,472 45.8
2 Supplier B This supplier is a state-owned company registered
in Qingdao, the PRC, in 2017 and has a
registered capital of RMB5 million. It is a
subsidiary of a well-known radio and television
group in Qingdao and is principally engaged in
human resources services and training services
2021 Referral services 5,624 16.7
3 Supplier D This supplier is registered in Qingdao, the PRC,
in 2014 and has a registered capital of RMB10
million. It is principally engaged in provision of
human resources services such as personnel
agency, labour dispatch, project outsourcing,
personnel recruitment, corporate training and
business consulting
2022 Referral services 3,966 11.7
4 Supplier I This supplier is registered In Qingdao, the PRC,
in 2023 and has a registered capital of RMB5
million. It is principally engaged in labour and
human resources
2024 Referral services 1,467 4.3
5 Supplier H This supplier is registered in Qingdao, the PRC,
in 2021 and has a registered capital of RMB1.5
million. It is principally engaged in human
resources services and training services
2021 Referral services 262 0.8
Top five suppliers
in aggregate
26,791 79.3
Notes:
(1) As at the Latest Practicable Date, Haier Group held 0.0124% equity interest in Supplier C.
(2) The nature of IT services provided by Supplier A and Supplier B mainly included IT services for certain
ancillary work in our provision of IT services. For details, please refer to the paragraph headed
‘‘Subcontracting’’ in this section.
(3) The nature of risk management services provided by Supplier C mainly included assistance on risk
management with an aim to enhance their safety awaren ess and reduce the possibility of insurance claims
or accidents.
(4) The nature of risk management and training service s provided by Supplier E mainly included assistance on
risk management and provision of training to insu rance clients with an aim to enhance their safety
awareness and reduce the possibility of insurance claims or accidents.
BUSINESS
–2 4 4–


--- page 255 ---
Save for Haier Group and the equity interest of Haier Group in Supplier C, none of the
top five suppliers and the other strategic channel partners have any past or present
relationships with our Company and subsidiaries , their shareholders, directors, supervisors
or senior management, or any of their respective associates.
Save as disclosed above, none of our Directors, Supervisors, their respective close
associates or any Shareholders (which to the best knowledge of our Directors owns more
than 5% of the issued share capital of our Company) had any interest in any of our five
largest suppliers during the Track Record Period.
During the Track Record Period and up to the Latest Practicable Date, our Group had
not experienced any major disruption in business due to material delays or defaulting
payments.
Reliance on supplier
We rely on our major strategic channel partners to provide us with referral services for
our insurance agency business. For the year s ended 31 December 2021, 2022 and 2023 and
the four months ended 30 April 2024, our purchases from our five largest suppliers
amounted to approximately RMB42.1 millio n, RMB58.6 million, RMB74.4 million and
RMB26.8 million, respectively, accounting for 58.5%, 72.2%, 74.7% and 79.3% of our
total purchases, respectively. The increase in purchases from our five largest suppliers are
primarily due to our business efforts and st rategy to cooperate wi th strategic channel
partners to reach more insurance clients. In particular, we have reliance on referral services
provided by Supplier A, which was our largest supplier and strategic channel partner in
each year/period during the Track Record Pe riod, as we continued to strengthen our
cooperation with Supplier A to expand our insurance client base and had established a
strong and strategic relationship. Purchases from Supplier A accounted for approximately
36.8%, 39.3%, 45.6% and 45.8% of our total purchases for the years ended 31 December
2021, 2022 and 2023 and the four months ended 30 April 2024. Since majority of the
insurance clients referred by Supplier A continued to purchase insurance products from us
on an annual basis during the Track Record Period and Supplier A continued to refer new
insurance clients to us to purchase insurance products, there had been an increase in our
referral fees to Supplier A during the Track Record Period. The amount of our commission
income of the insurance agency business attributable to Supplier A amounted to RMB28.4
million, RMB38.9 million, RMB56.3 million a nd RMB21.0 million for FY2021, FY2022,
FY2023 and 4M2024.
Relationship with Supplier A
We were acquainted with Supplier A through participation in a human resources
association and first cooperated with Supplier A in 2020 to expand our reach to larger
population of corporate and household insurance clients. Supplier A has network in the HR
industry, which often works closely with corporates and individuals to provide a range of
services and has day-to-day access with la rge number of potential insurance clients.
Moreover, Supplier A has many branch offices in Shandong province and is able to reach
out to different types of insurance client base, including but not limited to construction
companies, financial institutions and other large enterprises and universities.
BUSINESS
–2 4 5–


--- page 256 ---
During the Track Record Period, Supplie r A referred over 5,600, 7,300, 8,600 and
7,800 insurance clients, respectively, to us to purchase different types of insurance products
including property insurance products, accident and automobile insurance products.
Through accumulation of experience and under standing of the needs of insurance clients
referred by Supplier A, we collaborated with our insurance company partners to provide
suitable insurance solutions to these insurance clients. Majority of these insurance clients
continued to purchase insurance products from us on an annual basis during the Track
Record Period while Supplier A continued to refer new insurance clients to us to purchase
insurance products, leading t o the continuous increase in our referral fees to Supplier A
during the Track Record Period.
Despite our reliance on Supplier A, our Directors are of the view that our business is
sustainable for the following reasons:
(i) we entered into collaboration agreem ent with Supplier A in 2020 for a term of
three years and have maintained good business relationship with Supplier A since
then, and there has not been any disagreement or termination of cooperation
between us. In August 2023, we renewed the collaboration agreement with
Supplier A for a further term of three years;
(ii) our Directors are of the view that it would not be in line with the Supplier A’s
business interest to terminate the business relationship with us since we provide a
wide range of insurance products to insurance clients referred by Supplier A
including employer’s liability insura nce products, which can be complex due to
the diverse risks and coverage options w here insurance clients often rely on us in
assessing the risks associated with their business scenarios and providing suitable
solutions. With the established trust and l ong-term business relationship with the
insurance company partners and our transaction volume, we are able to locate
and distribute suitable employer’s liabilit y insurance products to insurance clients
referred to by Supplier A at their acceptable insurance premium;
(iii) we have successfully maintained our str ategic channel partners base and entered
into collaboration agreements of terms r anging from two to three years with new
strategic channel partners, including Supplier D in 2022 (with purchases
accounting for approximately 2.5%, 12.9% and 11.7% of our total purchases
for the years ended 31 December 2022 and 2023 and the four months ended 30
April 2024) and Supplier I in 2024 (with purchases accounting for approximately
4.3% of our total purchases for the four months ended 30 April 2024) and that all
the new strategic channel partners with business relationship commenced in 2024
accounted for approximately 5% of our total purchases for the four months ended
30 April 2024. We will make efforts to r educe our supplier concentration by
seeking cooperation with more st rategic channel partners; and
(iv) we will make efforts to strengthen the retention and stickiness of the insurance
clients by enhancing their user experience in purchasing insurance products
(through provision of insurance support services such as online insurance claims
assistance and management of insurance policies) so as to decrease our reliance on
BUSINESS
–2 4 6–


--- page 257 ---
a single strategic channel partner. Our Directors believe that, with a more diverse
base of strategic channel partners and a reduced reliance on strategic partners in
general, the proportions of our purchases from each of our major suppliers to our
total revenue are expected to decrease in the future.
SUBCONTRACTING
Whilst we have a team of experienced in-house technical staff, we may from time to
time subcontract certain ancillary work in our provision of IT services, such as coding and
testing. During the Track Record Period, we had engaged two subcontractors, both are our
top five suppliers in each year/period during the Track Record Period. For the years ended
31 December 2021, 2022 and 2023 and the four months ended 30 April 2024, our
subcontracting cost amounted to approximately RMB0.2 million, RMB5.4 million,
RMB2.5 million and RMB0.2 million, respectiv ely, which accounted for approximately
0.3%, 6.7%, 2.5% and 0.6%, respectively, of our total purchase, for the relevant year.
We subcontract such ancillary work to our sub contractors because we consider that (a)
the subcontracting allows us to focus on cor e areas that we are experienced in; and (b)
increase our flexibility and capacity in carr ying out our insurance agency services, IT and
consulting services, thereby enabling us to ope rate more efficiently and cost-effectively.
Depending on the contractual terms, prior wri tten approval from our IT services customers
may be required before subcontracting part of our work. Further, our subcontractors are
subject to confidentiality obligation and shall work on our premises with our computers
upon request to prevent leakage.
We select our subcontractor based on various conditions including registered capital,
length of incorporation and the relevant qua lifications and experience. During the Track
Record Period, we entered into formal written agreement with our subcontractors in
relation to the subcontracting arrangement.
BUSINESS
–2 4 7–


--- page 258 ---
The general terms of our subcontracti ng arrangements typically include:
Basis of determination
of subcontracting fee:
Depending on the market price depending on length of
experience and expertise of the relevant technical personnel
required for individual projects
Term of agreement: Generally three yea rs, with auto-renewal for one year upon
expiry
Scope of services: Provision of IT services such as raw data processing and entry
and providing software technical services, depending on the
requirements of individual project
Aftersales service and
warranty:
Within one year from the delivery of the service, if there are
problems arising from the service provided, the subcontractor
will provide ratification and remedial measures for free
Termination: We have the right to terminate the agreement (1) with 30 days
prior notice to the subcontractor, or (2) if the subcontractor
breaches the agreement and fails to rectify such breach
Our Group has implemented the following measures to supervise and ensure the
quality of the performance of our subcontractors: (i) maintaining relationships with a
number of subcontractors so that we do not have to rely on any particular subcontractor
and can find alternatives within a short period o f time; (ii) closely monitoring whether our
subcontractors’ performance meet our stand ards; (iii) evaluating our subcontractors’
performance in terms of their performance qualit y, efficiency, cost charged, responsiveness
to our requests and follow-up work after completion of the projects; and (iv) continuously
exploring potential new subcontractors.
BUSINESS
–2 4 8–


--- page 259 ---
OVERLAPPING OF MAJOR CUSTOMERS AND SUPPLIERS
During the Track Record Period, among our top five customers and suppliers, we had
two overlapping customers and suppliers. The following sets forth our revenue and
purchase amount in each year/period during the Track Record Period:
Customer Period
Revenue derived
from such
customer/supplier
Approximate
percentage of our
total revenue
Purchase
amount
Approximate
percentage of our
total purchase Reasons for overlapping
RMB’000 (%) RMB’000 (%)
Customer A (Note) FY2021 42,046 35.0 3,370 4.7 In FY2021, we purchased
insurance products
from Ping An Property
& Casualty Insurance
Company of China,
Ltd. ( 中國平安財產保險
股份有限公司)a n d
provided such
insurance products to
certain employees of
Haier Group at our
cost as a marketing
campaign to promote
our brand reputation
and visibility within
Haier Group, with a
view to increasing
their awareness about
our insurance agency
business, including the
range of insurance
products we offer, and
encourage them to
consider purchasing
insurance products
through us.
FY2022 56,537 38.1 nil nil
FY2023 62,847 36.1 nil nil
4M2024 18,619 31.7 nil nil
Haier Group and its
affiliated companies
FY2021 1,367 1.1 4,204 5.8 During the Track Record
Period, we procured a
variety of services
including referral
services from four
subsidiaries of Haier
Group and provided
IT and consulting
services to subsidiaries
and affiliated
companies of Haier
Group.
FY2022 8,388 5.7 3,776 4.7
FY2023 10,192 5.9 1,529 1.5
4M2024 1,950 3.3 237 0.7
Note: Customer A consists of (i) Ping An Property & Ca sualty Insurance Company of China, Ltd. ( 中國
平安財產保險股份有限公司), whose parent company is listed on the Stock Exchange (stock code:
2318) and Shanghai Stock Exchange (stock code: 601318); and (ii) affiliated and related
companies of this listed group.
Our Directors confirmed that negotiations of the terms of our sales to and purchases
from the above overlapping customer-supplier were conducted independently, and these
sales and purchases were independent from one another. The terms of transactions with the
overlapping customer–supplier are of normal commercial terms and similar to those
transactions with our other customers and suppliers.
BUSINESS
–2 4 9–


--- page 260 ---
SEASONALITY
Our business operation is generally not subject to seasonality changes.
INSURANCE CLIENTS’ SERVICES AND QUALITY CONTROL
We believe that our emphasis on superior e nd customer service is a significant
contributor to our growth. Insurance products can be complex, and it is important for us
and our insurance agents to have a thorough understanding of the products they sell in
order to provide accurate and helpful information to insurance clients. To better serve our
insurance clients, we provide professional training to our insurance agents and require them
to take test from time to time to ensure that th ey have a solid understanding of insurance
products and provide high quality insurance agency services to insurance clients. We receive
feedbacks directly from our insurance clients, and also deal with their complaints directed
to us from insurance company partners we collaborate with. During the Track Record
Period, we had not experienced any material complaint from our insurance clients.
MARKET AND COMPETITION
The China insurance intermediary industry has experienced constant growth.
According to Frost & Sullivan, the China insur ance intermediary industry will maintain a
steady growth trend, and the scale of underwriting premium in the industry is expected to
grow at a CAGR of 12.8% between 2024 and 2 028, reaching RMB1,505.5 billion in 2028.
The insurance intermediary industry in China, as depicted by the end-of-2022 data and
insights from the latest ‘‘China Insurance Yearbook’’ published in December 2023, presents
a highly competitive and fragmented market landscape. There were 2,215 insurance
intermediary companies in China by the end of 2022, including 1,721 insurance agencies. At
the same time, due to the insurance intermediary licence being recognised at the national
level without geographical restriction, competitors from other provinces have also entered
the market to compete for market share. Our Company has distinguished ourselves from
traditional insurance agencies in the insurance intermediary industry in Shandong province
with a comprehensive mix of insurance products and digital operation capabilities, allowing
us to thrive in this competitive market environ ment. In 2022, accordin g to Frost & Sullivan,
we ranked 78th among all insurance agencies in China in terms of insurance business
income reported based on the latest China Insurance Yearbook published by the National
Financial Regulatory Administration. We compete with online and offline insurance
agencies and insurance companies to distribute insurance products. As competition in the
China insurance interm ediary industry intensifies, we be lieve it is important for us to utilise
our technological capabilities to achieve c ost reduction and improve efficiency.
Notwithstanding the above, it is unlikely that there will be material impact on our
Group in terms of competition given the existing major entry barriers of the market as
stated in the section headed ‘‘Industry Overview’’ in this prospectus.
BUSINESS
–2 5 0–


--- page 261 ---
LICENCES AND PERMITS
We are subject to various regulatory licenci ng requirements governing our business.
During the Track Record Period and up to the La test Practicable Date, we had obtained all
material licences and permits that are required for our operations. The following table sets
forth our material licences as at the Latest Practicable Date:
Licence Holder Issuing Authority Date of grant Expiry date
Insurance Intermediary
Licence (Nationwide)
(保險中介許可證
（全國）) Note 1
Haier Insurance
Agency
Qingdao Supervision Bureau of
China Baking and Insurance
Regulatory Commission
(中國銀行保險監督委員會青島監
管局)
28 December
2021
N/A
Level 3 Filing Certification
of Information System
Security Protection ( 信息
系統安全等級保護第三級
備案證明)
Haier Insurance
Agency
Qingdao Municipal Public Security
Bureau ( 青島市公安局)
8J a n u a r y2 0 2 1 N / A
Human Resources Service
Licence ( 人力資源服務
許可證)
Note 2
Zhongmiao
Caizhi
Qingdao Municipal Shibei District
Bureau of Administrative
Services ( 青島市市北區行政審批
服務局)
24 March 2022 20 May 2026
Notes: 1. The licence for operating insurance agenc y business was initially obtained by Haier
Insurance Agency on 15 September 2017.
2. The licence for operating human resources se rvice business was initially obtained by
Zhongmiao Caizhi on 21 May 2021.
In addition, as at the Last Practicable Date, our Group has completed the filing
procedures for our online platforms with Shandong Communications Administration in
accordance with applicable PRC laws and regulations and the operation of our Group’s
online platforms does not require an ICP licence. P lease refer to section headed ‘‘Regulatory
Overview — Regulations Related to Internet Information Service’’ in this prospectus for
details.
We will apply to the relevant government authorities to renew our licences, permits and
qualification certificates prior to their exp iry (if applicable). Our Directors believe that
there will be no material legal impediment to re new the relevant qualif ication certificates.
BUSINESS
–2 5 1–


--- page 262 ---
AWARDS AND CERTIFICATES
After years of development, our operations have accomplished a number of milestones
and we have obtained a number of awards and certificates, a summary of which is set out
below:
Certificates Award/Issuing Organisation Year of Issue Expiry Date
High and New Technology
Enterprise Certificate
(高新技術企業證書)
Science Technology Department of
Qingdao ( 青島市科學技術局), Qingdao
Department of Finance ( 青島市財政局),
Qingdao Tax Service, State Taxation
Administration ( 國家稅務總局青島市稅務
局)
2022 13 December
2025
Awards Award/Issuing Organisation Year of Issue
2023 Municipal Service Industry Innovative
Demonstration Enterprise (2023 年市級服
務業創新型示範企業)
The Development and Reform Commission of
Qingdao ( 青島市發展與改革委員會)
2023
InsurStar30–2023 Annual Outstanding
Insurance Technology Company
(InsurStar30–2023 年度優秀保險科技公司)
Insur View ( 保觀) 2023
Qingdao New Economic Potential
Enterprises of 2022 (2022 年青島市
新經濟
潛力企業)
The Development and Reform Commission of
Qingdao ( 青島市發展與改革委員會)
2023
Qingdao ‘‘Specialised, Refinement,
Differential and Innovation’’ Enterprise
(青島市「專精特新」企業)
Qingdao Municipal Private Economy
Development Bureau ( 青島市民營經濟發展
局) and Qingdao Municipal Small and
Medium Enterprises Bureau ( 青島市中小企
業局)
2021
Shandong Province Gazelle Enterprise
(山東省瞪羚企業)
Ministry of Industry and Information
Technology of Shandong Province
(山東省工業和信息化廳)
2021
China Potential Unicorn enterprise
(中國潛在獨角獸企業)
Great Wall Enterprise Institute
(長城戰略諮詢)
2021
2021 Qingdao New Economic Potential
Enterprises and 2021 Qingdao
Enterprises Favoured by Venture Capital
Institutions (2021 年度青島市新經濟潛力
企業和2021 年度青島市創投機構青睞企業)
The Development and Reform Commission of
Qingdao ( 青島市發展與改革委員會)
2021
Top 50 New-economy High-growth
Enterprises in Qingdao ( 青島市新經濟高
成長企業50強)
Qingdao Civil Economic Development Bureau
(青島市民營經濟發展局)a n dt h eP e o p l e ’ s
Government of Laoshan district
(嶗山區人民政府)
2021
2019 Best Enterprise Service Provider of
the Year (2019 年度最佳企業服務商)
Chandashi ( 蟬大師
) 2020
BUSINESS
–2 5 2–


--- page 263 ---
EMPLOYEES
As at 30 April 2024, we had 122 employees in the PRC who were directly employed by
us. The table below sets out a breakdown of our employees as at 30 April 2024 :
Department
Total
number of
employees
Percentage
of total (%)
Sales and marketing
— Household insurance business 25 20.5
— Corporate insurance business 20 16.4
— HR consulting services 7 5.7
Marketing and promotion services 3 2.5
Research and development 51 41.8
Management and administrative 10 8.2
Finance 6 4.9
Total 122 100.0
Age
51 or above 4 3.3
41 to 50 15 12.3
31 to 40 67 54.9
18 to 30 36 29.5
Total 122 100.0
Gender
Female 54 44.3
Male 68 55.7
Total 122 100.0
The remuneration packages for our employees include salary, bonuses and allowances.
For our in-house sales executives who are individ ual insurance sales practitioners registered
with the NFRA under us, their remuneration packages will include salary and incentives for
successful sales of insurance products. As required by the PRC regulations, we participate
in social insurance schemes operated by the relevant local government authorities and
maintain mandatory pension contribution plans, medical insurance, work-related injury
insurance, unemployment insurance and maternity insurance for some of our employees.
We also contribute to housing accumulation funds for some of our employees. Further,
Shanghai Zhaoqi and Qingdao Haizhongjie ser ved as the shareholding platforms of, among
others, employees of our Group, to better align the employees’ interests with our Group’s
BUSINESS
–2 5 3–


--- page 264 ---
interest, and will hold approximately 17.0% and 2.08% of the total issued share capital of
our Company respectively, immediately after completion of the Global Offering, assuming
the Over-allotment Option is not exercised.
When we make hiring decisions, we take into account factors such as our business
strategies, our development plans, industry trends and the competitive environment. We
recruit our employees based on a number of factors such as their work experience,
educational background and vacancy needs. We endeavour to attract and retain
appropriate and suitable personnel to serve our Group and we treat our employees fairly
and ensure that they enjoy fair opportunities and conditions.
We enter into standard contracts and agreements with our employees. These contracts
typically include a confidentiality provisio n effective during and after their employment
with us. Our standard employment contract al so includes specific intellectual property
rights provisions such that all intellectual property created or developed during the course
of employment are owned by and will belong solely to us.
We provide continuing education and training programmes to our employees to
improve their skills and develop their poten tial. We also adopt evaluation programmes
through which our employees can receive feedback. We foster strong employee relations by
offering various staff benefits and personal development support. During the Track Record
Period and up to the Latest Practicable Date, we had not experienced any material labour
disputes or claims and had maintained a turnover rate of approximately ranging from 11%
to 26% during the Track Record Period. There was no labour union established by our
employees.
During the Track Record Period, we occa sionally engaged employment agent to
provide us with recruitment services for hiring some staff to support our business
operations. We paid service fees to the emp loyment agent for hiring such staff, and the
benefit expenses and other applicable costs such as social insurance and housing funds shall
be borne by the employment agent.
ENVIRONMENTAL, SOCI AL AND GOVERNANCE
We understand that environmental, social and governance (ESG) issues have become
key to measuring corporate sustainability a nd long-term value. We recognise potential
impacts of ESG and climate change on our Group’s business. By proactively identifying and
confirming our Group’s responsibilities in rel ation to environmental, social and governance
(ESG) matters, we strive to identify, evalua te, manage and mitigate ESG-related risks
through adoption of comprehensive and effective measures. We are committed to
complying with environmental, social and governance reporting requirements upon our
listing and proactively engaging with our stakeholders on our ESG practises and
performance.
BUSINESS
–2 5 4–


--- page 265 ---
We have integrated ESG with our mission, vision and set of values, recognising that all
our business and non-business activities should be dedicated to advancing the social
development. We have formulated key ESG-related policies and institutional documents
covering ESG-related management principle s, organisational str ucture, training and
assessment requirements, etc., and set out spec ific practise guidelines in three dimensions
of environment, society and governance (including but not limited to responsible products,
fair treatment of customers, protection of customer privacy, resource usage and emissions,
etc.) to ensure that we carry out ESG-related practises in a standardised and effective
manner in all aspects.
ESG GOVERNANCE STRUCTURE
We attach great importance to ESG work and have established a comprehensive ESG
governance structure with clear delineation of authority and responsibility at all levels. The
Board, as the highest decision-making body, is responsible for formulating ESG strategies,
objectives and policies, supervising the effective operation of the ESG management
structure, and comprehensively scrutinising the ESG work on an annual basis, so as to
ensure compliance with the relevant laws and regulations, proactively fulfil its social
responsibilities and advance sustainable development. The Board conducts comprehensive
and in-depth evaluation and supervision of the progress and effectiveness of ESG work
through various means, such as regularly considering ESG reports, listening to the ESG
leadership group’ report, and reviewing ESG performance indicators. The Board pays great
attention to the realisation of ESG objectives , the effectiveness of risk management and the
continuity of performance improvement to ensure that ESG efforts are coordinated with
our Company’s overall strategy and business development.
The ESG leadership group and the ESG workin g group are respectively responsible for
formulating implementation plans and carryin g out specific tasks, and reporting regularly
on the progress of ESG work and the assessmen t of major issues to ensure the effective
implementation of ESG work. Each department actively implements ESG strategies and
enhances ESG performance in its daily work . For major ESG issues, we have established a
rigorous assessment process to ensure that pot ential risks are addressed in a timely manner.
The ESG working group reports on the progress of its work on a monthly basis, while the
ESG leadership group reports on the overall situation to the Board on a quarterly basis to
ensure transparency of informat ion and timely communication.
Environmental R esponsibilities
We strictly comply with Chinese environ mental laws and regulations and have
established a comprehensive e nvironmentally-friendly system. Through scientific
classification, cooperative recycling, green procurement and technological innovation, we
strive to achieve the reduction, recycling and harmlessness of waste. At the same time, we
have set clear environmental-friendly targets and continue to promote energy conservation
and emission reduction through comprehensive energy audits and the implementation of
energy conservation measures. During th e Track Record Period and up to the Latest
Practicable Date, there were no incidents of material environmental non-compliance, nor
have we been involved in any environmental-related penalties or litigation.
BUSINESS
–2 5 5–


--- page 266 ---
We have taken environmentally-friendly measures, including but not limited to:
. Paperless office: implementing paperle ss office and online approval, reducing
paper waste and promoting the use of electronic documents.
. Resources sharing: advocating the sharing of resources such as meeting rooms and
printers to achieve efficient use of resources.
. Energy conservation and emission reduction: encouraging employees to conserve
water and electricity, reasonably regula te temperature and lighting in the office
area, and use low-energy appliances to help protect the environment.
. Green commutes: promoting the use of public transport, cycling and walking as
green modes of travel for employees, and reducing the use of private cars to
alleviate traffic pressure and air pollution.
. Online products: developing a Palm Insurance Policy ( 掌上保單)s y s t e mt ou n i f y
policy management, facilitate online ope ration by users, enhance management
convenience and reduce the use of paper documents.
Energy Conservation and Emission Reduction
We adhere to the development concept of green, low-carbon and recycle. Through the
formulation and implementation of an ener gy resource manageme nt system, we have
comprehensively promoted the management of energy resources, proactively identified
potential space for energy conservation and fo rmulated detailed energy conservation plans.
We insist on giving priority to the procurement of energy-efficient and
environmental-friendly products and have established a comprehensive maintenance
system to ensure the efficient operation of facilities and equipment and reduce energy
wastage. We strive to achieve energy conservation and emission reduction in all aspects by
adopting various energy conservation measures, such as optimising the office environment,
promoting energy conservation electrical appliances and lighting, and strengthening energy
conservation management of high-power equip ment. In addition, we also focus on energy
conservation publicity and training, popularising energy conservation knowledge through
internal meetings, new media and other channel s, and organising emplo yees to participate
in energy conservation training, so as to enha nce the energy conservation awareness and
capability of all employees.
We have set an energy management target with 2023 as the base year and plan to
reduce energy consumption by 2025 by 10%.
BUSINESS
–2 5 6–


--- page 267 ---
A breakdown of our major energy consumption during the Track Record Period is set
out below:
For the year ended 31 December
For the four
months
ended
30 April
20242021 2022 2023
Purchased electricity
consumption (MWh) 169.6 178.2 175.3 56.5
Purchased heat consumption
(GJ) 207.9 232.2 250.6 140.9
Energy consumption (MWh) 227.4 242.8 245.0 95.6
Energy consumption intensity
(MWh/per employee) 2.21 1.76 1.84 0.78
GHG emission
(1) (Scope 1 and
Scope 2) (tonnes of CO 2e) 121.4 129.1 127.5 47.7
GHG emission intensity
(Scope 1 and Scope 2)
(tonnes of CO
2e/per
employee) 1.18 0.94 0.96 0.39
Water consumption (cubic
metres) 1,716.0 1,953.7 1,897.7 628.0
Water consumption intensity
(cubic metres/per employee) 16.66 14.16 14.27 5.15
Notes:
(1) During the Track Record Period, we only consum ed electricity and heat in the office without
consumption of petrol, diesel and natural gas, a nd the GHG emissions generated were all indirect
(Scope 2) GHG emissions due to purchased elect ricity and purchased heat consumption.
(2) The above statistics cover our headquarters off ice. We have only few employees working in branch
offices.
(3) The average energy consumption and GHG emissions of the first four months of a year are generally
higher than the annual average due to the purchase of winter heating.
Waste Management
Given the nature of our business operations, we do not involve the emission of exhaust
gases, wastewater or hazardous waste in our manufacturing processes, and only generate
some non-hazardous waste in our office operations. Fully recognising the importance of
waste management to environmental protection and sustainable development, we have
developed a waste management system to regula te in detail the classification, collection,
transportation, treatment and discharge of waste to ensure safe, efficient and
environmentally friendly handling of was te. During the year ended 31 December 2023
BUSINESS
–2 5 7–


--- page 268 ---
and the four months ended 30 April 2024, we generated approximately 5.3 tonnes and 1.8
tonnes of general solid waste by weight, which mainly consisted of household waste and
paper used in daily office operations.
We scientifically classify waste according to its nature and disposal method and set up
special collection stations to ensure that all types of waste are accurately deposited and
disposed of. Waste generated from office operations is disposed of by the operator of the
office space. We also conduct regular environmental publicity and training programmes to
raise the environmental awareness of our staff a nd encourage them to actively participate in
waste management and resource recovery.
With 2023 as the base year, we have set waste management targets and plan to ensure
that the rate of separate collection of non-hazardous waste reaches more than 80% by 2024,
and that the recycling rate of non-hazardous waste reaches more than 95% by 2028. In
addition, we are implementing a fully digitalis ed office to achieve a significant reduction in
the amount of non-hazardous waste generated in the future, aiming to reduce the current
level to less than 50% within the next five years.
Climate Resilience
Global climate change is likely to trigger an increase in the frequency of extreme
weather and natural disasters, which in turn will affect economic and social development
and the day-to-day operations of businesses. In response, we proactively identify and
analyse the potential impacts of climate- related risk factors and have begun to plan
accordingly to enhance our clim ate risk response capabilitie s. The main climate risk and
opportunity factors we have identified include:
. Natural disaster risk: climate chang eh a sl e dt oah i g hi n c i d e n c eo fe x t r e m e
weather events, such as heavy rains, floods, hurricanes, droughts and heat waves.
Such extreme weather events may cause disruptions to our operations, impact our
business continuity and put pressure on our underwriters to pay claims. For
example, heavy rainfall and flooding can lead to damage to houses, infrastructure
and goods. Also, extreme hot weather events may start fires leading to injuries and
property damage.
. Climate effects on health: climate change has a negative impact on human health,
such as heat waves, which may lead to increased rates of heat stroke, pyrexia and
cardiovascular diseases, and floods, which may lead to contamination of water
sources and spread of infectious diseases, and related health problems, which may
also threaten the lives of insurance subscribers, thereby increasing the risk of
health insurance claims.
. Technology and market risks: in the face of climate change, governments may
encourage or mandate the promotion of green industry development and the
introduction of relevant policies and re gulations, which will lead to the rapid
development of new technologies such as clean energy technologies that can
BUSINESS
–2 5 8–


--- page 269 ---
promote green development, and the increasing demand for green products and
services, and the need for insurance companies to expand new insurance products
and services.
. Climate-related opportunities: related products such as life insurance and accident
insurance can help insurance users av oid or reduce catastrophic losses, and
climate risk variability may lead to increased awareness of risk protection among
insurance clients and increased deman d for insurance product allocations.
We plan to set up a dedicated assessment team for climate risk factors, gradually make
use of the existing data and models in the futu re to enhance our ability to assess and identify
climate risks, and establish a comprehensiv e risk management system and emergency plans
to ensure a prompt and effective response to climate change risks. In addition, we have
carried out science popularisation for insurance users to disseminate knowledge on climate
change risks through online and offline channels to raise their awareness of the risks.
SOCIAL RESPONSIBILITY
We attach great importance to supply cha in management to ensure efficiency,
transparency and stability. We select ou r suppliers strict ly and focus on green
certification. Meanwhile, we respect labour rights, protest against discrimination and
provide a fair and safe working environment for them. We value staff training and
development, provide extensive and professional development space, and are committed to
sustainable development to create greater value.
Responsible Supply Chain
We are fully aware of the importance of supply chain management to enterprises’
long-term development, as such, we establis h and optimise actively our supply chain
management system with efficiency, transpa rency and stability as its core. We follow the
principles of unified platform, unified standa rds, and unified pathways to form an efficient
and collaborative supply chain system through the integration of internal and external
resources.
In terms of supplier selection, we insist on stringent screening to ensure that suppliers
possess legal business qualifications, good business reputation and stable product quality,
and give priority to suppliers with green product or service certifications. In terms of
procurement management, we implement a co mbination of centralised procurement and
bidding procurement to ensure that the procure ment process is open, fair and equitable. At
the same time, we have established a comprehensive procurement process and quality
control system to ensure the regularity and effectiveness of procurement activities.
Labour Rights
We pay great attention to labour rights and are committed to creating a fair, safe and
healthy working environment for our employees. We strictly abide by national laws and
regulations to ensure that the legitimate rights and interests of our employees are fully
protected. We firmly oppose all forms of discrimination in the recruitment process and are
BUSINESS
–2 5 9–


--- page 270 ---
committed to providing a fair, equitable and inclusive working environment for our
employees, candidates, business partners and clients. Therefore, we have formulated a
comprehensive anti-discrimination policy tha t explicitly prohibits discrimination on the
basis of race, gender, religious beliefs, and other factors that are not performance-related.
We focus on equal opportunities in recruitment and selection, encourage diversified training
and development, and establish fair performance appraisal and promotion systems.
We have established an effective complaint mechanism, publicised staff reporting
telephone numbers, mailboxes and other channels to encourage them to actively report any
form of discrimination, so as to ensure that our staff can report to our Group in a timely
manner and have their cases dealt with fair ly when they are discriminated against or
harassed. Complaints involving discriminatory behaviour will be investigated and dealt
with in a timely and impartial manner, and the confidentiality of the whistleblower will be
maintained.
Diversity and Inclusion
We understand that respecting diversity is an important cornerstone of our Company’s
sustainable development. We have formula ted an Employee Diversity Policy to create a
working environment that is inclusive and respectful of the differences of all employees, and
to promote diversity in terms of race, gender, age, religious beliefs, sexual orientation,
educational background, work experience, etc. We provide equal opportunities for
candidates and employees in the areas of recruitment and selection, training and
development, performance evaluation and promotion, and take into account their diverse
backgrounds and contributions. Our human resources department will regularly monitor
and evaluate the implementation of our E mployee Diversity Policy, and will collect
feedback and opinions from employees to id entify problems and make improvements in a
timely manner.
Staff Training and Development
We have always regarded staff training and development as a key element to enhance
our core competitiveness, and are committed to providing an equal and inclusive growth
environment for employees from different backgrounds through our diversity policy. We
pay attention to the skills training for our staff and improve their professional ability and
management level through technical and management training. In addition, we also
encourage our employees to participate in cross-departmental and cross-field co-operation
p r o j e c t s ,s oa st op r o m o t ec o m m u n i c a t i o na n di n t e g r a t i o na m o n ge m p l o y e e sa n de n h a n c e
teamwork.
In terms of career development, we have se t up a clear staff development plan and
career progression channels to provide our staff with a broad career development space. We
value the diverse backgrounds and contributions of our staff, and fully consider these
factors in our promotion decisions to ensure that staff from different backgrounds are given
equal opportunities for promotion. Through the implementation of our Employee Diversity
Policy, our training system has become more comprehensive and our career progression
channels have become more accessible, pr oviding our employees with a broad career
development space.
BUSINESS
–2 6 0–


--- page 271 ---
DATA PRIVACY AND DATA SECURITY
Our services involve possession, processing and analysis of data provided by insurance
clients during the course of our business. As such, we have established and implemented
policies and procedures to safeguard data privacy and data security and to ensure our
compliance with the relevant laws and regulations. Set forth below are the summary of our
related policies and procedures:
Data access and usage
In our ordinary course of business, we mainly collect various types of personal
information on our online platforms to facilitat e the provision of our services in accordance
with the applicable laws and regulations. We c ollect and process the following types of
personal information, among others:
(i) customers’ and relevant individuals’ (such as beneficiaries and policyholders)
personal information in the insurance agency business, including the mobile
phone numbers, email addresses and other online platform account information
from corporate customer contacts and individual customers, as well as the name,
identity document, date of birth, gender, address, marital status, education and
occupation information, health and physiological information, income
information of relevant individuals (i.e ., policyholder, beneficiary and insurer,
the information as collected depends on the role of such individual) in accordance
with the requirements of specific insurance products and the laws and regulations
of the insurance sector.
(ii) insurance agents’ personal inform ation in the insurance agency business,
including name, gender, bank account, employment experience, identity
document, and personal photo.
(iii) candidates’ personal information in the HR-related consulting services:
candidates’ resumes, contact information, basic information related to
job-seeking intention, work experience and education experience.
In accordance with applicable PRC laws and regulations, we provide the aforesaid
individuals with prior notice as to what personal information are being collected and
undertake to manage and use such personal information as collected only for purpose of
our products and services to the minimum necessary extent. We obtain necessary consent or
rely on other lawful basis for our processing activities. In addition, we retain relevant
personal information only within the period necessary to fulfil our business purposes or to
comply with the mandatory retention period a s required by relevant laws and regulations.
As of the Latest Practicable Date, we possess the personal information of
approximately 308,000 individuals, primarily including individual customers (and
relevant individuals such as policyholders and beneficiaries), corporate customer
contacts, insurance agents and candidates. We store all of our data in the PRC in
accordance with applicable PRC laws and regu lations and there is no cross-border transfer
of data as collected and generated by us during the course of business. To prevent any
BUSINESS
–2 6 1–


--- page 272 ---
unauthorised access to or illegitimate use of d ata, we only grant access to employees holding
specific positions at certain levels to data on a need-to-know basis and maintain records of
such employees.
Data security system and infrastructure
To reinforce data protection, we deploy di fferent encryption methods at both software
or APP and infrastructure levels. Data collected in the course of our business is stored on
our database secured by firewall subject to additional encryption and decryption
procedures.
Data security procedures and policies
We have designated the Information Technology Department and specific personnel
responsible for the protection of cybersecurity and personal information, and formulated
and implemented relevant cybersecurity and dat a protection policies, such as the Personal
Information Protection Policy, the Persona l Information Protection Impact Assessment
Policy, Data Backup Management Provisions , Password Management Provisions, System
Account Management Provisions, and Third-party Information Security Management
Measures, etc. We also maintain internal access control to restrict unauthorised data
browsing, manipulation or exportation and conduct information security audits on
employees’ user logs of internal networks and information systems. In addition, our
employees are required to sign a non-disclosure agreement with specific information
security requirements at their on-boarding.
To mitigate the risks of misusing of data, we provide data security and protection
training to our employees on a regular basis. According to our internal policies, our
employees would be penalised for breaching of our data security policies, the level of
penalty depend on the severity and frequency of the breach. We also maintain contingency
plans and conduct regular data backup and recovery tests to enhance the resilience,
reliability and stability of our systems. For m ore details, please refer to the paragraph
headed ‘‘Technology’’ in this section.
Our employees are required to report any data security incident (e.g. leakage or loss of
confidential data) to our data security team which will then investigate the causes of the
incident, monitor the implementation of any rectification measures and any follow up
measures to be taken by the responsible department or team to prevent recurrences of
similar incidents.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any material data leakage or loss of data and we were not subject to any
administrative investigation, punishment, litigation or legal proceedings in relation to
network security, data protection or other si milar incidents. As advised by our PRC Legal
Advisers, based on the fact that our Group has not been subject to any material
investigation, penalty, litigation or legal pro ceedings relating to data privacy and protection
during the Track Record Period and up to the Latest Practicable Date, our PRC Legal
BUSINESS
–2 6 2–


--- page 273 ---
Advisers are of the view that we had complied with the applicable laws and regulations on
the collection, possession, use and disclosur e of data in all material respects during the
Track Record Period and up to the Latest Practicable Date.
Data privacy and protection laws and regulations
In terms of data collection, the PRC Cy bersecurity Law provides that network
operators shall abide by the principles of legi timacy, fairness and necessity to collect and
use personal information by announcing rules for collection and use, expressly notifying the
purpose, methods and scope of such collection and use, and obtain the consent of the
person whose personal information is to be collected. Network operators shall not disclose
such information to others without prior con sent of the person whose personal information
has been collected. If we fail to meet the aforesaid requirements, we could be subject to
rectification orders and one or combination of the following actions, depending on the
severity of the circumstance: warning, confiscation of illega l earnings, a fine equivalent to
more than one but less than 10 times the illegal earnings, or a fine less than RMB1.0 million
where no illegal earnings are made.
In terms of data management and data secu rity, PRC Data Security Law stipulates
that whoever carries out data processing acti vities shall establish a sound data security
management system throughout the whole process, organise data security education and
training, and take corresponding technical m easures and other necessary measures to ensure
data security, in accordance with the provisions of laws and regulations. If we fail to
perform the said data security and protection obligations, we may be subject to the
authorities’ rectification orders and warnin g, and may be concurrently fined not less than
RMB50,000 but not more than RMB500,000.
On 28 December 2021, the CAC, together with certain other PRC governmental
authorities, promulgated the Cybersecurity Review Measures ( 《網絡安全審查辦法》)w h i c h
took effect from 15 February 2022. Article 5 of the measures requires that the purchase of
network products and services by a critical information infrastructure operator (CIIO) that
affect or may affect national security shall be subject to a cybersecurity review. Article 7 of
the measures provides that network platform operators with personal information of over
one million users shall be subject to cybers ecurity review before listing abroad ( 國外上市).
In addition, according to these measures, the co mpetent governmental authorities may also
initiate a cybersecurity review against the operators if the authorities believe that the
network product or service or data processing activities of such operators affect or may
affect national security.
During the Track Record Period and up to the Latest Practicable Date, we complied
with the Cybersecurity Review Measures in all material respects on the basis that: (i) as at
the Latest Practicable Date, we had not been notified, approached or designated by any
PRC authorities as a critical information infrastructure operator (CIIO) nor had received
any notice that notifying any of our network facilities or information systems being
determined as critical information infrastru cture from any PRC authorities. Therefore, we
a r en o ts u b j e c tt ot h er e q u i r e m e n to fa p p l y i ng for cybersecurity review under Article 5 of
the Cybersecurity Review Measures; (ii) acco rding to the real-name consultation with the
BUSINESS
–2 6 3–


--- page 274 ---
China Cybersecurity Review Technology and Certification Center ( 中國網絡安全審查技術
與認證中心), currently known as the China Cybersecu rity Review, Certification and Market
Regulation Big Data Center ( 中國網絡安全審查認證和市場監管大數據中心), the proposed
Global Offering and listing in Hong Kong will not qualify as ‘‘seeking a foreign initial
public offering’’ under the Article 7 of the Cybersecurity Review Measures. Therefore, we
are not subject to the requirement of applying for cybersecurity review pursuant to Article 7
of the Cybersecurity Review Measures; and ( iii) during the Track Record Period and up to
the Latest Practicable Date, we had not received any notice from any PRC authorities
notifying that any of the our data processing activities affects or may affect national
security, and we had not received any warning o r sanction regarding cybersecurity from any
PRC authorities nor had been involved in any inquiry and investigations on cybersecurity
review made by any PRC authorities.
Our Directors confirm that our Group has never been subject to any penalties or
claims for violating applicable data securi ty or cybersecurity laws and has adopted the
relevant measures to satisfy the said data securi ty and cybersecurity requirements. Based on
the foregoing, as advised by our PRC Legal Advisers, our Group had complied in all
material respects with relevant applicable data privacy and cybersecurity laws and
regulations during the Track Record Period and up to the Latest Practicable Date.
INSURANCE
We maintain insurance policies coverin g risks in line with industry standards.
Furthermore, we (i) maintain social welfare insurance for our employees as required by
applicable PRC laws and regulations, and (ii) paid the security deposit of 5% of the
registered capital in lieu of the purchase of professional liability insurance as required by
the Provisions on the Regula tion of Insurance Agents ( 保險代理人監管規定) published by
the CBIRC (now known as NFRA). During the Track Record Period and up to the Latest
Practicable Date, we had not made nor had been the subject of any material insurance
claims. We believe that our insurance coverage is consistent with that of other insurance
agency companies in the PRC.
LEGAL PROCEEDINGS AND COMPLIANCE
During the Track Record Period and up to the Latest Practicable Date, there was no
litigation or arbitration pending or threate ned against our Group or any of our Directors
which could have a material adverse effect on our Group’s financial condition or results of
operations.
BUSINESS
–2 6 4–


--- page 275 ---
We are of the view that, we had complied, in all material respects, with all relevant laws
and regulations in the PRC during the Track Record Period and up to the Latest
Practicable Date. As confirmed by our PRC Legal Advisers, during the Track Record
Period and up to the Latest Practicable Date, our business operations in the PRC complied
with the relevant PRC laws and regulations in all material respects, and no material
administrative penalties imposed on us have been found that may have a material adverse
effect on our Group’s business operations.
PROPERTIES
Our headquarters is located on leased premises comprising approximately 1,746 sq.m.
located in Qingdao. As at the Latest Practicable Date, we leased eight properties from
certain Independent Third Parties and one property from Haier Group’s associates. Our
leased properties in the PRC had a total gross floor area of approximately 2,648.73 sq.m.,
and each leased property ranged from a gross floor area of approximately 38.89 sq.m. to
1,746 sq.m. The leased properties are principally used as our principal office and branch
offices. None of these properties is individually material to our operations.
Pursuant to relevant PRC regulations, part ies to a lease agreement are required to file
the lease agreements for registration and obtain property leasing filing certificates for their
leases. The registration is subject to the cooperation from the landlords of the leased
properties as the registration requires the submission of certain documents from the
landlords, including their identification docu mentation and property ownership certificates,
to the relevant authorities. As at the Latest Pr acticable Date, we had not filed all nine lease
agreements for our leased properties under which we are the tenants of the leased
properties. As advised by our PRC Legal Advisers, the failure to register the lease
agreements does not affect the validity of the lease agreements under the relevant PRC laws
and regulations. However, we may be required by relevant government authorities to
complete the registration formalities withi n the prescribed time limit or otherwise we may
be subject to fines imposed by PRC government authorities ranging from RMB1,000 and
RMB10,000 for each unregistered lease agreements. As further advised by our PRC Legal
Advisers, the risk of us being fined is low provided that we will and will be able to carry out
rectification in accordance with the laws and regulations in a timely manner if the relevant
regulatory authorities so order. Given that (i) our business operation does not involve any
production activities that mat erially depend on any of the leased properties; and (ii) we are
able to relocate to a different site at a relatively low cost if we are required to do so, our
Directors are of the view that the abovementioned issue regarding our leased properties will
not materially and adversely affect our business operations.
For more details, please refer to the section headed ‘‘Risk Factors — Risks Relating to
Our Business — Some landlords have not provi ded to us relevant title certificates with
respect to some of our leased properties in the PRC and some of our lease agreements were
not registered with the relevant government authorities’’ in this prospectus.
BUSINESS
–2 6 5–


--- page 276 ---
We had no single property with a carrying amount of 15% or more of our total assets
as at 30 April 2024 and, therefore, we did not need to prepare a valuation report with
respect to our property interests in reliance upon the exemption provided by section 6(2) of
the Companies (Exemption of Companies and Prospectus from Compliance with
Provisions) Notice (Chapter 32L of the Laws of Hong Kong).
INTELLECTUAL PR OPERTY RIGHTS
As at the Latest Practicable Date, we (i) registered 20 trademarks and three trademarks
in the PRC and Hong Kong, respectively; (ii) were granted three invention patents in the
PRC; (iii) had 49 computer software copyrigh ts in the PRC, and (iv) was in the progress of
registering six patents in the PRC. These tra demarks have a validity period of ten years and
our granted invention patent has a validity period of 20 years from the date of its
application and these copyr ights have a validity period of 50 years from their first
publication, respectively. The trademarks, patent and copyrights are important to our
Group and therefore applications have been and will be made to the relevant authority for
the renewal of the trademarks and patents in the PRC.
Our Directors are of the view that there is no legal impediment for the renewal of the
aforesaid trademarks and patents in the PRC upon their relevant dates of expiry. For more
details, please refer to the section headed ‘‘Appendix VI — Statutory and General
Information — B. Further Information about our Business — 2. Our Material Intellectual
Property Rights’’ in this prospectus.
During the Track Record Period and up to the Latest Practicable Date, we had not
been subject to any intellectual property infringement claims which had any material
adverse impact on our Group.
RISK MANAGEMENT, AML AND I NTERNAL CONTROL SYSTEMS
Risk Management
With the growth and expansion of our operations, potential risks to our business
increase as well. In order to identify, assess and control the risks that may create
impediments to the growth of our business, we have designed and implemented risk
management policies to address various potential risks identified in relation to our
operations, including operational risks, credit risks, market risks, financial risks and legal
risks. Our risk management policies set forth p rocedures to identify, analyse, categorise,
mitigate and monitor various risks as well as the reporting hierarchy of risks identified in
our operations. Each of our business departments and functions is responsible for
identifying and evaluating the risks relating to its area of operations and implementing our
risk management and internal control systems.
Our Audit Committee is responsible for overseeing our management in the
implementation of our overall risk management and internal control systems and
assessing our risk management and internal control systems. For more details on the
BUSINESS
–2 6 6–


--- page 277 ---
qualifications and experiences of the members of our Audit Committee, please refer to the
section headed ‘‘Directors, Supervisors and Senior Management — Board Committees —
Audit Committee’’ in this prospectus.
Anti-Money Laundering
We have adopted various anti-money laund ering measures in accordance with the
Notice of Strengthening Anti-money Laundering in Insurance Industry ( 《關於加強保險業反
洗錢工作的通知》) and Administrative Measures for Anti-money Laundering in Insurance
Industry (《保險業反洗錢工作管理辦法》). For more details on the laws and regulations,
please refer to the section headed ‘‘Regulatory Overview — Regulations Related to
Insurance Agency Business — Internal Governance — Anti-money Laundering’’ in this
prospectus. We have established an anti-money laundering committee which is vested with
the responsibility to supervise our internal bu siness procedures to prohibit the illegal
sources of funds. Our anti-money laundering committee is composed of four members, who
are led by Mr. Lu, our Chairman, executive Director and general manager. We have also
implemented anti-money laundering polic ies, including customer/insurance client
identification, record keeping on customer/insurance client information covering their
identification, transaction records as well as s ource of funds. We have further established an
anti-money laundering information reporting system, as part of the policies and procedures
aimed at preventing money laundering activities. Our employees collect, analyse, monitor
and preserve customer/insurance client info rmation and transaction records, and are
required to report any suspicious transactions detected up to our anti-money laundering
committee. We deal with any suspicious activities on a timely basis to mitigate the risk of
money laundering. We also actively carry out training on anti-money laundering to enhance
the awareness of anti-money laundering among our employees.
Internal Control
It is responsibility of the Board to ensure that our Company maintains sound and
effective internal controls to safeguard the Shareholders’ investment and our Group’s assets
at all times. We would adopt the following measures to safeguard good corporate
governance standards and to avoid po tential conflict of interests:
. as part of our preparation for the Global Offering, we have amended our Articles of
Association to comply with the Listing Rules . In particular, our Articles of Association
provide that a Director shall not vote on any resolution in which such Director have a
material interest in the company involved, a nd if the laws and regulations and the rules
of the stock exchange where our Shares are listed imposed any further restrictions on
directors’ attendance at board meetings and voting, such laws, regulation and rules
shall be complied with.
. we will establish internal control mechanisms to identify connected transactions. Upon
the Listing, if we enter into connected tr ansactions with any of our Controlling
Shareholders or their respective associates, our Company will comply with the
applicable Listing Rules.
BUSINESS
–2 6 7–


--- page 278 ---
. we will establish anti-fraud policies to identify, prevent and punish unethical and
illegal conducts, as well as whistle-blowin g procedures to encourage our employees to
bring those conducts to the attention of our senior management and Board of
Directors and ensure the protection of whistle-blowers.
. we are committed that our Board should include a balanced composition of executive
and non-executive Directors (including independent non-executive Directors). We have
appointed three (3) independent non-executive Directors and we believe our
independent non-executive Directors possess sufficient experience and they are free
of any business or other relationship which could interfere in any material manner with
the exercise of their independent judgement and will be able to provide an impartial
and external opinion to protect the interests of our public Shareholders. Details of our
independent non-executive Directors are set out in ‘‘Directors, Supervisors and Senior
Management — Board of Directors — Independent Non-executive Directors’’.
. in the event that the independent non-executive Directors are requested to review any
conflicts of interests circumstances between our Group on the one hand and our
Controlling Shareholders and/or our Dir ectors on the other hand, our Controlling
Shareholders and/or our Directors shall provide the independent non-executive
Directors with all necessary informat ion and our Company shall disclose the
decisions of the independent non-executive Directors either through our annual
report or by way of announcements.
. Our code of conduct explicitly communicates to each employ ee our values, acceptable
criteria for decision-making and our ground rules for behaviour.
. Our internal audit team regularly monitors key controls and procedures in order to
assure our management and the Board that the internal control system is functioning
as intended. The Audit Committee is responsible for supervising our internal audit
function.
. We regularly provide training to our Directors, senior management and employees
with respect to our internal control policie s and the duties and responsibilities of
directors and management of listed companies under the Listing Rules and other
applicable laws and regulations.
. Our various policies aim to ensure complianc e with the Listing Rules, including but not
limited to aspects related to corporate governance, connected transactions and
securities transactions by our Directors.
. We have appointed Ping An of China Capital (Hong Kong) Company Limited as our
compliance adviser to advise on ongoing compliance with the Listing Rules and other
applicable securities laws and regulations in Hong Kong.
Our Directors are of the view that our current internal control measures are adequate
and effective.
BUSINESS
–2 6 8–


--- page 279 ---
OVERVIEW
Our Board consists of seven Directors, comprising four executive Directors and three
independent non-executive Directors. Our Board is responsible and has the general
authority for the management and operation of our Company. Our Directors are appointed
for a term of three years and are eligible for re- election upon expiry of their term of office.
Our Supervisory Committee consists of three Supervisors, including two shareholder
representative Supervisors and one employee representative Supervisor. Our Supervisors
are appointed for a term of three years and are eligible for re-election upon expiry of their
term of office.
Our senior management is responsible for the management of day-to-day operations of
our Group.
BOARD OF DIRECTORS
The following table shows certain information of our Directors as at the Latest
Practicable Date.
Name Age
Date of joining
our Group Position
Date of
appointment
as a Director
Roles and
Responsibilities
Relationship with
other Directors,
Supervisors and
senior
management
members
Executive directors
Mr. Lu Yao
(鹿遙)
39 16 March 2017 Chairman, executive
Director and
general manager
10 May 2018 Overall business
management and
corporate
development of
our Group
None
Mr. Zhang Zhiquan
(張志全)
45 1 May 2017 Executive Director
and deputy
general manager
10 May 2018 Formulating and
executing
strategies of
household
insurance business
of our Group
None
M s .L iT i a n
(李甜)
39 1 January 2019 Executive Director
and chief financial
officer
14 March 2023 Overall financial
management of
our Group
None
Mr. Wang Heping
(王合平)
39 18 April 2017 Executive Director
and chief
technology officer
14 March 2023 Overall development
and operation of
the technology
platform of our
Group
None
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 6 9–


--- page 280 ---
Name Age
Date of joining
our Group Position
Date of
appointment
as a Director
Roles and
Responsibilities
Relationship with
other Directors,
Supervisors and
senior
management
members
Independent non-executive directors
Ms. Fang Qiaoling
(房巧玲)
48 14 March 2023 Independent
non-executive
Director
14 March 2023 Supervising and
providing
independent
judgement and
opinion to our
B o a r do ni s s u e s
material to our
Group and where
otherwise required
None
Mr. Chung Wai Man
(鍾偉文)
60 Listing Date Independent
non-executive
Director
18 May 2023
(with effect
from the
Listing Date)
Supervising and
providing
independent
judgement and
opinion to our
B o a r do ni s s u e s
material to our
Group and where
otherwise required
None
Ms. Ng Sin Kiu
(吳先僑)
50 Listing Date Independent
non-executive
Director
18 May 2023
(with effect
from the
Listing Date)
Supervising and
providing
independent
judgement and
opinion to our
B o a r do ni s s u e s
material to our
Group and where
otherwise required
None
Executive Directors
Mr. Lu Yao ( 鹿遙), aged 39, is our chairman of the Board, executive Director and
general manager. He has been appointed as our general manager and Director since March
2017 and May 2018, respectively. Mr. Lu was re-designated as an executive Director on 14
March 2023. Mr. Lu is primarily responsible for the overall business management and
corporate development of our Group. Mr. Lu is the chairman of our Nomination
Committee. He is also the director and general manager of Zhongmiao Shujin, Zhongmiao
Caizhi and Haier Insurance Agency, and serves as a director of Yunhai Lianji Technology.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 0–


--- page 281 ---
Mr. Lu has over 15 years of experience in the field of corporate, business management
and human resources and over five years of experience in the insurance intermediary
industry. Mr. Lu began his career as a manager of the human resources department of
Qingdao Haikeda Electronics Co., Ltd. ( 青島海科達電子有限公司) (formerly known as
Qingdao Haier Electronics Co., Ltd. ( 青島海爾電子有限公司)), principally engaged in the
production and sales of household electrical appliances from August 2007 to May 2011,
where he was primarily responsible for staff training and human resources management.
From June 2011 to January 2017, he joined at Chongqing New Ririshun Home Appliance
Sales Co. Ltd. ( 重慶新日日順家電銷售有限公司), a company primarily engaged in the sales
of household electrical appliances, served as the director of the human resources
department from June 2011 to August 2016 and as general manager of its Shanghai
branch since from September 2016 to January 2017. Both companies are under the Haier
Group.
Mr. Lu obtained a bachelor’s degree in electronic information science and technology
from Qingdao University, the PRC ( 青島大學) in June 2007.
Mr. Zhang Zhiquan ( 張志全先生), aged 45, is our executive Director and deputy
general manager. He was appointed as a Director on 10 May 2018 and re-designated as an
executive Director on 14 March 2023. Mr. Zhang is primarily responsible for formulating
and executing strategic of household insurance business of our Group. He has served as our
deputy general manager since May 2017. He also serves as a director of Yunhai Lianji
Technology.
Mr. Zhang has over 20 years of experience in the insurance industry in the PRC. He
was an audit commissioner of Ping An Insurance (Group) Company of China, Ltd. ( 中國平
安保險（集團）股份有限公司), a company listed on the Shanghai Stock Exchange (stock
code: 601318) and the Stock Exchange (stock code: 2318) which is principally engaged in
the provision of insurance services, and was primarily responsible for auditing from July
2002 to March 2006. From March 2006 to May 2016, he successively served as an officer of
the audit department, a deputy general manage r of comprehensive service department of
telemarketing division and Internet business department of telemark eting division, and
assistant to the general manager of strategi c development department in Sunshine Property
and Casualty Insurance Company Limited ( 陽光財產保險股份有限公司) a subsidiary of
Sunshine Insurance Group Company Limited ( 陽
光保險集團股份有限公司), a company
listed on the Stock Exchange (stock code: 6963) which is principally engaged in insurance
businesses and was primarily responsible for fi nancial affairs, strategy and administration.
Mr. Zhang obtained a bachelor’s degree in auditing from Tianjin Finance and
Economics Institute, the PRC ( 天津財經學院) (now known as Tianjin University of Finance
Economics ( 天津財經大學)) in June 2002.
M s .L iT i a n( 李甜女士) (formerly known as Li Tian Tian ( 李甜甜)), aged 39, is our
executive Director and chief financial office r. She was appointed as an executive Director
on 14 March 2023. Ms. Li joined our Group as our chief financial officer in January 2019
and is primarily responsible for the overall financial management of our Group. Ms. Li is a
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 1–


--- page 282 ---
member of our Remuneration Committee and serv es as supervisors at certain subsidiaries of
our Group, including Zhongmiao Shujin, Zhongmiao Caizhi and Haier Insurance Agency.
She also served as a supervisor of our Company from May 2020 to March 2023.
Ms. Li has over 10 years of experience in accounting and auditing. Prior to joining our
Group, from October 2011 to October 2014, Ms. Li served as an auditor in
PricewaterhouseCoopers Zhong Tian Qingdao Branch ( 普華永道中天會計師事務所有限公
司青島分所), and she was primarily responsible for auditing work. Subsequently, she served
as head of financial department and was primarily responsible for the management of
financial and accounting activities at several companies under the Haier Group, including
(i) Qingdao Ririxin Information Service Co., Ltd ( 青島日日新信息服務有限公司), a
company principally engaged in information consulting service from January 2015 to
February 2017; (ii) Qingdao Ririshun Lejia Trading Co., Ltd ( 青島日日順樂家貿易有限公
司), a company principally engaged in the operation of trading platform from February
2017 to September 2018; and (iii) Qingdao Rir ishun Chuangzhi Investment Management
Co., Ltd ( 青島日日順創智投資管理有限公司) (now known as Qingdao Haishang Chuangzhi
Investment Co., Ltd ( 青島海尚創智投資有限公司)), a company principally engaged in
investment management from September 2018 to December 2018.
Ms. Li obtained her bachelor’s degree in international economic and trade from
Qingdao University, the PRC ( 青島大學) in June 2008 and obtained her dual master’s
degree in finance and logistics management from the University of Sydney, Australia in
April 2010. She is a non-practising member of t he Chinese Institute of Certificated Public
Accountants ( 中國註冊會
計師協會).
Mr. Wang Heping ( 王合平先生), aged 39, is our executive Director and chief
technology officer. He was appointed as an executive Director on 14 March 2023. Mr.
Wang joined our Group as our chief techno logy officer in April 2017 and is primarily
responsible for the overall development and operation of the technology platform of our
Group.
Mr. Wang has over 15 years of experience in software research and development. Prior
to joining our Group, Mr. Wang worked at Computer Mind Co., Ltd., a company
principally engaged in IT system development, Astroway Technology Development
(Qingdao) Co., Ltd ( 宇威科技發展（青島）有限公司), a company principally engaged in the
development and sales of technology for use in areas of education and training and
administrative digitalisation, and Qingdao Zhonglianheli Information Technology Co.,
Ltd. ( 青島中聯合力信息技術有限公司) (now known as Shandong Yakailin Environmental
Protection Technology Co., Ltd. ( 山東亞凱林環保科技有限公司)), a company principally
engaged in the development and sales of technology. From April 2011 to March 2014, Mr.
Wang worked as a software development engineer at Qingdao Hisense Media Network
Technology Co., Ltd. ( 青島海信傳媒網絡技術有限公司), a company principally engaged in
the provision of network technology services and a subsidiary of Hisense Visual Technology
Co., Ltd. ( 海信視像科技股份有限公司), a company listed on the Shanghai Stock Exchange
(stock code: 600060), and was primarily responsible for software development and technical
management.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 2–


--- page 283 ---
Mr. Wang obtained a bachelor’s degree in computer science and technology from
Ocean University of China, the PRC ( 中國海洋大學) in June 2006.
Independent Non-executive Directors
Ms. Fang Qiaoling ( 房巧玲女士), aged 48, was appointed as an independent
non-executive Director on 14 March 2023. She is responsible for supervising and
providing independent judgement and opinion to our Board on issues material to our
Group and where otherwise required. Ms. Fang is the chairlady of our Remuneration
Committee and a member of our Audit Committee and Nomination Committee.
Ms. Fang has been teaching in the accounting faculty of Management College of Ocean
University of China ( 中國海洋大學管理學院) since July 1999, where she served as a teaching
assistant, lecturer and associate professor, and is currently a professor, PhD tutor and the
head of accounting faculty. Ms. Fang has also served as an independent non-executive
director of Bank of Qingdao Co., Ltd. ( 青島銀行股份有限公司), a company listed on the
Stock Exchange (stock code: 3866) and Shenzhen Stock Exchange (stock code: 002948),
since June 2018 and an independent director of Fengshi (Qingdao) Marine Technology Co.,
Ltd. ( 逢時（青島）海洋科技有限公司) (principally engaged in food business) since June 2024.
From June 2017 to June 2023, Ms. Fang had served as an independent director of Triangle
Tire Co., Ltd. ( 三角輪胎股份有限公司) (listed on the Shanghai Stock Exchange (stock code:
601163) and principally engaged in the production and sales of tyres). From August 2021 to
June 2024, Ms. Fang had served as an independent director of Chendu Landtop Technology
Co., Ltd. ( 成都能通科技股份有限公司) (principally engaged in development and production
of electronic equipment).
Ms. Fang obtained a bachelor’s degree in economics in Zhejiang Silk Technology
College, the PRC ( 浙江絲綢工學院) (now known as Zhejiang Sci-tech University ( 浙江理工
大學
)) in July 1996. She also received a master’s degree and a doctorate degree in
management from Renmin University of China ( 中國人民大學), the PRC in July 1999 and
June 2005, respectively. She is a non-practisin g member of the Chinese Institute of Certified
Public Accountants. She is currently a council member of the audit education division of the
Chinese Audit Society ( 中國審計學會審計教育分會), an executive council member ( 常務理
事) of Shandong Accounting Society ( 山東省會計學會), a council member ( 理事)o f
Accounting Society of China ( 中國會計學會), the president ( 會長)o fQ i n g d a oB u s i n e s s
Accounting Society ( 青島市商貿會計學會) and the vice-president ( 副會長)o fQ i n g d a o
Auditing Society ( 青島市審計學會). Ms. Fang was selected as a National Accounting
Leading (back-up) Talents (academics) ( 全國會計領軍（後備）人才（學術類）) in 2009 and
received a certificate of ‘‘National Accounting Leading Talents’’ ( 全國會計領軍人才證書)
issued by Ministry of Finance of the PRC in 2016.
Mr. Chung Wai Man ( 鍾偉文先生), aged 60, was appointed as an independent
non-executive Director on 18 May 2023 (with effect from the Listing Date). He is
responsible for supervising and providing independent judgement and opinion to our Board
on issues material to our Group and where otherwise required. Mr. Chung is the chairman
of our Audit Committee and a member of our Remuneration Committee.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 3–


--- page 284 ---
Mr. Chung has over 25 years of experience in accounting, taxation and finance. From
August 1993 to August 2000, Mr. Chung worked in Deloitte Touche Tohmatsu with his last
position as a tax manager, and was primarily responsible for the tax services. From August
2000 to August 2002, he served as the chief financial officer at Artel Solutions Group
Holdings Limited (currently known as China HK Power Smart Energy Group Limited), a
company listed on the Stock Exchange (stock code: 0931) and principally engaged in the
provision of computing, multimedia and networking solutions and digital products, and
was primarily responsible for the management o f financial and accounting activities. From
August 2002 to September 2003, he worked as t he chief financial officer and company
secretary at Venturepharm Laboratories Li mited (currently known as China Health Group
Inc.), a company listed on the Stock Exchange (stock code: 8225) and principally engaged
in the provision of integrated pharmaceutical service and terminal medical service, and was
primarily responsible for the management of financial and accounting activities. From
September 2007 to September 2010, he served as the executive director and chief financial
officer of Silver Base Group Holdings Limited, a company which had been listed on the
Stock Exchange (stock code: 0886) and delis ted on 4 December 2023 and primarily engaged
in distribution and sale of high-end liq uors, and was primarily responsible for the
management of financial and accounting acti vities. From December 2010 to January 2012,
he served as the chief financial officer of Yongkai International Holding Limited, a
company principally engaged in the manufactu ring and sales of sugar and paper products in
China, and was primarily responsible for the management of financial and accounting
activities. From June 2012 to January 2013, he was a corporate finance director of KVB
Kunlun International (HK) Limited (now known as CLSA Premium International (HK)
Limited), a subsidiary of CLSA Premium Limit e d ,ac o m p a n yl i s t e do nt h eS t o c kE x c h a n g e
(stock code: 6877) which is primarily engage d in the provision of diversified financial
products to overseas Asian community. From June 2015 to November 2017, he joined
Legend Strategy International Holdings Group Company Limited, a company listed on the
Stock Exchange (stock code: 1355) and primarily engaged in the provision of hotel
management and served, as an independent non-executive director from June 2015 to
November 2016, as chief financial officer, compa ny secretary, authorised representative and
process agent from November 2016 to February 2017 and as a non-executive director from
February 2017 to November 2017. From February 2017 to May 2019, he was a vice general
manager and chief financial officer of China Taihe Group Limited, and was primarily
responsible for the management of financial and accounting activities. From June 2019 to
March 2023, he worked as a vice general manager and chief financial officer of Huapei
Global Capital Limited, and was primarily responsible for the management of financial and
accounting activities. He had also been the general manager of Yipei Global Capital
Limited, a company primarily engaged in asset management business, from June 2021 to
January 2024, before transferring to position of the consultant since January 2024.
Mr. Chung has served as an independent non-executive director of Net Pacific
Financial Holdings Limited (listed on the Si ngapore Exchange Limited (stock code: 5QY)
and principally engaged in provision of financing services) since June 2018, E Lighting
Group Holdings Limited (listed on the Stock Exchange (stock code: 8222) and principally
engaged in retail chain business in lighting and household products) since September 2014,
Shandong Fengxiang Co., Ltd (listed on the Stock Exchange (stock code: 9977) and
principally engaged in production of white-feathered broiler) since August 2019 and
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 4–


--- page 285 ---
Shanghai MicroPort MedBot (Group) Co., Ltd (listed on the Stock Exchange (stock code:
2252) and principally engaged in designing, developing and commercialising surgical robots
to assist surgeons in performing comple x surgical procedures) since July 2024.
Mr. Chung obtained a bachelor’s degree in social sciences from University of Hong
Kong in December 1989 and a master’s degree in international business management from
City University of Hong Kong in Novemb er 1998. Mr. Chung has been an associate
member of the Hong Kong Institute of Certified Public Accountants since April 1995 and a
fellow of The Association of Chartered Certified Accountants in the United Kingdom since
November 1999.
M s .N gS i nK i u(吳先僑女士), aged 51, was appointed as an independent non-executive
Director on 18 May 2023 (with effect from the Listing Date). She is responsible for
supervising and providing independent judgement and opinion to our Board on issues
material to our Group and where otherwise required. Ms. Ng is a member of our Audit
Committee and Nomination Committee.
Ms. Ng has over 20 years of experience in legal practise and, in particular, substantial
experience in corporate finance matters, an d has advised on a broad spectrum of matters,
including initial public offerings, secondary equity and equity-linked offerings, mergers and
acquisitions, transactional and compliance matters, and other commercial matters. She has
been a partner of Watson Farley & Williams LL P since December 2015. From August 1998
to March 1999, Ms. Ng last served as an assistant solicitor of Chiu & Partners. From April
1999 to August 1999, she was an assistant solicitor of Siao, Wen & Leung. From August
1999 to February 2000, she was an assistant solicitor of Pun & Associates. From February
2000 to April 2001, she was an assistant solicitor of Gallant (formerly known as Gallant Y.
T. Ho & Co.). From May 2001 to December 2007, she was an assistant solicitor of Sidley
Austin. From January 2008 to October 2008, she was an assistant solicitor of Paul Hastings.
From October 2008 to December 2009, she was an a ssistant solicitor of Sidley Austin. From
January 2010 to March 2012, Ms. Ng was a consultant of Sidley Austin. From April 2012 to
December 2015, she was a partner of Squire Patton Boggs. Ms. Ng has served as an
independent non-executive director of Palasino Holdings Limited (listed on the Stock
Exchange (stock code: 2536) and principally engaged in gaming and leisure business) since
March 2024.
Ms. Ng obtained her bachelor’s degree, postgraduate certificate and master’s degree in
laws from the University of Hong Kong in November 1995, June 1996 and December 1999,
respectively. She has been a solicitor of the High Court of Hong Kong and of the Greater
Bay Area since August 1998 and May 2023, respectively.
Ms. Ng was a director of the following company, which had been dissolved at the
Latest Practicable Date:
Name of the company
Place of
incorporation
Date of
dissolution
Mean of
dissolution Reasons of dissolution
Gain Pacific Investment
Limited
Hong Kong 8 May 2020 Strike-off Cessation of business
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 5–


--- page 286 ---
Ms. Ng confirmed that (i) the above company was solvent immediately prior to its
dissolution; (ii) there was no wrongful act on her part leading to dissolutions of the above
company and was not aware of any actual or potential claim that had been or would be
made against her as a result of dissolution; and (iii) no misconduct or misfeasance had been
involved in the dissolution of the above company.
SUPERVISORY COMMITTEE
The following table shows the key information of our Supervisors. All of our
Supervisors meet the qualification requirements under relevant PRC laws and regulations
for their positions.
Name Age
Date of joining
our Group Position
Date of
appointment
as a Supervisor Responsibilities
Relationship with
other Directors,
Supervisors and
senior
management
members
Mr. Zhu Rongwei
(朱榮偉)
31 1 July 2018 Employee
representative
Supervisor
14 March 2023 Supervising the
operating
of our Company
None
Ms. Wang Jiesi
(王杰斯)
37 14 March 2023 Shareholder
representative
Supervisor
14 March 2023 Supervising the
operating
of our Company
None
Ms. Wang Yangyang
(王陽陽)
41 1 March 2019 Shareholder
representative
Supervisor
17 June 2024 Supervising the
operating of
our Company
None
Mr. Zhu Rongwei ( 朱榮偉先生), aged 31, was appointed as a Supervisor and the
chairman of Supervisory Committee on 14 March 2023. He is responsible for supervising
the operating of our Group, supervising the performance of our Directors and senior
management and performing other supervisory duties as a Supervisor. Mr. Zhu has been
our strategic director since July 2018 and has been responsible for the strategic affairs of
our Company. He also serves as the supervisor of Yunhai Lianji Technology.
Prior to joining our Group, from March 2016 to June 2018, Mr. Zhu served as an
accountant in Ririshun Internet of Things Co. Ltd. ( 日日順物聯網有限公司), which was
under Haier Group and was principally engaged in the research and development of
Internet of Things technology, and he was prim arily responsible for financial affairs. Mr.
Zhu obtained his bachelor’s degree in finance management in Qingdao Agricultural
University ( 青島農業大學), the PRC in July 2015. Mr. Zhu obtained his qualification as
Certified Management Accountant issued by th e Institute of Management Accountants of
USA in January 2020.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 6–


--- page 287 ---
Ms. Wang Jiesi ( 王杰斯女士), aged 37, was appointed as a Supervisor on 14 March
2023. She is responsible for supervising the operating of our Group, supervising the
performance of our Directors and senior management and performing other supervisory
duties as a Supervisor.
From August 2011, Ms. Wang joined Haier Group. From August 2011 to September
2014, she worked as an IP manager of the IP department of Haier Group, and was
responsible for the IP-related legal affairs. From October 2014 to July 2016, she worked as
an overseas legal manager of Haier Group and w as primarily responsible for legal affairs of
overseas business. From July 2016 to May 2020, she worked as an overseas legal director,
and was primarily responsible for the overall c ompliance system of the overseas business.
From June 2020 to August 2023, she has been a legal director of corporate department of
Haier Group, and was primarily responsible for overseas legal affairs, corporate
governance, investment, and acquisition. Since September 2023, she has been a senior
manager of the risk control and compliance d epartment of Qingdao Haizhi Huiying, the
general partner of Qingdao Haichuangying. Ms. Wang graduated as an undergraduate in
law in Xi’an University of Architecture and Technology, the PRC ( 西安建築科技大學)i n
July 2006, and obtained a masters of law degre e in international commercial law from the
University of Glasgow, the United Kingdom in April 2008. Ms. Wang obtained the Legal
Profession Qualification Certificate is sued by the Ministry of Justice of the PRC ( 中華⼈民
共和國司法部) in March 2010.
Ms. Wang Yangyang ( 王陽陽) (formerly known as Wang Xuelian ( 王雪蓮)), aged 41,
was appointed as a Supervisor on 17 June 2024 to replace Ms. Sun Yanlu ( 孫艷露女士)d u e
to the work allocation within our Group. She is re sponsible for supervising the performance
of our Directors and senior management and performing other supervisory duties as a
Supervisor. Ms. Wang joined our Group as a human resource manager of Haier Insurance
Agency in March 2019 and has been responsibl e for human resource management of Haier
Insurance Agency.
Ms. Wang has over 19 years of experience in human resource management. Prior to
joining our Group, she served different roles in human resource department and was
primarily responsible for the staff training, recruitment, remuneration and human resource
management at several companies under the Haier Group, including serving as training
manager in Qingdao Haier Special Steel Pl ate Research and Development Co., Ltd. ( 青島海
爾特種鋼板研製開發有限公司) (currently known as Qingdao HBIS Composite New
Material Technology Co., Ltd. ( 青島河鋼複合新材料科技
有限公司)), a company
principally engaged in manufacturing of steel materials, from August 2004 to March
2007; serving as training manager in Qingdao Haier Training Centre ( 青島海爾培訓中心), a
company principally engaged in consulting business, from March 2007 to August 2007;
serving as training manager in Qingdao Hai er Human Resources Development Co., Ltd. ( 青
島海爾人力資源開發有限公司), a company principally engaged in provision of human
resource management within the Haier Group, from August 2007 to May 2008; serving as
human resources assistant in Qingdao Haier Refrigerator Co., Ltd. ( 青島海爾電冰箱有限公
司), a company principally engaged in manufact uring of refrigerators, from May 2008 to
February 2010; last serving as recruitment manager in Qingdao Haidarui Procurement
Services Co., Ltd. ( 青島海達瑞採購服務有限公司), a company principally engaged in
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 7–


--- page 288 ---
trading business, from February 2010 to November 2016; serving as remuneration manager
in Qingdao Ririshun Electric Service Co. Ltd. ( 青島日日順電器服務有限公司) (currently
known as Qingdao Haier Family Life Service Co., Ltd. ( 青島海爾家生活服務有限公司)), a
company principally engaged in sales of hom e appliance, from December 2016 to February
2017; and serving as remuneration manager in Qingdao Haier Strauss Water Equipment
Co., Ltd. ( 青島海爾施特勞斯水設備有限公司), a company principally engaged in sales of
water treatment equipment, from March 2017 to February 2019.
Ms. Wang obtained her graduation certificate in computer application and
maintenance from Qingdao Technical College, the PRC ( 青島職業技術學院), in July
2004. Ms. Wang obtained her graduation certificate in human resource management from
Renmin University of China ( 中國人民大學) through online education in July 2017.
SENIOR MANAGEMENT
Mr. Lu, Mr. Zhang, Ms. Li and Mr. Wang are also the senior management of our
Group. For more details on their biographical details, please refer to the paragraph headed
‘‘Executive Directors’’ in this section.
GENERAL
Save as disclosed above and in ‘‘Statuto ry and General Information — C. Further
Information about our Directors, Supervisors and Substantial Shareholders’’ in Appendix
VI to this prospectus, each of our Directors and Supervisors confirms with respect to
him/her that:
(i) did not hold other long positions or short positions in the Shares, underlying Shares,
debentures of our Company or any associated corporation (within the meaning of Part
XV of the SFO) as at the Latest Practicable Date;
(ii) had no other relationship with any Directors, Supervisors, senior management or
substantial shareholders of our Company as at the Latest Practicable Date;
(iii) did not hold any other directorships in the three years prior to the Latest Practicable
Date in any public companies of which the securities are listed on any securities market
in Hong Kong and/or overseas;
(iv) there are no other matters concerning our Director’s and Supervisors’ appointment
that need to be brought to the attention of our Shareholders and the Stock Exchange
or shall be disclosed pursuant to Rules 13.51(2) of the Listing Rules; and
(v) to the best of the knowledge, information and belief of our Directors and Supervisors
having made all reasonable enquiries, there are no other matters with respect to the
appointment of our Directors and Supervisors that needs to be brought to the
attention of our Shareholders.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 8–


--- page 289 ---
Further, since all of the executive Directors were full-time employees of our Group and
that all of our independent non-executive Directors were serving not more than three listed
companies as independent non-executive dir ectors, our Directors are of the view that our
Board members are able to devote sufficient time and attention to our Company’s affairs
against their commitments to oth er companies or organisations.
JOINT COMPANY SECRETARIES
Ms. Chan Sau Ling ( 陳秀玲女士), aged 54, was appointed as our joint company
secretary on 17 June 2024 (with effect from the Listing Date). Ms. Chan is a Director of
Company Secretarial Services of Tricor Servi ces Limited, Asia’s leading business expansion
specialist. Ms. Chan has over 25 years of experience in the company secretarial field. She
has been providing professional corporate services to Hong Kong listed companies as well
as multinational, private and offshore companies.
Ms. Chan is currently the company secretary or joint company secretary of a few listed
companies on the Stock Exchange.
Ms. Chan is a Chartered Secretary, a Charte red Governance Professional and a Fellow
of both The Hong Kong Chartered Governance Institute and The Chartered Governance
Institute in the United Kingdom.
Ms. Sun Yanlu ( 孫艷露女士), aged 34, was appointed as our joint company secretary on
17 June 2024 (with effect from the Listing Date). She is also the secretary of our Board and
financial manager of our Company and is responsible for supervising the operating and
financial affairs of our Group and managing the operation of our Board. Ms. Sun joined
our Company as our financial manager in A pril 2022. From March 2023 to June 2024, she
served as a supervisor of our Company and was responsible for supervising the performance
of our Directors and senior management and performing other supervisory duties as a
supervisor.
Prior to joining our Group, Ms. Sun served as an audit manager in Hexin Certified
Public Accountants LLP (Special General Partnership) Qingdao Branch ( 和信會計師事務所
（特殊普通合夥）青島分所) from March 2014 to February 2022, and was primarily
responsible for audit work. Ms. Sun is a non-practising member of the Chinese Institute
of Certificated Public Accountants ( 中國註冊會計師協會), and she obtained her bachelor’s
degree in information and computer science from North Minzu University, the PRC ( 北方
民族大學) in July 2013.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 7 9–


--- page 290 ---
BOARD COMMITTEES
Audit Committee
Our Group has established an audit committee with written terms of reference in
compliance with Rule 3.21 of the Listing Rules and paragraph D.3 of part 2 of the CG Code
as set out in Appendix C1 to the Listing Rules. The primary duties of our Audit Committee
are to assist our Board in providing an independent view of the effectiveness of the financial
reporting process, the internal control an d risk management system of our Group, to
oversee the audit process and to perform other duties and responsibilities as assigned by our
Board. Our Audit Committee consists of three members, namely, Mr. Chung, Ms. Fang and
Ms. Ng. Mr. Chung is the chairman of our Audit Committee and possesses the appropriate
accounting or related financial management expertise in compliance with the requirements
under Rules 3.10(2) and 3.21 of the Listing Rules. The primary duties of our Audit
Committee are to (i) monitor and evaluate the wo rk of the external auditor; (ii) evaluate the
implementation of the internal audit syst em of our Company; (iii) responsible for the
communications among the management leve l of our Company, the internal and external
audit; (iv) review and comment on the financial reports of our Company; (v) examine the
financial reporting system, risk management and internal control systems of our Company;
(vi) make recommendations to our Company on the appointment, re-appointment and
removal of the external auditor; (vii) perform daily management duties and implementing
control on connected transactions; and (viii) perform such other duties determined by our
Board.
Remuneration Committee
Our Group has established a remuneration co mmittee with written terms of reference
in compliance with Rule 3.25 of the Listing Rules and paragraph E.1.2 of part 2 of the CG
Code as set out in Appendix C1 to the Listing Rules. Our Remuneration Committee
consists of three members, namely, Ms. Fang, Mr. Chung and Ms. Li. Ms. Fang is the
chairlady of our Remuneration Committee.
The primary duties of our Remuneration Committee include, but not limited to (i)
establishing, reviewing and providing advices to our Board on our policy and structure
concerning remuneration of our Directors, Supervisors and senior management and on the
establishment of a formal and transparent procedure for developing policies concerning
such remuneration; (ii) determining the terms of the specific remuneration package of each
Director and senior management; and (iii) re viewing and approving performance-based
remuneration by reference to corporate goals and objectives resolved by our Directors from
time to time.
Nomination Committee
Our Group has established a nomination co mmittee with written terms of reference in
compliance with paragraph B.3.1 of part 2 of the CG Code as set out in Appendix C1 to the
Listing Rules. Our Nomination Committee consists of three members, namely Mr. Lu, Ms.
Ng and Ms. Fang. Mr. Lu is the chairman of our Nomination Committee.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 8 0–


--- page 291 ---
The primary duties of our Nomination Committee are to (i) review the structure, size
and composition of our Board on a regular basis and make recommendations to our Board
regarding any proposed changes to the compos ition of our Board; (ii) identify, select or
make recommendations to our Board on the selection of individuals nominated for
directorship, and ensure the diversity of our B oard members; (iii) asse ss the independence of
our independent non-executive Directors; and (iv) make recommendations to our Board on
relevant matters relating to the appointment, re-appointment and removal of our Directors
and succession planning for our Directors.
MANAGEMENT PRESENCE IN HONG KONG
Since our headquarters and principal business operations and management of our
Group are carried out in mainland China, our e xecutive Directors are based in mainland
China to better manage and attend to our Group’s business operations. Therefore, we do
not and, in the foreseeable future, will not have sufficient management presence in Hong
Kong for the purpose of satisfying the requir ement under Rule 8.12 of the Listing Rules.
Pursuant to Rule 19A.15 of the Listing Rules, we have applied to the Stock Exchange for,
and the Stock Exchange has granted, a waiver from strict compliance with the requirement
under Rule 8.12 and Rule 19A.15 of the Listin g Rules. For details, please refer to the
section headed ‘‘Waiver From Strict Compliance with the Listing Rules — Waiver in
Relation to Management Presence in Hong Kong’’ in this prospectus.
CORPORATE GOVERNANCE
Our Directors recognise the importance of incorporating elements of good corporate
governance in the management structures a nd internal procedures of our Group so as to
achieve effective accountab ility and are committed to ensure the lawful, ethical and
responsible operation of our Group’s businesses. Our Company has adopted the code
provisions stated in the CG Code, with intern al compliance policies in place which set out
our compliance requirements so as to ensure consistency with the code provisions stated in
the CG Code of Appendix C1 to the Listing Rules. Our Directors have also delegated the
responsibility of supervising internal compliance matters of our Company to our risk
management committee, in which a compliance officer is appointed to s pecifically monitor
the daily implementation of our internal compliance policies and conduct regular internal
compliance reviews. In addition, our Company provides regular and ad hoc trainings to our
employees in order to familiarise them with our i nternal compliance policies and equip them
with the necessary knowledge for the effectiv e and consistent implementation of our
internal compliance policies.
Our Company is also committed to the view that our Board should include a balanced
composition of executive Directors and independent non-executive Directors so that there is
a strong independent element on our Board, which can effectively exercise independent
judgement.
As at the Latest Practicable Date, to the best of the knowledge, information and belief
of our Directors having made all reasonable enquiries, save as disclosed below, our
Directors were not aware of any deviation from the code provisions of the CG Code as set
out in Appendix C1 to the Listing Rules, as well as the Guidance for Boards and Directors.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 8 1–


--- page 292 ---
Deviation from the CG Code
Pursuant to code provision C.2.1 of the CG Code, companies listed on the Stock
Exchange are expected to comply with, but may choose to deviate from the requirement
that the responsibilities betwe en the chairman and the chief ex ecutive should be segregated
and should not be performed by the same individual. Mr. Lu currently serves as both the
chairman of the Board and the general manage r of our Company. While this will constitute
a deviation from code provision C.2.1 of the CG Code, our Board believes that this
structure will not impair the balance of power and authority between our Board and the
management of our Company, given that (i) our Board comprises three independent
non-executive Directors, and we believe there is sufficient check and balance in our Board
to protect the interests of our Group and the Shareholders; (ii) Mr. Lu is involved with our
day to day operations, our Directors are of the view that vesting both roles on him helps to
maintain the continuity of the policies and the stability of the operations of our Company.
Our Board will continue to review the effectiveness of the corporate governance structure of
our Group in order to assess whether separation of the roles of chairman and general
m a n a g e ri sn e c e s s a r y .
Board Diversity Policy
Our Board has adopted a board diversity policy which sets out the approach to achieve
diversity on our Board. Our Company recognises and embraces the benefits of having a
diverse Board and sees increasing diversity at our Board level as an essential element in
supporting the attainment of our Company’s strategic objectives and sustainable
development. Our Company seeks to achieve Board diversity through the consideration
of a number of factors, including but not limited to talents, skills, gender, age, cultural and
educational background, ethnicity, experienc e (professional or otherwise), independence,
knowledge and length of service and any other factors that our Board may consider relevant
and applicable from time to time. We will continue to implement measures and steps to
promote and enhance gender diversity at all levels of our Company. We will select potential
Board candidates based on merit and his/her potential contribution to our Board while
taking into consideration our own business m odel and specific needs from time to time. All
Board appointments will be based on meritocracy and candidates will be considered against
objective criteria, having due regard to the benefits of diversity on our Board.
Our Directors also have a balanced mix of knowledge, skills and experience. They
obtained degrees in various majors and p ossessed various working experience.
Furthermore, our Board has a wide range of age. The presence of female members in our
management, namely Ms. Li, Ms. Fang and Ms. Ng, contributes to the gender diversity of
our management team and offers us valuable strategic, management and operational
insights from a female perspective. We have taken and will continue to take steps to
promote gender diversity at all levels of our Company, including but without limitation at
our Board and senior management levels. Tak ing into account our business model and
specific needs as well as the presence of female Directors, we consider that the composition
of our Board satisfies our board diversity policy.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 8 2–


--- page 293 ---
Our Nomination Committee is responsible for ensuring the diversity of our Board
members. After Listing, our Nomination Comm ittee will review our board diversity policy
from time to time to ensure its continued effectiveness and we will disclose the
implementation of our board diversity policy in our corporate governance report on an
annual basis.
Taking into account our existing business model and specific needs as well as the
different background and abilities of our Dire ctors, our Directors are of the view that the
current composition of our Board satisfies th e principles under our board diversity policy.
CONFIRMATION UNDER LISTING RULES
Each of the Directors has obtained the legal advice in accordance with Rule 3.09D of
the Listing Rules from Fangda Partners by March 2024 and that each of the Directors has
confirmed he/she understood his/her obligations as a director of a listed issuer.
Further, each of the independent non-executive Directors has confirmed:
(a) his/her independence as regards each of the factors referred to in Rule 3.13(1) to
( 8 )o ft h eL i s t i n gR u l e s ;
(b) he/she has no past or present financial or other interest in the business of our
Group or any connection with any core connected person of our Company, if any;
and
(c) that there are no other factors that may affect the independent non-executive
Director’s independence at th e time of his/her appointment.
COMPENSATION OF DIRECTORS, SUPE RVISORS AND SENIOR MANAGEMENT
Our Directors, Supervisors and membe rs of our senior management receive
compensation from our Group in the form of fee s, salaries, allowances, benefits in kind,
discretionary bonuses and retirement scheme contributions. The aggregate remuneration
(including salaries, allowances, benefits i n kind and discretionary bonuses) paid to our
Directors and Supervisors for each of the three years ended 31 December 2021, 2022 and
2023 and the four months ended 30 April 2024 was approximately RMB2.5 million,
RMB2.5 million, RMB4.1 million and RMB1.5 m illion, respectively. Save as disclosed
above, no other amounts have been paid or are payable by any member of our Group to our
Directors and Supervisors during the Track Record Period.
The aggregate amount of salaries, allowance, benefits in kind and discretionary
bonuses paid to our five highest paid individuals, including three, two, three and three
Directors or Supervisors, in respect of each of the three years ended 31 December 2021,
2022 and 2023 and the four months ended 30 April 2024 was approximately RMB3.5
million, RMB3.9 million, RMB4.1 million and RMB1.4 million, respectively.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 8 3–


--- page 294 ---
No remuneration was paid by us to our Directors, Supervisors or the five highest paid
individuals as an inducement to join or upon joining us or as a compensation for loss of
office in respect of each of the three years ended 31 December 2021, 2022 and 2023 and the
four months ended 30 April 2024. The emoluments of Mr. Zhan Bo and Ms. Wang Jiesi
were waived with their authorisation. The re was no other arrangement under which our
Directors and Supervisors had waived or agreed to waive any remuneration during the same
periods.
Under the arrangement currently in force, the aggregate remuneration (including
directors’ fees, salaries, allowances, benefit s in kind, discretionary bonuses and retirement
scheme contributions) of our Directors and Supervisors for the year ending 31 December
2024 is estimated to be no more than RMB5.0 million.
Our Board will review and determine the rem uneration and compensation packages of
our Directors, Supervisors and senior managem ent which, following the Listing, will receive
recommendation from our Remuneration Committee which will take into account salaries
paid by comparable companies, time commitment and responsibilities of our Directors,
Supervisors and senior management, employment conditions of other positions in our
company, the desirability of performance-b ased remuneration, a nd performance of our
Group.
COMPETITION
Each of our Directors confirms that as at th e 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(2) of the Listing Rules.
COMPLIANCE ADVISER
In compliance with Rule 3A.19 of the Listing Rules, we have appointed Ping An of
China Capital (Hong Kong) Company Limit ed as our compliance adviser to provide
advisory services to our Company. Pursuant to Rule 3A.23 of the Listing Rules, it is
expected that the compliance adviser will, am ongst other things, adv ise our Company with
due care and skill in the following circumstances:
. before the publication of any regulatory announcement, circular and financial report;
. where a transaction, which might be no tifiable or connected transaction, is
contemplated including shares issues and share repurchases;
. where we propose to use the proceeds from the Global Offering in a manner different
from that detailed in this prospectus or where our business activities, developments or
results of our Group deviate from any forecast, estimate, or other information in this
prospectus; and
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 8 4–


--- page 295 ---
. where the Stock Exchange makes an inquir y of us regarding unusual movements in the
price or trading volume of the Share securities, the possible development of a false
market in this Shares, or any other matte rs in accordance with Rule 13.10 of the
Listing Rules.
The term of the appointment shall commen ce on the Listing Date and end on the date
on which we distribute our annual report in respect of our financial results for the first full
financial year commencing after the Listing Date and such appointment may be subject to
extension by mutual agreement.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
–2 8 5–


--- page 296 ---
OUR CONTROLLING SHAREHOLDERS
As at the Latest Practicable Date, by virtue of its direct interest in Qingdao
Haichuanghui IoT of 51.20% and the voting right arrangement of the remaining 48.80%,
Haier Group controlled 100% of the voting rig hts of Qingdao Haichuanghui IoT, and as
such, held indirectly approximately 60.44% of the voting rights of our Company through
Qingdao Haichuanghui IoT. Qingdao Haichuanghui IoT was (i) indirectly interested in
approximately 52.88% of our total issued share capital through its indirect shareholding in
Qingdao Haiyinghui through Qingdao Haichuanghui Investment; and (ii) indirectly
interested in approximately 7.56% of our t otal issued share capital through (a) its
indirect shareholding in Qingdao Haichuanghui Venture, which is the general partner of
Qingdao Haichuanghui, through Qingdao Haichuanghui Investment, Haichuanghui
Holding, Ningbo Meishan and (b) its direct shareholding in Qingdao Haichuanghui
Investment, which owned 49.50% interest in Qingdao Haichuanghui as its limited partner.
Immediately following the completion of the Global Offering (assuming the Over-allotment
Option is not exercised), Haier Group will ho ld an aggregate of approximately 45.33% of
the voting rights of our Company through Qingdao Haichuanghui IoT. As such, Haier
Group, together with Qingdao Haichuanghui IoT, Qingdao Haichuanghui Investment,
Haichuanghui Holding, Ningbo Meishan, Qingdao Haichuanghui Venture, Qingdao
Haiyinghui and Qingdao Haichuanghui , will constitute a group of Controlling
Shareholders of our Company.
According to the articles of association of Haier Group, the nature of Haier Group is
an urban collectively-owned enterprise. The property of Haier Group is collectively owned
by the working masses, subject to joint work, with distribution according to work as the
principal distribution method. In light of its enterprise nature, Haier Group has no
shareholder.
According to the articles of association of Haier Group, without the approval of the
relevant decision-making power organ of Haier Group, no entity or individual has the right
to dispose of, occupy such collective propertie s or infringe on the relevant legitimate rights
and interests of the collective properties in any other ways. The employee assembly ( 職工代
表大會) is the highest power organ of Haier Group, which enjoys the power to elect and
dismiss management personnel, decide on Haier Group’s articles of association, the profits
distribution plan for Haier Group’s employees and other major issues in Haier Group’s
operation and management.
Li Cang Organisation not considered as our Controlling Shareholders
Despite Qingdao Ronghai has an interest in our Company through its 49.50% interest
in Qingdao Haichuanghui along with Haier G roup, Qingdao Ronghai and its beneficial
owners (Qingdao Ronghai Capital and Qingdao Li Cang) (Qingdao Ronghai Capital and
Qingdao Li Cang together with Qingdao Ronghai, collectively ‘‘ Li Cang Organisation ’’) is
not considered as part of our Controlling S hareholders on the following grounds:
(i) Qingdao Haichuanghui is not an investment vehicle of Haier Group and Haier
Group does not exclusively hold its interest in our Company through Qingdao
Haichuanghui. Haier Group holds its interests in our Company through both
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 8 6–


--- page 297 ---
Qingdao Haiyinghui and Qingdao Haichuanghui as direct shareholders of our
Company. Further, only 5.67% interest in our Company is held through Qingdao
Haichuanghui immediately after completion of the Global Offering;
(ii) Qingdao Haichuanghui was established as an equity investment fund. Other than
its investment in our Company, it has invested in Shanghai Jingyi Technology
Co., Ltd. ( 上海京頤科技股份有限公司), as at the Latest Practicable Date, and had
invested in other entities including Qingdao Haichuang Huiju Management Co.,
Ltd. ( 青島海創彙聚管理有限公司), Ningbo Baoshui District Youniji Equity
Investment Partnership (Limited Partnership) ( 寧波保稅區友尼基股權投資合夥
企業（有限合夥）) and Qingdao Baheal Intelligent Technology Co., Ltd. ( 青島百洋
智能科技股份有限公司). As such, Qingdao Haichuanghui has other operations
other than holding interest in our Company;
(iii) Qingdao Ronghai is ultimately owned by Qingdao Li Cang, which in turn is an
government-affiliated institution ( 事業單位法人) under the Li Cang Government,
and a social service organisation establis hed by the state by utilising state-owned
assets to promote social welfare, as well as serving as an investment platform of Li
Cang Government;
(iv) Haier Group has no ownership control or management control over, Qingdao Li
Cang, being the government-affiliated institution, and vice versa;
(v) save for Qingdao Li Cang’s investment in Qingdao Haichuanghui and Lenong IoT
Co., Ltd. ( 樂農物聯網有限公司)( ‘ ‘Lenong ’’), another controlled corporation of
Haier Group, there had not been any association between Li Cang Organisation
and Haier Group in any past and present business dealings nor any formal or
informal arrangements among them;
(vi) save for Mr. Jiang Jindong ( 姜
金棟), the executive director of Qingdao Ronghai,
being nominated as director in Lenong by Qingdao Li Cang with regard to its
investment in Lenong, there had been no overlapping directors between Haier
Group and Li Cang Organisation; and
(vii) Qingdao Haichuanghui, being the only investment vehicle which Li Cang
Organisation has our Company’s interest in, only held/will hold approximately
7.56% and 5.67% interest in our Company as at the Latest Practicable Date and
immediately after completion of the G lobal Offering respectively, on its
standalone basis, and would not ha ve been regarded as our Controlling
Shareholder had it not been ultimately controlled by Haier Group.
Based on the foregoing, Li Cang Organisation is not regarded as part of our
Controlling Shareholders.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 8 7–


--- page 298 ---
CONFIRMATION OF NO COMPETING INTEREST
Haier Group, apart from its interests in our Group, is engaged in, among others, (i)
production, sourcing and sales of home appliances; (ii) provision of digitalised upgrade to
production systems of industrial customers to enhance their production efficiency; (iii)
medical services; (iv) manufacturing of medical equipment; (v) real estates; and (vi)
financial services. Qingdao Haichuanghui is primarily engaged in equity investment.
Qingdao Haichuanghui Venture is primarily engaged in investment management business,
and each of Qingdao Haichuanghui IoT, Qingda o Haichuanghui Investment, Haichuanghui
Holding, Ningbo Meishan and Qingdao Haiyinghui is primarily engaged in investment
holding. As at the Latest Practicable Date, Hai er Group has equity interests in several listed
companies in different stock exchanges, which are primarily engaged in the abovementioned
industries. Such listed companies do not compete with our Group.
Save for their respective interests in our Company and our subsidiaries, none of the
Controlling Shareholders, the Directors and Su pervisors or any of their respective close
associates had any interest in any other comp any which competes, or is likely to compete,
either directly or indirectly, with the business of our Group and would require disclosure
pursuant to Rule 8.10 of the Listing Rules as at the Latest Practicable Date.
BUSINESS RELATIONSHIP WITH HAIER GROUP
During the Track Record Period, Haier Group insurance clients purchased insurance
products through us and we receive commission income from insurance company partners
for successful distribution of insurance products to them. In addition to our insurance
agency business, we provided IT and consulting services to Haier Group. On the other
hand, we procure comprehensive services an d utility services from Haier Group. We will
continue the aforementioned business relationship with Haier Group after Listing. For
more details, please refer to the section headed ‘‘Connected Transactions’’ in the prospectus.
The table below sets forth commission inco me generated from insurance company
partners for distribution of their insurance products to Haier Group insurance clients and
non-Haier Group insurance clients for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income (1)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income (1)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income (1)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income (1)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income (1)
Percentage
of
commission
income
Average
commission
rate
RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % %
Household insurance clients 429,127 74,641 64.3 17.4 708,461 80,498 61.6 1 1.4 901,435 91,478 58.7 10.1 251,178 27,189 52.7 10.8 304,550 28,487 52.0 9 .4
Corporate insurance clients 237,254 41,415 35.7 17.5 309,913 50,223 38. 4 16.2 357,686 64,270 41.3 18.0 125,910 24,441 47.3 19.4 121,837 26,315 48.0 2 1.6
— Haier Group insurance clients 152,484 18,288 15.8 12.0 192,856 23,809 18. 2 12.3 190,960 24,100 15.5 12.6 50,578 7,088 13.7 14.0 59,792 9,107 16.6 15. 2
— Non-Haier Group insurance
clients 84,770 23,127 19.9 27.3 117,057 26,414 20.2 22.6 166,726 40,170 25.8 24.1 75,332 17,353 33.7 23.0 62,045 17,208 31.4 27.7
Total 666,381 116,056 100.0 17.4 1,018,374 130,721 100.0 12.8 1,259 ,121 155,748 100.0 12.4 377,088 51,630 100.0 13.7 426,387 54,802 100.0 12.9
Note: Commission income represents commission r eceived from insurance company partners for
distribution of their insurance products to corporate and household insurance clients.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 8 8–


--- page 299 ---
The following table sets forth a breakdown of revenue, gross profit and gross profit
margin of our IT services by types of customers for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Haier Group and its affiliated companies 577 284 49.2 6,042 3,681 60.9 8,732 4,870 55.8 75 43 57.3 1,665 968 58.1
Non-Haier Group 687 523 76.1 8,911 3,586 40.2 7,050 4,300 61.0 971 631 65.0 1,553 898 57.8
Total 1,264 807 63.8 14,953 7,267 48.6 15,782 9,170 58.1 1,046 674 64.4 3,218 1,866 58.0
There is no major difference in the nature of IT services provided to Haier Group and
its affiliated companies compared with those provided to non-Haier Group customers
during the Track Record Period.
The table below sets forth the revenue generated from our consulting services by types
of customers for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue from
consulting services Revenue Revenue Revenue Revenue Revenue
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Haier Group and its
affiliated companies 790 29.8 2,346 86.1 1,460 58.8 723 96.5 285 45.7
Non-Haier Group 1,864 70.2 378 13.9 1,021 41.2 26 3.5 339 54.3
Total 2,654 100.0 2,724 100.0 2,481 100.0 749 100.0 624 100.0
There are differences in the nature of services procured by Haier Group and its
affiliated companies and non-Haier Group cu stomers. During the Track Record Period,
Haier Group and its affiliated companies prim arily procured HR recruitment services while
non Haier-Group customers procured all types of HR consulting services, including
provision of advice on human resource management and recruitment strategies, and HR
recruitment services, and marketing and promotion services from our Group.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 8 9–


--- page 300 ---
The following table sets forth certain financial information attributable to (i) Haier
Group and its affiliated companies, (ii) insu rance clients referred by Haier Group and its
affiliated companies, and (iii) its employees and their family members pursuant to a life and
health insurance programme designed for them (the ‘‘ Insurance Programme ’’):
GWP attributable or relating to Haier Group
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Percentage
of total
GWP
facilitated GWP
Percentage
of total
GWP
facilitated GWP
Percentage
of total
GWP
facilitated GWP
Percentage
of total
GWP
facilitated GWP
Percentage
of total
GWP
facilitated
(RMB’000) (%) (RMB’000) (%) (RMB’000) (%) (RMB’000) (%) (RMB’000) (%)
Distribution of insurance
products to Haier
Group insurance
clients
(1) 152,484 22.9 192,856 18.9 190,960 15.2 50,578 13.4 59,792 14.0
Distribution of insurance
products to insurance
clients referred by
Haier Group
(2) 29,063 4.4 31,435 3.1 27,425 2.2 8,342 2.2 10,160 2.4
Distribution of insurance
products to employees
of Haier Group and
their family members
(pursuant to the
Insurance
Programme)
(3) 22,098 3.3 53,861 5.3 31,147 2.4 2,819 0.8 3,581 0.8
Total 203,645 30.6 278,152 27.3 249,532 19.8 61,739 16.4 73,533 17.2
Notes:
(1) We mainly distributed propert y insurance products and a small amount of life and health, accident
and automobile insurance products to Haier Group insurance clients.
(2) We distributed property insurance products to insurance clients referred by Haier Group.
(3) We distributed life and health insurance pr oducts to employees of Haier Group and their family
members (pursuant to the Insurance Programme).
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 9 0–


--- page 301 ---
Revenue attributable or relating to Haier Group
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Commission
income
Percentage
of total
revenue
Commission
income
Percentage
of total
revenue
Commission
income
Percentage
of total
revenue
Commission
income
Percentage
of total
revenue
Commission
income
Percentage
of total
revenue
(RMB’000) (%) (RMB’000) (%) (RMB’000) (%) (RMB’000) (%) (RMB’000) (%)
Commission income from
insurance agency
business
— Distribution of
insurance products
to Haier Group
insurance clients 18,288 15.2 23,809 16.0 24,100 13.9 7,088 13.3 9,107 15.5
— Distribution of
insurance products
to insurance
clients referred by
Haier Group 8,505 7.1 7,666 5.2 5,786 3.3 1,762 3.3 1,946 3.3
— Distribution of
insurance products
to employees of
Haier Group and
their family
members (pursuant
to the Insurance
Programme) 2,146 1.8 7,674 5.2 4,427 2.5 390 0.7 571 1.0
Subtotal 28,939 24.1 39,149 26.4 34,313 19.7 9,240 17.3 11,624 19.8
Revenue from provision
of IT services to Haier
Group and its
affiliated companies 577 0.5 6,042 4.1 8,732 5.0 75 0.1 1,665 2.8
Revenue from provision
of consulting services
to Haier Group and
its affiliated
companies 790 0.7 2,346 1.5 1,460 0.8 723 1.4 285 0.5
Total 30,306 25.3 47,537 32.0 44,505 25.5 10,038 18.8 13,574 23.1
Cost of sales attributable or relating to Haier Group (Note)
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Cost of
sales
Percentage
of total cost
of sales
Cost of
sales
Percentage
of total cost
of sales
Cost of
sales
Percentage
of total cost
of sales
Cost of
sales
Percentage
of total cost
of sales
Cost of
sales
Percentage
of total cost
of sales
(RMB’000) (%) (RMB’000) (%) (RMB’000) (%) (RMB’000) (%) (RMB’000) (%)
Insurance agency business 10,347 14.4 10,105 12.5 8,505 8.5 2,623 9.2 2,608 7.7
IT services 293 0.4 2,361 2.9 3,862 3.9 32 0.1 697 2.1
Total 10,640 14.8 12,466 15.4 12,367 12.4 2,655 9.3 3,305 9.8
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 9 1–


--- page 302 ---
Gross profit attributable or relating to Haier Group (Note)
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
(RMB’000)
Insurance agency business 18,592 29,044 25,808 6,617 9,017
IT services 284 3,681 4,870 43 968
Gross profit margin attributable or relating to Haier Group (Note)
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
(%)
Insurance agency business 64.2 74.2 75.2 71.6 77.6
IT services 49.2 60.9 55.8 57.3 58.1
Note:
The cost of sales, gross profit and gross profit ma rgin of our Group’s consulting services by types of
customers (Haier Group and non-Haier Group) are not available mainly because the wages and salaries of
our Group could not be accurately allocated to determi ne the gross profit attributable to Haier Group and
non-Haier Group for consulting services as the costs of th e relevant staff are incurred for different type of
customers simultaneously.
We are of the view that there are mutual be nefits between our Group and Haier Group
for the following reasons:
. Deep understanding of Haier Group — through years of distributing insurance
products to Haier Group, we are familiar wi th their preferences and requirements
in purchasing insurance products. By co nsolidating the purchase through us, we
believe that it reduces the time needed for Haier Group to accurately identify
suitable insurance products from multiple insurance company partners to meet
their needs;
. Cost Saving for Haier Group — we are the designated insurance agency service
provider to handle and manage all insurance related for Haier Group in the PRC.
This centralised procurement arrangeme nt allowed Haier Group to (i) reduce time
and resources in coordinating with multiple insurance companies and insurance
intermediaries; and (ii) reduce mana gement effort to maintain an in-house
insurance team to handle and manage their insurance products;
. Better Risk Management — we are a licensed insurance agency service provider in
the PRC and we have in place the industry regulated risk management and
corporate governance measures. We believe that by consolidating purchases with
us, the risk of Haier Group in purchasing from unapproved or unqualified
insurance companies or intermediaries and the risk of non-compliance of
regulatory requirements can be reduced; and
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 9 2–


--- page 303 ---
. Exposure to the Haier Group network — our relationship with Haier Group has
allowed us to leverage on their network to reach out to a larger group of potential
insurance clients, such as their custome rs, suppliers and business partners. This
offers us the opportunity for future growth and allows us to reach out potential
insurance clients in industries and locati ons that we have not yet covered which is
beneficial for the development of our insurance agency business.
Based on the above factors, our Directors co nsider there are mutual benefits between
our Group and Haier Group, and it is in the interests of our Company and Shareholders as
a whole to collaborate with Haier Group. Ou r Directors believe that the business
relationship with Haier Group will not cause any business dependence or reliance issue
between our Company and Haier Group. While stable commission income has been derived
from insurance company partners attributable to Haier Group insurance clients, we have
diversified our insurance client base to cover over 368,000 household insurance clients and
over 20,000 non-Haier Group corporate insurance clients during the Track Record Period
whilst we served only Haier Group in our early years. Further, the commission income
attributable to Haier Group insurance clients decreased from 18.2% in 2022 to 15.5% in
2023, and further to 13.7% for 4M2024. Going forward, we plan to expand our
geographical coverage by setting up 30 to 36 branch offices in locations such as Hebei,
Henan, Anhui, Hubei, Chongq ing, Shanghai and Beijing and promote our brand awareness
through online advertising effort to expand our non-Haier Group insurance client coverage.
For details, please refer to the section headed ‘‘Business — Our Strategies’’ in this
prospectus.
INDEPENDENCE FROM OUR CON TROLLING SHAREHOLDERS
Our Directors consider that we are capable of carrying out our business independently
from our Controlling Shareholders and their resp ective close associates after the Listing,
taking into account the following factors:
Management Independence
Our Board comprises four executive Direct ors and three independent non-executive
Directors upon Listing. We believe that our management and operational decisions are
made by our Board and senior management, all of whom have substantial experience in the
industry in which we are engaged and/or in their respective fields of expertise. Also, Mr. Lu,
Mr. Zhang, Ms. Li and Mr. Wang have a track record of devoting sufficient time and
energy to discharge their duty as our Direc tors and senior management and they will
continue to focus on our Group’s business. For more details, please refer to the section
headed ‘‘Directors, Supervisors and Senior Management’’ in this prospectus.
Despite Mr. Lu, our executive Director, holding approximately 1.95% interest in
Qingdao Haichuang Boyi Management Consulting Enterprise (Limited Partnership) ( 青島
海創博壹管理諮詢企業（有限合夥）), which in turn holds not more than 1% indirect interest
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 9 3–


--- page 304 ---
in certain subsidiaries of Haier Group, we consider that our Board, who are also members
of our senior management team, will func tion independently from our Controlling
Shareholders for the following reasons:
. there were no overlapping directors between our Company and Haier Group, and save
as disclosed above, none of our Directors holds any interest in Haier Group and its
subsidiaries as at the Latest Practicable Date;
. each of our Directors is aware of his/her fiduciary duties as a Director which require,
among others, that he/she must act for the benefit of and in the best interests of our
Company and not allow any conflict between his/her duties as a Director and his/her
personal interests;
. three out of our seven Directors are independent non-executive Directors upon Listing
who have extensive experience in different professions and they are independent from
our Controlling Shareholders or their resp ective associate. They have been appointed
pursuant to the requirements under the Listing Rules to ensure that the decisions of
our Board are made only after due consideration of independent and impartial
opinions. We believe our independent non-executive Directors will bring independent
judgement to the decision-making process of our Board. Further, when considering
connected transactions, our independent non-executive Directors will review the
relevant transaction;
. our Directors shall not vote in any Board resolution approving any contract or
arrangement or any other proposal in which he/she or any of his/her close associates
have a material interest and shall not be counted in the quorum present at the
particular Board meeting; and
. we have adopted a series of corporate governance measures to manage conflicts of
interest, if any, between our Group and our Controlling Shareholders which would
support our independent management. For more details, please refer to the section
headed ‘‘Directors, Supervisors and Senior Management — Corporate Governance’’ in
this prospectus.
Based on the above, our Directors are sati sfied that our Board as a whole are able to
perform the managerial role in our Group independently and are of the view that we are
capable of managing our busin ess independently from the C ontrolling Shareholders after
the Global Offering.
Operational Independence
We have established a functional and organisational structure independent from our
Controlling Shareholders, with major depa rtments including individual business
department, corporate business department, strategic management department,
information technology department, financial management department, human resources
department, internal control and audit department, brand marketing department,
recruitment services department and securities and compliance department. We have
designed clearly-delineated r esponsibilities and functions f or each department which are
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 9 4–


--- page 305 ---
tailor-made for our business, and each department is under the management of our
Company and independent from our Controlling S hareholders. Further, each department is
capable of making professional decision s and implementations efficiently and
independently.
We entered into (i) the Utility Services F ramework Agreement with COSMO Energy
Technology Co., Ltd. ( 卡奧斯能源科技有限公司)( ‘ ‘COSMO Energy Technology ’’) pursuant
to which our Group will continue to procure electricity, water supply and other energy
supplies from COSMO Energy Technology; ( ii) the Comprehensive Service Framework
Agreement with Haier Group, pursuant to which Haier Group and/or its associates will
provide office and logistics services involv ing leasing of offices, renovation works for
offices, procuring office supplies, administra tive services, consulting services, referral
services and business support services to u s; and (iii) the IT and Consulting Services
Framework Agreement pursuant to which we will provide IT and consulting services to
Haier Group and/or its associates. Upon Listing, we will continue with the abovementioned
services and business relationship with Haier Group and/or its associates. For more details,
please refer to the section headed ‘‘Connected Transactions’’ in this prospectus. For certain
business support services contemplated und er the Comprehensive Services Framework
Agreement, which are services not directly essential to revenue generation, such as the
provision of certain services available on Haier Group’s financial management systems, HR
management systems and contra ct management systems (the ‘‘ Non-core Services ’’), Haier
Group generally provides such services to its subsidiaries at no cost as a means to
streamline operations and enhance efficiency. During the Track Record Period, the cost for
such Non-core Services were borne by Haier Group, and the Directors estimated that the
procurement cost for the relevant Non-core Services would not be more than RMB0.1
million for each year/period during the Track Record Period. Upon Listing, Haier Group
will continue to provide such Non-core Services to our Group at no cost, which would not
affect our independence as our Group can undoubtedly procure such Non-core Services
from independent third parties should we choose to do so.
Taking into account our previous experience with Haier Group and/or its associates,
we consider Haier Group is well suited in term s of resources and cost efficiency to provide
stable and quality services to us and vice versa. Further, the services provided by Haier
Group and/or its associates to us are ancilla ry in nature, and such services are readily
available from Independent Third Parties in the market.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 9 5–


--- page 306 ---
As such, our Directors believe that entering into the abovementioned arrangements
will not give rise to any business dependence or reliance issue for our Group and is in the
interest of our Company and our Shareholders as a whole. Based on the above, our
Directors believe that we are able to operate our business independent from Haier Group
and/or its associates.
In addition, we have sufficient capital, facilities, equipment and employees to operate
our business independently from our Contro lling Shareholders. We h ave independent access
to suppliers and customers and an independent management team to handle our day-to-day
operations. We are also in possession of all material licences, certificates, facilities and
intellectual property rights necessary to ca rry on and operate our principal businesses.
Based on the foregoing, our Directors believe that we are able to operate independently of
the Controlling Shareholders and the ir respective close associates.
Financial Independence
We have independent internal control, accounting and financial management systems.
We also have an independent finance department responsible for discharging the treasury
function. We make financial decisions according to our own business needs.
We do not expect to rely on our Controlling S hareholders and their respective close
associates for financing after the Listin g and we believe we are capable of obtaining
financing from external sources without reliance on our Controlling Shareholders.
We are capable of making financial decisions independently according to our own
needs, and our Controlling Shareholders do not and will not interfere with our use of funds.
We maintain and manage bank accounts independently and do not share any bank accounts
with our Controlling Shareholders and/or the ir respective associates. We are registered
independently for tax in accordance with applicable laws and we pay tax independently
pursuant to applicable PRC tax laws and regulat ions, rather than on a combined basis with
our Controlling Shareholders or othe r enterprises under their control.
Our Directors confirmed that, as at th e Latest Practicable Date, none of our
Controlling Shareholders or their respective a ssociates had provided any loans, guarantees
or pledges to our Group. Our Directors also confirmed that, as at the Latest Practicable
Date, our Group did not provide any loans , guarantees or pledges to our Controlling
Shareholders or their respective associates.
Based on the above analysis, our Directors are of the view that they and our senior
management are capable of carrying on our business independently of, and do not place
undue reliance, on our Controllin g Shareholders and their respect ive close associates after
Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
–2 9 6–


--- page 307 ---
OVERVIEW
We have entered into certain agreements with parties which will be our connected
persons (as defined under Chapter 14A of the Listing Rules) upon the Listing, and the
transactions contemplated under such agreem ents will constitute continuing connected
transactions under Chapter 14A of the Listing Rules.
CONNECTED PERSONS
As at the Latest Practicable Date, our Company was owned by Haier Group indirectly
through its subsidiaries and voting rights arrangements, holds approximately 60.44% of the
voting rights of our Company (as to approximately 52.88% through Qingdao Haiyinghui
and as to approximately 7.56% through Qingdao Haichuanghui). Immediately following
the completion of the Global Offering (assuming the Over-allotment Option is not
exercised), Haier Group will hold an aggregate of approximately 45.33% of the voting
rights of our Company. Haier Group, together with its associates as defined under Rule
14A.13 of the Listing Rules, are therefore our connected persons by virtue of Rules
14A.07(1) and 14A.07(4) of the Listing Rules.
SUMMARY OF OUR CONTINUING CONNECTED TRANSACTIONS
No. Nature of Transactions
Relevant
Listing Rules
Applicable
exemptions
under the
Listing
Rules
Proposed Annual Cap
for the Year Ending 31 December
2024 2025 2026
(RMB’000)
Fully-exempt continuing connected transaction
1. Utility Service Framework
Agreement
14A.24(8) 14A.97 330 460 510
Partially exempt continuing connected transaction
2. Comprehensive Services
Framework Agreement
14A.24(7) 14A.76(2) 5,160 6,110 6,820
Non-exempt continuing connected transaction
3. IT and Consulting Services
Framework Agreement
14A.24(7) N/A 13,100 14,700 16,800
CONNECTED TRANSACTIONS
–2 9 7–


--- page 308 ---
FULLY-EXEMPT CONTINUING CONNECTED TRANSACTION
1. Utility Services Framework Agreement
During the Track Record Period, our Group has been procuring electricity, water
supply and other energy supplies from COSMO Energy Technology. On 23 May 2023, our
Company and COSMO Energy Technology en tered into a utility service framework
agreement, as restated and amended by a restated and amended agreement dated 23 July
2024, (collectively, the ‘‘ Utility Services Framework Agreement ’’), pursuant to which our
Company agreed to continue to procure electricity, water supply and other energy supplies
from COSMO Energy Technology. COSMO Energy Technology is a non-wholly owned
subsidiary of Haier Group and is one of the energy suppliers located near our offices in
Qingdao.
Historical transaction amounts
The historical transaction amounts in respect of the fees paid by us to COSMO
Energy Technology amounted to approxi mately RMB0.2 million, RMB0.2 million,
RMB0.2 million and RMB0.1 million for the t hree years ended 31 December 2023 and
the four months ended 30 April 2024, respectively.
Annual caps
Our Directors estimate that the maximum amounts of fees paid by us to COSMO
Energy Technology in connection with the U tility Services Framework Agreement for
the three years ending 31 December 2026 will not exceed RMB330, 000, RMB460,000
and RMB510,000, respectively. Our Directors considers that the proposed annual caps
are fair and reasonable.
Basis of annual caps
The above proposed annual caps are determined with reference to the following
factors:
— the historical transaction amounts for the Track Record Period for the
utilities we procured from COSMO Energy Technology; and
— our expected demand for utility services in the next three years ending 31
December 2026 in view of the anticipated growth in labour force as a result of
our business expansion.
Listing Rules implications
Haier Group is our Controlling Sharehold er upon Listing. Accordingly, the
transactions under the Utility Service s Framework Agreement will constitute
continuing connected transactions for our Company under Chapter 14A of the
Listing Rules upon Listing. However, since the electricity, water and other energy
supplies purchased from COSMO Energy Technology is for our Group’s own
CONNECTED TRANSACTIONS
–2 9 8–


--- page 309 ---
consumption and use, not processed into our products or for resale, and that there is
an open market and transparency in the pricing of electricity, water and other energy
supplies procured by our Group, the transactions with COSMO Energy Technology
are fully exempted from the independent shareholders’ approval, annual review and all
disclosure requirements under Rule 14A.97 of the Listing Rules.
PARTIALLY EXEMPT CONTINUIN G CONNECTED TRANSACTION
2. Comprehensive Services Framework Agreement
Principal terms
We entered into a comprehensive services framework agreement with Haier Group
o n1 9M a y2 0 2 3( a ss u p p l e m e n t e db yas u p p lemental agreement dated 23 July 2024)
(collectively, the ‘‘ Comprehensive Services Framework Agreement ’’), pursuant to which
Haier Group and/or its associates agreed to provide (i) office and logistics services
involving leasing of offices, renovation works for the offices, and procuring office
supplies; (ii) administrative services invo lving travel agency services and catering
services; (iii) consulting services; (iv) r eferral services; and (v) business support
services.
The initial term of the Comprehensive Services Framework Agreement will
commence on the Listing Date and up to 31 December 2026. Relevant subsidiaries or
associated companies of both parties will enter into separate underlying agreements
which will set out the specific terms and conditions according to the principles
provided in the Comprehensive Services Framework Agreement.
Pricing policy
Taking into consideration the estimated transaction amount, the services fees to
be paid by us to Haier Group and/or its associates under the Comprehensive Services
Framework Agreement will be determined th rough arm’s length negotiations between
the parties, taking into account:
. In respect of office and logistics services: (i) location of the offices; (ii) size of
the offices; (iii) gross floor area of the o ffices; (iv) operation costs, such as
cost of raw materials and labour and administration expenses; and (v) the
prevailing market price of similar services.
. In respect of administrative services: (i) the anticipated administrative costs
including labour costs; and (ii) the prevailing market price of similar services.
. In respect of consulting services: (i) the different service and standards
required; (ii) the anticipated costs to b e incurred for rendering the services,
including but not limited to labour, consumables and administrative costs;
and (iii) the prevailing market price of similar services.
CONNECTED TRANSACTIONS
–2 9 9–


--- page 310 ---
. In respect of referral services: (i) the historical fees of such services; (ii) the
type of insurance products; (iii) the n umber and type of insurance clients
referred; (iv) the synergy brought to our Group; and (v) the prevailing
marketing price of similar services.
. I nr e s p e c to fb u s i n e s ss u p p o r ts e r v i c e s :(i) the anticipated costs including
labour costs and administrative costs; and (ii) the prevailing market price of
similar services.
The pricing terms under the Comprehen sive Services Framework Agreement will
be no less favourable to our Company than terms of services available to Independent
Third Parties, and the service fees are in line with or lower than market rates and is in
the best interests of our Company and our Shareholders as a whole.
Reasons for the transaction
Our Group historically procured a variety of services from Haier Group to satisfy
our business and operational needs. Taking into consideration that Haier Group has
provided such services to us historically and the stability and quality of the services
provided, we believe that it is in the best i nterest of our Group to continue to procure
such services from Haier Group, which is capable of fulfilling our demands with a
stable and quality supply of services on terms which are similar to or better than those
offered by Independent Third Parties.
Historical transaction amounts
For the three years ended 31 December 2023 and the four months ended 30 April
2024, the historical transaction amounts in respect of the fees paid by us to Haier
Group and its affiliated compa nies in relation to the comprehensive services provided
by Haier Group and its affiliated compa nies amounted to RMB5.4 million, RMB5.7
million, RMB3.7 million and RMB0.6 million, respectively. The decrease in historical
t r a n s a c t i o na m o u n ti nr e l a t i o nt oc o m p rehensive services for the year ended 31
December 2023 was due to the decrease in referral fee to certain strategic channel
partners.
Annual caps
Our Directors estimate that the maximum amounts of service fees paid by us to
Haier Group and/or its associates in conn ection with the Comprehensive Services
Framework Agreement for the three years ending 31 December 2026 will not exceed
RMB5.2 million, RMB6.1 million and RMB6 .8 million, respectively. Our Directors
considers that the proposed annual caps are fair and reasonable.
CONNECTED TRANSACTIONS
–3 0 0–


--- page 311 ---
Basis of annual caps
The above proposed annual caps are determined with reference to the following
factors:
. the historical transaction amounts for the Track Record Period for the
comprehensive service we procured from Haier Group and its affiliated
companies and the prevailing market price of similar services;
. the expected increase in our operational needs for administrative services,
consulting services and business support services due to our continuous
business expansion, including the existing lease arrangement between our
Group and Haier Group and the expected signing of new office leases and
renewal of existing leases to meet our business needs and expansion plan, in
particular, its exponential growth in the historical rental expenses from
RMB0.2 million in 2021 to RMB0.8 million in 2023, with a CAGR of 100%
and from RMB0.4 million in 2022 to RMB0.8 million in 2023, with a
year-on-year growth of 100%. The growth rate of the proposed rental
expenses, with a CAGR of 35.2% from RMB0.8 million in 2023 to RMB2.0
million in 2026, is consistent with and mo re conservative than the aforesaid
historical growth rate; and
. the existing business cooperation between our Group and Haier Group as
strategic channel partner, including the type of insurance products and the
number of insurance clients expected to be referred by Haier Group and/or
its associates for our insurance agency business, in particular, the proposed
referral fees payable to Haier Group of RMB1.5 million in 2024, RMB1.7
million in 2025 and RMB1.9 million in 2026, with a CAGR of 20.7% from
RMB1.1 million in 2023 to RMB1.9 millio n in 2026, the growth rate of which
is consistent with the historical growth rate of our revenue at a CAGR of
20.4% from 2021 to 2023.
Listing Rules implications
As the highest applicable percentage rati o of the transaction contemplated under
the Comprehensive Services Framework Agr eement for each of the three years ending
31 December 2026 calculated for the purp ose of Chapter 14A of the Listing Rules is
more than 0.1% but less than 5% on an an nual basis, such transaction will, upon
Listing, constitute continuing connect ed transactions of our Company subject to
reporting, annual review, announcement re quirement but exempt from the circular and
the independent Shareholders’ approval requirement under Rules 14A.76(2) of the
Listing Rules.
CONNECTED TRANSACTIONS
–3 0 1–


--- page 312 ---
NON-EXEMPT CONTINUING CONNECTED TRANSACTION
3. IT and Consulting Services Framework Agreement
Principal terms
W ee n t e r e di n t oaI Ta n dc o n s u l t i n gs e rvices provision agreement with Haier
Group on 19 May 2023, as replaced by a framework agreement dated 23 July 2024
(collectively, the ‘‘ IT and Consulting Services Framework Agreement ’ ’ )p u r s u a n tt o
which we will provide IT and consulting services to Haier Group and/or its associates.
During the Track Record Period, we have bee n providing IT and consulting services in
the ordinary and usual course of our business and on normal commercial terms to
Haier Group and/or its associates. The provision of IT and consulting services by us to
Haier Group and/or its associates is expected to continue after Listing. The initial term
of the IT and Consulting Services Framework Agreement will commence on the Listing
Date and up to 31 December 2026. Relevant sub sidiaries or associated companies of
both parties will enter into separate underlying agreements which will set out the
specific terms and conditions accordin g to the principles provided in the IT and
Consulting Services Framework Agreement.
Pricing policy
Taking into consideration the estimated transaction amount, the service fees to be
paid by Haier Group and/or its associates under the IT and Consulting Services
Framework Agreement will be determined th rough arm’s length negotiations between
the parties, taking into account (i) in respect of IT services, the complexity of the
software/system developed, allocation of staff (including the seniority of staff assigned
on site), duration of the agreement, owne rship of the IP right, other costs such as
server fees and indicative price range specified by our customers in their invitation of
tenders or request for quotation (if any), and (ii) in respect of consulting services, the
scope of services requested and prevailing m arket price of such requested services (if
any). The pricing terms under the IT and Consulting Services Framework Agreement
will be no less favourable to us than terms o f services offered to Independent Third
Parties and is in the best interest of our Company and our Shareholders as a whole.
Reasons for the transaction
Since our establishment, our Group has had close business relationship with Haier
Group and/or its associates. We have acquired a deep understanding of the business
and operational requirements of Haier Group and/or its associates and are able to
provide the IT and consulting services needed by Haier Group. Taking into
consideration our previous experience with Haier Group and/or its associates, we
believe that maintaining a stable and quality business relationship with Haier Group
will facilitate our current and future business operations and our Group is capable of
effectively satisfying the demands of Haier Group and/or its associates for providing
IT and consulting services at prices and ter ms no less favourable to those we offered to
Independent Third Parties, which is in the interests of our Group and the Shareholders
as a whole.
CONNECTED TRANSACTIONS
–3 0 2–


--- page 313 ---
Historical transaction amounts
For the three years ended 31 December 2023 and the four months ended 30 April
2024, the historical transaction amounts in respect of the provision of IT and
consulting services by us to Haier Group and its affiliated companies amounted to
RMB1.4 million, RMB8.4 million, RMB10.2 million and RMB1.9 million,
respectively. The increase in the historical transaction amounts from 2021 to 2023
and from 4M2023 to 4M2024 is mainly due to the increase in the number of IT projects
for Haier Group engaged by our Group in FY2022, FY2023 and 4M2024, evidencing
the successful commercialisation of the IT services of our Group. For details, please
refer to the sections headed ‘‘Financial Information — Period to Period Comparison of
Results of Operations’’ and ‘‘Financial Information — Revenue — Revenue from IT
services by type of customers’’ in this prospectus.
Annual caps
Our Directors estimate that the maximu m amounts of service fees paid by Haier
Group and/or its associates to us in connect ion with the IT and Consulting Services
Framework Agreement for the three years ending 31 December 2026 will not exceed
RMB13.1 million, RMB14.7 million and RMB16.8 million, respectively. Our Directors
considers that the proposed annual caps are fair and reasonable.
Basis of annual caps
The above proposed annual caps are determined with reference to the following
factors:
. the historical transaction amounts for the Track Record Period regarding the
provision of IT and consulting services to Haier Group and its affiliated
companies during the Track Record Perio d, in particular, (i) its exponential
growth in the historical transaction amount from RMB1.4 million in 2021 to
RMB10.2 million in 2023, with a CAGR of 169.9%, (ii) its steady growth in
the historical transaction amount from RMB8.4 million in 2022 to RMB10.2
million in 2023, with a year-on-year growth of 21.4%, in the aftermath of the
exponential growth of our IT services in 2022. The growth rate of the
proposed annual caps, with a CA GR of 18.1% from RMB10.2 million in
2023 to RMB16.8 million in 2026, is consistent with and more conservative
than the aforesaid historical growth rate;
. the continual growth of Haier Group leading to the expected increase in
Haier Group’s demand for our IT and consulting services in the three years
ending 31 December 2026;
. the expected cost to be incurred for provision of IT and consulting services;
CONNECTED TRANSACTIONS
–3 0 3–


--- page 314 ---
. we have become more competent to provide IT and consulting services to
Haier Group through accumulation of experience and understanding of the
needs of Haier Group, and we were recently selected as an approved supplier
for over 100 subsidiaries of Haier Group;
. the projected growth rate at a CAGR of 13.5% from 2024 to 2026 of the
overall corporate demand for IT services in the PRC according to Frost &
Sullivan; and
. the expected increase of service fees t o be charged by our Group considering
the expected inflation in the PRC at an inflation rate of approximately 1.0%
to 2.0% from 2024 to 2026, according t o Frost & Sullivan, and increase in
our operational costs.
Listing Rules implications
As the highest applicable percentage rati o of the transactions contemplated under
the IT and Consulting Services Framework Agreement for each of the three years
ending 31 December 2026 calculated for the purpose of Chapter 14A of the Listing
Rules is expected to exceed 5% on an annua l basis, such transactions will, upon
Listing, constitute continuing connected transaction of our Company subject to
reporting, annual review, announcement, circular and the independent Shareholders’
approval requirement under Chapter 14A of the Listing Rules.
PROPOSED ARRANGEMENTS TO MONITOR THE NON-EXEMPT CONTINUING
CONNECTED TRANSACTIONS
To ensure the terms under the relevant framework agreements for the continuing
connected transactions are fair and reasonable, and no less favourable to our Company
than terms and conditions available for Independent Third Parties, the following
arrangements are proposed to monitor the non-exempt continuing connected transactions
of our Company after Listing:
(1) the finance department of our Company will review the transaction amounts of the
relevant continuing connected transactions and conduct analysis of the data at least
half-yearly to manage the continuing connected transactions;
(2) the independent non-executive Direct ors will consider the continuing connected
transactions requiring approval from the Board and/or Shareholders’ general meeting,
and provide their opinions to the Board;
(3) the independent non-executive Directors and our Company’s auditors will conduct
annual review of the non-exempt continuing connected transactions and provide
annual confirmations in accordance with Rules 14A.55 and 14A.56 of the Listing
Rules;
CONNECTED TRANSACTIONS
–3 0 4–


--- page 315 ---
(4) our Company will follow the approval procedures for connected transactions
including:
(a) in respect of connected transaction s not governed by the existing framework
agreements, our Company will communicate with the independent non-executive
Directors in advance and provide th e necessary documents to facilitate
decision-making and disclosure process;
(b) our Company will seek the necessary a pprovals in advance for continuing
connected transactions exceeding the proposed annual caps;
(c) according to the pricing policy of our Company, our Company’s financial
management department, together with the individual and corporate business
departments, the information technology department, and other relevant
departments will determine the transaction price for continuing connected
transactions through arm’s length nego tiation between parties based on the
comparable market rates from Independent Third Parties, cost-plus pricing, or
agreed price. The transaction price will be submitted to the chief financial officer
for approval after the revision by th e department head of the relevant
departments; and
(d) the financial management department, together with the individual and corporate
business departments, the information technology department, and other relevant
departments will review any price adjustment requests for connected transactions.
The adjusted transaction price will be submitted to the chief financial officer for
approval after the revision by the department head of the relevant departments.
(5) in respect of acquisition of products and services from our connected persons, our
Company will periodically (and in any event not less frequent than twice every year)
survey the applicable market rates in respect of such products and services procured
under the relevant framework agreement (where applicable).
APPLICATION FOR WAIVERS
The transaction described in the paragraph headed ‘‘Partially Exempt Continuing
Connected Transaction — 2. Comprehensiv e Services Framework Agreement’’ in this
section constitutes our continuing connected transaction under the Listing Rules, which is
subject to the reporting, annual review and announcement requirements but exempt from
the circular and independent Shareholders’ approval requirements of the Listing Rules.
The transaction described in the paragraph headed ‘‘Non-Exempt Continuing
Connected Transaction — 3. IT and Consulting Services Framework Agreement’’ in this
section constitute our continuing connected transactions under the Listing Rules which are
subject to the reporting, annual review, announcement, circular and independent
Shareholders’ approval requirements of the Listing Rules.
CONNECTED TRANSACTIONS
–3 0 5–


--- page 316 ---
In respect of these continuing connected transactions, pursuant to Rule 14A.105 of the
L i s t i n gR u l e s ,w eh a v ea p p l i e df o r ,a n dt h eS t ock Exchange has granted, waivers exempting
us from strict compliance with the announcement requirement under Chapter 14A of the
Listing Rules in respect of the continuing connected transaction as disclosed in ‘‘Partially
Exempt Continuing Connected Transaction — 2. Comprehensive Services Framework
Agreement’’; and the announcement and independent Shareholders’ approval requirements
under Chapter 14A of the Listing Rules in respect of the continuing connected transactions
as disclosed in ‘‘Non-Exempt Continuing Connected Transaction — 3. IT and Consulting
Services Framework Agreement’’ in this sectio n for the period commencing from the Listing
Date up to 31 December 2026, subject to the con dition that the relevant annual transaction
amounts shall not exceed the applicable annual caps as set out above.
In addition, we will comply with other applicable provisions under Chapter 14A of the
Listing Rules after Listing. We will also compl y with the applicable requirements under the
Listing Rules if any of the applicable proposed annual caps set out above are exceeded, or if
any of the framework agreements in relation to the non-exempt continuing connected
transactions are renewed or where there is a material change under the terms of such
agreements. After expiry of the waivers gr anted, we will comply with the applicable
provisions of Chapter 14A of the Listing Rules as amended from time to time and/or apply
for the relevant waivers (where required).
In the event of any future amendments to the Listing Rules imposing more stringent
requirements than those applicable under Chap ter 14A of the Listing Rules as at the Latest
Practicable Date on the continuing connected transactions, our Company will take
immediate steps to ensure compliance with such requirements within a reasonable time.
If any of the terms of the transaction conte mplated under the agreements mentioned
above are altered or if our Company enters i nto any new agreements with any connected
person in the future, we will fully comply with the relevant provisions under Chapter 14A of
the Listing Rules, when we apply for and separate waiver is obtained from, the Stock
Exchange.
CONFIRMATION FROM THE DIRECTORS
The Directors (including the independent non-executive Directors) consider that the
continuing connected transactions under ( 1) the Comprehensive Services Framework
Agreement; and (2) the IT and Consulting Services Framework Agreement (i) have been
and will be entered into in the ordinary and usual course of our Company’s business; (ii) are
o nn o r m a lc o m m e r c i a lt e r m so rb e t t e rw h i c ha re fair and reasonable and in the interests of
our Company and its Shareholders as a whole; and (iii) the proposed annual caps for the
continuing connected transactions are fair and reasonable and in the interests of our
Company and the Shareholders as a whole. Apart from the announcement, circular and/or
independent shareholders’ approval requirements of which waiver has been sought, our
Company will comply with the relevant requi rements under Chapter 14A of the Listing
Rules.
CONNECTED TRANSACTIONS
–3 0 6–


--- page 317 ---
CONFIRMATION FROM THE JOINT SPONSORS
Based on the above, and the documentation and data provided by our Company and
the participation in due diligence and discuss ion with our Company, the Joint Sponsors are
of the view that the above non-exempt continuing connected transactions (i) have been
entered into in the ordinary and usual course of business of our Group; (ii) are on normal
commercial terms or better, and are fair and r easonable and in the interests of our Company
and its shareholders as a whole; and (iii) the proposed annual caps under the above
non-exempt continuing connected transactions are fair and reasonable and in the interests
of our Company and its Shareholders as a whole.
CONNECTED TRANSACTIONS
–3 0 7–


--- page 318 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering without taking into account any Shares which may be issued pursuant to the
exercise of the Over-allotment Option, the following persons will have an interest or a short
position in our Shares or underlying Shares which will be required to be disclosed to our
Company and the Stock Exchange pursuant to the provisions of Division 2 and 3 of Part
XV of the SFO or will be, directly or indirectly, interested in 10% or more of the nominal
value of any class of share capital carrying rights to vote in all circumstances at general
meetings of our Company or any of our subsidiaries:
As at
the Latest Practicable Date
Immediately following
the completion of
the Global Offering
(assuming the Over-allotment
Option
is not exercised) (2)
Name of Shareholder Nature of Interest
Number of
Shares (1)
Approximate
percentage of
interest in our
Company
Number of
Shares (1)(3)
Approximate
percentage of
interest in our
Company
(%) (%)
Haier Group (4) Interest in controlled
corporation/
interest of a party to
an agreement
64,000,000 60.44 64,000,000 45.33
Qingdao Haichuanghui IoT (5) Interest in controlled
corporation
64,000,000 60.44 64,000,000 45.33
Qingdao Haichuanghui Investment (5) Interest in controlled
corporation
64,000,000 60.44 64,000,000 45.33
Haichuanghui Holding (6) Interest in controlled
corporation
8,000,000 7.56 8,000,000 5.67
Ningbo Meishan (6) Interest in controlled
corporation
8,000,000 7.56 8,000,000 5.67
Qingdao Haichuanghui Venture (6) Interest in controlled
corporation
8,000,000 7.56 8,000,000 5.67
Qingdao Li Cang (7) Interest in controlled
corporation
3,960,000 7.56 8,000,000 5.67
Qingdao Ronghai State-Owned Capital
Investment Operations Co., Ltd
(青島融海國有資本投資運營有限公司)
(‘‘Qingdao Ronghai Capital ’’)(7)
Interest in controlled
corporation
3,960,000 7.56 8,000,000 5.67
Qingdao Ronghai Capital (7) Interest in controlled
corporation
3,960,000 7.56 8,000,000 5.67
Qingdao Haichuanghui (5)(7) Beneficial interest 8,000,000 7.56 8,000,000 5.67
Qingdao Haiyinghui (5) Beneficial interest 56,000,000 52.88 56,000,000 39.66
Shanghai Zhaoqi (8) Beneficial interest 24,000,000 22.66 24,000,000 17.00
Qingdao Haichuangying (9) Beneficial interest 14,394,000 13.59 14,394,000 10.19
SUBSTANTIAL SHAREHOLDERS
–3 0 8–


--- page 319 ---
Notes:
1. All interests stated are long positions.
2. The calculation is based on the total number of 141, 195,600 Shares in issue immediately following the
completion of the Global Offering and without taking into account any Shares which may be issued
pursuant to the exercise of the Over-allotment Option.
3. For the avoidance of doubt, both Domestic Shares and H Shares are ordinary Shares in the share capital
of our Company, and are considered as one class of Shares.
4. As at the Latest Practicable Date, Haier Group was entitled to exercise the voting rights attached to
approximately 60.44% of the tota l issued share capital of our Company through Qingdao Haichuanghui
IoT, Qingdao Haichuanghui Investment, Haic huanghui Holding, Ningbo Meishan, Qingdao
Haichuanghui Venture, Qingdao Haiyinghui and Q ingdao Haichuanghui. On 18 December 2023 (i.e.
date of incorporation of Qingdao Haichuanghui IoT), Haier Group and Qingdao Haichuangke entered
into a voting rights entrustment agreement whereby t he entire voting rights of Qingdao Haichuanghui IoT
has been entrusted to Haier Group. Therefore, Haier G roup is deemed to control the entire voting rights
of Qingdao Haichuanghui IoT and, in turn, Qingdao Ha ichuanghui Investment, Qingdao Haiyinghui and
Qingdao Haichuanghui pursuant to the SFO.
5. As at the Latest Practicable Date, Qingdao Haichuanghui IoT directly holds 100% of Qingdao
Haichuanghui Investment and in turn indirectly hol ds 100% of Haichuanghui Holding; Haichuanghui
Holding directly holds 100% of Ningbo Meishan, wh ich in turn directly holds Qingdao Haichuanghui
Venture. As at the Latest Practicable Date, Qingdao Haichuanghui is owned as to 1.00% by Qingdao
Haichuanghui Venture being its general partner, an d as to 49.50% by Qingdao Haichuanghui Investment.
As at the Latest Practicable Date, Qingdao Ha ichuanghui Investment holds (i) 100% of Qingdao
Haiyinghui which holds 52.88% of the issued Share s; and (ii) directly 49.50% as equity interests and
indirectly 1.00% of Qingdao Haichuanghui (with Qin gdao Haichuanghui Venture as the general partner)
which holds 7.56% of the issued Shares. Theref ore, Qingdao Haichuanghui IoT and Qingdao
Haichuanghui Investment are deemed to be interested in the Shares held by Qingdao Haiyinghui and
Qingdao Haichuanghui pursuant to the SFO.
6. As at the Latest Practicable Date, Qingdao Haichuanghui Venture, the general partner of Qingdao
Haichuanghui, was owned as to 100% by Ningbo Meish an, which was in turn wholly owned by Qingdao
Haichuanghui Holding. Therefore Haichuanghui Ho lding, Ningbo Meishan and Qingdao Haichuanghui
Venture are deemed to be interested in the Shares held by Qingdao Haichuanghui pursuant to the SFO.
7. As at the Latest Practicable Date, Qingdao Haic huanghui is owned as to 49.50% by Qingdao Ronghai
which is entirely owned by Qingdao Ronghai Capit al and in turn entirely owned by Qingdao Li Cang.
Qingdao Li Cang is an governmen t-affiliated institution ( 事業單位法人) under the Li Cang Government,
and a social service organisation established by the state for the purpose of social welfare with
state-owned assets, which serves as an investment p latform of Li Cang Government. Qingdao Ronghai is
the limited partner of Qingdao Haichuanghui.
8. Shanghai Zhaoqi was established as a limited partne rship in the PRC on 1 February 2018 by employees of
our Group and with Qingdao Haichuang (wholly owned by Mr. Lu) as the general partner. For more
details on Shanghai Zhaoqi, please refer to the sect ion headed ‘‘History and Development — Capital
Increase in May 2018’’ in this prospectus.
9. Qingdao Haichuangying is one of our Pre-IPO Invest ors. For more details, please refer to the section
headed ‘‘History and Development — Pre- IPO Investments’’ in this prospectus.
SUBSTANTIAL SHAREHOLDERS
–3 0 9–


--- page 320 ---
Save as disclosed above and in ‘‘Statuto ry and General Information — C. Further
Information about Our Directors, Super visors and Substantial Shareholders — 1.
Disclosure of Interests’’ in Appendix VI (an d taking no account of any Shares which may
be issued pursuant to the exercise of the Over-allotment Option), our Directors are not
aware of any person who will, immediately following the completion of the Global Offering
has an interest or a short position in the Shares or underlying Shares which will be required
to be disclosed to our Company and the Stock Exchange under the provisions of Divisions 2
and 3 of Part XV of the SFO or will be, directly or indirectly, interested in 10% or more of
the nominal value of any class of share capital c arrying rights to vote in all circumstances at
general meetings of any other member of our Group.
SUBSTANTIAL SHAREHOLDERS
–3 1 0–


--- page 321 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (the ‘‘ Cornerstone Investment
Agreements ’’) with Hong Tai International III LPF ( 洪泰國際三號有限合夥基金)( ‘ ‘Hong
Tai’’) and The Reynold Lemkins Group (Asia) Limited (‘‘ Reynold Lemkins ’’), being the
cornerstone investors set out below (the ‘‘ Cornerstone Investors ’’), pursuant to which the
Cornerstone Investors have agreed to subscrib e, subject to certain conditions, amounts of
HK$36,234,000 and HK$10,000,000, respectively, at the Offer Price as set out in the tables
below (the ‘‘Cornerstone Placing ’’).
The Cornerstone Placing will form part of the International Offering. The Offer Shares
to be subscribed for by the Cornerstone Investors will rank pari passu in all respects with
other fully paid H Shares then in issue upon completion of the Global Offering and to be
listed on the Stock Exchange and will be counted towards the public float of our Company
under Rule 8.08 of the Listing Rules. The Cornerstone Investors will not subscribe for any
Offer Shares under the Global Offering (other than pursuant to the Cornerstone Investment
Agreements).
Pursuant to the Cornerstone Investment Agr eements, the Cornerstone Investors will
not be entitled to have any representation on our Board. Immediately following the
completion of the Global Offering, the Corne rstone Investors will not become a substantial
shareholder (as defined under the Listing Rules) of our Company. Other than a guaranteed
allocation of the relevant Offer Shares at the final Offer Price, none of the Cornerstone
Investors has any preferential rights in t he Cornerstone Investment Agreements as
compared with other public Shareholders.
Details of the actual number of the Offer Shares to be allocated to the Cornerstone
Investors will be disclosed in the allotment results announcement to be issued by our
Company on or around Monday, 5 August 2024.
In the event that the requirement pursuant to Rule 8.08(3) of the Listing Rules (in
which no more than 50% of the Shares in public hands on the Listing Date can be
beneficially owned by the three largest public shareholders of our Company) cannot be
satisfied, the allocation of the number of Offer Shares to be subscribed by the Cornerstone
Investors will be adjusted to ensure the comp liance with Rule 8.08(3) of the Listing Rules.
Our Company is of the view that, (i) the Cornerstone Placing will ensure a reasonable
size of solid commitment at the beginning of the marketing period of the Global Offering
and will provide confidence to the market; and (ii) by leveraging on the Cornerstone
Investors’ background and investment profile, the Cornerstone Placing will help raise the
profile of our Company and to signify that such investors have confidence in our business
and prospect.
CORNERSTONE INVESTORS
–3 1 1–


--- page 322 ---
To the best knowledge of our Company after making reasonable enquiries, (i) the
Cornerstone Investors and their respective ultimate beneficial owners are Independent
Third Parties, are not connected persons (as defined under the Listing Rules) of our
Company, are not existing Shareholders or close associates of our Company and have no
other relationship with our Company; (ii) the Cornerstone Investors are not accustomed to
take instructions from any of our Company, our D irectors, our Supervisors, chief executive
of our Company, our subsidiaries, our Controlling Shareholders, substantial Shareholders,
existing Shareholders or any of their respective close associates in relation to the
acquisition, disposal, voting, or other disposition of Shares registered in its name or
otherwise held by it; and (iii) the subscripti on of the relevant Offer Shares by each of the
Cornerstone Investors is not, directly or in directly, financed by any of our Company, our
Directors, our Supervisors, chief executive of our Company, our subsidiaries, our
Controlling Shareholders, substantial Shareho lders, existing Shareholders or any of their
respective close associates.
As confirmed by the Cornerstone Investors, their subscriptions under the Cornerstone
Placing would be financed by their own internal resources. None of the Cornerstone
Investors or their limited partners or sharehol der(s) are listed on any stock exchanges. The
Cornerstone Investors have confirmed that a ll necessary approvals have been obtained with
respect to the Cornerstone Placing and that no specific approval from any stock exchange
(if relevant) or their limited partners or shareholder(s) are required for the relevant
cornerstone investment. There are no side arrangements or agreements between our
Company and the Cornerstone Investors or any benefit, direct or indirect, conferred on the
Cornerstone Investors by virtue of or in rela tion to the Listing, other than a guaranteed
allocation of the relevant Offer Shares at the final Offer Price.
The Cornerstone Investors have confirmed that they have sufficient funds to settle the
investment amounts and they will pay and settle in full for the relevant Offer Shares that
they subscribed before dealings in the Offer Shares commence on the Stock Exchange. The
Offer Shares to be subscribed by the Cornerstone Investors may be affected by the
reallocation in the event of over-subscription under the Hong Kong Public Offering, as
described in ‘‘Structure of the Global Offering — The Hong Kong Public Offering —
Reallocation’’ in this prospectus. Details of th e allocations to the Cornerstone Investors will
be disclosed in the allotment results announcement to be issued by our Company on or
around Monday, 5 August 2024. If there is over-allocation in the International Offering, the
settlement of such over-allocation may be effe cted through delayed delivery of the Offer
Shares to be subscribed by the Cornerstone Investors under the Cornerstone Placing. Where
delayed delivery takes place, the Cornerstone Investors shall nevertheless pay and settle in
full for the relevant Offer Shares that it subscribed before dealings in the Offer Shares
commence on the Stock Exchange. As such, there will not be any deferred settlement in
payment by the Cornerstone Investors. If there is no over-allocation in the International
Offering, delayed delivery will not take place. For details of the Over-allotment Option, see
‘‘Structure of the Global Offering — Over-allotment Option’’ in this prospectus.
CORNERSTONE INVESTORS
–3 1 2–


--- page 323 ---
OUR CORNERSTO NE INVESTORS
The below table sets out certain details in respect of the Cornerstone Placing:
Number of
Offer Shares
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Cornerstone Investors
Approximate
Investment
amount
(rounded
down to the
nearest whole
board lot of
500 Shares)
Approximate
%o ft h e
Offer Shares
Approximate
%of the
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(HK$ in
million)
Based on the Offer Price of HK$7.0 (being the low-end of the indicative Offer Price range)
Hong Tai 36.2 5,176,000 14.66 3.67 12.75 3.53
Reynold Lemkins 10.0 1,428,500 4.05 1.01 3.52 0.98
Total 46.2 6,604,500 18.71 4.68 16.27 4.51
Based on the Offer Price of HK$8.6 (being the mid-point of the indicative Offer Price range)
Hong Tai 36.2 4,213,000 11.94 2.99 10.38 2.88
Reynold Lemkins 10.0 1,162,500 3.29 0.82 2.86 0.79
Total 46.2 5,375,500 15.23 3.81 13.24 3.67
Based on the Offer Price of HK$10.2 (being the high-end of the indicative Offer Price range)
Hong Tai 36.2 3,552,000 10.06 2.52 8.75 2.42
Reynold Lemkins 10.0 980,000 2.78 0.69 2.41 0.67
Total 46.2 4,532,000 12.84 3.21 11.16 3.09
Hong Tai
Hong Tai was founded in Hong Kong on 13 September 2023 and is a private fund
managed by Starwin Wealth Management Limited ( 星合財富管理有限公司)( ‘ ‘Starwin ’’)
acting as its general partner and Hong Tai Securities Limited ( 洪泰證券有限公司)( ‘ ‘Hong
Tai Securities ’’) as its investment manager. Based on t he information provided by Hong Tai,
Hong Tai is owned as to 42.6% by Zhu Jianhua ( 朱建華) as a limited partner and as to
57.4% by other eight limited partners (non e of which owns more than 20% interest in Hong
Tai) and each of the limited partners and their respective ultimate beneficial owner(s) is
independent from Hong Tai Securities. The beneficial owner of Starwin is Hong Tai
International Holding Limited ( 洪泰國際控股有限公司)( ‘ ‘Hong Tai International ’’), which
is wholly owned by Ms. Shen Yanjie ( 沈燕婕).
Hong Tai Securities’ assets under man agement amounted to approximately HK$300
million as of the Latest Practicable Date. Ho ng Tai’s investment strategy is to provide
medium-term capital growth primarily through direct or indirect investment into the
equities market of Hong Kong. Hong Tai International is a limited company incorporated
in Hong Kong, with investment holding as its principal business. Our Company became
acquainted with Hong Tai through introduction by a local government in Qingdao.
CORNERSTONE INVESTORS
–3 1 3–


--- page 324 ---
Each of Hong Tai, Hong Tai Securities, Starwin, Hong Tai International and their
respective ultimate beneficial owner(s) is an Independent Third Party, and is not a
connected person (as defined under the Listing Rules) of our Company. Hong Tai Securities
is a licenced corporation under the SFO to en gage in type 1 (dealing in securities), type 4
(advising on securities) and type 9 (asset manag ement) regulated activities and is one of the
Joint Bookrunners, Joint Lead Managers, CMIs and Underwriters of the Global Offering.
Hong Tai Securities is owned as to 80.2% by Hong Tai International beneficially and
therefore Hong Tai is a connected client of Hong Tai Securities. We have applied to the
Stock Exchange for, and the Stock Exchange has granted us its consent under paragraph
5(1) of Appendix F1 to the Listing Rules to permit Hong Tai to participate in the Global
Offering as a Cornerstone Investor subject to c ertain conditions. For details, please refer to
the section headed ‘‘Waiver from Strict Co mpliance with the Listing Rules — Consent in
Relation to Allocation of Offer Shares to Connected Client of the Connected Syndicate’’ in
this prospectus.
Reynold Lemkins
Reynold Lemkins is an investment holding company incorporated in Hong Kong with
limited liability on 30 November 2020. Rey nold Lemkins is principally engaged in
investments across various assets classes, indu stries and geographies. In the equity market,
Reynold Lemkins invests primarily in emerging growth companies with a focus on
t e c h n o l o g ya n dh e a l t h c a r e .R e y n o l dL e m k i n si sw h o l l yo w n e db yM r .L i uH a o r a n(劉浩然),
an Independent Third Party. Our Company became acquainted with Reynold Lemkins
through the introduction by our Underwriters.
CLOSING CONDITIONS
The subscription obligation of the Cornerstone Investors is subject to the following
closing conditions:
(a) the Underwriting Agreements being ent ered into and having become effective and
unconditional (in accordance with their respective original terms or as
subsequently waived or varied by agreement of the parties thereto) by no later
than the time and date as specified in the r espective Underwriting Agreements,
and neither of the Underwriting Agreements having been terminated;
(b) the Offer Price having been agreed upon between our Company and the Overall
Coordinators (for and on behalf of the Underwriters);
(c) the Listing Committee having granted the listing of, and permission to deal in, the
H Shares (including the H Shares to be subscribed by the Cornerstone Investors)
as well as other applicable waivers and approvals and such approval, permission
or waiver having not been revoked prior to the commencement of dealings in the
H Shares on the Stock Exchange;
CORNERSTONE INVESTORS
–3 1 4–


--- page 325 ---
(d) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or in the Cornerstone Investment Agreements and there shall be no
orders or injunctions from a court of competent jurisdiction in effect precluding
or prohibiting the consummation of such transactions; and
(e) the respective representations, warranties, undertakings, acknowledgements and
confirmations of the Cornerstone Investors under the Cornerstone Investment
Agreements are (as at the date of the respective Cornerstone Investment
Agreements) and will be (as of the Listin g Date or, if applicable, the delayed
delivery date) accurate and true in all respects and not misleading and that there is
no breach of the Cornerstone Investment Agreements on the part of the
Cornerstone Investors.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
The Cornerstone Investors have agreed that without the prior written consent of each
of the Company, the Joint Sponsors and the Overall Coordinators, it will not, and will
procure its wholly-owned subsidiary to whic h it has transferred any of the Offer Shares it
has subscribed for pursuant to the Cornerstone Investment Agreements (the ‘‘ Relevant
Shares ’’), whether directly or indirectly, at any time during the period of six months from
the Listing Date, dispose of any of the Relevant Shares or any interest in any company or
entity holding any of the Relevant Shares.
CORNERSTONE INVESTORS
–3 1 5–


--- page 326 ---
SHARE CAPITAL OF OUR COMPANY
As at the Latest Practicable Date, the registered share capital of our Company was
RMB105,895,600, comprising 105,895,600 Shares with a nominal value of RMB1.0 each.
Immediately after the Global Offering (assu ming that the Over-allotment Option is not
exercised), the share capital of our Company will be as follows.
Description of Shares
Number of
Shares
Approximate
%o ft h e
Enlarged
Issued Share
Capital after
the Global
Offering
Domestic Shares 105,895,600 75.00%
H Shares to be issued pursuant to the Global
Offering 35,300,000 25.00%
Total 141,195,600 100.00%
Immediately after the Global Offering (assu ming that the Over-allotment Option is
fully exercised), the share capital of our Company will be as follows:
Description of Shares
Number of
Shares
Approximate
%o ft h e
Enlarged
Issued Share
Capital after
the Global
Offering
Domestic Shares 105,895,600 72.29%
H Shares to be issued pursuant to the Global
Offering 40,595,000 27.71%
Total 146,490,600 100.00%
OUR SHARES
The H Shares in issue following the completion of the Global Offering and the
Domestic Shares are ordinary Shares in the share capital of our Company, and are
considered as one class of Shares together with the Domestic Shares. However, apart from
certain qualified domestic institutional investors in the PRC, qualified PRC investors under
the Shanghai-Hong Kong stock exchanges connectivity mechanism (‘‘ Shanghai-Hong Kong
Stock Connect ’’) and the Shenzhen-Hong Kong stock exchanges connectivity mechanism
SHARE CAPITAL
–3 1 6–


--- page 327 ---
(‘‘Shenzhen-Hong Kong Stock Connect ’’) and other persons entitled to hold H Shares
pursuant to the relevant PRC laws and regulations or upon approval or filing with any
competent authorities, including our existing Shareholders who may convert their Domestic
Shares into H shares upon completion of filin g with the CSRC, H Shares generally may not
be subscribed for by, or traded between, legal or natural persons of the PRC.
RANKING
Domestic Shares and H Shares are regarded a s one class of Shares under our Articles
of Association and will rank pari passu with each other in all other respects and, in
particular, will rank equally for all dividends or distributions declared, paid or made after
the date of this prospectus. Dividends in respect of our Shares may be paid by us in Hong
Kong dollars or Renminbi. In addition to cash, dividends may be distributed in the form of
Shares.
CONVERSION OF DOMESTIC SHARES INTO H SHARES
Pursuant to the regulations prescribed by the securities regulatory authorities of the
State Council and the Articles of Association, the unlisted Shares may be converted into
overseas-listed Shares. Such converted Shares could be listed or traded on an overseas stock
exchange, provided that prior to the conversion and trading of such converted Shares, any
requisite internal approval process and the f iling with the CSRC have been duly completed.
In addition, such conversion and trading shal l 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 including the approval
of the Stock Exchange.
Listing Approval by the Stock Exchange
We have applied to the Stock Exchange for the granting of listing of, and permission to
deal in, our H Shares to be issued pursuant to the Global Offering (including any H Shares
which may be issued pursuant to the exercise of the Over-allotment Option), which is
subject to the approval by the Stock Exchange.
REGISTRATION OF SHARES NOT LISTE D ON AN OVERSEAS STOCK EXCHANGE
According to the Notice on Adjustment of Bu siness Acceptance of Registration and
Depository of Non-Overseas Listed Sh ares of Overseas Listed Companies ( 《關於境外上市
公司非境外上市股份登記存管業務受理調整的通知》) and the Business Guidelines for the
Registration and Depository of Non-Overseas Listed Shares of Overseas Listed Companies
(《境外上市公司非境外上市股份登記存管業務指南》), our Company is required to register
and deposit our Domestic Shares that are not listed on the overseas stock exchange with
CSDC after the Listing.
SHARE CAPITAL
–3 1 7–


--- page 328 ---
SHAREHOLDERS’ APPROVAL FOR THE GLOBAL OFFERING
Approval from holders of the Shares is required for our Company to issue H Shares
and seek the listing of H Shares on the Stock Exchange. Our Company has obtained such
approval at the Shareholders’ general meet ing held on 18 May 2023. For more details on
Shareholders’ approval and circumstances under which our Shareholders’ general meeting
is required, please refer to the sections headed ‘‘Statutory and General Information — A.
Further Information about our Group — 4. Resolutions Passed at our Company’s
Extraordinary General Meeting on 18 May 2023’’ in Appendix VI and ‘‘Summary of
Articles of Association’’ in Appendix V to this prospectus.
LOCK-UP PERIODS
In accordance with the PRC Company Law , the shares issued prior to any public
offering of shares by a company cannot be transferred within one year from the date on
which such publicly offered shares are listed a nd traded on the relevant stock exchange. As
such, the Shares issued by our Company prior to the issue of H Shares will be subject to
such statutory restriction on transfer within a period of one year from the Listing Date. Our
Directors, Supervisors and members of the senior management of our Company shall
declare their shareholdings in our Company and any changes in their shareholdings. Shares
transferred by our Directors, Supervisors an d such members of the senior management each
year during their term of office shall not exceed 25% of their total respective shareholdings
in our Company. The Shares that the aforementioned persons held in our Company cannot
be transferred within one year from the date o n which the Shares are listed and traded, nor
within half a year after they leave their positions in our Company. The Articles of
Association may contain other restrictions or conditions on the transfer of the Shares held
by our Directors, Supervisors, members of senior management of our Company and other
Shareholders. For more details, please refer to the section headed ‘‘Summary of Articles of
Association’’ in Appendix V this prospectus.
SHARE CAPITAL
–3 1 8–


--- page 329 ---
Y o us h o u l dr e a dt h i ss e c t i o ni nc o n j u n c t i o nw i t ho u rh i s t o r i c a lf i n a n c i a li n f o r m a t i o na s
set out in Appendix I to this prospectus. The historical financial information has been
prepared in accordance with the IFRS, which may differ in material aspects from generally
accepted accounting principles in other jurisdictions. You should read the entire
Accountants’ Report and not merely rely on the information contained in this section.
The following discussion and analysis contains forward-looking statements that involve
risks and uncertainties. These statements are based on assumptions and analysis made by us
in light of our experience and perception of historical trends, current conditions and
expected future developments, as well as other factors we believe are appropriate under the
circumstances. However, our actual results may differ significantly from those projected in
the forward-looking statements. Factors that might cause future results to differ
significantly from those projected in the forward-looking statements include those
discussed in ‘‘Risk Factors’’ in this prospectus.
In addition, the following discussion and analysis contains certain amounts and
percentage figures that have been subject to rounding adjustments, Accordingly, figures
shown as totals in certain tables may not be arithmetic aggregation of the figures preceding
them, and all monetary amounts and percentages shown are approximate amounts only.
OVERVIEW
We are an insurance agency service and solution provider in the PRC, dedicated to
distributing a wide range of insurance product s covering (i) property insurance products,
(ii) life and health insurance products, (iii) ac cident insurance products and (iv) automobile
insurance products, to both corporate and household insurance clients. We have an
ecosystem where we collaborate and cooperate with different industry participants
including insurance company partners, which are our customers, insurance agents and
strategic channel partners to promote and distribute insurance products from our insurance
company partners to corporate and household insurance clients. Leveraging our sales
channels, we promote and distribute insurance products underwritten by insurance
companies to insurance clients and receiv e commission from insurance companies for
successful purchase of their ins urance products by our insurance clients. Our services cover
major stages of insurance business including assistance on risk assessment and product
selection, confirmation of insurance polic y, premium payment, policy administration and
insurance claims. Our sales channels comprise (i) sales through insur ance agents (whom we
engage to promote and distribute insurance products to mainly our household insurance
clients, in return for commissions we paid for su ccessful purchase of insurance products by
insurance clients), (ii) referral from strat egic channel partners (through whom a large
population of corporate and household insuran ce clients are referred, in return for referral
fees we paid for successful purchase of insurance products by insurance clients) and (iii)
direct sales. We also provide IT services and consulting services as an extension of our
insurance agency business, to various participants in our ecosystem, including insurance
companies, insurance intermediaries and other companies from different industries.
FINANCIAL INFORMATION
–3 1 9–


--- page 330 ---
We achieved continued growth during the Track Record Period. Our total revenue
increased from RMB120.0 million for FY2021 to RMB148.4 million for FY2022 and
further to RMB174.0 million for FY2023, re presenting a CAGR of 20.4%, and from
RMB53.4 million for 4M2023 to RMB58.6 million for 4M2024. Our revenue from our
insurance agency business was RMB116.1 m illion, RMB130.7 million, RMB155.7 million
and RMB54.8 million for FY202 1, FY2022, FY2023 and 4M20 24, representing 96.7%,
88.1%, 89.5% and 93.4% of our total revenue for the corresponding years and period,
respectively. Our revenue from IT services business was RMB1.3 million, RMB15.0 million,
RMB15.8 million and RMB3.2 million for FY2021, FY2022, FY2023 and 4M2024,
representing 1.1%, 10.1%, 9.1% and 5.5% of our total revenue for the corresponding years
and period, respectively. Our revenue fro m consulting services business was RMB2.7
million, RMB2.7 million, RMB2.5 million and RMB0.6 million for FY2021, FY2022,
FY2023 and 4M2024, representing 2.2%, 1.8%, 1.4% and 1.1% of our total revenue for the
corresponding years and period, respectively.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business, results of operations and financial condition have been and will continue
to be affected by a number of factors, which primarily include the following:
Our business and results of operations are significantly affected by China overall economic
conditions
We are established, and our operations are located, in the PRC. Accordingly, our
financial condition and results of operations are subject to the economic, legal
developments and other factors in China. While China economy has experienced
significant growth in the past few decades, g rowth may vary across different regions.
These variations may impact the purchasing p ower and willingness of insurance clients to
purchase insurance products. For more deta ils, please refer to the section headed ‘‘Risk
Factors — Risks Relating to Conducting Our Business in the PRC’’ in this prospectus.
Insurance premiums and commission rates
We derive a majority of our revenue from our insurance agency business. We provide
agency services for insurance companies in China by distributing primarily property, life
and health, accident and automobile insurance products, underwritten by our insurance
company partners and receive commissions fro m them after successful distributions of their
insurance products to insurance clients. Our commission income is generally based on
commission rate which is a percentage of the premiums of insurance products distributed by
us. Our revenue and results of operations are thus affected by the premiums and
commission rates for insurance products that we distribute.
Insurance premiums for our insurance agency business refer to the GWP we facilitated
for our insurance company partners. Commission rates for our insurance agency business
fluctuate based on a number of factors and are determined between us and our insurance
company partners based on the type of insurance products concerned, the insurance period
to which the commission rate related to (for example, the first-year commission rates of
long-term life and health insurance products a re generally higher), the expectation of the
FINANCIAL INFORMATION
–3 2 0–


--- page 331 ---
insurance company partners on profits taking into account the expected claim ratios of the
particular insurance products, insurance clients’ demand for insurance products in the
market, the availability and pricing of com parable products fro m other insurance
companies, requirements set b y the industry association, re gulatory requirements and
governmental policies and other factors that affect our insurance company partners at the
relevant time. We face intense competition in China insurance agency market from
insurance agencies, individual insurance agents, insurance intermediaries, Internet
insurance platforms, and in-house sales force of insurance companies. If the commission
rates for our insurance agency business decrease and we fail to manage or reduce the
commission paid to our insurance agents, our gross profit margin might decrease and our
results of operations and financial performance might be adversely affected.
Our ability to maintain and expand insurance client base
Business prospects for our insurance agency business depend, to a large extent, on our
ability to maintain existing and expand new insurance client base. We engage insurance
agents to promote and distribute the insurance products authorised by our insurance
company partners and strengthen our coope ration with strategic channel partners to
expand our reach to both corporate and household insurance clients. We had built a sales
network consisting of insurance agents covering across Shandong, Hebei, Henan and Jilin
and 17 strategic channel partners during the Track Record Period. On the other hand, we
strive to provide insurance clients with satis factory experience, which to a large extent
influences our ability to maintain and establis h relationships with ou r insurance company
partners.
Cost of insurance agency business
Cost of sales for our insurance agency business primarily comprises referral fees and
commissions. We cooperate with strategic channel partners to expand our reach to large
population of corporate and household insurance clients, and we pay referral fees to
strategic channel partners for successful purchase of insurance products underwritten by
our insurance company partners by insurance clients through us. We also engage insurance
agents to promote and distribute the insurance products underwritten by our insurance
company partners to mainly our household insurance clients, and we pay commissions to
insurance agents for successful purchase of insurance products by insurance clients through
us. The rates of referral fees to our strategi c channel partners and commissions to our
insurance agents fluctuate depending on the competitive landscape and the market
conditions and our target gross profit margin. For FY2021, FY2022, FY2023 and
4M2024, referral fees to our strategic channel partners and commissions to insurance agents
amounted to RMB58.2 million, RMB64.4 m illion, RMB82.6 million and RMB29.4 million,
accounting for 48.5%, 43.4%, 47.5% and 50.2% of our total revenue for the corresponding
years and period, respectively. We expect our referral fees and commissions to increase in
the future as we expand. To maintain our antic ipated level of growth in gross profit and
operating profit, we must manage the rate of growth in referral and commissions.
FINANCIAL INFORMATION
–3 2 1–


--- page 332 ---
Our ability to maintain trusted relationship with our business partners
We cooperate with a variety of business partners in conducting our businesses,
including insurance company partners, insurance agents and strategic channel partners. In
our insurance agency business, we primarily act as agent for our insurance company
partners, which are our customers. We earn co mmission income by distributing insurance
products underwritten by them to insurance clients. We also collaborate with our insurance
agents and strategic channel partners, who are our suppliers, to expedite our market
penetration and broaden our end consumer reach. Our relationships with business partners
are crucial for us to continue our business growth and deliver satisfactory experience to
insurance clients. Any significant changes to our relationships with these business partners
could have a material adverse impact on our resu lts of operations. For more details, please
r e f e rt ot h es e c t i o nh e a d e d‘ ‘ R i s kF a c t o r s—Risks Relating to Our Business — If we fail to
maintain stable relationships with our business partners, our business, results of operations,
financial condition and business prospects could be materially and adversely affected’’ in
this prospectus.
Regulatory environment
We are subject to regulation and adminis tration by the insurance regulatory
authorities and other government authorities as described in the section headed
‘‘Regulatory Overview’’ in this prospectus , including certifying the eligibility for us to
provide insurance agency services, authorising the geographical area in which we operate,
establishment of branch institutions and prescribing prohibited acts for professional
insurance agencies and their practitioners. In addition, the regulatory framework for the
insurance intermediary industry in the PRC is constantly evolving. If the interpretation or
implementation of the existing laws and regulations further changes or new regulations
come into effect, we may be required to obtain ad ditional permits, licences or certificates.
There is no assurance that we will respond suc cessfully to such changes in a timely manner.
Such changes may also result in increased compliance costs. For instance, the Notice of the
General Office of the China Banking and Insurance Regulatory Commission on Printing
and Distributing the Measures for the Supervision of Informatisation Work of Insurance
Intermediaries ( 《中國銀保監會辦公廳關於印發保險中介機構信息化工作監管辦法的通知》)
issued by the CBIRC requires insurance intermediaries to establish a technical
connection with insurance company partners and generate data files that comply with
regulatory requirements. Wh ile this measure has raised industry standards an improved the
industry environment, it has also increased the operational costs for insurance
intermediaries.
IMPACTS OF THE COVID-19 OUTBREAK
In 2022, there was a resurgence of COVID-19 pandemic including the highly
transmissible Delta and Omicron variants ac ross the world, which had adversely affected
the economy globally. As a result, certain of our business operations and financial
performance were negatively affected, primarily because (i) consumers’ demand for certain
life and health insurance products, which are non-essential insurance products and not
compulsory under the applicable laws, was we akened due to the increased uncertainty in
FINANCIAL INFORMATION
–3 2 2–


--- page 333 ---
global economic outlook; and (ii) offline sales activities of our insurance agents were
affected. In particular, revenue generated from the distribution of life and health insurance
products was reduced in 2022 as compared to 2021 as it became difficult for our insurance
agents to arrange face-to-face meetings with household insurance clients. Despite the
challenges posed by COVID-19 pandemic, our business operations and financial
performance had not been significantly affected during the Track Record Period as our
overall revenue reached RMB120.0 millio n in 2021, RMB148.4 million in 2022 and
RMB174.0 million in 2023, representing a CAGR of 20.4%, and from RMB53.4 million for
4M2023 to RMB58.6 million for 4M2024. This i s mainly contributed by our diversified
product portfolio and sales channels, which allow us to respond to the changing market and
mitigate risk by reducing reliance on any single category of insurance products or sales
channel. While we recorded rapid growth dur ing the Track Record Period, we cannot assure
you that we will be able to deliver similar gro wth in the future, or avoid any decline in the
future. For more details, please refer to the sec tion headed ‘‘Risk Factors—If we are unable
to manage our growth or execute our strategies effectively, our business and prospects may
be materially and adversely affected’’ in this prospectus.
BASIS OF PRESENTATION
The historical financial in formation has been prepared in accordance with IFRS. For
more details on the accounting policies that have been applied, please refer to note 2 to the
section headed ‘‘Appendix I — Accountants’ Report’’ in this prospectus.
MATERIAL ACCOUNTING POLICY INFORMATION
Our consolidated financial information h as been prepared in accordance with IFRS.
The financial information is presented in RMB, which is the same as our Company’s
functional currency and all values are rounded to the nearest thousand unless otherwise
indicated. Our most critical accounting policies, judgements and estimates are summarised
below. For more details on the description of our material accounting policy information,
judgements and estimates, please refer to note 2 and note 3 to the section headed ‘‘Appendix
I — Accountants’ Report’’ in this prospectus.
Revenue recognition
(i) Revenue from contracts with customers
Income is classified by our Group as revenue when it arises from the provision of
services in the ordinary course of our Group’s business. Our Group derives agency revenue
serving as an insurance agency to distribute insurance products on behalf of insurance
companies by which our Group is entitled to receive commissions from the insurance
companies based on the premium paid by the po licyholders for the related insurance policy
sold (‘‘sales services ’’). For long-term insurance pro ducts, our Group is also entitled to
receive trailing commissions when our Grou p completes the post-sales services (‘‘ post-sales
services ’’). Our Group also derives revenue by providing IT and consulting services to
certain customers.
FINANCIAL INFORMATION
–3 2 3–


--- page 334 ---
Revenue is the gross inflow of economic benefits arising in the course of our Group’s
ordinary activities when the inflows result in increases in shareholders’ equity, other than
increases relating to contributions from shareholders.
Revenue is recognised when our Group satisfies the performance obligation in a
contract by transferring control over rel evant goods or services to the customers.
Where a contract has two or more performance obligations, our Group determines the
stand-alone selling price at contract incepti on of the distinct service underlying each
performance obligation in the contract and allocates the transaction price in proportion to
those stand-alone selling prices. Our Group recognises as revenue the amount of the
transaction price that is allocated to each per formance obligation. Th e stand-alone selling
price is the price at which our Group would sell a promised service separately to a customer.
If a stand-alone selling price is not directly obs ervable, our Group considers all information
that is reasonably available to our Group and maximises the use of observable inputs to
estimate the stand-alone selling price.
The transaction price is the amount of consideration to which our Group expects to be
entitled in exchange for transferring promised services to a customer, excluding amounts
collected on behalf of third parties. Our Group recognises the transaction price only to the
extent that it is highly probable that a significant reversal in the amount of cumulative
revenue recognised will not occur when the u ncertainty associated with the variable
consideration is subsequently resolved.
Our Group satisfies a performance obligation over time if one of the following criteria
is met; otherwise, the performance obligation is satisfied at a point in time:
— the customer simultaneously receives and consumes the benefits provided by our
Group’s performance as our Group performs;
— the customer can control the asset created or enhanced during our Group’s
performance; or
— our Group’s performance does not create an asset with an alternative use to it and
our Group has an enforceable right to payment for performance completed to
date.
For a performance obligation satisfied over time, our Group recognises revenue over
time by measuring the progress towards complete satisfaction of that performance
obligation. When the outcome of that perf ormance obligation cannot be measured
reasonably, but our Group expects to recover the costs incurred in satisfying the
performance obligation, our Group recognises revenue only to the extent of the costs
incurred until such time that it can reasona bly measure the outcome of the performance
obligation.
FINANCIAL INFORMATION
–3 2 4–


--- page 335 ---
For a performance obligation satisfied at a point in time, our Group recognises
revenue at the point in time at which the customer obtains control of the relevant products
or services. To determine whether a customer has obtained control of goods or services, our
Group considers the following indicators:
— our Group has a present right to payment for the goods or services;
— our Group has transferred physical possession of the goods to the customer;
— our Group has transferred the legal title of the goods or the significant risks and
rewards of ownership of the g oods to the customer; and
— the customer has accepted the goods or services.
Our Group determines whether it is a principal or an agent, based on whether it
obtains control of the specified goods or servi ce before that good or service is transferred to
a customer. Our Group is a principal if it controls the specified good or service before that
good or service is transferred to a customer and recognises revenue in the gross amount of
consideration which it has received (or whic h is receivable). Otherwise, our Group is an
agent, and recognises revenue in the amount of any fee or commission to which it expects to
be entitled. The fee or commission is the net amount of consideration that our Group
retains after paying the other party the consideration or is determined according to the
established amount or proportion.
The timing of revenue recognition for ou r Group’s principal revenue streams is
described as follows:
— Revenue from insurance agency services
The revenue from sales services is recognised at a point in time upon successful
distributions of the relevant insurance products.
The revenue from post-sales services for long-term life and health insurance
products is recognised ratably over the period of services according to the contract
terms.
— Revenue from IT services
Our Group primarily provides IT services to corporate customers by designing
and developing IT solutions based on their needs. The revenue is recognised at a point
in time when the customised software and/or IT system is delivered to and accepted by
the customer.
The revenue from other IT services is recognised ratably over the period of
services according to the contract terms.
FINANCIAL INFORMATION
–3 2 5–


--- page 336 ---
— Revenue from consulting services
Our Group provides HR consulting services and marketing and promotion
services to corporate customers.
The revenue from HR consulting services is recognised at a point in time upon the
completion of the service with a success-based fee. Marketing and promotion service
revenue is recognised when or as the service is rendered.
(ii) Revenue from other sources and other income
— Interest income
Interest income is recognised as it accrues under the effective interest method
using the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to the gro ss carrying amount of the financial asset.
For financial assets measured at amortised cost or FVOCI (recycling) that are not
credit-impaired, the effective interest rate is applied to the gross carrying amount of
the asset. For credit-impaired financial assets, the effective interest rate is applied to
the amortised cost (i.e. gross carrying amo unt net of loss allowance) of the asset.
— Government grants
Government grants are recognised in the sta tement of financial position initially
when there is reasonable assurance that they will be received and that our Group will
comply with the conditions attaching to t hem. Grants that compensate our Group for
expenses incurred are recognised as income in profit or loss on a systematic basis in the
same periods in which the expenses are in curred. Grants that compensate our Group
for the cost of an asset are deducted from the carrying amount of the asset and
consequently are effectively recognised in profit or loss over the useful life of the asset
by way of reduced depreciation expense.
Accounts and other receivables
A receivable is recognised when our Group has an unconditional right to receive
consideration. A right to receive consideration is unconditional if only the passage of time is
required before payment of that consideration is due. If revenue has been recognised before
our Group has an unconditional right to receive consideration, the amount is presented as a
contract asset.
Accounts receivables that do not contain a significant financing component are
initially measured at their transaction price. Ac counts receivables that contain a significant
financing component and other receivable s are initially measured at fair value plus
transaction costs. All receivables are subsequently stated at amortised cost, using the
effective interest method and including an allowance for credit losses.
FINANCIAL INFORMATION
–3 2 6–


--- page 337 ---
Trade and other payables
Trade and other payables are initially recognised at fair value. Subsequent to initial
recognition, trade and other payables are s tated at amortised cost unless the effect of
discounting would be immaterial, in which case they are stated at invoice amounts.
Contract costs
Contract costs are either the incremental costs of obtaining a contract with a customer
or the costs to fulfil a contract with a customer.
Incremental costs of obtaining a contract are those costs that our Group incurs to
obtain a contract with a customer that it would not have incurred if the contract had not
been obtained. Our Group recognises as an asset the incremental costs of obtaining a
contract with a customer if it expects to reco ver those costs. Other costs of obtaining a
contract are expensed when incurred.
If the costs to fulfil a contract with a customer are not within the scope of inventories
or other accounting standards, our Group recognises an asset from the costs incurred to
fulfil a contract only if those costs m eet all of the following criteria:
— the costs relate directly to an existing contract or to a specifically identifiable
anticipated contract, including direct la bour, direct materials, allocations of
overheads (or similar costs), costs that a re explicitly chargeable to the customer
and other costs that are incurred only because our Group entered into the
contract;
— the costs generate or enhance resources of our Group that will be used in
satisfying (or in continuing to satisfy) p erformance obligations in the future; and
— the costs are expected to be recovered.
Assets recognised for the incrementa l costs of obtaining a contract and assets
recognised for the costs to fulfil a contract are amortised on a systematic basis that is
consistent with the transfer to the customer of the goods or services to which the assets
relate and recognised in profit or loss for the current period.
FINANCIAL INFORMATION
–3 2 7–


--- page 338 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
The following table summarises our Company’s consolidated statements of profit or
loss and other comprehensive income for the y ears/periods indicated, details of which are
set out in the Accountants’ Report in Appendix I to this prospectus.
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue 119,974 148,398 174,011 53,425 58,644
Cost of sales (71,925) (81,139) (99,498) (28,549) (33,805)
Gross profit 48,049 67,259 74,513 24,876 24,839
Other income 7,682 8,176 11,324 3,937 3,014
Research and development costs (4,739) (6,843) (7,141) (2,774) (2,809)
General and administrative expenses (11,383) (12,854) (18,566) (5,283) (3,806)
Sales and marketing costs (6,836) (9,948) (11,871) (3,964) (2,886)
Reversal of/(provision for) impairment loss 11 (44) (34) (55) (39)
Profit from operations 32,784 45,746 48,225 16,737 18,313
Finance costs (176) (154) (206) (40) (53)
Profit before taxation 32,608 45,592 48,019 16,697 18,260
Income tax (5,616) (9,243) (9,026) (3,292) (3,431)
Profit for the year/period 26,992 36,349 38,993 13,405 14,829
Attributable to:
Equity shareholders of the Company 27,047 37,776 40,372 13,937 15,067
Non-controlling interests (55) (1,427) (1,379) (532) (238)
Profit for the year/period 26,992 36,349 38,993 13,405 14,829
Total comprehensive income for the year/
period 26,992 36,349 38,993 13,405 14,829
Basic and diluted earnings per share
(RMB) 0.33 0.46 0.39 0.14 0.14
FINANCIAL INFORMATION
–3 2 8–


--- page 339 ---
Non-IFRS Measure
To supplement our consolidated financial statements of profit or loss and other
comprehensive income, which are presented i n accordance with IFRS, we also use adjusted
profit for the year/period (non-IFRS measure) as an additional financial measure. We
present this financial measure because it is used by our management to evaluate our
financial performance by eliminating the im pact of the Listing expenses. We also believe
that this non-IFRS measure provides additional information to investors and others in
understanding and evaluating our consolidated results of operations in the same manner as
they help our management and in comparing fin ancial results across accounting periods and
to those of our peer companies.
The term adjusted profit for the year/period is not defined under IFRS. As a non-IFRS
measure, adjusted profit for the year/period is presented because our management believes
such information will be helpful for investors in assessing the effect of the Listing expenses
on our profit. The use of the adjusted profit for the year/period (non-IFRS measure) has
material limitations as an analytical tool as it does not include all items that impact our
profit for the relevant periods. In light of the foregoing limitations, when assessing our
operating and financial performance, you should not view the adjusted profit for the
year/period (non-IFRS measure) in isolation or as a substitute for our profit for the
year/period or any other operating performance measure that is calculated in accordance
with IFRS. In addition, because this non-IFRS measure may not be calculated in the same
manner by all companies, they may not be comparable to other similarly titled measures
used by other companies.
The following table reconciles our adjusted profit for the year/period (non-IFRS
measure) against profit for the year/period presented in accordance with IFRS, which is
profit from our continuing operations:
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Profit for the year/period 26,992 36,349 38,993 13,405 14,829
Add:
Listing expenses — — 4,754 714 250
Adjusted profit for the year/
period (non-IFRS measure) 26,992 36,349 43,747 14,119 15,079
Our net profit increased from RMB27.0 million in FY2021 to RMB36.3 million in
FY2022 and further to RMB39.0 million in F Y2023, and from RMB13.4 million in 4M2023
to RMB14.8 million in 4M2024, primarily due to the increase in gross profit of our
insurance agency business and IT services during the Track Record Period.
FINANCIAL INFORMATION
–3 2 9–


--- page 340 ---
DESCRIPTION OF SELECTED ITEMS IN THE CONSOLIDATED STATEMENTS OF
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Revenue
Revenue by business segments
The following table sets forth the breakdown of our revenue by business segments for
the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
(unaudited)
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
Insurance agency business 116,056 96.7 130 ,721 88.1 155,748 89.5 51,630 96.6 54,802 93.4
IT services 1,264 1.1 14,953 10.1 15,782 9.1 1,046 2.0 3,218 5.5
Consulting services (Note) 2,654 2.2 2,724 1.8 2,4 81 1.4 749 1.4 624 1.1
Total 119,974 100.0 148,398 100.0 174, 011 100.0 53,425 100.0 58,644 100.0
Note: Consulting services mainly incl ude HR consulting services (amounting to RMB1.4 million, RMB2.4
million, RMB1.8 million, RMB0.7 million and RMB0.4 million, representing 1.2%, 1.6%, 1.0%, 1.4%
and 0.7% of our total revenue during the years ended 31 December 2021, 2022 and 2023 and the four
months ended 30 April 2023 and 2024, respectively) and marketing and promotion services (amounting
to RMB1.3 million, RMB0.3 million, RMB0.7 mi llion, RMB26 thousand and RMB0.2 million,
representing 1.0%, 0.2%, 0.4%, 0.0% and 0.4% of our total revenue during the years ended 31
December 2021, 2022 and 2023 and the four months ended 30 April 2023 and 2024, respectively).
During the Track Record Period, we generated revenue from three segments: (i)
insurance agency business; ( ii) IT services; and (iii) consulting services. We generated
revenue from our insurance agency business mainly through receiving commissions from
insurance company partners for distribution of their insurance products to insurance
clients. We also generated revenue from provid ing IT services and consulting services as an
extension of our insurance agency business.
Our revenue from insurance agency bus iness was RMB116.1 million, RMB130.7
million, RMB155.7 million and RMB54.8 m illion for FY2021, FY2022, FY2023 and
4M2024, respectively, representing 96.7%, 8 8.1%, 89.5% and 93.4% for the corresponding
years and period, respectively. Our rev enue from IT services was RMB1.3 million,
RMB15.0 million, RMB15.8 million and RMB3.2 million for FY2021, FY2022, FY2023
and 4M2024, respectively. Our revenue fr om consulting services was RMB2.7 million,
RMB2.7 million, RMB2.5 million and RMB0.6 million for FY2021, FY2022, FY2023 and
4M2024, respectively.
FINANCIAL INFORMATION
–3 3 0–


--- page 341 ---
Revenue from insurance agency business by category of insurance products
We offer a comprehensive mix of insurance pro ducts, providing insurance clients with
broad selections and adequate options to choose from in order to satisfy their protection
needs in different scenarios and at different life stages. We primarily distribute four
categories of insurance products, namely (i) property insurance products; (ii) life and health
insurance products; (iii) accident insurance products; and (iv) automobile insurance
products.
The table below sets forth the GWP, commission income generated from insurance
company partners for distribution of their insurance products and average commission rate
for each category of insurance products we offered for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate
RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % %
Property insurance products 228,554 39,658 34.2 17.4 290,994 47,620 36. 4 16.4 334,332 59,806 38.4 17.9 117,189 22,910 44.4 19.5 119,574 25,733 47.0 2 1.5
Life and health insurance products 176,086 48,332 41.6 27.4 223,853 36,156 27.7 16.2 228,817 33,757 21.7 14.8 92,051 12,958 25.1 14.1 78,133 8,102 14. 8 10.4
Accident insurance products 55,465 16,171 13.9 29.2 82,116 24,096 18.4 2 9.3 84,121 27,830 17.9 33.1 28,505 7,741 15.0 27.2 24,034 9,162 16.7 38.1
Automobile insurance products 206,276 11,895 10.3 5.8 421,411 22,849 17.5 5.4 611,851 34,355 22.1 5.6 139,343 8,021 15.5 5.8 204,646 11,805 21.5 5.8
Total 666,381 116,056 100.0 17.4 1,018,374 130,721 100.0 12.8 1,259 ,121 155,748 100.0 12.4 377,088 51,630 100.0 13.7 426,387 54,802 100.0 12.9
During the Track Record Period, our commission income from the distribution of
property insurance products and automobile insurance products recorded an increasing
trend as the GWP we facilitated for such insur ance products increased gradually. The
commission income from the distribution of accident insurance products recorded an
i n c r e a s i n gt r e n dd u r i n gt h eT r a c kR e c o r dPeriod as (i) the GWP we facilitated for such
insurance products increased gradually from FY2021 to FY2023 and (ii) the average
commission rate of such insurance product s increased from 27.2% for 4M2023 to 38.1% for
4M2024 despite a decrease in the GWP recorded for the same period due to the higher
commission rates offered by our insurance com pany partners for distribution of traffic
accident insurance products as part of their product focus and business strategies. However,
the commission income from the distribution of life and health insurance products recorded
a decreasing trend during the Track Record Period mainly as a result of (i) the COVID-19
pandemic weakening consumers’ demand for certain life and health insurance products,
which are non-essential insurance products and not compulsory under the applicable laws,
and affecting offline sales activities of our insurance agents, and (ii) the decline in average
commission rates for life and health insurance products due to the uncertainty in global
economy outlook where our insurance clients purchased fewer new policies that offer higher
commission rates, or purchased life and health insurance products with shorter duration
that offer lower commission rates. Despite the se challenges, we maintain a positive outlook
on potential increase in commission income from the distribution of life and health
insurance products in the near future, taking into account the resumption of sales activities
of our insurance agents and the gradual economic recovery following the impact of the
COVID-19.
FINANCIAL INFORMATION
–3 3 1–


--- page 342 ---
The table below sets forth the GWP, commission income and the average commission
rates attributable to each of long-term and short-term life and health insurance products for
the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
Average
commission
rate GWP
Commission
income
Average
commission
rate GWP
Commission
income
Average
commission
rate GWP
Commission
income
Average
commission
rate GWP
Commission
income
Average
commission
rate
RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 % RMB’000 RMB’000 %
Long-term life and health insurance products 151,411 45,129 29.8 161,754 26,762 16.5 191,638 28,124 14.7 88,691 12,411 14.0 73,918 7,388 10.0
— New policies 62,360 34,699 55.6 25,715 13,907 54.1 41,342 18,861 45.6 16,266 7,165 44.1 7,285 3,580 49.1
— Renewal 89,051 10,430 11.7 136,039 12,855 9.4 150,296 9,263 6.2 72,425 5,246 7.2 66,633 3,808 5.7
Short-term life and health insurance products 24,675 3,203 13.0 62,099 9,394 15.1 37,179 5,633 15.2 3,360 547 16.3 4,215 714 16.9
Total 176,086 48,332 27.4 223,853 36,156 16.2 228,817 33,757 14.8 92,051 12,958 14.1 78,133 8,102 10.4
The decrease in average commission rate of life and health insurance products from
27.4% in FY2021 to 16.2% in FY2022 was mainly due to the resurgence of COVID-19,
resulting in the decrease in distribution of new policies for long-term life and health
i n s u r a n c ep r o d u c t st h a to f f e rh i g h e rc o m m ission rates. The further decrease in average
commission rate of life and health insurance products from 16.2% in FY2022 to 14.8% in
FY2023 was mainly due to the increase in distr ibution of new policies with shorter duration
that offer lower commission rates, reflecting the uncertainty in global economy outlook
where insurance clients tend to purchase life and health insurance products with shorter
duration. For details of the commission rates for different types of life and health insurance
products, please refer the section headed ‘ ‘Business — Insurance Products that we
distribute’’ in this prospectus.
The increase in average commission rate of property insurance products from 19.5%
for 4M2023 to 21.5% for 4M2024 was mainly due to the increase in distribution of
employer’s liability insurance pro ducts with higher commission rates.
Revenue from insurance agency business by type of insurance clients
We define our insurance clients as purchaser s of the insurance policies we distribute,
which include (i) corporate insurance clients; and (ii) household insurance clients. Through
offering a comprehensive mix of insurance products, we have accumulated a wide base of
insurance clients and are able to provide them with various options to choose from in order
to serve their protection needs in different scenarios and at different life stages.
FINANCIAL INFORMATION
–3 3 2–


--- page 343 ---
The table below sets forth the GWP we facili tated, commission income generated from
insurance company partners for distribution of their insurance products and the average
commission rate by type of insurance clients for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
GWP
Commission
income
(Note)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
(Note)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
(Note)
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate GWP
Commission
income
Percentage
of
commission
income
Average
commission
rate
RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % % RMB’000 RMB’000 % %
Household insurance clients 429,127 74,641 64.3 17.4 708,461 80,498 61.6 1 1.4 901,435 91,478 58.7 10.1 251,178 27,189 52.7 10.8 304,550 28,487 52.0 9 .4
Corporate insurance clients 237,254 41,415 35.7 17.5 309,913 50,223 38. 4 16.2 357,686 64,270 41.3 18.0 125,910 24,441 47.3 19.4 121,837 26,315 48.0 2 1.6
— Haier Group insurance clients 152,484 18,288 15.8 12.0 192,856 23,809 18. 2 12.3 190,960 24,100 15.5 12.6 50,578 7,088 13.7 14.0 59,792 9,107 16.6 15. 2
— Non-Haier Group insurance
clients 84,770 23,127 19.9 27.3 117,057 26,414 20.2 22.6 166,726 40,170 25.8 24.1 75,332 17,353 33.7 23.0 62,045 17,208 31.4 27.7
Total 666,381 116,056 100.0 17.4 1,018,374 130,721 100.0 12.8 1,259 ,121 155,748 100.0 12.4 377,088 51,630 100.0 13.7 426,387 54,802 100.0 12.9
Note: Commission income represents commission r eceived from insurance company partners for
distribution of their insurance products to corporate and household insurance clients.
Our commission income generated from insurance company partners for distributing
insurance products to household and corporate insurance clients both recorded an
increasing trend during the Track Record Period. The commission income attributable to
household insurance clients increased from RMB74.6 million in FY2021 to RMB80.5
million in FY2022 and further to RMB91.5 million in FY2023, and from RMB27.2 million
for 4M2023 to RMB28.5 million for 4M2024, wh ile the commission income attributable to
corporate insurance clients increased from RMB41.4 million in FY2021 to RMB50.2
million in FY2022 and further to RMB64.3 million in FY2023, and from RMB24.4 million
for 4M2023 to RMB26.3 million for 4M2024. In particular, the commission income
attributable to non-Haier Group insurance c lients increased significantly from RMB23.1
million in 2021 to RMB40.2 million in 2023, representing a CAGR of 31.9%.
The average commission rates attributable to each type of insurance clients generally
varies depending on the types of insurance products purchased by the relevant insurance
clients. During the Track Record Period, household insurance clients primarily purchased
life and health insurance products, accident insurance products and automobile insurance
products while corporate insurance clients primarily purchased property insurance products
and accident insurance products. As such, t he decrease in average commission rates
attributable to household insurance clients during the Track Record Period was mainly due
to (i) the decrease in the average commission rates of life and health insurance products
(from 27.4% in FY2021 to 16.2% in FY2022, and further to 14.8% in FY2023, and from
14.1% in 4M2023 to 10.4% in 4M2024) and (ii) the increase in commission income
generated from the distribution of automobile insurance products, which offer lower
average commission rates compared with other categories of insurance products (5.8% in
FY2021, 5.4% in FY2022, 5.6% in FY2023, 5.8% in 4M2023 and 5.8% in 4M2024);
meanwhile, the average commission rates attributable to corporate insurance clients
amounted to 17.5% in FY2021, 16.2% in FY2022, 18.0% in FY2023, 19.4% in 4M2023 and
21.6% in 4M2024, which were in line with t he average commission rates of property
insurance products for the corresponding years/periods (17.4% in FY2021, 16.4% in
FINANCIAL INFORMATION
–3 3 3–


--- page 344 ---
FY2022, 17.9% in FY2023, 19.5% in 4M2023 and 21.5% in 4M2024). For the average
commission rate of each product category, ple ase refer to the paragraph headed ‘‘Revenue
from insurance agency business by category of insurance products’’ in this section.
Revenue from IT services by type of customers
The table below sets forth the revenue ge nerated from our IT services by type of
customers for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue from IT services Revenue Revenue Revenue Revenue Revenue
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Haier Group and
its affiliated companies 577 45.6 6,042 40.4 8,732 55.3 75 7.2 1,665 51.7
Non-Haier Group 687 54.4 8,911 59.6 7,050 44.7 971 92.8 1,553 48.3
Total 1,264 100.0 14,953 100.0 15,782 100.0 1,046 100.0 3,218 100.0
During the Track Record Period, our Group experienced revenue growth in our IT
services, which amounted to RMB1.3 millio n for FY2021, RMB15.0 million for FY2022,
RMB15.8 million for FY2023, RMB1.0 m illion for 4M2023 and RMB3.2 million for
4M2024, as a result of the increase in the number of IT projects engaged by our Group.
There is no major difference in the nature of IT services provided to Haier Group and its
affiliated companies compared with those pro vided to non-Haier Group customers during
the Track Record Period. Our pricing, credit and other material terms for provision of IT
services to Haier Group and its affiliated c ompanies are on normal commercial terms.
Revenue from consulting services by type of customers
The table below sets forth the revenue generated from our consulting services by type
of customers for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Revenue from consulting
services Revenue Revenue Revenue Revenue Revenue
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Haier Group and its affiliated
companies 790 29.8 2,346 86. 1 1,460 58.8 723 96.5 285 45.7
Non-Haier Group 1,864 70.2 378 13.9 1,021 41.2 26 3.5 339 54.3
Total 2,654 100.0 2,724 100.0 2 ,481 100.0 749 100.0 624 100.0
During the Track Record Period, our over all revenue generated from consulting
services remained stable at RMB2.7 million for FY2021, RMB2.7 million for FY2022 and
RMB2.5 million for FY2023 and at RMB0.7 million for 4M2023 and RMB0.6 million for
4M2024. The significant increase in revenue contribution from Haier Group and its
affiliated companies in FY2022 was mai nly due to the increase in demand for HR
consulting services. There are differences in the nature of services procured by Haier Group
FINANCIAL INFORMATION
–3 3 4–


--- page 345 ---
and its affiliated companies and non-Haier Group customers. During the Track Record
Period, Haier Group and its affiliated compa nies primarily procured HR recruitment
services while non Haier-Group customers procured all types of HR consulting services,
including provision of advice on human resource management and recruitment strategies,
and HR recruitment services, and marketing and promotion services from our Group. Our
pricing, credit and other material terms for pr ovision of consulting services to Haier Group
and its affiliated companies a re on normal commercial terms.
Cost of sales
The following table sets forth the breakdown of our cost of sales by nature for the
years/periods indicated:
Year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Cost of
sales
Percentage
of cost of
sales
Cost of
sales
Percentage
of cost of
sales
Cost of
sales
Percentage
of cost of
sales
Cost of
sales
Percentage
of cost of
sales
Cost of
sales
Percentage
of cost of
sales
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Referral fees and service fees 42,902 59.6 60,832 75.0 76,678 77.1 21,131 74.0 27,650 81.8
— Referral fees 31,936 44.4 50,138 61.8 68,170 68.5 19,761 69.2 25,707 76.1
— Service fees 10,798 15.0 5,336 6.6 6,004 6.1 1,330 4.7 1,763 5.2
— IT subcontracting fees 168 0.2 5,358 6.6 2,504 2.5 40 0.1 180 0.5
Commission 26,234 36.5 14,286 17.6 14,470 14.5 5,612 19.7 3,718 11.0
Wages and salaries 2,789 3.9 6,021 7.4 8,350 8.4 1,806 6.3 2,437 7.2
Total 71,925 100.0 81,139 100.0 99,498 100.0 28,549 100.0 33,805 100.0
During the Track Record Period, our cost of s ales comprised (i) re ferral and service
fees, which included referral fees to strategic channel partners for referral of insurance
clients, service fees to strategic channel partners and other suppliers such as risk
management and training service providers for our insurance agency business, and IT
subcontracting fees for our IT services; (ii) commission to insurance agents; and (iii) wages
and salaries of our staff. The overall increase in referral fees was primarily attributed to our
continuous efforts to strengthen our cooperation with major strategic channel partners to
expand our insurance client base. In particu lar, the commission income attributable to
strategic channel partners increased from RMB44.9 million in FY2021, to RMB69.3 million
in FY2022 and further to RMB94.2 million in FY2023, and from RMB30.6 million in
4M2023 to RMB36.1 million in 4M2024. On the ot her hand, the decreases in commission in
FY2022 as compared to FY2021 and for 4M2023 as compared to 4M2024 were primarily
due to the decrease in the commission income attributable to insurance agents from
RMB49.7 million in FY2021 to RMB27.9 million in FY2022 and from RMB12.7 million for
4M2023 to RMB7.7 million for 4M2024, respectively, and in particular, the decrease in the
distribution of life and health insurance products through our insurance agents as a result
of the COVID-19 pandemic and the weakened consumers’ demand due to the overall
economic uncertainty. The overall increase in wages and salaries during the Track Record
Period was primarily attributed to the expansion of our business. The increase in IT
subcontracting fees in FY2022 was primarily due to the increase in subcontracting of
certain ancillary work to IT service provide rs to support our expansion in IT services
business.
FINANCIAL INFORMATION
–3 3 5–


--- page 346 ---
The following sensitivity analysis illustra tes the impact of hypothetical fluctuations in
our referral fees and commission on our profit before taxation for the years/periods
indicated, assuming all other factors affect ing our profitability had remained unchanged.
Increase/decrease in referral fees and commission:
Increase/
Decrease by
5%
Increase/
Decrease by
10%
Increase/
Decrease by
15%
RMB’000 RMB’000 RMB’000
Corresponding change in profit before taxation
For the year ended 31 December 2021 2,909 5,817 8,726
For the year ended 31 December 2022 3,221 6,442 9,664
For the year ended 31 December 2023 4,132 8,264 12,396
For the four months ended 30 April 2023 1,269 2,537 3,806
For the four months ended 30 April 2024 1,471 2,943 4,414
Gross profit and gross profit margin
Gross profit and gross profit margin by business segments
The following table sets forth a breakdown of gross profit and gross profit margin by
business segments for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Insurance agency business 45,154 38.9 58,241 44.6 64,007 41.1 23,767 46.0 22,589 41.2
IT services 807 63.8 7,267 48.6 9,170 58.1 674 64.4 1,866 58.0
Consulting services
(Note) 2,088 78.7 1,751 64.3 1,336 53.8 435 58.1 384 61.5
Total 48,049 40.0 67,259 45.3 74,513 42.8 24,876 46.6 24,839 42.4
Note: Consulting services mainly incl ude human resources consulting serv ices and marketing and promotion
services. We recorded a higher gross profit margin for consulting services in FY2021 as we generated
higher revenue from provision of marketing and pro motion services, which has a higher gross profit
margin due to lower costs involved in the re levant marketing and promotion projects.
For the years ended 31 December 2021, 2022 and 2023, we experienced an overall
growth in gross profit and recorded gross profit margin of 40.0%, 45.3% and 42.8%,
respectively. For the four months ended 30 April 2023 and 2024, our overall gross profit
decreased slightly from RMB24.9 million f or 4M2023 to RMB24.8 million for 4M2024 and
our overall gross profit margin decreased f rom 46.6% for 4M2023 to 42.4% for 4M2024.
FINANCIAL INFORMATION
–3 3 6–


--- page 347 ---
Gross profit and gross profit margin of our insurance agency business
The gross profit for our insurance agency business increased from RMB45.2 million
for FY2021 to RMB58.2 million for FY2022 an d further increased to RMB64.0 million for
FY2023 but decreased from RMB23.8 million for 4M2023 to RMB22.6 million for 4M2024.
The gross profit margin for our insurance agency business increased from 38.9% for
FY2021 to 44.6% for FY2022 and decreased to 41.1% for FY2023, and decreased from
46.0% for 4M2023 to 41.2% for 4M2024.
The following table sets forth a breakdown of our gross profit and gross profit margin
of our insurance agency business by insurance products for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Property insurance products 23,180 58.4 32,181 67.6 40,488 67.7 15,061 65.7 16,838 65.4
Life and health insurance products 20,169 41.7 21,465 59.4 18,492 54.8 7,289 56.3 4,311 53.2
Accident insurance products 1,627 10.1 2,905 12.1 2,812 10.1 916 11.8 750 8.2
Automobile insurance products 178 1.5 1,690 7.4 2,215 6.4 501 6.2 690 5.8
Total 45,154 38.9 58,241 44.6 64,007 41.1 23,767 46.0 22,589 41.2
During the Track Record Period, we recorded higher gross profit margin for property
insurance products and life and health insurance products as these products are usually
non-standardised due to the higher level of complexity involved, which require our in-depth
industry and product knowledge to navigate these complexities and identify suitable
insurance products for insurance clients. In addition, the distribution of these products
involved our direct sales channel without paying any referral fee to strategic channel
partners or commission to insurance agents, leading to the overall higher gross profit
margins. On the other hand, accident insura nce products and automobile insurance
products typically have a higher degree of stand ardisation and are highly competitive in the
market, leading to the overall lower gross prof it margins. Despite the significantly lower
gross profit margins of accident and automobile insurance products, we continue to
distribute these insurance products as they cont ribute to our overall revenue diversification,
cater to a broader market segment and allow us to offer a comprehensive range of insurance
solutions.
Despite the decrease in commission income from insurance company partners for
distribution of life and health insurance products for FY2022, the gross profit margin of life
and health insurance products increased f rom 41.7% for FY2021 to 59.4% for FY2022,
mainly due to the increase in proportion of commission income contributed by (i) the
increase in distribution of short-term life and health insurance products through our direct
sales channel without paying any referral fee o r commission; and (ii) the successful renewal
of existing policies for life and health insu rance products, which generally incur a
comparatively lower cost to insurance agents.
FINANCIAL INFORMATION
–3 3 7–


--- page 348 ---
The following table sets forth a breakdown of our gross profit and gross profit margin
attributable to each type of insurance clients of our insurance agency business for the
years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Household insurance clients 20,820 27.9 23,874 29.7 21,573 23.6 8,189 30.1 5,507 19.3
Corporate insurance clients 24,334 58.8 34,367 68.4 42,434 66.0 15,578 63.7 17,082 64.9
—H a i e rG r o u p
insurance clients 13,377 73.1 17,923 75.3 17,681 73.4 5,154 72.7 6,680 73.4
— Non-Haier Group insurance
clients 10,957 47.4 16,444 62.3 24,753 61.6 10,424 60.1 10,402 60.4
Total 45,154 38.9 58,241 44.6 64,007 41.1 23,767 46.0 22,589 41.2
Note: The gross profit and gross profit margin are der ived from the commission income generated from
insurance companies for distribution of their insu rance products to the underlying insurance clients.
The gross profit margin attributable to each type of insurance clients generally varies
depending on the categories of insurance products purchased by the relevant insurance
clients. During the Track Record Period, household insurance clients primarily purchased
life and health insurance products, automobile insurance products and accident insurance
products while corporate insurance clients primarily purchased property insurance products
and accident insurance products. As the gross profit margin of property insurance products
was generally higher than that of other insurance products, the gross profit margin
attributable to corporate insurance clients is higher than that of household insurance
clients. In particular, the gross profit margi n attributable to Haier G roup insurance clients
was generally higher than that of non-Haier Group insurance clients as the cost of sales
incurred for the distribution of insurance pr oducts to Haier Group insurance clients is
significantly lower than that for non-Haier G roup insurance clients. This is because the
distribution of insurance products to Haier Group insurance clients is through our direct
sales channel only without paying any refer ral fees to strategic channel partners or
commissions to insurance age nts, and such referral fees and commissions in aggregate
accounted for approximately 80% of our cost of sales for each year/period during the Track
Record Period. The pricing, credit and other material terms for distribution of insurance
products to Haier Group insurance clients are on normal commercial terms. For the gross
profit margin of each product category, please refer to the paragraph headed ‘‘Gross profit
and gross profit margin of our insurance agency business’’ in this section.
The decrease in gross profit margin attributable to household insurance clients from
30.1% for 4M2023 to 19.3% for 4M2024 was primarily attributed to (i) the increase in
proportion of commission income contributed by the distribution of accident insurance
products and automobile insurance products, both with comparatively lower gross profit
margins; and (ii) the decrease in gross profit for the distribution of life and health insurance
products, which generally have higher gross profit margin.
FINANCIAL INFORMATION
–3 3 8–


--- page 349 ---
Gross profit and gross profit margin of our IT services
The following table sets forth a breakdown of gross profit and gross profit margin of
our IT services by types of customers for the years/periods indicated:
For the year ended 31 December For the four months ended 30 April
2021 2022 2023 2023 2024
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Haier Group and its affiliated
companies 284 49.2 3,681 60.9 4,870 55.8 43 57.3 968 58.1
Non-Haier Group 523 76.1 3,586 40.2 4,300 61.0 631 65.0 898 57.8
Total 807 63.8 7,267 48.6 9,170 58.1 674 64.4 1,866 58.0
The increase in gross profit earned from rendering IT services from RMB0.8 million
for FY2021 to RMB7.3 million for FY2022 and f urther to RMB9.2 million for FY2023, and
from RMB0.7 million for 4M2023 to RMB1.9 million for 4M2024 was mainly due to the
overall increase in revenue generated from I T services during the Track Record Period. In
FY2022, we recorded a relatively lower gross profit margin for IT services as we did not
have sufficient manpower and subcontra cted certain ancillary work to address the
increasing demands of our IT services, resulting in increased subcontracting costs and
thus higher cost of sales for our IT services . In FY2021, we recorded a relatively higher
gross profit margin for IT services in FY2021 mainly attributed to one of the few IT
projects we engaged in, which primarily invo lved upgrading and enhancing a IT system
previously developed by us on behalf of the same customer. Leveraging our understanding
of the system, we were able to enhance efficiency and optimise our costs in provision of IT
services to the same customer, leading to a higher gross profit margin for such IT project.
Our Directors believe that the gross profit margin of our IT services are comparable
with those of similar services available in the market. In view of the different functions and
features of the software and system we developed for our customers under IT services, gross
profit margin of our Group fluctuated depending on, among others, (i) the nature and
complexity of the relevant IT services (inc luding the extent to which our Group has to
modify the software/system based on its developed products), (ii) the subcontracting service
we required from our subcontractors (e.g. the gross profit margin of our IT services
decreased from 63.8% for FY2021 to 48.6% for FY2022 mainly due to the increase in IT
subcontracting fees for FY2022); and (iii) pricing model we adopted in the particular
projects. We generally provide our IT services on the project basis for a fixed service fee or
fixed daily rate (for IT projects which we assign our R&D staff on site). As such, any
material deviation of our initial cost estimation against the actual execution may negatively
affect our gross profit margin of customers charged under fixed amount pricing model.
FINANCIAL INFORMATION
–3 3 9–


--- page 350 ---
Other income
The following table sets forth the breakdown of our other income for the years/periods
indicated:
Year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Realised gains from financial
investments measured at fair value
through profit or loss 5,636 3,871 — — —
Government grants 1,156 649 2,063 427 420
Unrealised gains/(loss) from financial
assets measured at fair value
through profit or loss 120 (830) — — —
Interest income 729 4,444 9,292 3,536 2,585
Others 41 42 (31) (26) 9
Total 7,682 8,176 11,324 3,937 3,014
Our other income mainly consists of (i) rea lised gains from financial investments
measured at fair value through profit or loss; (ii) government grants mainly in relation to
the subsidies received to support our research and development and business development
for our principal business and in the ordin ary course of our business; (iii) unrealised
gains/(loss) from financial assets measured at fair value through profit or loss; (iv) interest
income mainly derived from time deposit; and (v) others. For FY2021, FY2022, FY2023
and 4M2024, we recorded other income of RMB7.7 million, RMB8.2 million, RMB11.3
million and RMB3.0 million, respectively.
The following table sets forth a breakdown of our government grants by nature during
the Track Record Period:
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
General support from
government (Note 1) 1,146 600 2,007 412 360
Subsidies for employment (Note 2) 23 84 1 14 0
Subsidies related to
individual tax (Note 3) 81 11 51 42 0
Total 1,156 649 2,063 427 420
FINANCIAL INFORMATION
–3 4 0–


--- page 351 ---
Notes:
1. General support from government, including rewards for recognition as a ‘‘High and New
Technology Enterprise’’ ( 高新技術企業), contribution to the local economic growth and meeting
certain level of tax contribution and incentives t o encourage R&D investments, represents both
recurring and non-recurr ing subsidies from local government after meeting certain requirements
imposed by various policies or for engagi ng in certain specific industries.
2. Subsidies for employment are ongoing subsidies from local government during the Track Record
Period for creating jobs.
3. Subsidies provided for withhol ding of individual income tax.
Research and development costs
Our research and development costs mainly comprise of staff cost incurred in
conducting research and development activities.
Our research and development costs we re RMB4.7 million, RMB6.8 million and
RMB7.1 million, RMB2.8 million and RMB2.8 million for the years ended 31 December
2021, 2022 and 2023 and for the four months ended 30 April 2023 and 2024, respectively.
The increase in our research and development costs was mainly attributable to the
continuing enhancement for the development of our insurance agency business.
General and administrative expenses
Our general and administrative expenses mainly represent staff costs, office expenses,
depreciation and amortisation, listing expenses and others.
The following table sets forth the breakdown of our administrative expenses for the
years/periods indicated:
Year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Staff costs 6,966 7,531 8,609 2,380 2,161
Office expenses 3,124 3,927 3,282 1,495 721
Depreciation and amortisation 691 938 1,428 474 409
Listing expenses — — 4,754 714 250
Others 602 458 493 220 265
Total 11,383 12,854 18,566 5,283 3,806
FINANCIAL INFORMATION
–3 4 1–


--- page 352 ---
Sales and marketing costs
Our sales and marketing costs consist primarily of staff costs for our sales and
marketing team, marketing fees and depreciation of right-of-use assets.
The following table sets forth a breakdown of our sales and marketing costs for the
years/periods indicated:
Year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Staff costs 6,034 8,414 9,523 3,228 2,602
Marketing fees 502 854 1,469 437 104
Depreciation of right-of-use assets 300 680 879 299 180
Total 6,836 9,948 11,871 3,964 2,886
Finance costs
Our finance costs mainly represented ha ndling fees paid to third-party payment
platforms and banks and interest on lease liabilities and remained stable at RMB0.2 million
for FY2021, FY2022 and FY2023 and at RMB 40 thousand and RMB53 thousand for
4M2023 and 4M2024, respectively. Duri ng the Track Record Period, we settled
commissions with insurance agents and colle cted insurance premiums from insurance
clients through third-party payment platforms, and incurred handling fees of approximately
RMB0.1 million for each year/period. These t hird-party payment p latforms provided a
convenient and secure way to make and collect payments among businesses and individuals
and simplified the payment process. By maki ng payments through third-party payment
platforms, we could simplify the payment process, and we bore the handling fees arose from
the settlement through third-party payment platforms without recharging the relevant
parties.
Income tax
(i) Hong Kong profits tax
No Hong Kong profits tax has been provided for as our Group did not have any
assessable profit in Hong Kong during the Track Record Period.
(ii) PRC corporate income tax
During the Track Record Period, we were subject to a statutory rate of 25%
determined in accordance with the PRC En terprise Income Tax Law except for the
preferential tax rates mentioned below.
FINANCIAL INFORMATION
–3 4 2–


--- page 353 ---
Our income tax amounted to RMB5.6 million, RMB9.2 million, RMB9.0 million,
RMB3.3 million and RMB3.4 million for the yea rs ended 31 December 2021, 2022 and 2023
and the four months ended 30 April 2023 and 2024, respectively. Our effective tax rate was
17.2%, 20.3%, 18.8%, 19.7% and 18.8% for the years ended 31 December 2021, 2022 and
2023 and the four months ended 30 April 2023 and 2024, respectively. Our effective tax rate
was lower than the statutory tax rate of 25% as our Group benefited from a series of
preferential tax treatment. Our Company was qualified as ‘‘High and New Technology
Enterprise’’ since 2019 and enjoyed a preferential income tax rate of 15% during the Track
Record Period. The High and New Technology Ent erprise certificate was renewed in 2022.
During the Track Record Period, Haier Insuran ce Agency was subject to an income tax rate
of 25% determined in accordance with the P RC Enterprise Income Tax Law. During the
Track Record Period, as our other subsidiaries are recognised as small low-profit
enterprises. According to the relevant tax r elief policy, the income tax provision for
small-low profit enterprises with annual taxable income of less than RMB1 million is
calculated at an enterprise income tax rate of 20% on 12.5% of the amount of the annual
taxable income for FY2021 and FY2022 and o n 25% of the amount of the annual taxable
income for FY2023. For more details, please refer to note 7 to the section headed
‘‘Appendix I — Accountants’ Report’’ in this prospectus.
As at the Latest Practicable Date and durin g the Track Record Period, we had fulfilled
all our tax obligations and did not have any unresolved tax disputes.
PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS
Four months ended 30 April 2024 compared to four months ended 30 April 2023
Revenue
Our total revenue increased from RMB 53.4 million for 4M2023 to RMB58.6 million
for 4M2024 mainly due to the increase in revenue generated from our insurance agency
business and IT services.
Our commission income generated from insurance agency business increased from
RMB51.6 million for 4M2023 to RMB54.8 millio n for 4M2024, primarily attributable to
the increase in commission income generated from insurance company partners for
distribution of property insurance products, accident insurance products and automobile
insurance products. In particular, the increase was mainly due to (i) the distribution of new
types of property insurance products on our Corporate Insurance Interactive Service
Platform ( 企業保險交互服務平台) through collaboration with our insurance company
partners; and (ii) the distribution of accident and automobile insurance products through
our business expansion in Henan province.
Our revenue generated from IT services increased from RMB1.0 million for 4M2023 to
RMB3.2 million for 4M2024 mainly due to t he increase in the number of IT projects
engaged by us from 8 projects to 17 projects as we improved our tender success rate and
obtained more IT projects.
FINANCIAL INFORMATION
–3 4 3–


--- page 354 ---
Our revenue generated from consulting s ervices business decreased slightly from
RMB0.7 million for 4M2023 to RMB0.6 million for 4M2024.
Cost of sales
Our cost of sales increased from RMB28.5 million for 4M2023 to RMB33.8 million for
4M2024 mainly due to the increase in referral f ees to strategic channel partners as they
expanded our reach to new insurance clients, wh ich was in line with our growth in insurance
agency business during the period.
Gross profit and gross profit margin
Our overall gross profit slightly decr eased from RMB24.9 million for 4M2023 to
RMB24.8 million for 4M2024, mainly due to the dec rease in gross profit from our insurance
agency business. Such decrease was primarily attributed to the decrease in gross profit for
the distribution of life and health insurance products as consumers’ demand for certain life
and health insurance products, which are non-essential insurance products and not
compulsory under the applicable laws, continued to be weakened due to overall economic
uncertainty.
Our overall gross profit margin decreased from 46.6% for 4M2023 to 42.4% for
4M2024, mainly due to the decrease in gross profit margin of our insurance agency business
from 46.0% for 4M2023 to 41.2% for 4M2024. Such decrease was primarily attributed to (i)
the increase in proportion of commission income contributed by the distribution of accident
insurance products and automobile insurance products, both with comparatively lower
gross profit margins; and (ii) the decrease in gross profit for the distribution of life and
health insurance products as mentioned above.
Other income
Our other income decreased from RMB3. 9 million for 4M2023 to RMB3.0 million for
4M2024 mainly due to the decrease in interest income generated from time deposits.
Research and development costs
Our research and development costs rema ined stable at RMB2.8 million for 4M2023
and 4M2024.
General and administrative expenses
Our general and administrative expenses decreased from RMB5.3 million for 4M2023
to RMB3.8 million for 4M2024 mainly due to (i) the decrease in office expenses of RMB0.8
million; and (ii) the decrease in the Listing expenses of RMB0.5 million.
FINANCIAL INFORMATION
–3 4 4–


--- page 355 ---
Sales and marketing costs
Our sales and marketing costs decreased from RMB4.0 million for 4M2023 to RMB2.9
million for 4M2024 mainly due to (i) the decrease in staff costs of RMB0.6 million resulting
from the decrease in number of in-house sales e xecutives; and (ii) the decrease in marketing
fees of RMB0.3 million.
Finance costs
Our finance costs remained stable at RMB40 thousand and RMB53 thousand for
4M2023 and 4M2024, respectively.
Income tax
Our income tax remained stable at RMB3 .3 million and RMB3.4 million for 4M2023
and 4M2024, respectively.
Profit for the period
As a result of the foregoing, our profit fo r the period increased by RMB1.4 million
from RMB13.4million for 4M2023 to RMB14.8 million for 4M2024. Our net profit margin
remained stable at 25.1% and 25.3% for 4M2023 and 4M2024, respectively.
Year ended 31 December 2023 compared to year ended 31 December 2022
Revenue
Our total revenue increased from RMB1 48.4 million in FY2022 to RMB174.0 million
in 2023 mainly due to the increase in revenue generated from our insurance agency business.
Our revenue generated from insurance ag ency business increased from RMB130.7
million in FY2022 to RMB155.7 million in FY2023, p rimarily attributable to the increase in
commission income generated from insuran ce company partners for distribution of
property insurance products, accident insurance products and automobile insurance
products as the GWP we facilitated for such ins urance products increased gradually. In
particular, the increase was mainly due to (i) the distribution of new types of property
insurance products on our Corporate Insurance Interactive Service Platform ( 企業保險交互
服務平台) through collaboration with our insurance company partners; (ii) the strengthened
cooperation with our major strategic channel partners, which referred large number of
insurance clients to purchase property, accident and automobile insurance products from
us; and (iii) our sales efforts, including recruiting additional sales and marketing staff to
support the growth of our insurance agency business.
Our revenue generated from IT services s lightly increased from RMB15.0 million for
FY2022 to RMB15.8 million for FY2023 mainly due to the increase in the number of IT
projects engaged by us from 28 projects to 32 projects. In FY2023, we continued to develop
our IT services and expanded the number of our IT service staff from 40 employees as at 31
December 2022 to 48 employees as at 31 December 2023. In particular, we provided IT
FINANCIAL INFORMATION
–3 4 5–


--- page 356 ---
services to insurance-related companies (including insurance companies and an insurance
intermediary company), which are Independent Third Parties, by developing insurance
related marketing and business systems, which in aggregate generated revenue of
approximately RMB 5.8 million for FY2023. We were also selected as the service
provider for four subsidiaries of Haier Group and, through independent tendering
processes, obtained several major IT project s ,w h i c hi na g g r e g a t eg e n e r a t e dr e v e n u eo f
approximately RMB7.4 million for FY2023.
Our revenue generated from consulting services business remained stable at RMB2.7
million and RMB2.5 million for FY2 022 and FY2023, respectively.
Cost of sales
Our cost of sales increased from RMB81. 1 million for FY2022 to RMB99.5 million for
FY2023, primarily attributable to the increase in referral fees to strategic channel partners
as they expanded our reach to new insurance clients, which was in line with our growth in
insurance agency business during the year.
Gross profit and gross profit margin
Our overall gross profit increased fr om RMB67.3 million for FY2022 to RMB74.5
million for FY2023 mainly due to the increase i n gross profit from our insurance agency
business from RMB58.2 million for FY2022 to RMB64.0 million for FY2023 resulting from
the increase in the distribution of property insurance products during the year.
Our overall gross profit margin decreased from 45.3% in 2022 to 42.8% in 2023,
mainly due to the decrease in gross profit margin of our insurance agency business from
44.6% for FY2022 to 41.1% for FY2023, which was partially offset by the increase in gross
profit margin of our IT services from 48.6% for FY2022 to 58.1% for FY2023.
The decrease in the gross profit margin of our insurance agency business was mainly
due to the increase in distribution of new po licies for long-term life and health insurance
products, which generally incur a compar atively higher cost to insurance agents.
The increase in the gross profit margin of our IT services was mainly due to the
decrease in subcontracting cost incurred for FY2023 as we recruited more R&D staff to
support our IT services.
Other income
Our other income increased from RMB8. 2 million for FY2022 to RMB11.3 million for
FY2023 mainly due to an increase in interest income generated from bank deposit and
government grants.
FINANCIAL INFORMATION
–3 4 6–


--- page 357 ---
Research and development costs
Our research and development costs increased from RMB6.8 million for FY2022 to
RMB7.1 million for FY2023 mainly due to an incr ease in staff costs as there was an increase
in demand for R&D activities to support our business development.
General and administrative expenses
Our general and administrative expenses increased from RMB12.9 million for FY2022
to RMB18.6 million for FY2023 mainly due to ( i) an increase in the Listing expenses of
RMB4.8 million for FY2023; and (ii) an increase in staff costs of RMB1.1 million resulting
from the increase of staff to support our business growth.
Sales and marketing costs
Our sales and marketing costs increased from RMB9.9 million for FY2022 to
RMB11.9 million for FY2023, mainly due to the increase in staff costs of RMB1.1 million
and increase in marketing fees of RMB0.6 million.
Finance costs
Our finance costs remained stable a t RMB0.2 million for FY2022 and FY2023.
Income tax
Our income tax remained stable at RMB9.2 million and RMB9.0 million for FY2022
and FY2023, respectively.
Profit for the year
As a result of the foregoing, our profit for the year increased by RMB2.7 million from
RMB36.3 million for FY2022 to RMB39.0 million for FY2023. Our net profit margin
decreased from 24.5% for FY2022 to 22.4% for FY2023.
Year ended 31 December 2022 compared to year ended 31 December 2021
Revenue
Our total revenue increased from RMB12 0.0 million in 2021 to RMB148.4 million in
2022 was mainly due to the increase in revenue generated from both insurance agency
business and IT services.
Our commission income generated from insurance agency business increased from
RMB116.1 million in 2021 to RMB130.7 millio n in 2022, primarily attributable to the
increase in commission income generated from insurance company partners for distribution
of property insurance products, accident insurance products and automobile insurance
products, which was partially offset by the decr ease in commission income from insurance
company partners for distribution of new policies for life and health insurance products
mainly due to the impact of COVID-19. In parti cular, the increase was mainly due to (i) the
FINANCIAL INFORMATION
–3 4 7–


--- page 358 ---
strengthened cooperation with our major strategic channel partners, which referred large
number of insurance clients to purchase property, accident and automobile insurance
products from us; (ii) the cooperation with ne w strategic channel partners in 2022, which
referred insurance clients to purchase automobile and accident insurance products from us;
and (iii) our sales efforts, including recruit ing additional sales and marketing staff to
support the growth of our insurance agency business.
Our revenue generated from IT services significantly increased from RMB1.3 million in
2021 to RMB15.0 million in 2022 mainly due to the significant increase in the number of IT
projects engaged by us from three projects in 2021 to 28 projects in 2022 through
accumulation of experience and understandi ng of the needs of customers for IT services and
our proactive business development efforts, including expansion of the number of our IT
service staff from 26 employees as at 31 December 2021 to 40 employees as at 31 December
2022.
During the Track Record Period, we further extended and developed our IT services by
leveraging on our IT technology and knowhow accumulated over years in view of the
inherent commonality between the digitalis ed solutions we developed for our insurance
agency business and the digitalised solutions demanded by our customers. As such, we
offered IT services to various participants in our ecosystem, including companies in
insurance industry and companies from different industries, by designing and developing
digitalised solutions based on their needs. In particular, we provided IT services to
insurance-related companies (including insurance companies and an insurance intermediary
company), which are Independent Third Parties, mainly by developing insurance related
marketing and business systems, which in aggregate generated revenue of approximately
RMB5.6 million for FY2022. We also obtained IT projects from companies in different
industries, which are Independent Third Parties, through business referrals and
introductions from our existing customers of insurance agency business. In addition, we
submitted solutions and quotations on Haier Group’s IT service procurement platform for
providing IT services to Haier Group, which is generally open to approved suppliers, and
we have to compete with other independent service providers. Before submitting such
solutions and quotations, we identified the needs for IT services of Haier Group and
assessed whether we had the capability to provide such IT services. As we became more
competent to provide IT services to Haier Group, we submitted more solutions and
quotations for providing IT services thro ugh Haier Group’s IT service procurement
platform. In 2022, we were selected as the service provider for two subsidiaries of Haier
Group and, through independent tendering proces ses, obtained several IT projects, which in
aggregate generated revenue of app roximately RMB4.6 million for FY2022.
Our revenue generated from consulting serv ices remained relatively stable at RMB2.7
million for the years ended 31 December 2021 and 2022.
FINANCIAL INFORMATION
–3 4 8–


--- page 359 ---
Cost of sales
Our cost of sales increased from RMB71.9 m illion in 2021 to RMB81.1 million in 2022,
primarily attributable to (i) the increase in refe rral fees to our strategic channel partners as
they expanded our reach to new insurance clients, which was in line with our growth in
insurance agency business during the year; and (ii) subcontracting fees to IT services
providers to support our expansion in IT services business. The increase was partially offset
by the decrease in commission to our insurance agents due to the decrease in the
distribution of life and health insurance products amid the COVID-19 pandemic.
Gross profit and gross profit margin
Our overall gross profit increased from RMB48.0 million in 2021 to RMB67.3 million
in 2022 mainly due to the increase in gross profit from our insurance agency business from
RMB45.2 million in 2021 to RMB58.2 million in 2022 as a result of the increase in the
distribution of property insurance products during the year, which generally offered higher
gross profit.
Our overall gross profit margin increased from 40.0% in 2021 to 45.3% in 2022, mainly
due to the increase in gross profit margin of our insurance agency business. The gross profit
margin of our insurance agency business increased from 38.9% in 2021 to 44.6% in 2022.
The increase was mainly due to (i) the increase in gross profit margin of property insurance
products as a result of (a) the reduction of the average referral fee rates to our major
strategic channel partners through strengthening our cooperation with them and (b) the
increase in distribution of property insurance products through our direct sales channel,
which offer a higher gross profit margin.
The gross profit margin of our IT services decreased from 63.8% for FY2021 to 48.6%
for FY2022 mainly due to the increase in subcon tracting fees incurred for our IT services.
Other income
Our other income remained stable at RMB7 .7 million for the year ended 31 December
2021 and RMB8.2 million for the year ended 31 December 2022.
Research and development costs
Our research and development costs in creased from RMB4.7 million in 2021 to
RMB6.8 million in 2022 mainly due to an increase in staff costs as there was an increase in
the number of our R&D staff primarily for supporting our business development.
General and administrative expenses
Our general and administrative expenses i ncreased from RMB11.4 million for the year
ended 31 December 2021 to RMB12.9 million for the year ended 31 December 2022 mainly
due to (i) an increase in office expenses and depreciation and amortisation of RMB1.1
million; and (ii) an increase in staff costs of RM B0.6 million resulting from the increase in
our general and administrative staff to support our business growth.
FINANCIAL INFORMATION
–3 4 9–


--- page 360 ---
Sales and marketing costs
Our sales and marketing costs increased from RMB6.8 million for the year ended 31
December 2021 to RMB9.9 million for the year e nded 31 December 2022, mainly due to the
increase in staff costs of RMB2.4 million res ulting from the increase in headcount of our
sales and marketing team.
Finance costs
Our finance costs remained stable at RMB 0.2 million for the years ended 31 December
2021 and 2022.
Income tax
Our income tax increased from RMB5.6 million for the year ended 31 December 2021
to RMB9.2 million for the year ended 31 Decem ber 2022, primarily attributable to an
increase in profit before taxation during the year as a result of our business growth. Our
effective tax rate increased from 17.2% in 2021 to 20.3% in 2022, mainly due to the increase
in commission income attributable to Haie r Insurance Agency, which was subject to an
income tax rate of 25%.
Profit for the year
As a result of the foregoing, our profit for the year increased by RMB9.3 million from
RMB27.0 million for the year ended 31 December 2021 to RMB36.3 million for the year
ended 31 December 2022. Our net profit margin increased from 22.5% for the year ended 31
December 2021 to 24.5% for the year ended 31 December 2022.
DESCRIPTION OF CERTAIN ITEMS OF CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
The following table sets forth the components of our consolidated statements of
financial position as at the dates indicated:
As at 31 December
As at
30 April
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment 380 341 324 273
Intangible assets 429 143 — —
Right-of-use assets 682 558 461 683
Deferred tax assets — 14 15 30
Contract costs and other assets 3 33 43 —
Time deposits — — 132,277 133,653
Restricted cash 7,834 8,102 7,545 7,608
Total non-current assets 9,328 9,191 140,665 142,247
FINANCIAL INFORMATION
–3 5 0–


--- page 361 ---
As at 31 December
As at
30 April
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Current assets
Financial assets at fair value through
profit or loss 238,730 — — —
Accounts receivables 11,988 21,132 30,806 27,174
Contract costs and other assets 2,607 2,049 10,635 16,428
Cash and cash equivalents 17,988 23,546 203,638 63,677
Time deposits — 265,283 — 150,829
Restricted cash 4,193 5,899 4,208 7,488
Total current assets 275,506 317,909 249,287 265,596
Current liabilities
Accounts and other payables 19,640 25,337 17,689 19,523
Contract liabilities 2,160 1,054 1,226 2,046
Lease liabilities 1,083 250 244 762
Accrued expenses 2,672 3,310 4,097 2,879
Current taxation payables 2,437 4,122 3,477 3,985
Total current liabilities 27,992 34,073 26,733 29,195
Net current assets 247,514 283,836 222,554 236,401
Total assets less current liabilities 256,842 293,027 363,219 378,648
Non-current liabilities
Lease liabilities 26 — — —
Deferred tax liabilities 138 — — —
NET ASSETS 256,678 293,027 363,219 378,648
Equity
Paid-in capital/share capital 83,007 83,007 105,896 105,896
Reserves 172,856 210,632 259,314 274,381
Total equity attributable to equity
shareholders of the Company 255,863 293,639 365,210 380,277
Non-controlling interests 815 (612) (1,991) (1,629)
Total Equity 256,678 293,027 363,219 378,648
Property, plant and equipment
As at 31 December 2021, 2022 and 2023 and 30 April 2024, our property, plant and
equipment were RMB0.4 million, RMB0.3 m illion, RMB0.3 million and RMB0.3 million,
respectively, primarily representing our electronic and office equipment, which was
procured to support our daily operation.
FINANCIAL INFORMATION
–3 5 1–


--- page 362 ---
Intangible assets
Our intangible assets mainly consist of a software for supporting the distribution of
insurance policies.
As at 31 December 2021, 2022 and 2023 and 30 April 2024, our intangible assets were
RMB0.4 million, RMB0.1 million, nil and nil, resp ectively. The decrease in our intangible
assets during the Track Record Period was primarily due to amortisation of intangible
assets.
Financial assets at fair value through profit or loss
Our financial assets at fair value through profit or loss primarily consist of the
structured notes issued by a PRC securities company.
The following table sets forth a summary of our financial assets at fair value through
profit or loss as at the dates indicated:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current
Structured notes
(Note) 238,730 — — —
238,730 — — —
Note: These structured notes were short-term in nature and generally had annualised rate of return ranging from
2.40% to 2.55%.
Our financial assets at fair value through profit or loss decreased from RMB238.7
million as at 31 December 2021 to nil as at 31 De cember 2022 and 2023 and 30 April 2024,
mainly due to the change in our investment portfolio.
We manage and evaluate the performance of investments on a fair value basis in
accordance with its risk management and inve stment strategy. To monitor and control the
investment risks associated with such product portfolio, we will adopt, before Listing, a
comprehensive set of internal policies and gu idelines to manage our investment in such
products and set up investment committee led by the chief financial officer of our Group,
Ms. Li, who has over 10 years of experience in accounting and auditing. For other relevant
qualifications and experience of our chief finan cial officer, please refer to the section headed
‘‘Directors, Supervisors and Senior Management’’ in this prospectus. With the
authorisation of the Board, our management is responsible for carrying out the
investment plans with respect to structured deposits and other wealth management
products in accordance with our cash management policies and internal approval process.
The investment strategy related to such produc ts focuses on minimising the financial risks
by reasonably and conservatively matching the maturities of the portfolio to anticipated
FINANCIAL INFORMATION
–3 5 2–


--- page 363 ---
operating cash needs, while generating desirable investment returns for the benefits of the
Shareholders. We primarily invest in wealth management products and time deposit issued
by major commercial banks with low risks. We make investment decisions related to wealth
management products after thoroughly considering a number of factors, including but not
limited to macro-economic environment, general market conditions, risk control and credit
of issuing banks, working capital conditions and the expected profit or potential loss of the
investment. Additionally, our Board adopted a variety of procedures in relation to the
valuation of our financial assets. Going forward, we intend to invest in wealth management
products with low risks on a case by case basis if such products are in our Group’s interest
as a whole upon thorough evaluations and analyses.
Accounts receivables
Our accounts receivables comprised primar ily commissions receivable from insurance
company partners of our insurance agency business for our services provided.
The following table sets forth the breakdown of our accounts receivables as at the
dates indicated:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Accounts receivables 12,001 21,189 30,897 27,304
Less: loss allowance (13) (57) (91) (130)
11,988 21,132 30,806 27,174
Our net accounts receivables increased fr om RMB12.0 million as at 31 December 2021
to RMB21.1 million as at 31 December 2022, an d further increased to RMB30.8 million as
at 31 December 2023. The increasing trend was mainly due to our business growth. Our net
accounts receivables decreased from RMB30 .8 million as at 31 December 2023 to RMB27.2
million as at 30 April 2024 as the relevant custo mers settled the accounts receivables on
time.
The payment terms are stipulated in relevan t contracts. Our Group’s trading terms
with our customers are mainly on credit. The credit period offered by our Group is
generally within three months. Our Group seeks to maintain strict control over our
outstanding receivables. Overdue balances are reviewed regularly by the management of
respective business segment. Our Group does not hold any collateral or other credit
enhancements over our accounts receivab le balances. Accounts receivables are
non-interest-bearing.
FINANCIAL INFORMATION
–3 5 3–


--- page 364 ---
The following table sets forth the ageing ana lysis of our accounts receivables based on
the invoice date as at the dates indicated:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months (inclusive) 11,851 20,723 28,966 24,854
3 months to 6 months (inclusive) 137 338 455 2,212
Over 6 months — 71 1,385 108
11,988 21,132 30,806 27,174
The following table sets forth a summary of average turnover days of accounts
receivables for the years/period indicated:
For the year ended 31 December
For the four
months
ended
30 April
2021 2022 2023 2024
Average turnover days of
accounts receivables
(Note) 34.6 days 40.7 days 54.5 days 59.8 days
Note: Average turnover days of accounts receivables is d erived from dividing the arithmetic mean of the
opening and closing balances of accounts receivables (after impairment) by our total revenue in the
respective year and multiplying by the num ber of days in the relevant year/period.
Our average accounts receivables turnov er days increased from 34.6 days for FY2021
to 40.7 days for FY2022, 54.5 days for FY2023, and further to 59.8 days for 4M2024 which
was in line with our credit policy.
As at 31 May 2024, RMB12.8 million or 47.0% of our accounts receivables
outstanding as at 30 April 2024 were settled.
Contract costs and other assets
Our contract costs and other assets mainly represented VAT input tax to be deducted,
costs to fulfil contracts and others.
FINANCIAL INFORMATION
–3 5 4–


--- page 365 ---
The following table sets forth the breakdown of our contract costs and other assets as
at the dates indicated:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Costs to fulfil contracts 2,183 1,528 1,263 1,895
Input value-added tax to
be deducted 333 406 1,582 139
Prepaid listing expenses — — 7,682 13,749
Others 94 148 151 645
2,610 2,082 10,678 16,428
Our contract costs and other assets was RMB2.6 million, RMB2.1 million and
RMB10.7 million and RMB16.4 million as a t 31 December 2021, 2022 and 2023 and 30
April 2024. The fluctuation was mainly due to costs to fulfil contracts incurred for the
engagement of external IT service providers to support our IT services and Listing expenses
incurred in FY2023 and 4M2024.
Accounts and other payables
Our accounts and other payables mainly represented amounts payable due to suppliers,
insurance premium payable and others.
The following table sets forth our accounts and other payables as at the dates
indicated:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Amounts payable to suppliers 15,092 18,239 13,383 12,890
Insurance premium payable 4,090 5,783 1,628 5,449
Others 458 1,315 2,678 1,184
Total 19,640 25,337 17,689 19,523
Our accounts and other payables increa sed from RMB19.6 million as at 31 December
2021 to RMB25.3 million as at 31 December 2022 and then decreased to RMB17.7 million
as at 31 December 2023. Our acco unts and other payables inc reased from RMB17.7 million
as at 31 December 2023 to RMB19.5 million as at 30 April 2024.
FINANCIAL INFORMATION
–3 5 5–


--- page 366 ---
The following table sets forth the ageing analysis of our amounts payable to suppliers
based on the invoice date as at the dates indicated:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months 15,092 18,239 12,178 12,890
3 months to 1 year — — 1,152 —
1 to 2 years — — 53 —
Total 15,092 18,239 13,383 12,890
The following table sets forth a summary of average turnover days of amounts payable
to suppliers for the years/period indicated:
For the year ended 31 December
For the four
months
ended
30 April
20242021 2022 2023
Average turnover days of
amounts payable to
suppliers
(Note ) 65.6 days 75.0 days 58.0 days 47.0 days
Note: Average turnover days of amounts payable to supplie rs is derived from dividing the arithmetic mean of
the opening and closing balances of amounts payable to suppliers by cost of sales in the respective year
and multiplying by the number of days in the relevant year/period.
Trade payables are non-interest bearing and are normally settled within one to three
months.
Our average amounts payable to supplier tur nover days were 65.6 days, 75.0 days, 58.0
days and 47.0 days for FY2021, FY2022, FY2023 and 4M2024, respectively, which were in
line with our normal settlement days.
As at 31 May 2024, RMB5.2 million or 40.1% of our amounts payable to supplier
outstanding as at 30 April 2024 were settled.
FINANCIAL INFORMATION
–3 5 6–


--- page 367 ---
Accrued expenses
The following table sets forth the breakdown of accrued expenses as at the date
indicated:
As at 31 December
As at
30 April
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Accrued staff costs 2,542 3,071 3,840 2,236
Value-added tax and surcharge
payable 94 188 224 612
Others 36 51 33 31
2,672 3,310 4,097 2,879
The accrued expenses was RMB2.7 million, RMB3.3 million and RMB4.1 million as at
31 December 2021, 2022 and 2023. The increasing trend was mainly due to our accrued
payroll increased from RMB2.5 million as at 31 December 2021 to RMB3.1 million as at 31
December 2022, and further increased to RMB3.8 million as at 31 December 2023, as a
result of the overall increase in staff costs to support our business growth. Our accrued
expenses decreased from RMB4.1 million as at 31 December 2023 to RMB2.9 million as at
30 April 2024 mainly due to the decrease in accruals for year-end bonus to employees.
Contract liabilities
Our contract liabilities mainly arise fr om advances received from our IT services
business and insurance agency services which shall be subsequently recognised as revenue
when we satisfy the performance obligation u nder the contract. Our contract liabilities
decreased from RMB2.2 million as at 31 D ecember 2021 to RMB1.1 million as at 31
December 2022 due to the services delivery and the respective contract liabilities was
recognised as revenue, and increased t o RMB1.2 million as at 31 December 2023 and
further to RMB2.0 million as at 30 April 2024 due to our project progress.
FINANCIAL INFORMATION
–3 5 7–


--- page 368 ---
LIQUIDITY AND CAPITAL RESOURCES
During the Track Record Period, we have funded our operations primarily with net
cash generated from our operations. The follo wing table summaries for the years/periods
indicated, our consolidated statements of cash flows:
For the year ended
31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Cash generated from
operations 30,260 34,913 29,651 11,411 19,591
Income tax paid (5,674) (7,711) (9,672) (5,878) (3,499)
Net cash generated from
operating activities 24,586 27,202 19,979 5,533 16,092
Net cash generated from/
(used in) investing
activities (151,039) (19,753) 138,224 2,241 (150,001)
Net cash generated from/
(used in)
financing activities 127,148 (1,891) 21,889 26,199 (6,052)
Net increase in cash and
cash equivalents 695 5,558 180,092 33,973 (139,961)
Cash and cash
equivalents at the
beginning of the year/
period 17,293 17,988 23,546 23,546 203,638
Cash and cash
equivalents at the end
of the year/period 17,988 23,546 203,638 57,519 63,677
Our cash and cash equivalents increas ed from RMB23.5 million as at 31 December
2022 to RMB203.6 million as at 31 December 2023 mainly due to withdrawal of time
deposit, and decreased to RMB63.7 million as a t 30 April 2024 mainly due to the purchase
of time deposit.
Net cash generated from operating activities
During the Track Record Period, our cash inflow from operating activities was
principally from the receipt of revenue from the provision of our insurance agency services
IT services and consulting services. Our cash outflow used in operating activities was
principally for the referral and services fee, commission and wages and salaries paid to our
staff and other operating expenses.
FINANCIAL INFORMATION
–3 5 8–


--- page 369 ---
For the four months ended 30 April 2024, our Group had net cash generated from
operating activities of RMB16.1 million, which w as primarily attributable to our operating
profit before changes in working capital o f RMB16.6 million, adjusted by decrease in
accounts receivables of RMB3.6 million, de crease in accounts and other payables of
RMB1.0 million; and decrease in accrued expenses of RMB1.2 million.
For the year ended 31 December 2023, our Group had net cash generated from
operating activities of RMB20.0 million, which w as primarily attributable to our operating
profit before changes in working capital of R MB45.0 million, adjusted by the increase in
accounts receivables of RMB9.7 million due to increase in commission income from our
insurance agency business during the year; and decrease in accounts and other payables of
RMB6.2 million.
For the year ended 31 December 2022, our Group had net cash generated from
operating activities of RMB27.2 million, which w as primarily attributable to our operating
profit before changes in working capital o f RMB40.3 million, adjusted by the increase of
RMB4.0 million in accounts and other payables and offset by (i) the increase in accounts
receivables of RMB9.2 million due to increase in commission income from our insurance
agency business during the year; (ii) decrea se in contract liabilities of RMB1.1 million as we
had delivered certain IT services performa nce; (iii) income tax paid of RMB7.7 million.
For the year ended 31 December 2021, our Group had net cash generated from
operating activities of RMB24.6 million, which w as primarily attributable to our operating
profit before changes in working capital of R MB27.9 million, adjusted by the increase in
contract liabilities of RMB2.1 million due to ou r project progress and the prepayment and
increase in accounts and oth er payable of RMB3.9 million due to the increase in amounts
payable to suppliers arising from the insurance agency business and offset by (i) the increase
in accounts receivables and contract costs and other assets of RMB1.2 million and RMB2.4
million, respectively; and (ii) income tax paid of RMB5.7 million.
Net cash generated/(used in) investing activities
During the Track Record Period, our cash inflow from investing activities was
principally from retrieving financial assets m easured at fair value through profit or loss and
time deposits. Our cash outflow used in investin g activities was principally for purchasing
deposits and financial assets measured at fair value through profit or loss.
For the four months ended 30 April 2024, our Group had net cash used in investing
activities of RMB150.0 million primarily attr ibutable to cash used in purchasing time
deposits.
For the year ended 31 December 2023, our Group had net cash generated from
investing activities of RMB138.2 million prim arily attributable to the cash generated from
retrieving deposits of RMB265.0 million and partially net off by the payment for the
purchase of time deposits of RMB130.0 million.
FINANCIAL INFORMATION
–3 5 9–


--- page 370 ---
For the year ended 31 December 2022, our Group had net cash used in investing
activities of RMB19.8 million primarily attr ibutable to cash used in purchasing time
deposits of RMB265.0 million and partially ne t off by cash generated from retrieving
financial assets measured at fair value through profit or loss of RMB241.8 million.
For the year ended 31 December 2021, our Group had net cash used in investing
activities of RMB151.0 million primarily attrib utable to cash used in purchasing financial
assets measured at fair value through profi t or loss of RMB237.9 million and partially net
off by cash generated from retrieving financial assets measured at fair value through profit
or loss of RMB87.0 million.
Net cash generated from/(used in) financing activities
During the Track Record Period, our cash inflow from financing activities was
principally from capital contribution by our shareholders. Our cash outflow used in
financing activities was principally for capi tal and interest elements of lease rentals and
Listing expenses paid.
For the four months ended 30 April 2024, our Group had net cash used in financing
activities of RMB6.1 million primarily attrib utable to the payment of Listing expenses of
RMB6.1 million.
For the year ended 31 December 2023, our G roup had net cash flows from financing
activities of RMB21.9 million primarily attr ibutable to the capital contribution by our
shareholders of RMB31.2 million and partially net off by the payment of Listing expenses
of RMB7.7 million.
For the year ended 31 December 2022, our Group had net cash flows used in financing
activities of RMB1.9 million primarily attribut able to capital and interest elements of lease
rental paid arising from our operating leases.
For the year ended 31 December 2021, our Group had net cash inflow from financing
activities of RMB127.1 million primarily attributable to capital injection by our
shareholders of RMB126.6 million.
FINANCIAL INFORMATION
–3 6 0–


--- page 371 ---
NET CURRENT ASSETS
The following table sets forth our current assets and current liabilities as at the dates
indicated, respectively:
As at 31 December
As at
30 April
2024
As at
31 May
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
CURRENT ASSETS
Financial assets at fair value
through profit or loss 238,730 — — — —
Accounts receivables 11,988 21,132 30,806 27,174 29,627
Contract costs and other
assets 2,607 2,049 10,635 16,428 16,660
Cash and cash equivalents 17,988 23,546 203,638 63,677 64,726
Time deposits — 265,283 — 150,829 151,048
Restricted cash 4,193 5,899 4,208 7,488 16,805
Total current assets 275,506 317,909 249,287 265,596 278,866
CURRENT LIABILITIES
Accounts and other payables 19,640 25,337 17,689 19,523 30,883
Contract liabilities 2, 160 1,054 1,226 2,046 1,567
Lease liabilities 1,083 250 244 762 744
Accrued expenses 2,672 3,310 4,097 2,879 3,509
Current taxation payables 2,437 4,122 3,477 3,985 708
Total current liabilities 27,992 34,073 26,733 29,195 37,411
NET CURRENT ASSETS 247,514 283,836 222,554 236,401 241,455
Our current assets mainly represented financial assets at fair value through profit or
loss, accounts receivables, contract costs and other assets, cash and cash equivalents, time
deposits and restricted cash. Our current liab ilities mainly represented accounts and other
payables, contract liabilities, lease liabilities, accrued expenses and current taxation
payables.
Our net current assets increased from RMB236.4 million as at 30 April 2024 to
RMB241.5 million as at 31 May 2024 primarily due to the increase in restricted cash.
Our net current assets increased from R MB222.6 million as at 31 December 2023 to
RMB236.4 million as at 30 April 2024 primarily due to increase in contract costs and other
assets and time deposits.
Our net current assets decreased from R MB283.8 million as at 31 December 2022 to
RMB222.6 million as at 31 December 2023 primarily due to the decrease in time deposits,
a n dn e to f fb ya ni n c r e a s ei nc a s ha n dc a s he q u i v a l e n t s .
FINANCIAL INFORMATION
–3 6 1–


--- page 372 ---
Our net current assets increased from R MB247.5 million as at 31 December 2021 to
RMB283.8 million as at 31 December 2022 primarily due to the increases in accounts
receivables and time deposits, and net off by a decrease in financial assets at fair value
through profit or loss and increase in account and other payables.
WORKING CAPITAL SUFFICIENCY
Our Directors confirm that, taking into co nsideration of the financial resources
presently available to us, which is primarily our internal resources and the estimated net
proceeds from the Global Offering, we have sufficient working capital for our present
requirements and for at least the next 12 months commencing from the date of this
prospectus.
Our Directors are not aware of any other factors that would have a material impact on
our Group’s liquidity. For more details on the funds necessary to meet our existing
operations and to fund our future plans, pleas e refer to the section headed ‘‘Future Plans
and Use of Proceeds’’ in the prospectus.
CAPITAL EXPENDITURES
During the Track Record Period, our Group incurred capital expenditures of RMB0.2
million, RMB0.2 million, RMB0.2 million, RM B77 thousand and RMB1 thousand for the
years ended 31 December 2021, 2022 and 2023 and four months ended 30 April 2023 and
2024, respectively, majority of which are related to the purchase of electronic equipment to
support our business operation.
CONTRACTUAL AND CAPITAL COMMITMENTS
As at 31 December 2021, 2022 and 2023 and 30 April 2024, our Group did not have any
significant contractual and capital commitm ents. During the Track Record Period, there
was no material change to our indebtedness and capital commitments.
FINANCIAL INFORMATION
–3 6 2–


--- page 373 ---
INDEBTEDNESS
Statement of indebtedness
Our indebtedness during the Track Record Period consisted primarily of lease
liabilities. The following table sets out a bre akdown of our indebtedness as at 31 December
2021, 2022 and 2023, 30 April 2024 and 31 May 2024, being the latest practicable date for
the purpose of this statement of indebtedness in this prospectus.
As at 31 December
As at
30 April
As at
31 May
2021 2022 2023 2024 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Non-current
Lease
liabilities 26 — — — —
Current
Lease
liabilities 1,083 250 244 762 744
Total 1,109 250 244 762 744
We leased various properties in the PRC mainly included our staff accommodation and
offices. Under IFRS16, these lease liabilitie s were measured at present value of the lease
payments during the lease terms that are no t yet paid. We recorded lease liabilities of
approximately RMB1.1 million, RMB0.3 m illion, RMB0.2 million, RMB0.8 million and
RMB0.7 million as at 31 December 2021, 202 2 and 2023, 30 April 2024 and 31 May 2024,
respectively. The decrease in lease liabilitie s during the Track Record Period was mainly due
to the continuous payment of rent by our Group for our leased properties. The increase in
leased liabilities as at 30 April 2024 was res ulted from entering into new lease of staff
accommodation and offices.
Save as disclosed below, we did not have any bank and other loan, or any loan capital
issued and outstanding or agreed to be issued, bank overdraft, borrowing or similar
indebtedness, liabilities under acceptance (other than normal trade payables) or acceptance
credits, debentures, mortgages, charges, hi re purchases or finance lease commitments,
guarantees or other material contingent liab ilities as at the Latest Practicable Date for our
indebtedness statement.
FINANCIAL INFORMATION
–3 6 3–


--- page 374 ---
Our Directors confirm that as at the Latest Practicable Date, there was no material
covenant on any of our outstanding debt and there was no breach of any covenant during
the Track Record Period and up to the Latest Practicable Date. Our Directors further
confirm that our Group did not experience any difficulty in obtaining bank loans and other
borrowings, default in payment of bank loans and other borrowings or breach of covenants
during the Track Record Period and up to the Latest Practicable Date.
Our Directors confirm that there has not been any material change in our indebtedness
since the Latest Practicable Date up to the date of this prospectus.
Lease liabilities
As we adopted IFRS 16, leases have been recognised in the form of an asset (for the
right of use) and a financial liability (for the payment obligation) in our Group’s
consolidated statement of financial position . As at 31 May 2024, our total lease liabilities
were RMB0.7 million.
Bank borrowings
Our bank borrowings amounted to nil as at 31 December 2021, 2022 and 2023, 30 April
2024 and 31 May 2024.
Contingent liabilities
As at 31 May 2024, being the latest practicable date for the purpose of the indebtedness
statement, we did not have any mat erial contingent liabilities.
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios for the years/period as at the
dates indicated:
For the year ended 31 December
For the
four months
ended
30 April
2021 2022 2023 2024
Gross profit margin
(1) 40.0% 45.3% 42.8% 42.4%
N e tp r o f i tm a r g i n(2) 22.5% 24.5% 22.4% 25.3%
Return on equity (3) 15.0% 13.2% 11.9% N/A
Return on total assets (4) 13.0% 11.9% 10.9% N/A
FINANCIAL INFORMATION
–3 6 4–


--- page 375 ---
As at 31 December
As at
30 April
2021 2022 2023 2024
Current/quick ratio (5) 9 . 8t i m e s 9 . 3t i m e s 9 . 3t i m e s 9 . 1t i m e s
Notes:
(1) Gross profit margin for the years ended 31 December 2021, 2022 and 2023 and the four months ended 30
April 2024 was calculated based on gross profit d ivided by revenue for the respective years/period.
(2) Net profit margin for the years ended 31 December 2021, 2022 and 2023 and the four months ended 30
April 2024 was calculated based on net profit div ided by revenue for the respective years/period.
(3) Return on equity for the years ended 31 December 2021, 2022 and 2023 was calculated based on net profit
of the respective years, divided by the average of th e opening and closing balances of total equity and
multiplied by 100%. Return on equity for 4M2024 is not meaningful as it is not comparable to annual
figures.
(4) Return on total assets for the years ended 31 December 2021, 2022 and 2023 was calculated based on net
profit of the respective years, divided by the average of the opening and closing balances of total assets
and multiplied by 100%. Return on total assets for 4M2024 is not meaningful as it is not comparable to
annual figures.
(5) Current/quick ratio as at 31 December 2021, 2022 and 2023 and 30 April 2024 was calculated based on the
total current assets divided by the total current liabilities.
Return on equity
Our return on equity slightly decreased from 15.0% for the year ended 31 December
2021 to 13.2% for the year ended 31 December 2022 and further decreased to 11.9% for the
year ended 31 December 2023, primarily due to the increase in total equity attributable to
equity shareholders of the Company mainly driven by the increase in shareholders’
contribution and retained earnings resulting from profit generated from our business
operation during the Track Record Period.
Return on total assets
Our return on total assets slightly decreased from 13.0% for the year ended 31
December 2021 to 11.9% for the year ended 31 D ecember 2022 and further decreased to
10.9% for the year ended 31 December 2023 due to the increase in shareholders’
contribution.
Current/quick ratio
As our Group did not hold any inventory during the Track Record Period, the current
ratio of our Group is identical to our quick ratio for the respective year. Our current/quick
ratio remained stable at 9.8, 9.3, 9.3 and 9 . 1t i m e sa sa t3 1D e c e m b e r2 0 2 1 ,2 0 2 2a n d2 0 2 3
and 30 April 2024.
FINANCIAL INFORMATION
–3 6 5–


--- page 376 ---
QUANTITATIVE AND QUALITATIVE DI SCLOSURES ABOUT MARKET RISKS
We are exposed to market risks from changes in market, such as credit risk, liquidity
risk and currency risk.
Credit risk
Our Group’s credit risk is primarily attribut able to accounts receivables. Our Group’s
exposure to credit risk arising from cash and cash equivalents is limited because the
counterparties are banks and financial institutions, of which our Group considers to have
low credit risk.
For more details on the credit quality and the credit risk we are exposed, please refer to
note 24 to the section headed ‘‘Appendix I — Accountants’ Report’’ in this prospectus.
Liquidity risk
Our Group’s approach to managing liquidity is to ensure, as far as possible, that it will
have sufficient cash to meet its liabilities whe n they are due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to our Group’s
reputation. Our Group’s policy is to regularly monitor current and expected liquidity
requirements, and to ensure that it maintains sufficient reserves of cash to meet its liquidity
requirements in the short and longer term.
For more details on the maturity profile of ou r financial liabilities, please refer to note
24 to the section headed ‘‘Appendix I — Accountants’ Report’’ in this prospectus.
Currency Risk
The functional currency of our subsidiaries is RMB. Our operating activities are
carried out in the PRC with most of the transactions denominated in RMB. We consider the
risk of movements in exchange rates to be insignificant.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
i n c u r r e di nc o n n e c t i o nw i t ht h eG l o b a lo f f ering. Assuming an Offer Price of HK$8.6 per
Offer Share, being the mid-point of the indicative Offer Price range of HK$7.0 to HK$10.2
per Offer Share, the total estimated Listing expenses in connection with the Global Offering
(including underwriting commission) are es timated to be HK$54.1 million (representing
approximately 17.8% of the estimated gros s proceeds from the Global Offering). The
Listing expenses include (i) underwriting c ommission of approximately HK$15.2 million,
and (ii) non-underwriting related expense s of approximately HK$38.9 million, which
consist of fees and expenses of the legal ad visors and reporting accountants of our
Company of approximately HK$22.6 million and other fees and expenses of approximately
HK$16.3 million.
FINANCIAL INFORMATION
–3 6 6–


--- page 377 ---
During the Track Record Pe riod, we incurred Listing expenses of RMB18.8 million
(equivalent to approximately HK$20.6 millio n), of which HK$5.5 million was charged to
consolidated statements of profit or loss an d comprehensive income and the remaining
amount of HK$15.1 million will be accounted for as a deduction from equity upon
successful Listing under the relevant accounting standards. We expect to further incur
Listing expenses of HK$33.5 million by the completion of the Listing, of which an estimated
amount of HK2.2 million will be charged to consolidated statements of profit or loss and
comprehensive income and HK$31.3 million w ill be accounted for as a deduction from
equity upon successful Listing. The Listing expenses above are the best estimate as at the
Latest Practicable Date and for reference on ly and the actual amount may differ from this
estimate.
DIVIDENDS
We do not have any fix dividend policy nor pre-determined dividend payout ratio. No
dividends had been declared during the Track Record Period and up to the Latest
Practicable Date. According to our dividend policy, the Articles of Association and
applicable laws and regulations, any future plan of declarations and payments of dividends
will be formulated by our Directors and determined by our Shareholders, and will depend
on our actual and expected results of operations, cash flow and financial position, general
business conditions and business strategies, expected working capital requirements and
future expansion plans, legal, regulatory and other contractual restrictions, and other
factors which our Directors and Shareholders consider relevant. No dividend shall be
declared or payable except out of our profits and reserves lawfully available for
distribution. According to relevant PRC laws, any future net profit that we make will
have to be first applied to make up for our histo rically accumulated losses, after which we
will be obliged to allocate 10% of our net profit to our statutory common reserve fund until
such fund has reached more than 50% of our registered capital.
DISTRIBUTABLE RESERVES
As at 30 April 2024, our Group had retaine d profits of RMB140.5 million, as reserves
available for distribution to our equity shareholders.
OFF-BALANCE SHEET ARRANGEMENT
During the Track Record Period, we did not have any material off-balance sheet
arrangements or any variable interest in any unconsolidated entity that provides financing,
liquidity, market risk or credit support for us. As at the Latest Practicable Date, we had not
entered into any off-balance sheet transactions.
FINANCIAL INFORMATION
–3 6 7–


--- page 378 ---
MATERIAL RELATED PARTY TRANSACTIONS
The following table sets forth the transactions we had with related parties for the
periods indicated:
Related Party Transactions
For the year ended 31 December
For the
four months
ended
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Revenue from IT and consulting
services 1,367 8,388 10,192 1,950
— Revenue from IT services 577 6,042 8,732 1,665
— Revenue from consulting
services 790 2,346 1,460 285
Referral and service fees (4,204) (3,776) (1,529) (237)
Interest Income 460 4,172 3,253 3
Finance costs (36) (43) (22) (12)
Sales and marketing expenses — (20) (35) (12)
General and administrative
expenses and others (1,607) (2,437) (2,338) (402)
Revenue from IT and consulting services
During the Track Record Period, we provide d IT services and consulting services to
Haier Group and its affiliated companies in exch ange for service fees. T he pricing policy for
IT services is generally based on a fixed amoun t or fixed daily rate (for IT projects which we
assign our R&D staff on site) as mutually agreed having considered the complexity of the
software/system developed, allocation of staff (including the seniority of staff assigned on
site), duration of the agreement, ownership o f the IP right, other costs such as server fees
and indicative price range specified by our customers in their invitation of tenders or
request for quotation (if any). The pricing ter ms were no less favourable to us than terms of
s e r v i c e so f f e r e dt oI n d e p e n d e n tT h i r dP a r t i e sas there is no material difference in the range
of gross profit margin earned from the provision of IT services to Haier Group and its
affiliated companies (ranging from 49.2% t o 60.9% during the Track Record Period) and
non-Haier Group customers (ranging fro m 40.2% to 76.1% during the Track Record
Period). For details of the ongoing transactions between us and Haier Group, please refer
to the section headed ‘‘Connected Transact ions — Non-Exempt Continuing Connected
Transactions — 3. IT and Consulting Services Framework Agreement’’ in this prospectus.
FINANCIAL INFORMATION
–3 6 8–


--- page 379 ---
Referral and service fees
For FY2021, FY2022 and FY2023, three subsidiaries of Haier Group were our
strategic channel partners, which referred over 300, 400 and 600 corporate insurance clients
to us to purchase insurance products, respectiv ely, out of the total of over 6,500, 9,100 and
11,100 corporate insurance clients referred by all of our strategic channel partners. For
successful purchase of insurance products by insurance clients, we paid referral fees of
RMB3.9 million, RMB3.4 million and RMB1.0 million to them for FY2021, FY2022 and
FY2023, respectively, representing approximately 12.2%, 6.8% and 1.5% of the total
referral fees to all of our strategic channel partners for the corresponding years,
respectively. We made reference to the type of insurance products, the number and type
of insurance clients and the synergy brought to our Group in determining the referral fees
rates to ensure that our Group retains a sufficient and acceptable spread as profit margin
for our insurance agency business. For more d etails, please refer to the section headed
‘‘Business — Our Suppliers’’ in this prospectus. The average referral fees paid to each of
these companies ranged from 18.7% to 46.4% during the Track Record Period, which were
on normal commercial terms or on terms no more favourable than those provided to other
independent strategic channel partners during the Track Record Period. For details of the
ongoing transactions between us and Haier Group, please refer to the section headed
‘‘Connected Transactions — Non-Exempt Continuing Connected Transactions — 2.
Comprehensive Services Framework Agreement’’ in this prospectus.
Interest Income
For FY2021, FY2022, FY2023 and 4M2024, we g enerated interest income of RMB0.5
million, RMB4.2 million, RMB3.3 million and RMB 3 thousand, respectively, from the
deposit with two subsidiaries of Haier Group, Haier Group Finance Co., Ltd. ( 海爾集團財
務有限責任公司)( ‘ ‘Haier Finance ’’) and Haier Consumer Finance Co., Ltd. ( 海爾消費金融
有限公司)( ‘ ‘Haier Consumer Finance ’’). Each of Haier Finance and Haier Consumer
Finance is a non-banking financial institution established in the PRC in 2002 and 2014,
respectively, and holds a finance licence ( 金融許可證)g r a n t e db yt h eC B I R C .H a i e r
Finance, as an enterprise group finance company, and Haier Consumer Finance can provide
deposit and other services to our Group, subject to the supervision of the financial
regulatory authorities. During the Track Re cord Period, we placed deposit of cash and cash
equivalents at Haier Finance having considered that Haier Finance as an licensed finance
company under the Haier Group which understands our operation and development needs,
can provide deposit and other financial services to our Group in a more efficient and
flexible manner than independent commerc ial banks in the PRC. The interest rate for
deposit saving provided by Haier Finance ranged from approximately 0.2% to 0.3%, which
is comparable to the interest rates provid ed by the independent commercial banks of
approximately 0.3% during the Track Record P eriod while the 7-day call deposit interest
rates provided by Haier Finance during the Track Record Period ranged from
approximately 0.8% to 1.4%, which are no le ss favourable than the interest rates of
approximately 0.8% to 1.1% offered by independent commercial banks. In addition, we
also placed time deposits with Haier Consumer Finance with an effective interest rate of
approximately 3.35%, which is comparable to the interest rates provided by independent
commercial banks of approximately 2.80% to 3.40%.
FINANCIAL INFORMATION
–3 6 9–


--- page 380 ---
To the best knowledge and belief of our Company, Haier Finance and Haier Consumer
Finance maintained our deposits in a segregated account, and such deposits had not been
utilised to fund the operations of other entities under Haier Group through the operations
of Haier Finance or Haier Consumer Finance.
As at the Latest Practicable Date, we did no t place any deposit with Haier Consumer
Finance and only maintained a deposit balance of less than RMB1,000 with Haier Finance,
which would fall within the de minimis thre shold and be exempted from the reporting,
annual review, announcement and independent Shareholders’ approval requirements under
Chapter 14A of the Listing Rules. Upon Listing, if we need to place deposits with any of
them, we will comply with the relevant requirements under the Listing Rules as and when
appropriate.
Finance costs
Finance costs mainly represented handling fees paid to a third-party payment platform
and Haier Finance and interest on lease liabilit ies arising from the lease of properties from
Haier Group during the Track Record Period.
Sales and marketing expenses
During the Track Record Period, we enga ged a subsidiary of Haier Group for
provision of leasing of office for our sales and marketing team and incurred a small amount
of sales and marketing expenses in FY2022, FY2023 and 4M2024.
General and administrative expenses and others
During the Track Record Period, we paid to Haier Group and its affiliated companies
for procurement of services, including (i) offi ce and logistics services involving leasing of
offices, renovation works for the offices, and p rocuring office supplies; (ii) administrative
services involving travel agenc y services and catering services ; (iii) consulting services; and
(iv) business support services. We paid Haier G roup and its affiliated companies the actual
costs incurred during the service process. The range of prices payable by our Group for the
purchase of such services were within the range of quotations obtained from the
Independent Third Party suppliers. For details of the ongoing transactions between us
and Haier Group, please refer to the section headed ‘‘Connected Transactions —
Non-Exempt Continuing Connected Transactions — 2. Comprehensive Services
Framework Agreement’’ in this prospectus.
Based on the above, our Directors believe that our transactions with the related parties
during the Track Record Period were conducted in the normal course of business and on an
arm’s length basis, and they did not distort our results of operations or make our historical
results not reflective of our future performance.
FINANCIAL INFORMATION
–3 7 0–


--- page 381 ---
The below tables set forth our Group’s outstanding balances with its related parties as
at the dates indicated:
Balance with Related Parties
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade related
Accounts receivable 303 3,335 3,958 2,669
Cash and cash equivalents and
restricted cash kept in related
parties
(1) 22,055 29,206 4,814 —
Lease Liabilities (2) (763) — — (680)
Account and other payables (3,893) (5,985) (2,505) (1,947)
Non-trade related
Time deposits
(1) — 265,283 — —
Notes:
(1) Such amounts represent the deposit with Haier Finance and Haier Consumer Finance as at the
respective dates.
(2) Such amounts represent the balance arising f rom the lease contract with an associate of Haier
Group.
UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS
For more details, please refer to the section headed ‘‘Appendix II — Unaudited Pro
Forma Financial information’’ in this prospectus.
NO MATERIAL AND ADVERSE CHANGE
Our Directors have confirmed, after due and careful consideration, that as at the date
of this prospectus, there has been no material adverse change in our financial or trading
position or prospects of our Group since 30 April 2024, and there is no event since 30 April
2024 that would materially and adversely affect the information shown in the Accountants’
Report set out in Appendix I to this prospectus.
DISCLOSURE PURSUANT TO 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
–3 7 1–


--- page 382 ---
RECENT DEVELOPMENTS
For more details on recent developments of our Group, please refer to the sections
headed ‘‘Summary — Recent Developments ’’ and ‘‘Summary — No Material Adverse
Change’’ and note 28 to ‘‘Appendix I — Accountants’ Report’’ in this prospectus.
FINANCIAL INFORMATION
–3 7 2–


--- page 383 ---
FUTURE PLANS
For more details on our future plans, please refer to the section headed ‘‘Business —
Our Strategies’’ in this prospectus.
USE OF PROCEEDS
We estimate that the net proceeds we will receive from the Global Offering (after
deducting underwriting commissions, fees and anticipated expenses payable by us in
connection with the Global Offering) will be approximately HK$249.5 million (equivalent
to approximately RMB227.8 million), assumin g the Over-allotment Option is not exercised
and an Offer Price of HK$8.6 per Offer Share, being the mid-point of the Offer Price range
of HK$7.0 to HK$10.2 per Offer Share as stated in this prospectus. Our Directors presently
intend to apply such net proceeds as follows:
. approximately 53.8%, or approximat ely HK$134.1 million (equivalent to
approximately RMB122.5 million), will be used for the development of our
insurance agency business within three years upon Listing, as allocated below:
(i) approximately 44.4%, or approxima tely HK$110.8 million (equivalent to
approximately RMB101.2 million), w ill be used for strengthening and
expanding our geographical coverage by setting up 30 to 36 branch offices in
locations such as Hebei, Henan, Anhui, H ubei, Chongqing, Shanghai and Beijing,
and achieving a penetration into major d eveloped provinces near Shandong. In
addition, we also expect to increase more sales staff in support of our planned
geographical expansion;
(ii) approximately 5.6%, or approx imately HK$13.9 million (equivalent to
approximately RMB12.7 million), will be used for launching of online
marketing and promotional campaign in order to promote the awareness of our
brand. We plan to place online advertisements on social media such as short video
platforms; and
(iii) approximately 3.8%, or approximately HK$9.4 million (equivalent to
approximately RMB8.6 million), will be used for setting up training centre(s)
and strengthening our capacity to provide systematic trainings to our insurance
agents to improve service quality.
FUTURE PLANS AND USE OF PROCEEDS
–3 7 3–


--- page 384 ---
The following table sets forth the breakdown of the use of net proceeds for the
development of our insurance agency business for the three years upon Listing:
Expected periods of allocation of Net Proceeds
First year upon
Listing
Second year
upon Listing
Third year
upon Listing Total
(RMB
million)
(RMB
million)
(RMB
million)
(RMB
million)
Setting up branch offices 15.8 33.4 52.0 101.2
— Staff remuneration 10.2 21.4 33.2 64.8
— Rent of office, property
management fee and
utility fee 5.6 12.0 18.8 36.4
Launching marketing
and promotional campaign 3.0 4.5 5.2 12.7
Setting up training centre(s) 2.0 2.9 3.7 8.6
— Staff remuneration 1.2 2.1 2.9 6.2
— Rent of office, property
management fee and
utility fee 0.8 0.8 0.8 2.4
Total capital requirement 20.8 40.8 60.9 122.5
The table below sets out the expected average annual salary and the number of the staff
m e m b e r st h a tw ei n t e n dt or e c r u i tt os t a t i o na tt h eb r a n c ho f f i c e sw ep l a nt oe x p a n df o ro u r
insurance agency business by geographical locations within three years upon Listing:
Locations
Expected
average annual
salary per staff
member
Estimated
number
of staff
(RMB’000)
Hebei 132 25–30
Henan 131 35–40
Hubei 144 35–40
Anhui 148 20–25
Shanghai 425 5–10
Beijing 426 5–10
Chongqing 336 5–10
Total 130–165
Our Directors believe that the number of s taff members above is reasonable as we
intend to employ a minimum of five sales and marketing staff members for each branch
office, encompassing roles such as team leader, supervisor, trainer, HR manager and
administrative staff, and such staffing stru cture ensures the effective functioning and
operational support for each branch office.
FUTURE PLANS AND USE OF PROCEEDS
–3 7 4–


--- page 385 ---
In addition to the above, we plan to recruit 40 to 50 staff members in our headquarters
who will be responsible for the sales and marketing of our corporate insurance business
within three years upon Listing, and their exp ected average annual salary is approximately
RMB0.2 million per staff member.
For more details, please refer to the sect ion headed ‘‘Business — Our Strategies —
Expand our insurance client coverage, strengthen our relationship with insurance company
partners and enhance training support to our insurance agents’’ in this prospectus.
. approximately 26.2%, or approximately HK$65.4 million (equivalent to
approximately RMB59.7 million), will be u sed for developing and delivering our IT
service offerings within five year s upon Listing, allocated as below:
(i) approximately 15.4%, or approximately HK$38.3 million (equivalent to
approximately RMB35.0 million), will be used for enhancing our technological
ability and enhancing our IT servic e offerings as detailed below:
(a) Insurance related systems
We further extended and developed its IT services business by leveraging on
our IT technology and knowhow accumulated over years in view of the
inherent commonality between the digit alised solutions we developed for our
insurance agency business and the dig italised solutions demanded by our
customers. We plan to standardise the IT software and systems we used in
our insurance agency business and transform these software and systems into
IT service products for companies en gaging in the insurance and finance
related industries in order to capture their demand for digitalised solutions.
(b) AI service system
Developing AI technologies for our IT services offering is crucial in staying
competitive and meeting the evolving needs of our customers. Our Directors
believe that as the field of AI conti nues to advance, more businesses are
leveraging AI technologies, includi ng certificate recognition, document
processing and computer visual recognition, to upgrade their operations
and services. We plan to dedicate resources to further enhance our AI service
system to capture the growing demand for AI technologies.
(c) Online training system
Our current online training system has be en successful in providing training
for the insurance industry. We plan to dedicate resources to further develop
our online training system to mee t the growing demand for online
user-friendly and efficient training to employees and insurance agents in
insurance and finance related industries.
FUTURE PLANS AND USE OF PROCEEDS
–3 7 5–


--- page 386 ---
We expect to (i) recruit additional R&D staff for designing our developing
digitalisation solutions; (ii) recruit other staff as sales and after-sales support for
our IT services; and (iii) purchase hard ware and equipment and upgrading our
software system. We plan to recruit 20 to 30 IT service staff to support our
expansion plans for IT services business. We believe that our IT service staff is
important to our success and development, and their skills, experience and
commitment would assist us in realisin g our expansion plan. During the Track
Record Period, the size of our IT service staff had increased from 26 employees as
at 31 December 2021 to 40 employees as at 31 December 2022 and further
increased to 48 employees as at 31 Dece mber 2023. The following table sets out
the details of IT service staff that we intend to recruit within five years upon
Listing:
Function
Estimated number
of staff
Software development 15–20
Sales and marketing 5–10
Total 20–30
The following table sets forth the break down of the use of the net proceeds for
recruitment of R&D staff for enhancing our technological ability and
continuously optimising and innovating our digitalised solutions:
Expected periods of allocation of
Net Proceeds
Primary role of the staff
Expected
average
annual
salary
First
year upon
Listing
Second
year upon
Listing
Third
year upon
Listing
Fourth
year upon
Listing
Fifth
year upon
Listing Total
(Note)
(RMB million)
Staff to be recruited
after Listing by
functions
Software
development
Design and operating
customised
digitalisation solution
0.4 2.1 3.8 4.6 4.9 5.3 20.7
Sales and marketing Promotion and marketing
of IT services
0.3 0.9 1.5 1.8 2.1 2.4 8.7
Sub-total 3.0 5.3 6.4 7.0 7.7 29.4
Purchasing hardware
and equipment and
upgrading our
software system
0 . 71 . 01 . 11 . 31 . 55 . 6
Total capital
requirement
3.7 6.3 7.5 8.3 9.2 35.0
Note: According to Frost & Sullivan, the expected annual salary of staff to be recruited by
function is in line with the range of annual sal ary of staff performing similar corresponding
function in the IT services industry.
FUTURE PLANS AND USE OF PROCEEDS
–3 7 6–


--- page 387 ---
According to data published by the Ministry of Industry and Information
Technology of the PRC, the market size by revenue of the software and IT service
industry in China increased from RMB7.2 trillion in 2019 to RMB12.3 trillion in
2023, representing a CAGR of 14.4%. Looking forward, with the continuous
integration of emerging information te chnology and application fields in major
industries, there will be broad market space and demand momentum in the China
software and IT service industry. The ma rket size by revenue of the software and
IT service industry in China is expected to keep a continuous increase, growing at
a CAGR of approximately 13.2% from 2024 to 2028. Furthermore, our Directors
believe that IT services offered by ins urance intermedia ry companies play a
crucial role in enhancing user experiences, streamlining claims processing and
aligning offerings with the demand of insurance clients, and it is not uncommon
for insurance intermediary companies t o leverage on their IT capabilities to
provide insurance related IT services, which indicate a rising demand for IT
services within the industry.
Taking into account (i) the increasing significance of IT services for the
insurance-related industries mentioned above; and (ii) the substantial growth in
our IT services segment in terms of revenue, gross profit and number of projects
during the Track Record Period, our Directors are of the view that there will be
sufficient demand for our IT services an d we have genuine need to apply the net
proceeds from the Global Offering to enha nce our technological ability and our
IT service offerings.
(ii) approximately 10.8%, or approximately HK$27.1 million (equivalent to
approximately RMB24.7 million), will be used for strengthening our online
platforms by recruiting additional R &D staff, purchasing hardware and
equipment and upgrading our software system as detailed below:
(i) Insurance intermediary core business system
Our insurance intermediary core busine ss system is a crucial system for us to
manage our business and operations more efficiently. To support the
business expansion of our Group, we plan to establish a more
comprehensive insurance intermediary core business system that supports
centralised operations.
(ii) Corporate Insurance Interactive Service Platform ( 企業保險交互服務平台)
Our Corporate Insurance Interactive S ervice Platform offers a variety of
insurance products that are commonly required by corporate insurance
clients. We plan to strengthen the AI functions on the platform, which aims
to enhance its ability to recommend s uitable insurance solutions for
corporate insurance clients and prov ides them with suitable insurance
coverage through AI.
FUTURE PLANS AND USE OF PROCEEDS
–3 7 7–


--- page 388 ---
(iii) Insurance claims system
Our Directors believe that there is a la ck of mature and efficient insurance
claims platforms as many insurance comp anies still rely on traditional offline
insurance claims processes, which can be time-consuming and inefficient. Our
insurance claims system currently prov ides a digitalised tool for household
and corporate insurance clients to submit their insurance claims
electronically by providing the requ ired information and documents. We
plan to further upgrade our insurance claims system to provide a more
streamlined and accessible platform fo r our insurance clients and insurance
company partners. We aim to provide a unified process and optimise the
functionality of the system with an aim to provide a more efficient and
user-friendly insurance claims platform.
(iv) Insurance marketing and sales system
Our insurance marketing and sales sys tem primarily supports sale of online
products and general insurance services; provides tools for business and
provision of services including policy management, policy renewal
notifications, insurance premium quotations, etc. As Internet-based
insurance channels continue to rapidly develop, we plan to further upgrade
our insurance marketing and sales system.
As a significant portion of our existing staff is preoccupied for the continuous
maintenance of our online platforms, we expect to recruit additional R&D staff
for optimising and innovating digitalised solutions by enhancing functionality and
features. We plan to recruit 14 to 24 R&D staff. The following table sets out the
details of R&D staff that we intend to re cruit for strengthening our online
platforms within five years upon Listing:
Function
Estimated number
of staff
Software development 8–15
Product design 6–9
Total 14–24
FUTURE PLANS AND USE OF PROCEEDS
–3 7 8–


--- page 389 ---
The following table sets forth the break down of the use of the net proceeds for
recruitment of R&D staff for strengthening our online platforms:
Expected periods of allocation of
Net Proceeds
Primary role of the staff
Expected
average
annual
salary
First
year upon
Listing
Second
year upon
Listing
Third
year upon
Listing
Fourth
year upon
Listing
Fifth
year upon
Listing Total
(Note)
(RMB million)
Staff to be recruited
after Listing by
functions
Software
development
Design and operating IT
software for online
platform
0.4 1.0 2.0 2.8 3.0 3.5 12.3
Product design Supervise and manage IT
projects and products
0.3 0.9 1.5 1.8 2.1 2.1 8.4
Sub-total 1.9 3.5 4.6 5.1 5.6 20.7
Purchasing hardware
and equipment and
upgrading our
software system
0 . 40 . 50 . 81 . 01 . 34 . 0
Total capital
requirement
2.3 4.0 5.4 6.1 6.9 24.7
Note: According to Frost & Sullivan, the expected annual salary of staff to be recruited by
function is in line with the range of annual salary of people performing similar
corresponding function in the insurance intermediary industry.
For more details, please refer to the sections headed ‘‘Business — Our Strategies —
Continue to strengthen our digital capabilit ies and further develop our IT services
offerings’’ in this prospectus.
. approximately 10.0%, or approximately HK$25.0 million (equivalent to
approximately RMB22.8 million), will be use d for pursuing selective investments and
acquisitions of target companies in insuran ce intermediary and fintech industry that
have complementary or synergistic effects o n our current business to further accelerate
the development of our business and strengthen our competitiveness. The investment
in insurance intermediary companies aims to expand our business presence in other
regions, increase the awareness of our brand and obtain better commission rates from
insurance companies leveraging the overall business network and insurance client bases
of the acquired companies while the investment in fintech companies aims to enhance
our Group’s technological capabilities in o rder to supplement our existing R&D team.
When selecting insurance intermediary comp anies, we will consider various criteria,
including (i) their potential synergies with or complement to our exi sting business; (ii)
having branch offices in locations where we have presence and expect to expand; (iii)
past operating results, financial perf ormance and growth potentials; and (iv)
background and experience of the management team. When selecting fintech
companies, we will consider various crite ria, including having (i) R&D capabilities
FUTURE PLANS AND USE OF PROCEEDS
–3 7 9–


--- page 390 ---
in technologies relevant to our existing business; (ii) commercialised products
generating revenue; (iii) past operating results and growth potentials; (iv) financial
performance; and (v) background of the management team. We intend to apply net
proceeds from the Global Offering, together with our existing financial resources of
approximately RMB100 million to finance the abovementioned investment and
acquisitions as appropriate.
According to Frost & Sullivan, it is estim ated that there are over 2,000 insurance
intermediary companies and 8,000 financial technology companies in China in 2022.
As at the Latest Practicable Date, we had not identified any potential target company
for acquisition or strategic investment. After the Listing, we will start identifying
target companies that are in line with our busi ness strategies. For more details, please
refer to the section headed ‘‘Business — Our Strategies — Selective investments and
acquisitions in insurance intermediary and fintech industry’’ in this prospectus.
. approximately 10.0%, or approximately HK$25.0 million (equivalent to
approximately RMB22.8 million), will be used for our general working capital and
general corporate purpose.
We will use our net proceeds to implement our future plans after Listing and expect
that our net proceeds will be fully utilised within two years after the Listing.
The above allocation of the net proceeds from the Global Offering will be adjusted on
a pro rata basis in the event that the Offer Price is fixed at a higher or lower level compared
to the mid-point of the proposed Offer Price range or the Over-allotment Option is
exercised.
If the Offer Price is fixed at HK$10.2 per O ffer Share (being the high end of the Offer
Price range stated in this prospectus) and assuming the Over-allotment Option is not
exercised, the net proceeds we receive will be approximately HK$303.1 million (equivalent
to approximately RMB276.8 million), after ded ucting underwriting commissions, fees and
anticipated expenses payable by us in connection with the Global Offering.
If the Offer Price is fixed at HK$7.0 per O ffer Share (being the low end of the Offer
Price range stated in this prospectus) and assuming the Over-allotment Option is not
exercised, the net proceeds we receive will be approximately HK$195.8 million (equivalent
to approximately RMB177.6 million), after ded ucting underwriting commissions, fees and
anticipated expenses payable by us in connection with the Global Offering.
In the event that the Over-allotment Opt ion is exercised in full, we will receive
additional net proceeds of approximately HK$35.2 million (assuming an Offer Price of
HK$7.0 per Offer Share, being the low end of the proposed Offer Price range),
approximately HK$43.3 million (assuming an Offer Price of HK$8.6 per Offer Share,
being the mid-point of the proposed Offer P rice range) and HK$51.3 million (assuming an
Offer Price of HK$10.2 per Offer Share, bei ng the high end of the proposed Offer Price
range), after deducting underwriting commissions, fees and anticipated expenses payable by
FUTURE PLANS AND USE OF PROCEEDS
–3 8 0–


--- page 391 ---
us in connection with the Global Offering. Additional net proceeds received due to the
exercise of any Over-allotment Option will be used for the above purposes on a pro rata
basis.
To the extent that the net proceeds of the Global Offering are not immediately applied
to the purposes described above and to the extent permitted by applicable law and
regulations, we will only deposit such proceeds in interest-bearing accounts at licensed
commercial banks and/or other authorised financial institutions (as defined under the SFO
or applicable laws and regulations in other jurisdictions). Our Directors consider that the
net proceeds from the Global Offering together with the internal resources of our Group
will be sufficient to finance the implementation of our Group’s business plans as set out in
this section.
We will issue an appropriate announcement if there is any material change in the
aforementioned use of proceeds.
REASONS FOR LISTING
Our Directors believe that the Listing will enable our Group to enjoy various benefits
as summarised below which do not only enable our Group to achieve our business
objectives, but also facilitate our Group’s future development:
(i) Pursuing long term business growth through the implementation of business
strategies
Our Directors believe that raising funds b y way of the Global Offering is in line
with our business strategies. The net proceeds will provide our Group with financial
resources to implement our business plans which in turn drive our business growth. As
disclosed in paragraph headed ‘‘Use of Proceeds’’ in this section, part of our net
proceeds will be applied to expand the geog raphical reach of our insurance agency
business and development of IT service off ering. Our Directors believe that tapping
into the market of the provinces beyond Shandong will be vital to our continuous
business growth in future in light of the anticipated growth of the insurance agency
industry and business opportunities. Acco rding to Frost & Sullivan, the market size of
China insurance industry by primary insurance premium is expected to reach RMB7.2
trillion in 2028, representing a CAGR of 7.0% from 2024. Our Directors believe that,
we will benefit from capturing such market growth and more business opportunities
through extending the geographical reach of our insurance agency business. In
addition, we plan to apply the net proceeds to fund our plan to strengthen our
technological ability of our IT services an d online platforms in order to increase our
competitiveness thereby driv ing our growth in long-term.
FUTURE PLANS AND USE OF PROCEEDS
–3 8 1–


--- page 392 ---
(ii) Enhance our corporate profile and market reputation
We believe that a public listing status in Hong Kong would assist us in reinforcing
our image, enhancing confidence in stakeholders in the insurance agency industry and
raising our recognition among our existing and potential customers and suppliers in
our target geographical market. This is in line with our long-term target to expand into
the regional markets. Our experience and track record to deal with renowned insurance
company partners puts our Group in good stead to cross over to meeting the insurance
agency requirements after our Listing by leveraging on our standing as a listed
company on the premier regional financial centre in Asia that is the Stock Exchange.
We will benefit from the perception of outsiders in respect of good corporate
governance and internal control, generate reassurance among our existing business
partners, customers and suppliers, and strengthen our overall competitiveness in the
market. Listing can increase the corporate transparency of our Group to gain
recognition from stakeholders. Our Dir ectors believe that we will become a more
competitive player in the insurance agency service and IT service market if we were
able to gain a listing status.
We consider our corporate profile and recognition to be important factors for our
business. As such, our Directors consider that a public listing status will enhance our
corporate profile and recognition and assist us in reinforcing our brand awareness and
image, which will assist in further strengt hening our market position, enhancing our
reputation and expanding our market share.
(iii) Enhance our recruitment and retention
We rely on qualified and experienced insurance agents in distributing insurances
products and experienced sales and marketing team in operating, managing and
supervising our sales network. We also rely on experienced research and development
team in operating, maintain ing and enhancing our IT system and online platforms. Our
Directors believe that being listed on the St ock Exchange will facilitate us in attracting
talents in the insurance agency and IT service industry to join our Group which will
improve our service quality and facilitate our recruitment of additional manpower
under our expansion plans. The status of be ing a listed company will also facilitate our
in-house talent management, through staff retention and development, whereby our
existing staff may be motivated to further develop their career with us in view of the
p e r c e i v e ds t a t u sa s s o c i a t e dw i t hw o r k i n gf o ral i s t e dc o m p a n y .
FUTURE PLANS AND USE OF PROCEEDS
–3 8 2–


--- page 393 ---
(iv) Enable us to raise funds more easily for future business development and provide
liquidity in the trading of Shares
Our Directors are of the view that a listing status can assist us in any future debt
financing, if necessary. Despite the fact that our Group was able to expand our
business by internally generated funds duri ng the Track Record Period, our Directors
believe that equity or equity-linked financing is a better alternative in the long run due
to the following reasons:
(a) debt financing from banks or finan cial institutions normally requires
collaterals, such as cash deposit, properties and/or personal guarantee from
our Group and/or our Controlling Shareho lders. The continuous reliance on
our Controlling Shareholders for provision of personal guarantee and other
form of financial assistance would be a hindrance to us in achieving financial
independence. Moreover, the amount of financial support from our
Controlling Shareholders is not unlim ited and may eventually hold back
our pace of growth.
Taking into account the necessity to achi eve an optimal capital structure and
maintain a disciplined financial str ategy without exposing our Group to
excessively high gearing, our Directors consider that the net proceeds from
the Global Offering are necessary for t he successful implementation of our
business plans as opposed to pure debt financing. On the contrary, our
Directors believe that our Listing and enlarged capital base will put us in a
better position to negotiate with banks a nd financial institutions, which in
turn will enable our Group to obtain debt financing on more favourable
terms than before; and
(b) heavy reliance on debt financing would subject our Group to the inherent
risks of higher interest rate and finance costs and expose ourselves to
negative liquidity events. Primary and potential secondary equity
fundraising, including hybrid debt-cum-equity fund raising, after the
Listing will enable our Group to improve our capital structure. Our
Directors therefore believe that the equity financing would mitigate the
risk of high interest rate associated wi th debt financing, which potentially
exposes our Group to increasing financing costs in the future.
In addition to the above, the Listing will provide our Company with a broader
shareholder base and a market for the trading of the Shares. The Listing will allow
institutional, professional and other investors in Hong Kong to easily invest in our
Company. Our Directors are of the view that the Listing will enable our Group to
conduct secondary fund raising in the Hong Kong stock market, if necessary, for our
further expansion in the future.
Taking into account the above considerations, our Directors believe that the
Listing is beneficial to our Company and its Shareholders as a whole.
FUTURE PLANS AND USE OF PROCEEDS
–3 8 3–


--- page 394 ---
HONG KONG UNDERWRITERS
China PA Securities (Hong Kong) Company Limited
CLSA Limited
CMB International Capital Limited
Fosun International Securities Limited
Hong Tai Securities Limited
Patrons Securities Limited
China Industrial Securities In ternational Capital Limited
Eddid Securities and Futures Limited
Fortune (HK) Securities Limited
ICBC International Securities Limited
Tiger Brokers (HK) Global Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis on the terms and conditions set out in this prospectus and the Hong Kong
Underwriting Agreement. The International O ffering is expected to be fully underwritten by
the International Underwriters subject to the terms and conditions of the International
Underwriting Agreement. If, for any reason, the Offer Price is not agreed between the
Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company,
the Global Offering will not proceed and will lapse.
The Global Offering comprises the Hong K ong Public Offering of initially 3,530,000
Hong Kong Offer Shares and the International Offering of initially 31,770,000
International Offer Shares, subject, in each c ase, to reallocation on the basis as described
in the section headed ‘‘Structure of the Global Offering’’ in this prospectus as well as to the
Over-allotment Option in the case of the International Offering.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering
initially 3,530,000 Hong Kong Offer Shares for subscription by way of a Hong Kong Public
Offering at the Offer Price on and subject to the terms and conditions of this prospectus.
Subject to (i) the Listing Committee of the Stock Exchange granting listing of, and
permission to deal in, the H Shares (including additional H Shares which may be issued
pursuant to the exercise of the Over-allotment Option) as mentioned herein, and such listing
and permission not having been subsequently revoked prior to the commencement of
trading of our H Shares on the Main Board of the Stock Exchange and (ii) to certain other
conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong
Underwriters have agreed severally to subs cribe or procure subscribers for their
UNDERWRITING
–3 8 4–


--- page 395 ---
respective applicable proportions of the Hong Kong Offer Shares now being offered which
are not taken up under the Hong Kong Public Offering on the terms and conditions of this
prospectus and the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional upon and subject to, amongst
other things, the International Underwriting Agreement having been signed and becoming
unconditional and not having been ter minated in accordance with its terms.
Grounds for termination
The obligations of the Hong Kong Underwrite rs to subscribe or procure subscribers
for the Hong Kong Offer Shares under the Hong Kong Underwriting Agreement are subject
to termination, if at any time prior to 8 : 00 a.m. on the Listing Date:
(a) there develops, occurs, exists or comes into effect:
(i) any new law or any change or development involving a prospective change or
any event or circumstance or series of events or circumstances resulting or
likely to result in or representing a c hange or development involving a
prospective change in any existing law or in the interpretation or application
thereof by any court or other compet ent authority in or affecting Hong
Kong, the PRC, Russia, the United States, the United Kingdom, the
European Union (or any member thereof) or any other jurisdiction relevant
to any member of our Group or its business operations (collectively, the
‘‘Relevant Jurisdictions ’’, and each, a ‘‘Relevant Jurisdiction ’’); or
(ii) any change or any development involving a prospective change or
development (whether or not permanent), or any event or circumstance or
series of events likely to result in or representing a change or development, or
involving a prospective change or development, in local, national, regional or
international financial, political, milit ary, industrial, legal, fiscal, economic,
regulatory, credit, market or currency matters or conditions or exchange
management or any monetary or trading settlement system (including a
change in the stock and bond markets, m oney and foreign exchange markets,
the interbank markets and credit markets or a change in the system under
which the value of the Hong Kong dollar is linked to the U.S. dollar or
revaluation of Hong Kong dollar or Renminbi against any foreign currencies
or a change in any other currency exchange rates) in or affecting any of the
Relevant Jurisdictions; or
(iii) any moratorium, suspension or rest riction (including any imposition of or
requirement for any minimum or maximum price limit or price range) in or
on trading in shares or securities generally on the Stock Exchange, the
London Stock Exchange, the Shanghai Stock Exchange, the Shenzhen Stock
Exchange, the Tokyo Stock Exchange, the New York Stock Exchange, or in
the NASDAQ Global Market; or
UNDERWRITING
–3 8 5–


--- page 396 ---
(iv) any general moratorium on commercial banking activities in Hong Kong
(imposed by the Financial Secretary or the Hong Kong Monetary Authority
or other competent government authority), New York (imposed at Federal or
New York State level or other compet ent authority), London or any other
Relevant Jurisdictions (declared by the relevant authorities) or any
disruption in commercial banking or foreign exchange trading or securities
settlement or clearance services, procedures or matters in or affecting any of
the Relevant Jurisdictions; or
(v) any change or development involving a prospective change in or affecting
taxation or exchange management, currency exchange rates or foreign
investment regulations (including a change in the system under which the
value of the Hong Kong currency is linked to the U.S. dollar, or a material
devaluation of the U.S. dollar, Hong Kong dollar or Renminbi against any
foreign currencies), or the implementation of any exchange management, in
any of the Relevant Jurisdictions or affecting an investment in the Offer
Shares; or
(vi) any imposition of sanctions or ec onomic sanctions, or the withdrawal of
trading privileges, in whatever form, d irectly or indirectly, by, or for, the
United Nations or any Relevant Jurisdiction; or
(vii) any valid demand by any creditor for repayment or payment of any
indebtedness of any member of our Group or in respect of which any member
of our Group is liable prior to its stated maturity; or
(viii) the outbreak or escalation of hostilities (whether or not war is or has been
declared) involving or affecting any of the Relevant Jurisdictions or the
declaration by any of the Relevant Jurisdictions of a national emergency or
war or any other national or international calamity or crisis; or
(ix) any event or circumstance, or series of events or circumstances (either
national or international), in the nature of force majeure in or affecting
directly or indirectly any of the Relevant Jurisdictions including, without
limiting the generality thereof, any act of God, act of government,
declaration of a national or international emergency or war, act of war,
outbreak or escalation of hostilities (whether or not war is declared),
calamity, economic sanction, strike, l abour dispute, crisis, riot, rebellion,
civil commotion, public disorder, labour dispute, epidemic (including Severe
Acute Respiratory Syndrome (SARS), swine or avian flu, Influenza A
(H5N1), H1N1, swine or avian influenza (H7N9), COVID-19 or such
related/mutated forms), pandemic, outbreak of infectious disease, lockdown,
lockout or severe or extended interruption in transport, earthquake, act of
terrorism (whether or not responsib ility has been claimed), flooding,
explosion, volcanic eruption, ice-storm, tsunami or fire; or
UNDERWRITING
–3 8 6–


--- page 397 ---
(x) the issue or requirement to issue by our Company of any supplement or
amendment to this prospectus, the preliminary offering circular or final
offering circular in connection with the International Offering (or to any
other document used in connection with the contemplated offer, subscription
and sale of the Offer Shares) or the CSRC Filings (as defined in the Hong
Kong Underwriting Agreement) pu rsuant to the Companies (WUMP)
Ordinance or the Listing Rules or the CSRC Rules (as defined in the Hong
Kong Underwriting Agreement) or any requirement or request of the Stock
Exchange, the SFC and/or the CSRC without the prior written consent of the
Joint Sponsors and the Overall Coordinators; or
(xi) that any matter has arisen or has been discovered which would, had it arisen
or been discovered immediately before the date of this prospectus, constitute
a material misstatement in any of the Hong Kong Public Offering Documents
(as defined in the Hong Kong Underwriting Agreement) or the Hong Kong
Information Pack (as defined in the Hong Kong Underwriting Agreement) or
the CSRC Filings; or
(xii) any change, development or event involving a prospective change in, or
actual materialisation of, any of the ri sks set out in the section headed ‘‘Risk
Factors’’ in this prospectus; or
(xiii) an order or a petition is presented for the winding up or liquidation of any
member of our Group or any 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 or a
provisional liquidator, receiver or manager is appointed over all or part of
the assets or undertaking of any member of our Group or anything
analogous thereto occurs in respect of any member of our Group; or
(xiv) any contravention or breach by any member of our Group or any Director or
member of the senior management of our Company of the Listing Rules, the
Companies (WUMP) Ordinance, the Companies Ordinance, the CSRC
Rules, the PRC Company Law or other applicable laws; or
(xv) a prohibition on our Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Share s (including any additional H Shares
that may be issued pursuant to the exe rcise of the Over-allotment Option)
pursuant to the terms of the Global Offering; or
(xvi) any non-compliance of this prospectus (or any other document used in
connection with the contemplated offer, subscription and sale of the Offer
Shares) or any aspect of the Global Offering with the Listing Rules, the
Companies (WUMP) Ordinance, the CSRC Rules or any other applicable
laws; or
UNDERWRITING
–3 8 7–


--- page 398 ---
(xvii) any litigation, claim or other legal or r egulatory proceeding being threatened
or instigated against (i) any member o f our Group; (ii) any of the Controlling
Shareholders; (iii) any Director; or (iv) any Supervisor; or
(xviii) any authority in any Relevant Jurisdiction commencing any investigation or
other action, or announcing an intention to investigate or take other action,
against any member of our Group or any Director or any Supervisor or any
of the Controlling Shareholders; or
(xix) any of the chairman of the Board, the chief executive officer of our
Company, the general manager of the Company, or any Director or any
Supervisor vacating his or her office; or any material loss or damage
sustained by any member of the Group (howsoever caused and whether or
not subject of any insurance or claim against any person); or
(xx) any of the chairman of the Board , the chief executive officer of our
Company, the general manager of our Company, or any Director or
Supervisor 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
(xxi) a material breach by any member of our Group of the Listing Rules or
applicable laws,
which, individually or in the aggregate, in the sole and absolute opinion of the
Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) and the Joint Sponsors:
(A) has or will or may have a material ad verse effect on the assets, liabilities,
business, general affairs, managemen t, prospects, shareholders’ equity,
profits, losses, properties, results o f operations, position, condition or
performance, financial, operational, trading or otherwise, of our Company
or any member of our Group; or
(B) has or will have or may have a material adverse effect on the success or
marketability of the Global Offering or the level of applications under the
Hong Kong Public Offering or the level of interest under the International
Offering; or
(C) makes or will or may make it inadvisab le or inexpedient or impracticable for
any part of the Hong Kong Public Offering or the International Offering to
proceed as envisaged or to market the G lobal Offering or to deliver the Offer
Shares on the terms and in the manner as contemplated by this prospectus,
the formal notice, the preliminary offer ing circular or final offering circular
in connection with the International Offering; or
UNDERWRITING
–3 8 8–


--- page 399 ---
(D) has or will have or may have the effect of (i) making any part of the Hong
Kong Underwriting Agreement (including underwriting) incapable or
impracticable of performance in accordance with its terms or (ii)
preventing or delaying the processing of applications and/or payments
pursuant to the Global Offering or pursuant to the underwriting thereof; or
(b) there has come to the notice of the Joint Sponsors or the Overall Coordinators
(for themselves and on behalf of the Hong Kong Underwriters):
(i) that any statement contained in the any of the Offering Documents (as
defined in the Hong Kong Underwriting Agreement) (including the Hong
Kong Public Offering Documents and the Hong Kong Information Pack, the
CSRC Filings, the Operative Documents (as defined in the Hong Kong
Underwriting Agreement), the preliminary offering circular and final offering
circular in connection with the International Offering and/or in any notices,
announcements, advertisements, communications, marketing or other
documents issued or used by or on behalf of our Company in connection
with the Hong Kong Public Offering (including any supplement or
amendment thereto)) (collectively, the ‘‘ Offering Related Documents ’’) was,
when it was issued, or has become, untrue, incorrect or inaccurate in any
material respect or misleading, or that any forecast, estimate, expression of
opinion, intention or expectation expressed or contained in any of the
Offering Related Documents is not fair and honest and not made on
reasonable grounds or, where appropriate, not based on reasonable
assumptions with reference to the facts and circumstances then subsisting; or
(ii) that any matter has arisen or has been discovered which would or might, had
it arisen or been discovered immediately before the date of this prospectus,
constitute a material omission from, or misstatement in, any of the Offering
Related Documents; or
(iii) any material contravention or br each by any member of our Group or any
Director of any applicable laws, the Listing Rules or the CSRC Rules; or
(iv) that there is a breach of, or any matter, event or circumstance rendering or
which may render, any of the representa tions, warranties, agreements and
undertakings given by any of our Company, the executive Directors, Qingdao
Haiyinghui and Qingdao Haichuanghui (Qingdao Haiyinghui and Qingdao
Haichuanghui are collectively referred to as ‘‘ Warranting Shareholders ’’, and
each of them a ‘‘ Warranting Shareholder ’’) in the Hong Kong Underwriting
Agreement, the Cornerstone Investmen t Agreements or the International
Underwriting Agreement, as applicable , untrue, incorrect, incomplete in any
respect or misleading; or
(v) that there is a breach of any provision of, or any obligation imposed upon
any party to, the Hong Kong Underwriting Agreement or the International
Underwriting Agreement (other than obligations imposed upon any of the
UNDERWRITING
–3 8 9–


--- page 400 ---
Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Joint Sponsors, the CMIs, the
Hong Kong Underwriters or the International Underwriters); or
(vi) there is an event, act or omission which gives or is likely to give rise to any
liability of any of our Company or any of the executive Directors and
Warranting Shareholders pursuant to the indemnities given by any of them
under the Hong Kong Underwriting Agreement or the International
Underwriting Agreement, as applicable; or
(vii) that there is any material adverse change, or any development involving a
prospective material adverse change or development, in the assets, liabilities,
business, general affairs, managemen t, prospects, shareholders’ equity,
profits, losses, properties, results o f operations, position, condition or
performance, financial, operational, trading or otherwise, of our Group or
any present or prospective shareholder of our Company in its capacity as
such; or
(viii) that a material portion of the orders in the bookbuilding process have been
withdrawn, terminated, cance lled or otherwise not fulfilled; or
(ix) that the investment commitments by any cornerstone investor(s) after signing
of the Cornerstone Investment Agreement(s) with such cornerstone
investor(s) have been withdrawn, terminated, cancelled or otherwise not
fulfilled; or
(x) any of the experts specified in this prospectus or other person whose consent
is required for the issue of this prospectus or any of the Hong Kong Public
Offering Documents with the inclusion of its reports, letters and/or legal
opinions (as the case may be) and references to its name included in the form
and context in which it respectively appears has withdrawn its consent to
being named in, or to the issue of, this prospectus or any of the Hong Kong
Public Offering Documents; or
(xi) that the approval by the Listing Committee of the listing of, and permission
to deal in, the H Shares (including any additional H Shares that may be
issued pursuant to the exercise of the Over-allotment Option) is refused, not
granted or qualified (other than by customary conditions), on or before the
Listing Date, or if granted, the approval is subsequently withdrawn,
cancelled, qualified (other than by customary conditions), revoked or
withheld; or
(xii) that our Company withdraws this p rospectus (and/or any other document
issued or used in connection with the Global Offering) or the Global
Offering.
UNDERWRITING
–3 9 0–


--- page 401 ---
Undertakings to the Stock Exchange Pursuant to the Listing Rules
Undertakings by our Company
We have undertaken to the Stock Exchange that within six months from the Listing
Date, except in certain circumstances prescribed by Rule 10.08 of the Listing Rules or
pursuant to the Global Offering and the Over-allotment Option, no further shares or
securities convertible into equity securities of our Company (whether or not of a class
already listed) may be issued or form the subject of any agreement to such an issue within
six months from the Listing Date (whether or not such issue of shares or securities will be
completed within six months from the Listing Date).
Undertakings by our Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, our Controlling Shareholders have
undertaken to the Stock Exchange and our Company that, except pursuant to the Global
Offering (including the exercise of the Ov er-allotment Option), they will not (and will
procure that any other registered holder (if any) of the Shares in which any of them has a
beneficial interest will not) without the pri or written consent of the Stock Exchange or
unless otherwise in compliance with the Listing Rules:
(i) in the period commencing on the date of this prospectus and ending on the date
which is six months from the Listing Date , dispose of, or enter into any agreement
to dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the Shares in respect of which any of them is shown by this
prospectus to be the beneficial owner (the ‘‘ Relevant Shares ’’); and
(ii) in the period of six months commencin g on the date on which the period referred
to in paragraph (i) above expires, dispose of, or enter into any agreement to
dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, the Relevant Shares if, immediately following such disposal or upon
the exercise or enforcement of such options, rights, interests or encumbrances,
they would cease to be a group of contro lling shareholders of our Company for
the purpose of the Listing Rules.
Pursuant to Note 3 to Rule 10.07(2) of the Lis ting Rules, our Contro lling Shareholders
have further undertaken to each of the Stock Exchange and our Company that, within the
period commencing on the date of this prospectus and ending on the date which is 12
months from the Listing Date, they will:
(i) when they pledge or charge any Shares or other securities of our Company
beneficially owned by them in favour of an authorized institution (as defined in
the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)) relying on 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
UNDERWRITING
–3 9 1–


--- page 402 ---
(ii) when they receive indications, eit her verbal or written, from the pledgee or
chargee that any of the pledged or charged Shares or such other securities of our
Company will be disposed of, immediately inform our Company of such
indications.
Our Company will inform the Stock Exchan ge as soon as we have been informed of the
matters referred to in paragraph (i) and (ii) ab ove (if any) by our Controlling Shareholders
and subject to the then applicable requirements of the Listing Rules disclose such matters
by way of an announcement.
Undertakings to the Hong Kong Underwrite rs pursuant to the Hong Kong Underwriting
Agreement
Undertakings by our Company
Pursuant to the Hong Kong Underwriting Ag reement, we have undertaken to each of
the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the CMIs and the Hong Kong Underwriters that
except for the issue, offer or sale of the Offer Shares pursuant to the Global Offering
(including pursuant to the exercise of the Over-Allotment Option), not to, and to procure
each other member of our Group 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) and unless in compliance with the Listing Rules, at any time during the
period commencing on the date of the Hong Kong Underwriting Agreement and ending on,
and including, the date that is six months after the Listing Date (the ‘‘ First Six-Month
Period ’’):
(a) allot, issue, sell, accept subscription fo r, offer to allot, issue or sell, contract or
agree to allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, hedge,
lend, grant or sell any option, warrant, contract or right to subscribe for or
purchase, grant or purchase any option, warrant, contract or right to allot, issue
or sell, or otherwise transfer or dispose of or create an Encumbrance (as defined in
the Hong Kong Underwriting Agreement) over, or agree to transfer or dispose of
or create an Encumbrance over, either directly or indirectly, conditionally or
unconditionally, any Shares or any other securities of any member of our Group,
as applicable, or any interest in any o f the foregoing (including, without
limitation, any securities convertible int o or exchangeable or exercisable for or
that represent the right to receive, or any warrants or other rights to purchase any
Shares or any other securities of any member of our Group, as applicable, or any
interest in any of the foregoing) or deposit any Shares or any other securities of
any member of our Group, as applicable, with a depositary in connection with the
issue of depositary receipts; or
UNDERWRITING
–3 9 2–


--- page 403 ---
(b) enter into any swap, derivative or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of subscription or ownership
(legal or beneficial) of any Shares or any other securities of any member of our
Group or any interest in any of the foregoing (including any securities convertible
into or exchangeable or exercisable for, or that represent the right to receive, or
any warrants or other rights to purchase, any Shares or any other securities of any
member of our Group, as applicable, or any interest in any of the foregoing); or
(c) enter into any transaction with the s ame economic effect as any transaction
described in (a) or (b) above; or
(d) offer or agree or contract to effect any t ransaction set out in (a), (b) or (c) above
or publicly announce any intention to do so,
in each case, whether any of the transactions specified in (a), (b) or (c) above is to be settled
by delivery of Shares or other securities of any member of our Group, as applicable, 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).
We have further agreed that, in the event that during the six-month period
commencing on the date on which the First Six-Month Period expires (the ‘‘ Second
Six-Month Period ’’) our Company enters into any of the transactions specified in (a), (b) or
(c) above or offers or agrees or contracts to, or publicly announces an intention to, enter
into any such transactions, our Company shall take all reasonable steps to ensure
compliance with applicable legal and regulato ry requirements relating to the avoidance of
creating a disorderly or false market in the Shares or other securities of any member of our
Group, where applicable. Each of the Warranting Shareholders has also undertaken to each
of the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the CMIs and the Hong Kong Underwriters to
procure our Company’s compliance with the foregoing undertakings.
Undertakings by the Warranting Shareholders
Each of the Warranting Shareholders has undertaken to each of the Joint Sponsors, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the CMIs and the Hong Kong Underwriters that, without the prior written
consent of the Joint Sponsors and the Overall Coordinators (for themselves and on behalf
of the Hong Kong Underwriters) and unless in compliance with the Listing Rules:
(a) save for any pledge or charge of Shares or other securities of our Company (in
respect of which it is shown in this prospectus as the beneficial owner or as having
any deemed or other interest) or any interest in any of the foregoing (including
without limitation, any securities convert ible into or exchangeable or exercisable
for or that represent the right to receive, or any warrants or other rights to
purchase, any Shares or any other securities of our Company) by it as security in
UNDERWRITING
–3 9 3–


--- page 404 ---
favour of an authorized institution (as defined in the Banking Ordinance (Chapter
155 of the Laws of Hong Kong) for a bona fide commercial loan, during the First
Six-Month Period, it will not and will procure that none of its affiliates will:
(i) offer, pledge, charge, sell, offer, co ntract or agree to sell, pledge, assign,
mortgage, charge, hypothecate, lend, grant or sell (or agree to grant or sell)
any option, warrant, contract or right to subscribe for or purchase, grant or
purchase (or agree to grant or purchase) any option, warrant, contract or
right to sell, lend or otherwise transfer or dispose of, make any short sale, or
otherwise transfer or dispose of or create an Encumbrance over, or agree to
transfer or dispose of or create an Encumbrance over, either directly or
indirectly, conditionally or unconditionally, any Shares or other securities of
our Company or any interest therein (including but not limited to any
securities convertible into or exchangeable for, or that represent the right to
receive, or any warrants or other rights to purchase, any Shares or other
securities of our Company), directly or indirectly held by it as of the date of
the Hong Kong Underwriting Agreement;
(ii) enter into any swap, derivative o r other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership
of any Shares or other securities of our Company or any interest therein
(including, without limitation, any securities convertible into or
exchangeable or exercisable for, or that represent the right to receive, or
any warrants or other rights to purchase, any Shares or other securities of
our Company) directly or indirectly held by it as of the date of the Hong
Kong Underwriting Agreement;
(iii) enter into any transaction with the same economic effect as any transaction
set out in paragraphs (i) or (ii); or
(iv) publicly disclose that it will or may enter into any transaction set out in
paragraphs (i), (ii) or (iii),
whether any of the transaction set out in pa ragraphs (i), (ii) or (iii) is to be settled
by delivery of such capital or securities of our Company, in cash or otherwise
(whether or not the issue of such Shares or other shares or securities will be
completed within the First Six-Month Period);
(b) during the Second Six-Month Period, it will not enter into any transaction
described in paragraphs (a)(i), (a)(ii), o r (a)(iii) or offer, agree or contract to or
publicly announce any intention to enter int o any such transaction if, immediately
following such transaction, it will cease to be a Controlling Shareholder;
(c) until the expiry of the Second Six-Month Period, in the event that it enters into
any such transactions specified in paragrap hs (a)(i), (a)(ii), or (a)(iii) or offers,
agrees or contracts to, or publicly announces an intention to enter into any such
UNDERWRITING
–3 9 4–


--- page 405 ---
transaction, it will notify the Joint Sponsors and the Overall Coordinators and
take all reasonable steps to ensure that it will not create a disorderly or false
market in the securities of our Company; and
(d) at any time after the date of the Hong Kong Underwriting Agreement up to and
including the date falling 12 months after the Listing Date, it shall:
(i) if and when it pledges or charges any Shares or other securities of our
Company (or any interests therein) beneficially owned by it, immediately
inform our Company, the Joint Sponsors and the Overall Coordinators in
writing of such pledge or charge together with the number of Shares or other
securities (or interests therein) so pledged or charged; and
(ii) if and when it receives indications, e ither verbal or written, from any pledgee
or chargee that any of the pledged or charged Shares or other securities (or
interests therein) of our Company will be disposed of, immediately inform
our Company, the Joint Sponsors and the Overall Coordinators in writing of
such indications.
Our Company has agreed and undertaken that upon receiving such information in
writing from a Warranting Shareholder, we sh all, as soon as practicable and if required
pursuant to the Listing Rules, notify the Stock Exchange and make an announcement in
relation to such information in accordance wi th applicable requirements of the Listing
Rules.
Our Company has further agreed and undertaken to each of the Joint Sponsors, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the CMIs and the Hong Kong Underwriters that we will not, and each of
the Warranting Shareholders has further undertaken to each of the Joint Sponsors, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the CMIs and the Hong Kong Underwriters to procure that our Company
will not, effect any purchase of H Shares, or agree to do so, which may reduce the holdings
of Shares held by the public (as defined in Ru le 8.24 of the Listing Rules) below 25% on or
before the date falling six mont hs after the Listing Date without first having obtained the
prior written consent of the Joint Sponsors and the Overall Coordinators (for themselves
and on behalf of the Hong Kong Underwriters).
Indemnity
We and the Warranting Shareholders have ag reed to jointly and severally indemnify
the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers and the Hong Kong Underwriters for certain losses
which they may suffer, including losses incurred arising from our performance of our
obligations under the Hong Kong Underwriting Agreement and any breach by our
Company of the Hong Kong Underwriting Agreement.
UNDERWRITING
–3 9 5–


--- page 406 ---
The International Offering
In connection with the International Offering, it is expected that our Company will
enter into the International Underwriting Agr eement with the International Underwriters,
among others. Under the International Underwriting Agreement, the International
Underwriters will, subject to certain conditions set out therein, severally and not jointly,
agree to procure subscribers or purchasers f or the International Offe r Shares, failing which
they agree to subscribe for or purchase their respective proportions of the International
Offer Shares which are not taken up under the International Offering.
Our Company is expected to grant to the International Underwriters the
Over-allotment Option, exercisable by the Overall Coordinators (for themselves and on
behalf of the International Underwriters) at any time from the date of the International
Underwriting Agreement until Saturday, 31 August 2024, being the 30th day from the last
day for the lodging of applications under the Hong Kong Public Offering, to require our
Company to issue and allot up to an aggregate of 5,295,000 additional Offer Shares,
representing 15% of the initial Offer Shares, at the Offer Price under the International
Offering to cover, among other things, ove r allocations (if any) in the International
Offering.
It is expected the International Underwrit ing 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 Unde rwriting Agreement is not entered into, the
Global Offering will not proceed.
Underwriting Commission and Expenses
The Underwriters will receive an underwriting commission of 3.0% of the aggregate
Offer Price of all the Offer Shares (including any Offer Shares to be issued pursuant to the
exercise of the Over-allotment Option) (the ‘‘ Fixed Fees ’’), out of which they will pay any
sub-underwriting commission and other fees. For unsubscribed Hong Kong Offer Shares
reallocated to the International Offering, our Company will pay an underwriting
commission to the relevant International Underwriters (but not the Hong Kong
Underwriters). The Company may also in its s ole discretion pay the Underwriters an
additional incentive fee of up to 2.0% of the agg regate Offer Price of all the Offer Shares
(including any Offer Shares to be issued pursuant to the exercise of the Over-allotment
Option) (the ‘‘Discretionary Fees ’’).
Assuming that all of the 2.0% Discretionary Fees will be paid in full to the
Underwriters, the aggregate amount of fees payable by us to all syndicate members will be
5.0% of the gross proceeds from the Global Offering, comprising 60% in Fixed Fees and
40% in Discretionary Fees.
Assuming an Offer Price of HK$8.6 per Offer Share (being the mid-point of the
indicative Offer Price range), the aggreg ate commissions and fees (assuming the full
payment of Discretionary Fees and no exercise o f the Over-allotment Option), together with
UNDERWRITING
–3 9 6–


--- page 407 ---
listing fees, SFC transaction levy, AFRC transaction levy, Stock Exchange trading fee, legal
and other professional fees and printing and other expenses, payable by our Company
relating to the Global Offering are estimated to be approximately HK$54.1 million in total.
The commission and expenses were determined after arm’s length negotiation between
the Company and the Hong Kong Underwriters or other parties by reference to the current
market conditions.
HONG KONG UNDERWRITERS’ INTERESTS IN THE COMPANY
Save for its obligations under the Hong Kong Underwriting Agreement or otherwise
disclosed in this prospectus, none of the Hong Kong Underwriters has any shareholding
interests in our Company or the right or option (whether legally enforceable or not) to
subscribe for or nominate persons to subscribe for securities in our Company.
Following the completion of the Global Offeri ng, the Underwriters and their affiliated
companies may hold a certain portion of t he H Shares as a result of fulfilling their
obligations under the Underwriting Agreements.
JOINT SPONSORS’ INDEPENDENCE
CITIC Securities (Hong Kong) Limited satisf ies the independence criteria applicable to
sponsors set out in Rule 3A.07 of the Listing Rules.
Ping An Insurance (Group) Company of China, Ltd. is the holding company of both
Ping An of China Capital (Hong Kong) Company Limited (‘‘ Ping An Capital ’’) and Ping An
Property and Casualty Insurance Company of China, Ltd.. Ping An Property and Casualty
Insurance Company of China, Ltd. was one of our largest customers in each year of the
T r a c kR e c o r dP e r i o da n dt h e r e f o r et h eP i n gA nC a p i t a lg r o u pm a yb ev i e w e dt oh a v ea
business relationship with our Group. As such, Ping An Capital does not satisfy the
independence criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules.
RESTRICTIONS ON THE OFFER SHARES
No action has been taken to permit a public offering of the Offer Shares other than in
Hong Kong, or the distribution of this prospectus in any jurisdiction other than in Hong
Kong. Accordingly, this prospectus may not be used for the purpose of, and does not
constitute, an offer or invitation in any jurisd iction or in any circumstances in which such
an offer or invitation is not authorised or to any person to whom it is unlawful to make such
an offer or invitation. In particular, the Offer Shares have not been offered or sold, and will
not be offered or sold, directly or indirectly, in China and the U.S.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering
(together, the ‘‘Syndicate Members ’’) and their affiliates may ea ch individually undertake a
variety of activities (as further described be low) which do not form part of the underwriting
or stabilising process.
UNDERWRITING
–3 9 7–


--- page 408 ---
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In the
ordinary course of their various business activities, the Syndicate Members and their
respective affiliates may purchase, sell or hold a broad array of investments and actively
trade securities, derivatives, loans, commodities, currencies, credit default swaps and other
financial instruments for their own account and for the accounts of their customers. Such
investment and trading activities may inv olve or relate to assets, securities and/or
instruments our Company and/or persons and entities with relationships with our
Company and may also include swaps and other financial instruments entered into for
hedging purposes in connection with our Group’s loans and other debt.
In relation to 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 fin ancing 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 unliste d 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 entiti es involving, directly or indi rectly, 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 Hong Kong and e lsewhere 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 o r 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 relevant rules of the exchange may require the issuer of those
securities (or one of its affiliates or agents) to act as a market maker or liquidity provider in
the security, and this will also result in hedg ing activity in the H Shares in most cases.
All such activities may occur both during a nd after the end of the stabilising period
described in ‘‘Structure of the Global Offering’ ’ in this prospectus. 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 (other than the Stabilising Manager or any person acting
for it) must not, in connection with the distribution of the Offer Shares, effect any
transactions (including issuing or entering into any option or other derivative
UNDERWRITING
–3 9 8–


--- page 409 ---
transactions relating to the Offer Shares) whether in the open market or
otherwise, with a view to stabilising or m aintaining the market price of any of
the Offer Shares at levels other than those which might otherwise prevail in the
open market; and
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false tra ding, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their res pective affiliates expect to provide in the
future, investment banking and other servic es to our Company and its affiliates for which
such Syndicate Members or their respectiv e affiliates will receive customary fees and
commissions. In addition, the S yndicate Members or their resp ective affiliates may provide
financing to investors to finance their subscriptions of Offer Shares in the Global Offering.
OVER-ALLOTMENT AND STABILISATION
Details of the arrangements relating to the Over-allotment Option and stabilisation are
set forth in the section headed ‘‘Structure of the Global Offering.’’
UNDERWRITING
–3 9 9–


--- page 410 ---
THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering.
The Global Offering comprises:
(a) the Hong Kong Public Offering of init ially 3,530,000 H Shares (reallocation as
mentioned below) in Hong Kong as described in the paragraph headed ‘‘— The
Hong Kong Public Offering’’ below; and
(b) the International Offering of initially 31, 770,000 H Shares (subject to reallocation
and the Over-allotment Option as mentioned below) to be offered only outside the
United States (including to professional and institutional investors within Hong
Kong) in offshore transactions in reliance on Regulation S, as described in the
paragraph headed ‘‘— The International Offering’’ below.
Investors may apply for Offer Shares under the Hong Kong Public Offering or apply
for or indicate an interest for Offer Shares under the International Offering, but may not do
both.
The Offer Shares will represent approximately 25.0% of the enlarged registered share
capital of our Company immed iately after completion of the Global Offering without
taking into account the exercise of the Over-al lotment Option, if any. If the Over-allotment
Option is exercised in full, the additional I nternational Offer Shares will represent
approximately 27.7% of the enlarged registe red share capital of our Company immediately
after completion of the Global Offering and the exercise of the Over-allotment Option as set
out in the paragraph headed ‘‘— Over-allotment Option.’’
References in this prospectus to applicatio ns, application monies or the procedure for
applications relate solely to the Hong Kong Public Offering.
The number of Offer Shares to be offered under the Hong Kong Public Offering and
the International Offering, respectively, may be subject to reallocation as described in the
paragraph headed ‘‘— The Hong Kong Public Offering — Reallocation.’’
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares Initially Offered
Our Company is initially offering 3,530,00 0 H Shares for subscription by the public in
Hong Kong at the Offer Price, representing 10% of the total number of Offer Shares
initially available under the Global Offering.
STRUCTURE OF THE GLOBAL OFFERING
–4 0 0–


--- page 411 ---
The number of Offer Shares initially offered under the Hong Kong Public Offering,
subject to any reallocation of Offer Shares bet ween the International Offering and the Hong
Kong Public Offering and assuming that the Ov er-allotment Option is not exercised, will
represent approximately 2.5% of the total Shares in issue immediately following the
completion of the Global Offering.
The Hong Kong Public Offering is open to members of the public in Hong Kong as
well as to institutional and professional investors. Professional investors generally include
brokers, dealers, companies (including fund managers) whose ordinary business involves
dealing in shares and other securities and corporate entities that regularly invest in shares
and other securities.
Completion of the Hong Kong Public Offering is subject to the conditions set out in
the paragraph headed ‘‘— Conditions of the Global Offering’’ below.
Allocation
The allocation of Offer Shares to investors under the Hong Kong Public Offering will
be based solely on the level of valid applications received under the Hong Kong Public
Offering. The basis of allocation may vary, depending on the number of Hong Kong Offer
Shares validly applied for by applicants. Such a llocation could, where appropriate, consist
of balloting, which could mean that some applicants may receive a higher allocation than
others who have applied for the same number of Hong Kong Offer Shares, and those
applicants who are not successful in the b allot may not receive any Hong Kong Offer
Shares.
For allocation purposes only, the total number of Hong Kong Offer Shares available
under the Hong Kong Public Offering (after taking into account any reallocation referred
to below) will be divided equally into two pools: pool A and pool B (with any odd board
lots being allocated to pool A). The Hong Kong Offer Shares in pool A will be allocated on
an equitable basis to applicants who have applied for Hong Kong Offer Shares with an
aggregate subscription pric e of HK$5 million (excluding the brokerage, SFC transaction
levy, AFRC transaction levy and the Stock Exchange trading fee payable) or less. The Hong
Kong Offer Shares in pool B will be allocated on an equitable basis to applicants who have
applied for Hong Kong Offer Shares with an aggregate subscription price of more than
HK$5 million (excluding the brokerage, SFC tr ansaction levy, AFRC transaction levy and
the Stock Exchange trading fee payable) and up to the total value in pool B.
Investors should be aware that applicat ions in pool A and applications in pool B may
receive different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of
the pools are unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred
to the other pool to satisfy demand in that other pool and be allocated accordingly. For the
purpose of the immediately preceding paragraph only, the ‘‘price’’ for Hong Kong Offer
Shares means the price payable on application therefor (without regard to the Offer Price as
finally determined). Applicants can only rece ive an allocation of Hong Kong Offer Shares
from either pool A or pool B and not from both pools. Multiple or suspected multiple
STRUCTURE OF THE GLOBAL OFFERING
–4 0 1–


--- page 412 ---
applications under the Hong Kong Public Offering and any application for more than
1,765,000 Hong Kong Offer Shares (being 50% of the Offer Shares initially available under
the Hong Kong Public Offering) is liable to be rejected.
Reallocation
The allocation of the Offer Shares between the Hong Kong Public Offering and the
International Offering is subject to reallocation. Paragraph 4.2 of Practice Note 18 of the
Listing Rules requires a clawback mechanism to be put in place which would have the effect
of increasing 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 if certain
prescribed total demand levels are reached.
3,530,000 Offer Shares are initially available in the Hong Kong Public Offering,
representing 10% of the Offer Shares initially available for subscription under the Global
Offering. If the International Offering is fully subscribed or oversubscribed and the number
of Offer Shares validly applied for under the Hong Kong Public Offering represents (a) 15
times or more but less than 50 times, (b) 50 times or more but less than 100 times and (c) 100
times or more of the total number of Offer Shares initially available for subscription under
the Hong Kong Public Offering, then Offer Shares will be reallocated to the Hong Kong
Public Offering from the International Offering. As a result of such reallocation, the total
number of Offer Shares available under the Hong Kong Public Offering will be increased to
10,590,000 Offer Shares (in the case of (a)), 14,120,000 Offer Shares (in the case of (b)) and
17,650,000 Offer Shares (in the case of (c)), representing 30%, 40% and 50% of the total
number of Offer Shares initially available und er the Global Offering, respectively (before
any exercise of the Over-allotment Option). In each case, the additional Offer Shares
reallocated to the Hong Kong Public Offering will be allocated between pool A and pool B
and the number of Offer Shares allocated to the International Offering will be
correspondingly reduced in such manner as the O verall Coordinators (for themselves and
on behalf of the Underwriters) deems appropriate.
In addition, the Overall Coordinators (for themselves and on behalf of the
Underwriters) may reallocate Offer Shares f rom the International Offering to the Hong
Kong Public Offering to satisfy valid applications under the Hong Kong Public Offering.
If the Hong Kong Public Offering is not fully subscribed, the Overall Coordinators (for
themselves and on behalf of the Underwriters) may reallocate all or any unsubscribed Hong
Kong Offer Shares to the International Offe ring, in such proportions as the Overall
Coordinators (for themselves and on behalf of the Underwriters) deems appropriate.
In addition to any mandatory allocation which may be required, the Overall
Coordinators (for themselves and on behalf of the Underwriters) may, at its discretion,
reallocate Offer Shares initially allocated for the International Offering to the Hong Kong
Public Offering to satisfy valid applications in pool A and pool B under the Hong Kong
Public Offering in accordance with Chapte r 4.14 of the Guide. In the event that (i) the
International Offer Shares are undersubscrib ed and the Hong Kong Offer Shares are fully
subscribed or oversubscribed irrespective of t he number of times; or (ii) the International
Offer Shares are fully subscribed or oversubscribed and the Hong Kong Offer Shares are
STRUCTURE OF THE GLOBAL OFFERING
–4 0 2–


--- page 413 ---
fully subscribed or oversubscribed as to less than 15 times of the number of Hong Kong
Offer Shares initially available under the Hong Kong Public Offering, then the Overall
Coordinators (for themselves and on behalf of the Underwriters) may only reallocate Offer
Shares from the International Offering to the Hong Kong Public Offering other than
pursuant to Practice Note 18 of the Listing Rules on the following conditions in accordance
with Chapter 4.14 of the Guide:
(a) the total number of Offer Shares available under the Hong Kong Public Offering
following such reallocation shall be not more than 20% of the number of Offer
Shares initially available under the Globa l Offering (i.e. 7,060,000 Offer Shares);
and
(b) the final Offer Price shall be fixed at the bottom of the Offer Price range stated in
this prospectus.
Applications
Each applicant 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 and
any person(s) for whose benefit he/she/it is making the application has not applied for or
taken up, or indicated an interest for, and will not apply for or take up, or indicate an
interest for, any International Offer Shares under the International Offering. Such
applicant’s application is liable to be rejected if such undertaking and/or confirmation
is/are breached and/or untrue (as the case may be) or if he/she/it has been or will be placed
or allocated International Offer Shares under the International Offering.
Applicants under the Hong Kong Public Offering may be required to pay, on
application (subject to application channels), the maximum Offer Price of HK$10.2 per
Offer Share in addition to the brokerage, SFC transaction levy, AFRC transaction levy and
the Stock Exchange trading fee payable on each Offer Share, amounting to a total of
HK$5,151.44 for one board lot of 500 Shares. If t he Offer Price, as finally determined in the
manner described in ‘‘— Pricing and Allocati on’’ below, is less than the maximum Offer
Price of HK$10.2 per Offer Share, appropriate refund payments (including the brokerage,
SFC transaction levy, AFRC transaction l evy and the Stock Exchange trading fee
attributable to the surplus application monies) will be made to successful applicants
(subject to application channels), without in terest. Please refer to the section headed ‘‘How
to Apply for Hong Kong Offer Shares’’ in this prospectus for further details.
THE INTERNATIONAL OFFERING
Number of Offer Shares Initially Offered
The number of Offer Shares initially offered under the International Offering, subject
to any reallocation of Offer Shares between the International Offering and the Hong Kong
Public Offering, will consist of a n initial offering of 31,770,000 Offer Shares, representing
90% of the total number of Offer Shares init ially available under the Global Offering
(assuming that the Over-allotment Option is not exercised).
STRUCTURE OF THE GLOBAL OFFERING
–4 0 3–


--- page 414 ---
Allocation
The International Offering will involve private placements of the Offer Shares to
institutional and professional investors and other investors anticipated to have a sizeable
demand for our International Offer Shares. Professional investors generally include
brokers, dealers, companies (including fund managers) whose ordinary business involves
dealing in shares and other securities and corporate entities which regularly invest in shares
and other securities. Allocation of Offer Share s pursuant to the International Offering will
be effected in accordance with the ‘‘book-building’’ process described in the paragraph
headed ‘‘— Pricing and Allocation’’ below and based on a number of factors, including the
level and timing of demand, the total size of the relevant investor’s invested assets or equity
assets in the relevant sector and whether or not it is expected that the relevant investor is
likely to buy further H Shares and/or hold or sell its H Shares after the Listing. Such
allocation is intended to result in a distribut ion of the H Shares on a basis which would lead
to the establishment of a solid professional and institutional shareholder base to the benefit
of our Group and our Shareholders as a whole.
The Overall Coordinators (for themselves on behalf of the Underwriters) may require
any investor who has been offered Offer Shares under the International Offering and who
has made an application under the Hong Kong Public Offering to provide sufficient
information to the Overall Coordinators s o as to allow them to identify the relevant
applications under the Hong Kong Public Offering and to ensure that they are excluded
from any allocation of Offer Shares under the Hong Kong Public Offering.
Reallocation
The total number of Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the clawb ack arrangement described in the paragraph
headed ‘‘— The Hong Kong Public Offering — Reallocation’’ above or the exercise of the
Over-allotment Option in whole or in part and/or any reallocation of unsubscribed Offer
Shares originally included in the Hong Kong Public Offering.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, our Company is expected to grant the
Over-allotment Option to the In ternational Underwriters, exercisable by the Overall
Coordinators (for themselves and on behalf of the International Underwriters).
Pursuant to the Over-allotment Option, the International Underwriters will have the
right, exercisable by the Overall Coordinators (for themselves and on behalf of the
International Underwriters) at any time fro m the Listing Date until 30 days after the last
day for lodging applications under the Hong Kong Public Offering, to require our
Company to issue up to an aggregate of 5,295,000 additional Offer Shares, representing not
more than 15% of the total number of Offer Share s under the Global Offering, at the Offer
Price under the International Offering to cove r over-allocations in the International
Offering, if any.
STRUCTURE OF THE GLOBAL OFFERING
–4 0 4–


--- page 415 ---
If the Over-allotment Option is exercised in full, the additional Offer Shares to be
issued pursuant thereto will represent appro ximately 3.6% of the total Shares in issue
immediately following the completion of the Global Offering and the exercise of the
Over-allotment Option. If the O ver-allotment Option is exercised, an announcement will be
made.
STABILISATION
Stabilisation is a practise used by underw riters in some markets to facilitate the
distribution of securities. To stabilise, th e underwriters may bid for, or purchase, the
securities in the secondary market during a specified period of time, to retard and, if
possible, prevent a decline in the initial public market price of the securities below the offer
price. Such transactions may be effected in all j urisdictions where it is permissible to do so,
in each case in compliance with all applicable la ws and regulatory requirements, including
those of Hong Kong. In Hong Kong, the price at which stabilisation is effected is not
p e r m i t t e dt oe x c e e dt h eo f f e rp r i c e .
In connection with the Global Offering, the Stabilising Manager (or any person acting
for it), on behalf of the Underwriters, may over -allocate or effect transactions with a view
to stabilising or supporting the market price of our H Shares at a level higher than that
which might otherwise prevail for a limited peri od after the Listing Date. However, there is
no obligation on the Stabilising Manager (or any person acting for it) to conduct any such
stabilising action. Such stabilising action, if taken, (a) will be conducted at the absolute
discretion of the Stabilising Manager (o r any person acting for it) and in what the
Stabilising Manager reasonably regards as t he best interest of our Company, (b) may be
discontinued at any time and (c) is required to be brought to an end within 30 days from the
last day for lodging applications und er the Hong Kong Public Offering.
Stabilisation action permitted in Hong Kon g pursuant to the Securities and Futures
(Price Stabilizing) Rules of the SFO include s (a) over-allocating for the purpose of
preventing or minimising any reduction in th e market price of our H Shares, (b) selling or
agreeing to sell our H Shares so as to establish a short position in them for the purpose of
preventing or minimising any reduction in the market price of our H Shares, (c) purchasing,
or agreeing to purchase, our H Shares pursu a n tt ot h eO v e r - a l l o t m e n tO p t i o ni no r d e rt o
close out any position established under paragraph (a) or (b) above, (d) purchasing, or
agreeing to purchase, any of our H Shares for the sole purpose of preventing or minimising
any reduction in the market price of our H Shares, (e) selling or agreeing to sell any H
Shares in order to liquidate any position est ablished as a result of those purchases and (f)
offering or attempting to do anything as desc ribed in paragraph (b), (c), (d) or (e) above.
Specifically, prospective applicants for and investors in our Offer Shares should note
that:
(a) the Stabilising Manager (or any person acting for it) may, in connection with the
stabilising action, maintain a l ong position in our H Shares;
STRUCTURE OF THE GLOBAL OFFERING
–4 0 5–


--- page 416 ---
(b) there is no certainty as to the extent to which and the time or period for which the
Stabilising Manager (or any person acting for it) will maintain such a long
position;
(c) liquidation of any such long positio n by the Stabilising Manager (or any person
acting for it) and selling in the open ma rket may have an adverse impact on the
market price of our H Shares;
(d) no stabilising action can be taken to su pport the price of our H Shares for longer
than the stabilisation period, which will begin on the Listing Date, and is expected
to expire on the 30th day after the last day for lodging applications under the
Hong Kong Public Offering. After this da te, when no further stabilising action
may be taken, demand for our H Shares, and therefore the price of the H Shares,
could fall;
(e) the price of our H Shares cannot be assured to stay at or above the Offer Price by
the taking of any stabilising action; and
(f) stabilising bids or transactions effected in the course of the stabilising action may
be made at any price at or below the Offer Price and can, therefore, be done at a
price below the price paid by applicants for, or investors in, the Offer Shares.
In order to effect stabilisation actions, t he Stabilising Manager may arrange cover of
up to an aggregate of 5,295,000 Offer Shares, representing up to 15% of the total number of
our Offer Shares under the Global Offering, through delayed delivery arrangements with
investors who have been allocated Offer Shares in the International Offering. The delayed
delivery arrangements (if specifically agreed to by an investor) relate only to the delay in the
delivery of our Offer Shares to such investo r and the Offer Price for the Offer Shares
allocated to such investor will be fully paid pr ior to Listing, accordingly there will be no
d e l a y e ds e t t l e m e n to fp a y m e n to fo u rO f f e rS h a r e s .B o t ht h es i z eo fs u c hc o v e ra n dt h e
extent to which the Over-allotment Optio n can be exercised will depend on whether
arrangements can be made with investors such that a sufficient number of Offer Shares can
be delivered on a delayed basis. If no investor in the International Offering agrees to the
delayed delivery arrangements, no stabilisin g actions will be undertaken by the Stabilising
Manager and the Over-allotmen t Option will not be exercised.
Our Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Ru les of the SFO will be made within seven days
of the expiration of the stabilisation period.
PRICING AND ALLOCATION
Pricing for the Offer Shares for the purpose of the various offerings under the Global
Offering will be fixed on the Price Determina tion Date, which is expected to be on or about
Friday, 2 August 2024 and, in any event, no later than 12 : 00 noon on Friday, 2 August
2024 by agreement between the Overall Coordi nators (for themselves and on behalf of the
Underwriters) and our Company, and the number of Offer Shares to be allocated under the
various offerings will be determined shortly thereafter.
STRUCTURE OF THE GLOBAL OFFERING
–4 0 6–


--- page 417 ---
The Offer Price will not be more than HK$10.2 per Offer Share and is expected to be
not less than HK$7.0 per Offer Share, unless otherwise announced, as further explained
below. Applicants under the Hong Kong Public Offering may be required to pay, on
application (subject to application channels), the maximum Offer Price of HK$10.2 per
Offer Share plus brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction
levy of 0.00015% and Stock Exchange trading fee of 0.00565%, amounting to a total of
HK$5,151.44 for one board lot of 500 Shares. Prospective investors should be aware that the
Offer Price to be determined on the Price Determination Date may be, but is not expected to
be, lower than the minimum Offer Price stated in this prospectus.
The International Underwriters will be soliciting from prospective investors
indications of interest in acquiring Offer Share s in the International Offering. Prospective
professional and institutional investors will be required to specify the number of Offer
Shares under the International Offering they would be prepared to acquire either at
different prices or at a particular price. This p rocess, known as ‘‘book-building,’’ is expected
to continue up to, and to cease on or about, the last day for lodging applications under the
Hong Kong Public Offering.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may,
where it deems appropriate, based on the level of interest expressed by prospective investors
during the book-building process in respect of the International Offering, and with the
consent of our Company, reduce the number of Offer Shares offered and/or the Offer Price
range below that stated in this prospectus at any time on or prior to the morning of the last
day for lodging applications under the Hong Kong Public Offering. In such a case, our
Company will, as soon as practicable following the decision to make such reduction, and in
any event not later than the morning of the last day for lodging applications under the
Hong Kong Public Offering, cause to be published on the websites of our Company at
www.haierbx.net and the Stock Exchange at www.hkexnews.hk , respectively, an
announcement, cancel the Global Offering and relaunch the Global Offering at the
revised number of Offer Shares and/or the revised Offer Price range and the requirements
under Rule 11.13 of the Listing Rules (which include the issue of a supplemental prospectus
or a new prospectus (as appropriate)). Upon issue of such announcement or supplemental
prospectus (as appropriate), the number of Offer Shares offered in the Global Offering
and/or the revised Offer Price range will be final and conclusive, and the Offer Price, if
agreed upon by the Overall Coordinators (for themselves and on behalf of the
Underwriters) and the Company, will be fixed within such revised Offer Price range. The
Global Offering must first be cancelled and subsequently relaunched on FINI pursuant to
the supplemental prospectus.
Before submitting applications for the Hong Kong Offer Shares, applicants should
have regard to the possibility that any annou ncement of a reduction in the number of Offer
Shares and/or the Offer Price range may not be made until the last day for lodging
applications under the Hong Kong Public Offering. In the absence of any such
announcement so published, the number of Offer Shares will not be reduced and/or the
Offer Price, if agreed upon by the Overall Coordinators (for themselves and on behalf of the
Underwriters) and our Company, will under no circumstances be set outside the Offer Price
range as stated in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
–4 0 7–


--- page 418 ---
In the event of a reduction in the number of Offer Shares, the Overall Coordinators
(for themselves and on behalf of the Underwriter s) may, at their discretion, reallocate the
number of Offer Shares to be offered in the Hong Kong Public Offering and the
International Offering. The Offer Shares to be offered in the Hong Kong Public Offering
and the Offer Shares to be offered in the International Offering may, in certain
circumstances, be reallocated between these offerings at the discretion of the Overall
Coordinators (for themselves and on behalf of the Underwriters).
ANNOUNCEMENT OF FINAL OFFER PRICE
The final Offer Price, the level of indications of interest in the International Offering,
the level of applications in the Hong Kong Public Offering, the basis of allocations of the
Hong Kong Offer Shares and the results of allocations in the Hong Kong Public Offering
are expected to be announced on Monday, 5 Au gust 2024 on the website of our Company at
www.haierbx.net and the website of the Stock Exchange at www.hkexnews.hk .
HONG KONG UNDERWRITING AGREEMENT
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms and conditions of the Hong Kong Underwriting Agreement and is subject
to the Overall Coordinators (for themselves and on behalf of the Underwriters) and our
Company agreeing on the Offer Price. Our Company expects to enter into the International
Underwriting Agreement relating to the International Offering on the Price Determination
Date.
These underwriting arrangements, including the Underwriting Agreements, are
summarised in the section headed ‘‘Underwriting’’ of this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on:
(a) the Stock Exchange granting approval for the listing of, and permission to deal in,
the H Shares to be offered pursuant to the Global Offering (including any
additional H Shares which may be issued pursuant to the exercise of the Over-
allotment Option), on the Main Board of the Stock Exchange, and such approval
not subsequently having been withdrawn or revoked prior to the Listing Date;
(b) the Offer Price having been agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company;
(c) the execution and delivery of the International Underwriting Agreement on or
about the Price Determination Date; and
STRUCTURE OF THE GLOBAL OFFERING
–4 0 8–


--- page 419 ---
(d) the obligations of the Hong Kong Underwriters under the Hong Kong
Underwriting Agreement and the obligations of the International Underwriters
under the International Underwriting Agreement becoming and remaining
unconditional and not having been terminated in accordance with the terms of
the respective agreements,
in each case on or before the dates and times specified in the respective Underwriting
Agreements (unless and to the extent such cond itions are validly waived on or before such
dates and times).
If, for any reason, the Offer Price is not agr eed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company on or before 12 : 00 noon
on Friday, 2 August 2024, the Global Offering will not proceed and will lapse.
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon the other offering becoming unconditional and not having
been terminated in accordance with its terms.
If the above conditions are not fulfille d or waived prior to the dates and times
specified, the Global Offering will lapse a nd the Stock Exchange will be notified
immediately. Notice of the lapse of the Hong Kong Public Offering will be published by
our Company on the websites of our Company at
www.haierbx.net and the Stock Exchange
at www.hkexnews.hk , respectively, on the next day following such lapse. In such a situation,
all application monies will be returned (subject to application channels), without interest,
on the terms set out in the section headed ‘‘How to Apply for Hong Kong Offer Shares —
D. Despatch/Collection of H Share Certificates and Refund of Application Monies.’’
H Share certificates for the Offer Shares will only become valid at 8 : 00 a.m. on
Tuesday, 6 August 2024 provided that the Global Offering has become unconditional in all
respects at or before that time and the right of termination as described in the section
headed ‘‘Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public
Offering — Grounds for Termination’’ in this prospectus has not been exercised.
ADMISSION OF THE H SHARES INTO CCASS
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and
the Company complies with the stock admission requirements of HKSCC, the H Shares will
be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS
with effect from the date of commencement of dealings in the H Shares on the Stock
Exchange or any other date HKSCC choose s. Settlement of transactions between
participants of the Stock Exchange is re quired to take place in CCASS on the second
settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
STRUCTURE OF THE GLOBAL OFFERING
–4 0 9–


--- page 420 ---
Investors should seek the advice of their stockbroker or other professional advisor for
details of the settlement arr angements as such arrangement may affect their rights and
interests.
DEALINGS ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before
8 : 00 a.m. in Hong Kong on Tuesday, 6 August 2024, it is expected that dealings in the H
Shares on the Stock Exchange will commence at 9 : 00 a.m. on Tuesday, 6 August 2024. The
H Shares will be traded in board lots of 500 Shares each and the stock code of our Shares
will be 1471.
STRUCTURE OF THE GLOBAL OFFERING
–4 1 0–


--- page 421 ---
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 Offer
and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the ‘‘HKEXnews> New Listings> New Listing Information’’ section, and our website
at
www.haierbx.net.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
You can apply for Hong Kong Offer Shares if you or the person(s) for whose
benefit you are applying for:
. a r e1 8y e a r so fa g eo ro l d e r ;
. have a Hong Kong address (for the HK eIPO White Form service only) ;a n d
. are outside the United States (within the meaning of Regulation S), and are a
person described in paragraph (h)(3) of Rule 902 of Regulation S.
Unless permitted by the Listing Rules or a waiver and/or consent has been granted
by the Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you
or the person(s) for whose benefit you are applying for:
. are an existing Shareholder or close associates; or
. are a Director or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offer period will begin at 9 : 00 a.m. on Monday, 29 July
2024 and end at 12 : 00 noon on Thursday, 1 August 2024 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 1–


--- page 422 ---
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
IPO App (which can be
downloaded by searching ‘‘ IPO
App’’ in App Store or Google
Play or downloaded at
www.hkeipo.hk/IPOApp or
www.tricorglobal.com/IPOApp )
or at 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
Monday, 29 July
2024 to 11 : 30
a.m. on
Thursday, 1
August 2024,
Hong Kong time.
The latest time for
completing full
payment of
application
monies will be
12 : 00 noon on
Thursday, 1
August 2024,
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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 2–


--- page 423 ---
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 Provider 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
s h a l lb ed e e m e dt oh a v ed e c l a r e dt h a t only one set of electronic application
instructions has been given for your benefit. If you are an agent for another person,
you shall be 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 seve rally) are deemed to have instructed and
authorised HKSCC to cause HKSCC Nomine es (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 Offer.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC
nor HKSCC Nominees shall be liable to you or any other person in respect of any
actions taken by HKSCC or HKSCC Nominees on your behalf to apply for Hong
Kong Offer Shares or for any breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 3–


--- page 424 ---
3 . I n f o r m a t i o nR e q u i r e dt oA p p l y
You must provide the following in formation with your application:
For Individual Applicants For Corporate Applicants
. Full name(s) 2 a ss h o w no ny o u r
identity document
. Identity document’s issuing
country or jurisdiction
. Identity document type, with order
of priority:
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
. Identity document number
. Full name(s)
2 a ss h o w no ny o u r
identity document
. Identity document’s issuing
country or jurisdiction
. Identity document type, with order
of priority:
i. LEI registration document; or
ii. Certificate of incorporation;
or
iii. Business registration
certificate; or
iv. Other equivalent document;
and
. Identity document number
Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a
valid e-mail address, a contact telephone num ber and a Hong Kong address. You are also
required to declare that the identity informati on provided by you follows the requirements as
described in Note 2 below. In particular, whe re you cannot provide a HKID number, you must
confirm that you do not hold a HKID card. The number of joint applicants may not exceed
four. If you are a firm, the applicant m ust be in the individual members’ names.
2. The applicant’s full name as shown on their iden tity document must be used. If an applicant’s
identity document contains both an English and Chinese name, both English and Chinese
names must be used. Otherwise, either English or Chinese names will be accepted. The order of
priority of the applicant’s identity documen t type must be strictly followed and where an
individual applicant has a val id HKID card, the HKID number must be used when making an
application to subscribe for shares in a public of fer. Similarly for corporate applicants, a LEI
number must be used if an entity has a LEI certificate.
3. If the applicant is a trustee, th e client identification data (‘‘ CID’’) of the trustee, as set out
above, will be required. If the applicant is an i nvestment fund (i.e. a collective investment
scheme, or CIS), the CID of the asset management company or the individual fund, as
appropriate, which has opened a trading account with the broker will be required, as above.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 4–


--- page 425 ---
4. The maximum number of joint a ccount holders on FINI is capped at 4 1 in accordance with
market practise.
5. If you are applying as a nominee, you must provi de: (i) the full name (as shown on the identity
document), the identity document’s issuing count ry or jurisdiction, the identity document
type; and (ii) the identity document number, for e ach 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 t reated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is
dealing in securities; and (ii) you exercise s tatutory control over that company, then the
application will be treated as being for your benefit and you should provide the required
information in your application as stated abov e. ‘‘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 registered shar e capital of the company (not counting any
part of it which carries no right to participate beyond a specified amount in a
distribution of either profits or capital).
For those applying through HKSCC EIPO channel, and making an application
under a power of attorney, we and the Overall Coordinators, as our agents, have
discretion to consider whether to accept it on any conditions we think fit, including
evidence of the attorney’s authority.
Failing to provide any required information may result in your application being
rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 500
Permitted number of
Hong Kong Offer
Shares for application
and amount payable
on application/
successful allotment
: Hong Kong Offer Shares are available for
application in specified board lot sizes only. Please
refer to the amount payable associated with each
specified board lot size in the table below.
The maximum Offer Price is HK$10.2 per Offer
Share.
1 Subject to change, if the Company’s Articles of Incor poration and applicable company law prescribe a lower
cap.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 5–


--- page 426 ---
If you are applying through the HKSCC EIPO
channel, you are required to pre-fund your
application based on the amount specified by your
broker or custodian, as determined based on the
applicable laws and regulations in Hong Kong.
By instructing your broker or custodian to apply for
the Hong Kong Offer Shares on your behalf through
the HKSCC EIPO Channel, you (and, if you are
joint applicants, each of you jointly and severally)
a r ed e e m e dt oh a v ei n s t r u c t e da n da u t h o r i s e d
HKSCC to cause HKSCC Nominees (acting as
nominee for the relevant HKSCC Participants) to
arrange payment of the final Offer Price, brokerage,
SFC transaction levy, the Stock Exchange trading
fee and the AFRC transaction levy by debiting the
relevant nominee bank account at the Designated
Bank for your broker or custodian.
If you are applying through the HK eIPO White
Form service, you may refer to the table below for
the 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.
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 5,151.44 7,000 72,120.07 50 ,000 515,143.36 700,000 7,212,006.90
1,000 10,302.88 8,000 82,422.93 60,000 618,172.02 800,000 8,242,293.60
1,500 15,454.29 9,000 92,725.81 70,000 721,200.69 900,000 9,272,580.30
2,000 20,605.73 10,000 103,028.66 80,000 824,229.35 1,000,000 10,302,867.00
2,500 25,757.17 15,000 154,543.00 90,000 927,258.04 1,200,000 12,363,440.40
3,000 30,908.61 20,000 206,057.35 10 0,000 1,030,286.70 1,400,000 14,424,013.80
3,500 36,060.03 25,000 257,571. 68 200,000 2,060,573.40 1,765,000 (1) 18,184,560.25
4,000 41,211.47 30,000 309,086.01 300,000 3,090,860.10
4,500 46,362.90 35,000 360,600.35 400,000 4,121,146.80
5,000 51,514.34 40,000 412,114.68 500,000 5,151,433.50
6,000 61,817.20 45,000 463,629.01 600,000 6,181,720.20
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong Offer
Shares initially offered.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 6–


--- page 427 ---
(2) The amount payable is inclusive of brokerage, SFC tr ansaction levy, the Stock Exchange trading fee and
AFRC transaction levy. If your application is suc cessful, 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 t he application channel of the HK eIPO White Form Service Provider) while
the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will be paid to
the SFC, the Stock Exchange and the AFRC, respectively.
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying
investor in your application as required under the paragraph headed ‘‘— A. Applications
for Hong Kong Offer Shares — 3. Information Required to Apply’’ in this section. If you
are suspected of submitting or cause to submit more than one application, all of your
applications will be rejected.
Multiple applications made either through (i) the HK eIPO White Form service, (ii)
HKSCC EIPO channel, or (iii) both channels concurrently are prohibited and will be
rejected. If you have made an application through the HK eIPO White Form service or
HKSCC EIPO channel, you or the person(s) for whose benefit you have made the
application shall not apply further for any Offer Shares.
T h eHS h a r eR e g i s t r a rw o u l dr e c o r da l la pplications into its s ystem and identify
suspected multiple applications with identical names and identification document numbers
according to the Best Practise Note on Treatment of Multiple/Suspected Multiple
Applications (‘‘Best Practise Note ’’) issued by the Federation of Share Registrars Limited.
Since applications are subject to personal information collection statements,
identification document numbers displayed are redacted.
6. Terms and Conditions of an Application
By applying for Hong Kong Offer Shares through the HK eIPO White Form service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or
the Overall Coordinators, as our agents, to execute any documents for you and to
do on your behalf all things necessary to register any Hong Kong Offer Shares
allocated to you in your name or in the n ame of HKSCC Nominees as required by
the Articles of Association, and (if y ou 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 Part icipant’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, the IPO App 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 7–


--- page 428 ---
(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 prosp ectus 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 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;
(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. Publicat ion of Results’’ in this section;
(x) confirm that you are aware of the situ ations 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 gove rned by and construed in accordance with
the laws of Hong Kong;
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 8–


--- page 429 ---
(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 H KSCC Nominees’ application on your
behalf is not financed directly or indirec tly by the Company, any of the directors,
chief executives, substantial Shareholder(s) or existing shareholder(s) of our
Company or any of our subsidiaries or any of their respective close associates; and
(b) you are not accustomed or will not be accustomed to taking instructions from
our Company, any of the directors, chief executives, substantial shareholder(s) or
existing shareholder(s) of our Company or any of our subsidiaries or any of their
respective close associates in relation to the acquisition, disposal, voting or other
disposition of the H Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on
your declarations and representations in deciding whether or not to allocate any
Hong Kong Offer Shares to you and tha t you may be prosecuted for making a
false declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number
allocated to you under the application;
(xvii) declare and represent that this is the only application made and the only
application intended by you to be made to benefit you or the person for whose
benefit you are applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel
of the HK eIPO White Form Service Provider or by any one as your agent or by
any other person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic app lication instructions to HKSCC or the HK
eIPO White Form Service Provider and (2) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 9–


--- page 430 ---
B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successf ully allocated any Hong Kong Offer
Shares through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website From the ‘‘IPO Results’’
function in the IPO App or at
www.tricor.com.hk/ipo/result or
www.hkeipo.hk/IPOResult with
a‘ ‘ s e a r c hb yI D ’ ’f u n c t i o n .
24 hours, from 11 : 00 p.m. on
Monday, 5 August 2024 to
12 : 00 midnight on Sunday, 11
August 2024 (Hong Kong time)
The full list of (i) wholly or
partially successful applicants
using the HK eIPO White Form
service and HKSCC EIPO
channel, and (ii) the number of
Hong Kong Offer Shares
conditionally allotted to them,
among other things, will be
displayed at
www.hkeipo.hk/
IPOResult or www.tricor.com.hk/
ipo/result.
The Stock Exchange’s website at
www.hkexnews.hk and our
website at www.haierbx.net
which will provide links to the
above mentioned websites of the
H Share Registrar.
No later than 11 : 00 p.m. on
Monday, 5 August 2024 (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 . ,f r o mT u e s d a y ,6A u g u s t
2024 to Friday, 9 August 2024
(Hong Kong time) on a business
day
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 0–


--- page 431 ---
For those applying through HKSCC EIPO channel, you may also check with your
broker or custodian from 6 : 00 p.m. on Friday, 2 August 2024 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6 : 00
p.m. on Friday, 2 August 2024 (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 fin al Offer Price, the level of indications
of interest in the Global Offering, the lev el of applications in the Hong Kong Public
Offer 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.haierbx.net by no later than
1 1 : 0 0p . m .o nM o n d a y ,5A u g u s t2 0 2 4( H o n gK o n gt i m e ) .
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
You should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Your application or the application m ade by HKSCC Nominees on your behalf
may be revoked pursuant to Section 44A ( 6 )o ft h eC o m p a n i e s( W i n d i n gU pa n d
Miscellaneous Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Shar e Registrar and their respective agents
and nominees have full discretion to reject or accept any application, or to accept only
part of any application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does
not grant permission to list the Shares either:
. within three weeks from the closing date of the application lists; or
. within a longer period of up to six weeks if the Stock Exchange notifies us of
that longer period within three weeks of the closing date of the application
lists.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 1–


--- page 432 ---
4. If:
. you make multiple applications or suspected multiple applications. You may
refer to the paragraph headed ‘‘— A. Application for Hong Kong Offer
Shares — 5. Multiple Applications Pr ohibited’’ in this section on what
constitutes multiple applications;
. your application instr uction is incomplete;
. your payment (or confirmation of funds, as the case may be) is not made
correctly;
. the Underwriting Agreements do not become unconditional or are
terminated;
. we or the Overall Coordinators believe that by accepting y our application, it
or we would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold suffici ent application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the
Receiving Bank will collect the portion of these funds required to settle each HKSCC
Participant’s actual allotment of Hong Kon g Offer Shares from their Designated Bank.
There is a risk of money settlement failure. I nt h ee x t r e m ee v e n to fm o n e y
settlement failure by a HKSCC Participant ( or its Designated Bank), who is acting on
your behalf in settling payment for your allotted shares, HKSCC will contact the
defaulting HKSCC Participant and its Des i g n a t e dB a n kt od e t e r m i n et h ec a u s eo f
failure and request such defaulting HKSCC Participant to rectify or procure to rectify
the failure.
However, if it is determined that such se ttlement obligation cannot be met, the
affected Hong Kong Offer Shares will be reallocated to the Global Offering. Hong
Kong Offer Shares applied for by you through the broker or custodian may be affected
to the extent of the settlement failure. In t he 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 2–


--- page 433 ---
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 Tuesday, 6 August 2024
(Hong Kong time), provided that the Global Offering has become unconditional and the
right of termination described in the section h eaded ‘‘Underwriting’’ has not been exercised.
Investors who trade H Shares prior to the receipt of H Share certificates or the H Share
certificates becoming valid do so entirely at their own risk.
The right is reserved to retain any H Share cer tificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 3–


--- page 434 ---
The following sets out the re levant 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
C o l l e c t i o ni np e r s o na tt h eHS h a r e
Registrar, Tricor Investor
Services Limited at 17/F, Far East
Finance Centre, 16 Harcourt
Road, Hong Kong
H Share certificate(s) will be issued
i nt h en a m eo fH K S C CN o m i n e e s ,
deposited into CCASS and
credited to your designated
HKSCC Participant’s stock
account
Time: from 9 : 00 a.m. to 1 : 00 p.m.
on Tuesday, 6 August 2024 (Hong
Kong time)
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: Monday, 5 August 2024
3 Except in the event of a tropical cyclone warning s ignal number 8 or above, a b lack rainstorm warning
and/or an ‘‘extreme conditions’’ announcement issued after a super typhoon in force in Hong Kong in the
morning on Monday, 5 August 2024 rendering it impossi ble for the relevant H Share certificates to be
dispatched to HKSCC in a timely manner, our Company s hall procure the H Share Registrar to arrange for
delivery of the supporting documents and H Share certi ficates in accordance with the contingency
arrangements as agreed between them. You may refer to ‘‘— E. Severe Weather Arrangements ’’ in this
section.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 4–


--- page 435 ---
HK eIPO White Form service HKSCC EIPO channel
Refund mechanism for surplus application monies paid by you
Date Tuesday, 6 August 2024 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 Thursday, 1 August 2024 if, there is:
. a tropical cyclone warning signal number 8 or above;
. a black rainstorm warning; and/or
. Extreme Conditions
(collectively, ‘‘Severe Weather Signals ’’),
in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Thursday, 1
August 2024.
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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 5–


--- page 436 ---
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.haierbx.net of the revised
timetable.
If a Severe Weather Signal is hoisted on Monday, 5 August 2024, 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 Tuesday, 6 August 2024.
If a Severe Weather Signal is hoisted on Monday, 5 August 2024, 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 Monday, 5
August 2024 or on Tuesday, 6 August 2024).
If a Severe Weather Signal is hoisted on Tuesday, 6 August 2024, 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 Tuesday, 6 August
2024 or on Wednesday, 7 August 2024).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on
the Stock Exchange and we comply with the stock admission requirements of HKSCC, the
H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the H
Shares or any other date HKSCC chooses. Se ttlement 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 advisor for details of
the settlement arrangement as such arrangem ents may affect your rights and interests.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 6–


--- page 437 ---
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 Sta tement 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 our agents and the H Share
Registrar is accurate and up-to-date when applying for Hong Kong Offer Shares or
transferring Hong Kong Offer Shares into or out of their names or in procuring the
services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in
your application for Hong Kong Offer Shares being rejected, or in the delay or the
inability of our Company or the H Share Registrar to effect transfers or otherwise
render their services. It may also prevent or delay registration or transfers of Hong
Kong Offer Shares which you have successf ully 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 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 an d regulations in Hong Kong and
elsewhere;
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 7–


--- page 438 ---
. 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 a nd holders of the Shares and identifying
any duplicate applicat ions for the Shares;
. facilitating the balloting of 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 our subsidiaries;
. compiling statistical information and profiles of the holder of the H Shares;
. disclosing relevant information to f acilitate claims on entitlements; and
. any other incidental or associated purposes relating to the above and/or to
enable our Company and the H Share Registrar to discharge our and their
obligations to applicants and holders of the H Shares and/or regulators
and/or any other purposes to which applicants and holders of the H Shares
may from time to time agree.
4. Transfer of Personal Data
Personal data held by our Company and the H Share Registrar relating to the
applicants for and holders of Hong Kong Offer Shares will be kept confidential but our
Company and the H Share Registrar may, to the extent necessary for achieving any of
the above purposes, disclose, obtain or transfer (whether within or outside Hong
Kong) the personal data to, from or with any of the following:
. our Company’s appointed agents such as financial 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 fa cilities or performing its functions in
accordance with its rules or procedures and operating FINI and CCASS
(including where applicants for the Hong Kong Offer Shares request a
deposit into CCASS);
. any agents, contractors or third-party service providers who offer
administrative, telecommunications, computer, payment or other services
to the Company or the H Share Registrar in connection with their respective
business operation;
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 8–


--- page 439 ---
. the Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or regulations,
including for the purpose of the Stock Exchange’s administration of the
Listing Rules and the SFC’s performan ce of its statutory functions; and
. any persons or institutions with which the holders of Hong Kong Offer
Shares have or propose to have dealings, such as their bankers, solicitors,
accountants or brokers etc.
5. Retention of Personal Data
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 ac cordance 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 th eir registered address disclosed in the
section headed ‘‘Corporate information’’ in this prospectus or as notified from time to
time, for the attention of the company secretary, or the H Share Registrar for the
attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 2 9–


--- page 440 ---
The following is the text of a report set out on pages I-1 to I-61, received from the
Company’s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the
purpose of incorporation in this prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF ZHONGMIAO HOLDINGS (QINGDAO) CO., LTD., CITIC
SECURITIES (HONG KONG) LIMITED AND PING AN OF CHINA CAPITAL
(HONG KONG) COMPANY LIMITED
Introduction
We report on the historical financial information of 眾淼控股（青島）股份有限公司
(Zhongmiao Holdings (Qingdao) Co., Ltd.) (the ‘‘Company’’) and its subsidiaries (together,
the ‘‘Group’’) set out on pages I-4 to I-61, which comprises the consolidated statements of
financial position of the Group and the statements of financial position of the Company as
at 31 December 2021, 2022 and 2023 and 30 April 2024, and the consolidated statements of
profit or loss and other comprehensive income, the consolidated statements of changes in
equity and the consolidated statements of cash flows, for each of the years ended 31
December 2021, 2022 and 2023 and the four months ended 30 April 2024 (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-4 to I-61 forms an integral part of this report, which has
been prepared for inclusion in the prospectus of the Company dated 29 July 2024 (the
‘‘Prospectus’’) in connection with the initial listing of shares of the Company on the Main
Board of The Stock Exchange of Hong Kong Limited.
Directors’ responsibility for the H istorical Financial Information
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of
preparation and presentation set out in Note 1 to the Historical Financial Information, and
for such internal control as the directors of the Company determine is necessary to enable
the preparation of the Historical Financial Information that is free from material
misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and
to report our opinion to you. We conducted our work in accordance with Hong Kong
Standard on Investment Circular Reporting Engagements 200 ‘‘Accountants’ Reports on
Historical Financial Information in Investment Circulars’’ issued by the Hong Kong
Institute of Certified Public Accountants (th e ‘‘HKICPA’’). This standard requires that we
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1–


--- page 441 ---
comply with ethical standards and plan and perform our work to obtain reasonable
assurance about whether the Historical Financial Information is free from material
misstatement.
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material
misstatement of the Historical Financial Information, whether due to fraud or error. In
making those risk assessments, the reporting ac countants consider internal control relevant
to the entity’s preparation of the Historical F inancial Information that gives a true and fair
view in accordance with the basis of preparation and presentation set out in Note 1 to the
Historical Financial Information in order to design procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. Our work also inc luded evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the Historical Financial
Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purpose of the
accountants’ report, a true and fair view of the Company’s and the Group’s financial
position as at 31 December 2021, 2022 and 2023 and 30 April 2024 and of the Group’s
f i n a n c i a lp e r f o r m a n c ea n dc a s hf l o w sf o rt h eT r a c kR e c o r dP e r i o di na c c o r d a n c ew i t ht h e
basis of preparation and presentation set out in Note 1 to the Historical Financial
Information.
Review of stub period corresponding financial information
We have reviewed the stub period corresponding financial information of the Group
which comprises the consolidated statement of profit or loss and other comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the four months ended 30 April 2023 and other explanatory information (the
‘‘Stub Period Corresponding Financial Information’’). The directors of the Company are
responsible for the preparation and presentation of the Stub Period Corresponding
Financial Information in accordance with the basis of preparation and presentation set out
in Note 1 to the Historical Financial Information. Our responsibility is to express a
conclusion on the Stub Period Corresponding Financial Information based on our review.
We conducted our review in accordance with Hong Kong Standard on Review Engagements
2410 ‘‘Review of Interim Financial Informat ion Performed by the Independent Auditor of
the Entity’’ issued by the HKICPA. A review consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit conducted in
accordance with Hong Kong Standards on Auditing and consequently does not enable us to
obtain assurance that we would become awar e of all significant matters that might be
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2–


--- page 442 ---
identified in an audit. Accordingly, we do not express an audit opinion. Based on our
review, nothing has come to our attention that causes us to believe that the Stub Period
Corresponding Financial Information, for the purpose of the accountants’ report, is not
prepared, in all material respects, in accordance with the basis of preparation and
presentation set out in Note 1 to the Historical Financial Information.
Report on matters under the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited and the Companies (Winding Up and Miscellaneous Provisions)
Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to Note 23(c) to the Historical Financial Information which states that no
dividends have been paid by the Company in respect of the Track Record Period.
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
29 July 2024
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3–


--- page 443 ---
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, were audited by 畢馬威華振會計師事
務所（特殊普通合夥）KPMG Huazhen LLP in accordance with Hong Kong Standards on
Auditing issued by the HKICPA (the ‘‘U nderlying Financial Statements’’).
The Historical Financial Information is pre sented in Renminbi (‘‘RMB’’) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4–


--- page 444 ---
Consolidated statements of profit or loss and other comprehensive income
E x p r e s s e di nR e n m i n b i( ‘ ‘ R M B ’ ’ )
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue 4 119,974 148,398 174,011 53,425 58,644
Cost of sales (71,925) (81,139 ) (99,498) (28,549) (33,805)
Gross profit 48,049 67,259 74,513 24,876 24,839
Other income 5 7,682 8,176 11,324 3,937 3,014
Research and development costs (4, 739) (6,843) (7,141) (2,774) (2,809)
General and administrative
expenses (11,383) (12,854) (18,566) (5,283) (3,806)
Sales and marketing costs (6,836) (9,948) (11,871) (3,964) (2,886)
Reversal of/(provision for)
impairment loss 11 (44) (34) (55) (39)
Profit from operations 32,784 45,746 48,225 16,737 18,313
Finance costs 6(a) (176) (154) (206) (40) (53)
Profit before taxation 32,608 45,592 48,019 16,697 18,260
Income tax 7 (5,616) (9,243) (9,026) (3,292) (3,431)
Profit for the year/period 26,992 36,349 38,993 13,405 14,829
Attributable to:
Equity shareholders of the
Company 27,047 37,776 40,372 13,937 15,067
Non-controlling interests (55) (1,427) (1,379) (532) (238)
Profit for the year/period 26,992 36,349 38,993 13,405 14,829
Other comprehensive income for the
year/period (after tax) —————
Total comprehensive income for the
year/period 26,992 36,349 38,993 13,405 14,829
Attributable to:
Equity shareholders of the
Company 27,047 37,776 40,372 13,937 15,067
Non-controlling interests (55) (1,427) (1,379) (532) (238)
Total comprehensive income for the
year/period 26,992 36,349 38,993 13,405 14,829
Basic and diluted earnings per
share (RMB) 10 0.33 0.46 0.39 0.14 0.14
The accompanying notes form part of th e Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5–


--- page 445 ---
Consolidated statements of financial position
E x p r e s s e di nR e n m i n b i( ‘ ‘ R M B ’ ’ )
As at 31 December
As at
30 April
2021 2022 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment 11 380 341 324 273
Intangible assets 12 429 143 — —
Right-of-use assets 13 682 558 461 683
Deferred tax assets 22 —1 41 53 0
Contract costs and other assets 16 33 34 3—
Time deposits 17(b) — — 132,277 133,653
Restricted cash 17(c) 7,834 8,102 7,545 7,608
9,328 9,191 140,665 142,247
Current assets
Financial assets measured at fair value through
profit or loss 14 238,730 — — —
Accounts receivables 15 11,988 21,132 30,806 27,174
Contract costs and other assets 16 2,607 2,049 10,635 16,428
Cash and cash equivalents 17(a) 17,988 23,546 203,638 63,677
Time deposits 17(b) — 265,283 — 150,829
Restricted cash 17(c) 4,193 5,899 4,208 7,488
275,506 317,909 249,287 265,596
Current liabilities
Accounts and other payables 18 19,640 25,337 17,689 19,523
Contract liabilities 19 2,160 1,054 1,226 2,046
Lease liabilities 20 1,083 250 244 762
Accrued expenses 21 2,672 3,310 4,097 2,879
Current taxation payables 22 2,437 4,122 3,477 3,985
27,992 34,073 26,733 29,195
Net current assets 247,514 283,836 222,554 236,401
Total assets less current liabilities 256,842 293,027 363,219 378,648
The accompanying notes form part of th e Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6–


--- page 446 ---
Consolidated statements of financial position (continued)
E x p r e s s e di nR e n m i n b i( ‘ ‘ R M B ’ ’ )
As at 31 December
As at
30 April
2021 2022 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000
Non current liabilities
Lease liabilities 20 2 6———
Deferred tax liabilities 22 138 — — —
164 — — —
NET ASSETS 256,678 293,027 363,219 378,648
Equity
Paid-in capital/share capital 23(a) 83,007 83,007 105,896 105,896
Reserves 23(b) 172,856 210,632 259,314 274,381
Total equity attributable to equity shareholders of
the Company 255,863 293,639 365,210 380,277
Non-controlling interests 815 (612) (1,991) (1,629)
TOTAL EQUITY 256,678 293,027 363,219 378,648
The accompanying notes form part of th e Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7–


--- page 447 ---
Statements of financial position of the Company
E x p r e s s e di nR e n m i n b i( ‘ ‘ R M B ’ ’ )
As at 31 December
As at
30 April
2021 2022 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment 40 28 14 12
Intangible assets 12 429 143 — —
Right-of-use assets 77 45 37 3
Deferred tax assets — — 3 3
Investments in subsidiaries 25(f) 52,906 52,906 57,906 57,906
Contract costs and other assets 25(c) 33 33 0—
Time deposits 25(e) — — 50,770 51,313
53,455 53,155 108,760 109,237
Current assets
Financial assets measured at fair value through
profit or loss 25(a) 170,653 — — —
Accounts receivables 25(b) 375 3,846 8,416 7,217
Contract costs and other assets 25(c) 1,829 1,528 8,948 16,286
Cash and cash equivalents 25(d) 3,955 7,900 196,087 54,356
Time deposits 25(e) — 182,195 — 150,829
176,812 195,469 213,451 228,688
Current liabilities
Accounts and other payables 25(g) 282 802 17,756 26,797
Contract liabilities 1,590 74 226 440
Lease liabilities 32 27 — —
Accrued expenses 25(h) 1,333 1,564 2,118 1,099
Current taxation payables 25(i) 753 748 716 —
3,990 3,215 20,816 28,336
Net current assets 172,822 192,254 192,635 200,352
Total assets less current liabilities 226,277 245,409 301,395 309,589
Non current liabilities
Lease liabilities 26 — — —
Deferred tax liabilities 98 — — —
124 — — —
NET ASSETS 226,153 245,409 301,395 309,589
Equity
Paid-in capital/share capital 23(d) 83,007 83,007 105,896 105,896
Reserves 23(d) 143,146 162,402 195,499 203,693
TOTAL EQUITY 226,153 245,409 301,395 309,589
The accompanying notes form part of th e Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8–


--- page 448 ---
Consolidated statements of changes in equity
E x p r e s s e di nR e n m i n b i( ‘ ‘ R M B ’ ’ )
Total equity attributable to equi ty shareholders of the Company
Reserves
Paid-in
capital/share
capital
Capital
reserve
PRC
statutory
reserve
Retained
profits Total
Non-
controlling
interests Total equity
Note 23(b)
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance as at 1 January 2021 68,613 6,432 591 26,547 102,183 — 102,183
Net profit — — — 27,047 27,047 (55) 26,992
Capital contributions from
shareholders 23(a) 14,394 112,239 — — 126,633 — 126,633
Capital contributions from
non-controlling interests — — — — — 870 870
Appropriation to PRC statutory
reserve — — 1,856 (1,856) — — —
Balance as at 31 December 2021 and
1 January 2022 83,007 118,671 2,447 51,738 255,863 815 256,678
Net profit — — — 37,776 37,776 (1,427) 36,349
Appropriation to PRC statutory
reserve — — 1,925 (1,925) — — —
Balance as at 31 December 2022 and
1 January 2023 83,007 118,671 4,372 87,589 293,639 (612) 293,027
Net profit — — — 40,372 40,372 (1,379) 38,993
Capital contributions from
shareholders 23(a) 22,889 8,310 — — 31,199 — 31,199
Appropriation to PRC statutory
reserve — — 2,479 (2,479) — — —
Balance as at 31 December 2023 and
1 January 2024 105,896 126,981 6,851 125,482 365,210 (1,991) 363,219
Net profit — — — 15,067 15,067 (238) 14,829
Capital contributions from
non-controlling interests — — — — — 600 600
Balance as at 30 April 2024 105,896 126,981 6,851 140,549 380,277 (1,629) 378,648
The accompanying notes form part of th e Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9–


--- page 449 ---
Consolidated statements of changes in equity (continued)
E x p r e s s e di nR e n m i n b i( ‘ ‘ R M B ’ ’ )
(unaudited)
Total equity attributable to equi ty shareholders of the Company
Reserves
Paid-in
capital/share
capital
Capital
reserve
PRC
statutory
reserve
Retained
profits Total
Non-
controlling
interests Total equity
Note 23(b)
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance as at 1 January 2023 83,007 118,671 4,372 87,589 293,639 (612) 293,027
Net profit — — — 13,937 13,937 (532) 13,405
Capital contributions from
shareholders 23(a) 22,889 8,310 — — 31,199 — 31,199
Balance as at 30 April 2023 105,896 126,981 4,372 101,526 338,775 (1,144) 337,631
The accompanying notes form part of th e Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 0–


--- page 450 ---
Consolidated statements of cash flows
E x p r e s s e di nR e n m i n b i( ‘ ‘ R M B ’ ’ )
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Operating activities
Cash generated from operations 17(d) 30,260 34,913 29,651 11,411 19,591
Income tax paid (5,674) (7,711) (9,672) (5,878) (3,499)
Net cash generated from operating
activities 24,586 27,202 19,979 5,533 16,092
Investing activities
Cash generated from retrieving
financial assets measured at fair
value through profit or loss 87,036 241,771 — — —
Cash generated from retrieving
deposits — — 265,000 — —
Proceeds from interests r eceived — 3,651 3,419 2,318 —
Payment for the purchase of
property, plant and equipment (175) (175) (195) (77) (1)
Payment for the purchase of time
deposits — (265,000) (130,000) — (150,000)
Payment for the purchase of
financial assets measured at fair
v a l u e t h r o u g h p r o f i t o r l o s s ( 2 3 7 , 9 0 0 ) ————
Net cash (used in)/generated from
investing activities (151,039) (19,753) 138,224 2,241 (150,001)
Financing activities
Capital contributions from
shareholders 126,633 — 31,199 31,199 —
Capital contributions from
non-controlling interests 870 — — — 600
Listing expenses paid — — (7,682) (4,553) (6,067)
Capital element of lease rentals
paid 17(e) (312) (1,838) (1,581) (426) (572)
Interest element of lease rentals
paid 17(e) (43) (53) (47) (21) (13)
Net cash generated from/(used in)
financing activities 127,148 (1,891) 21,889 26,199 (6,052)
Net increase/(decrease) in cash and
cash equivalents 695 5,558 180,092 33,973 (139,961)
Cash and cash equivalents at the
beginning of the year/period 17,293 17,988 23,546 23,546 203,638
Cash and cash equivalents at the end
of the year/period 17(a) 17,988 23,546 203,638 57,519 63,677
The accompanying notes form part of th e Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 1–


--- page 451 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1 BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL INFORMATION
Zhongmiao Holdings (Qingdao) Co., Ltd. (the ‘‘Com pany’’) was established under its former name,
Qingdao Quanzhanggui Technology Co., Ltd. ( 青島全掌櫃科技有限公司), by Qingdao Haiyinghui Management
Consulting Co., Ltd. ( 青島海盈匯管理諮詢有限公司) as a limited liability company in the PRC on 16 March
2017 and subsequently converted into a joint stock co mpany with limited liability on 14 March 2023. The
Company and its subsidiaries (together, ‘‘the Group’’) are principally engaged in providing insurance agency
services, IT services and consulting services in the P RC. The Company is the holding company of the Group and
is primarily engaged in the provision of IT services.
As at the date of this report, the Company has direct or in direct interests in the following subsidiaries, all
of which are private companies:
Proportion of
ownership interest
Company name
Date and place of
establishment/
operation
kind of
legal entity
Registered
capital/Paid-in
Capital
Held by
the
Company
Held by
the
subsidiary
Principal
activities
Name of statutory
auditor
Directly held
Qingdao Haier Insurance
Agency Co., Ltd.*
(青島海爾保險代理有限
公司)
17 December
2001/
the PRC
limited liability
company
RMB50,000,000/
RMB50,000,000
100% — Insurance
agency services
KPMG Huazhen LLP
畢馬威華振會計師事
務所（特殊普通合夥）
for the year ended 31
December 2022 and
the year ended 31
December 2023
China Audit Asia
Pacific Certified
Public Accountants
LLP* 中審亞太會計
師事務所（特殊普通合
夥）for the year
ended 31 December
2021
Qingdao Zhongmiao
Caizhi Human Resource
Management Consulting
Co., Ltd.* ( 青島眾淼才
智人力資源管理諮詢有限
公司)
11 September
2020/
the PRC
limited liability
company
RMB2,000,000/
RMB2,000,000
100% — HR consulting
services
China Audit Asia
Pacific Certified
Public Accountants
LLP* 中審亞太會計
師事務所（特殊普通合
夥）for the year
ended 31 December
2021, the year ended
31 December 2022
and the year ended
31 December 2023
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 2–


--- page 452 ---
Proportion of
ownership interest
Company name
Date and place of
establishment/
operation
kind of
legal entity
Registered
capital/Paid-in
Capital
Held by
the
Company
Held by
the
subsidiary
Principal
activities
Name of statutory
auditor
Qingdao Zhongmiao
Shujin Technology Co.,
Ltd.* ( 青島眾淼數金科技
有限公司)
31 December
2021/
the PRC
limited liability
company
RMB10,000,000/
RMB5,905,510
100% — Investment
holding
China Audit Asia
Pacific Certified
Public Accountants
LLP* 中審亞太會計
師事務所（特殊普通合
夥）for the year
ended 31 December
2022 and the year
ended 31 December
2023
Indirectly held
Qingdao Yunhai
Lianji Technology Co.,
Ltd.* ( 青島雲海聯冀科技
有限公司)*
16 August 2021/
the PRC
limited liability
company
RMB3,000,000/
RMB2,375,510
— 51% Advisory
services
China Audit Asia
Pacific Certified
Public Accountants
LLP* 中審亞太會計
師事務所（特殊普通合
夥）for the year
ended 31 December
2022 and the year
ended 31 December
2023
* The English translation of names is for reference only.
These entities were registered as l imited liability companies under the laws and regulations in the PRC.
All companies comprising the Group have adopted 31 December as their financial year end date.
As at the date of this report, the financial statemen ts of the subsidiaries of the Company were prepared in
accordance with the relevant accounting rules and regul ations applicable to entities in the PRC in which they
were established.
The Historical Financial Information has been pr epared in accordance with all applicable IFRS
Accounting Standards as issued by the International A ccounting Standards Board (‘‘IASB’’). The Stub Period
Corresponding Financial Information has been prepared in accordance with the same basis of preparation and
presentation adopted in respect of the Historical Finan cial Information. Further details of the material
accounting policy information adopted are set out in Note 2.
The IASB has issued a number of new and revised IFRS Accounting Standards. For the purpose of
preparing this Historical Financial Information, th e Group has adopted all applicable new and revised IFRS
Accounting Standards to the Track Record Period, except f or any new standards or interpretations that are not
yet effective for the Track Record Period. The revised an d new accounting standards and interpretations issued
but not yet effective during the Track Record Period are set out in Note 27.
The Historical Financial Information also complies w ith the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 3–


--- page 453 ---
The accounting policies set out below have been appl ied consistently to all periods presented in the
Historical Financial Information.
2 MATERIAL ACCOUNTING POLICY INFORMATION
(a) Basis of measurement
The measurement basis used in the preparation of the financial statements is the historical cost basis
except that the following assets are stated at their fai r value as explained in the accounting policies set out
below:
— Financial assets measured at fair value through profit or loss (see Note 2(d));
(b) Use of estimates and judgements
The preparation of financial statements in conf ormity with IFRS Accounting Standards requires
management to make judgements, estimates and assum ptions that affect the application of policies and
reported amounts of assets, liabilities, income and exp enses. The estimates and associated assumptions are
based on historical experience and various other fac tors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent fr om other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions ar e reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in w hich the estimate is revised if the revision affects
only that period, or in the period of the revision and fut ure periods if the revision affects both current and
future periods.
Judgements made by management in the application of IFRS Accounting Standards that have
significant effect on the financial statements, and ma jor sources of estimation uncertainty are discussed in
Note 3.
(c) Subsidiaries and non-controlling interests
Subsidiaries are entitie s controlled by the Group. The Group controls an entity when it is exposed,
or has rights, to variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. When assess ing whether the Group has power, only substantive
rights (held by the Group and other parties) are considered.
An investment in a subsidiary is consolidated into the consolidated financial statements from the
date that control commences until the date that contro l ceases. Intra-group balances, transactions and
cash flows, and any unrealised profits arising from i ntra-group transactions are eliminated in full in
preparing the consolidated financia l statements. Unrealised losses resul ting from intra-group transactions
are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of
impairment.
Non-controlling interes ts represent the equity in a subsidiary not attributable dir ectly or indirectly
to the Company, and in respect of which the Group has not agreed any additional terms with the holders
of those interests which would result in the Group as a whole having a contractual obligation in respect of
those interests that meets the definition of a financi al liability. For each busin ess combination, the Group
can elect to measure any non-controlling interests eith er at fair value or at the non-controlling interests’
proportionate share of the subsid iary’s net identifiable assets.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 4–


--- page 454 ---
Non-controlling interests are pre sented in the consolidated statement of financial position within
equity, separately from equity attributable to the e quity shareholders of the Company. Non-controlling
interests in the results of the Group are presented on the face of the consolidated statement of profit or
loss and other comprehensive income as an allocation of the total profit or loss and total comprehensive
income for the year between non-controlling interests and the equity shareholders of the Company. Loans
from holders of non-controlling interests and other contractual obligations towards these holders are
presented as financial liabilities in the consolidat ed statement of financial position depending on the
nature of the liability.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted
for as equity transactions, whereby adjustme nts are made to the amounts of controlling and
non-controlling interests within cons olidated equity to reflect the change in relative interests, but no
adjustments are made to goodwill and no gain or loss is recognised.
When the Group loses control of a subsidiary, it is a ccounted for as a disposal of the entire interest
in that subsidiary, with a resulting gain or loss being recognised in profit or loss. Any interest retained in
that former subsidiary at the date when control is lost is recognised at fair value and this amount is
regarded as the fair value on initial recognition of a fi nancial asset (see Note 2(d)) or, when appropriate,
the cost on initial recognition of an inves tment in an associate or joint venture.
(d) Other investments in debt and equity securities
The Group’s policies for investments in debt and equity securities, other than investments in
subsidiaries, associates and joint ventures, are set out below.
Investments in debt and equity securities are recognised/derecognised on the date the Group
commits to purchase/sell the investment. The investm ents are initially stated at fair value plus directly
attributable transaction costs, except for those inv estments measured at fair value through profit or loss
(FVPL) for which transaction costs are recognised dir ectly in profit or loss. For an explanation of how the
Group determines fair value of financial instruments , see Note 24(d). These investments are subsequently
accounted for as follows, depending on their classification.
(i) Investments other than equity investments
Non-equity investments held by the Group are classified into one of the following
measurement categories:
— amortised cost, if the investment is held for the collection of contractual cash flows
which represent solely payments of principal and interest. Interest income from the
investment is calculated using the effect ive interest method (see Note 2(o)(ii)).
— fair value through other comprehensive inc ome (FVOCI) — recyclin g, if the contractual
cashflows of the investment comprise solely payments of principal and interest and the
investment is held within a business model whose objective is achieved by both the
collection of contractual cash flows and sal e. Changes in fair value are recognised in
other comprehensive income, except for the recognition in profit or loss of expected
credit losses, interest income (calculated us ing the effective interest method) and foreign
exchange gains and losses. When the investment is derecognised, the amount
accumulated in other comprehensive incom e is recycled from equity to profit or loss.
— fair value through profit or loss (FVPL), if the investment does not meet the criteria for
being measured at amortised cost or FVOCI (recycling). Changes in the fair value of the
investment (including interest) a re recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 5–


--- page 455 ---
(ii) Equity investments
An investment in equity securities is classi fied as FVPL unless the equity investment is not
held for trading purposes and on initial recognition of the investment the Group makes an
irrevocable election to designate the investmen t at FVOCI (non-recycling) such that subsequent
changes in fair value are recognised in other comprehensive income. Such elections are made on an
instrument-by-instrument basis, but may only b e made if the investment meets the definition of
equity from the issuer’s perspective. Where such an election is made, the amount accumulated in
other comprehensive income remains in the fair valu e reserve (non-recycling) until the investment is
disposed of. At the time of disposal, the am ount accumulated in the fair value reserve
(non-recycling) is transferred to retained ear nings. It is not recycled through profit or loss.
Dividends from an investment in e quity securities, irre spective of whether classified as at FVPL or
FVOCI, are recognised in profit or loss as other income.
(e) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment
losses (see Note 2(h)(ii)):
Gains or losses arising from the retirement or dis posal of an item of property, plant and equipment
are determined as the difference between the net di sposal proceeds and the carrying amount of the item
and are recognised in profit or loss on the date of retirement or disposal.
Depreciation is calculated to write off the co st or valuation of items of property, plant and
equipment, less their estimated residual value, if any , using the straight line method over their estimated
useful lives as follows:
— Electronic equipment 3 years
— Office and other equipment 5 years
Both the useful life of an asset and its residual value, if any, are reviewed annually.
(f) Intangible assets
Intangible assets that are acquired by the Group a re stated at cost less accumulated amortisation
(where the estimated useful life is finite) a nd impairment losses (see Note 2(h)(ii)).
Amortisation of intangible assets with finite ,u s e f u ll i v e si sc h a r g e dt op r o f i to rl o s so na
straight-line basis over the assets’ estimated useful l ives. The following intangi ble assets with finite useful
lives are amortised from the date they are available for use and their estimated useful lives are as follows:
— Software 5t o1 0y e a r s
Both the period and method of amortisation are reviewed annually.
The estimates and associated assumptions of us eful life determined by the Group are based on
technical and commercial obsolescence, legal or c ontractual limits on the use of the asset and other
relevant factors. Based on the current functionalit ies equipped by the software and the daily operation
needs, the Group considers a useful life of 5–10 years to be their best estimation.
Intangible assets are not amortised while thei r useful lives are assessed to be indefinite. Any
conclusion that the useful life of an intangible asset i s indefinite is reviewed annually to determine whether
events and circumstances continue to support the indefi nite useful life assessment for that asset. If they do
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 6–


--- page 456 ---
not, the change in the useful life assessment from indefinite to finite is accounted for prospectively from
the date of change and in accordance with the policy for amortisation of intangible assets with finite lives
as set out above.
Research expenditures are recognised as expenses as incurred. Costs incurred on development
projects are capitalised as intangible assets whe n recognition criteria are met, including, (a) it is
technically feasible to complete the software so that i t will be available for use; (b) management intends to
complete the software and use or sell it; (c) there is an ability to use or sell the software; (d) it can be
demonstrated how the software will generate probabl e future economic benefits ; (e) adequate technical,
financial and other resources to complete the devel opment and to use or sell the software are available;
and (f) the expenditure attributable to the softwar e during its development can be reliably measured.
Other development costs that do not meet th ese criteria are expensed as incurred.
(g) Leased assets
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A
contract is, or contains, a lease if the contract convey s the right to control the use of an identified asset for
a period of time in exchange for consideration. Cont rol is conveyed where the customer has both the right
to direct the use of the identified asset and to obtai n substantially all of the economic benefits from that
use.
Where the contract contains lease component(s) a nd non-lease component(s), the Group has elected
not to separate non-lease components and account s for each lease component and any associated
non-lease components as a single lease component for all leases.
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability,
except for short-term leases that have a lease term le ss than 12 months and leases of low-value. When the
Group enters into a lease in respect of a low-value asset, the Group decides whether to capitalise the lease
on a lease-by-lease basis. The lease payments associ ated with those leases which are not capitalised are
recognised as an expense on a systematic basis over the lease term.
Where the lease is capitalised, the lease liability is initially recognised at the present value of the
lease payments payable over the lease term, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, using a rele vant incremental borrowing rate. After initial
recognition, the lease liability is measured at amort ised cost and interest expense is calculated using the
effective interest method. Variab le lease payments that do not depend on an index or rate are not included
in the measurement of the lease liability and hence are charged to profit or loss in the accounting period in
which they are incurred.
The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which
comprises the initial amount of the lease liability plus any lease payments made at or before the
commencement date, and any initial direct costs incur red. Where applicable, the cost of the right-of-use
assets also includes an estimate of costs to dismantl e and remove the underlying asset or to restore the
underlying asset or the site on which it is located, d iscounted to their present value, less any lease
incentives received. The right-of-use asset is subseque ntly stated at cost less accumulated depreciation and
impairment losses (see Note 2(h)(ii)).
The lease liability is remeasured when there is a change in future lease payments arising from a
change in an index or rate, or there is a change in the Group’s estimate of the amount expected to be
payable under a residual value guarantee, or there is a change arising from the reassessment of whether the
Group will be reasonably certain to exercise a purchas e, extension or termination option. When the lease
liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 7–


--- page 457 ---
The lease liability is also remeasured when there is a change in the scope of a lease or the
consideration for a lease that is not originally provided for in the lease contract (‘‘lease modification’’) that
is not accounted for as a separate lease. In this case th e lease liability is remeasured based on the revised
lease payments and lease term using a revised disc ount rate at the effective date of the modification.
In the consolidated statement of financial position, the current portion of long -term lease liabilities
is determined as the present value of contractual paym ents that are due to be settled within twelve months
after the reporting period.
(h) Credit losses and impairment of assets
(i) Credit losses from financial instruments
The Group recognises a loss allowance for exp ected credit losses (ECLs) on financial assets
measured at amortised cost (including cash and c ash equivalents, accounts receivables and other
receivables).
Other financial assets measured at fair va lue are not subject to the ECL assessment.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as
the present value of all expected cash shortfalls (i.e. the difference between the cash flows due
to the Group in accordance with the contract and the cash flows that the Group expects to
receive).
The expected cash shortfalls are discounted us ing the following discount rates where the
effect of discounting is material:
— fixed-rate financial assets, trade and other receivables: effective interest rate
determined at initial recognition or an approximation thereof;
The maximum period consider ed when estimating ECLs is the maximum contractual
period over which the Group is exposed to credit risk.
In measuring ECLs, the Group takes i nto account reasonable and supportable
information that is available without undue cost or effort. This includes information about
past events, current conditions and forecasts of future economic conditions.
ECLs are measured on either of the following bases:
— 12-month ECLs: these are losses that are expected to result from possible default
events within the 12 months af ter the reporting date; and
— lifetime ECLs: these are losses that are e xpected to result from all possible default
events over the expected lives of the items to which the ECL model applies.
Loss allowances for accounts receivables are always measured at an amount equal to
lifetime ECLs. For all other financial instr uments, the Group recognises a loss allowance
equal to 12-month ECLs, unless there has been a s ignificant increase in credit risk of the
financial instrument since initial recognition, in which case the loss allowance is measured at
an amount equal to lifetime ECLs.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 8–


--- page 458 ---
Significant increases in credit risk
In assessing whether the credit risk of a financ ial instrument has increased significantly
since initial recognition, the Group compares the risk of default occurring on the financial
instrument assessed at the reporting date with th at assessed at the date of initial recognition.
In making this reassessment, the Group consid ers that a default event occurs when (i) the
borrower is unlikely to pay its credit obligati ons to the Group in full, without recourse by the
Group to actions such as realising security (if any is held); or (ii) the financial asset is 90 days
past due. The Group considers both quantitat ive and qualitative information that is
reasonable and supportable, including hist orical experience and forward-looking
information that is available without undue cost or effort.
In particular, the following information is taken into account when assessing whether
credit risk has increased significantly since initial recognition:
— failure to make payments of principal or interest on their contractually due dates;
— an actual or expected significant deteriora tion in a financial instrument’s external
or internal credit rating (if available);
— an actual or expected significant deterioration in the operating results of the
debtor; and
— existing or forecast changes in the technological, market, economic or legal
environment that have a significant adve rse effect on the debtor’s ability to meet
its obligation to the Group.
Depending on the nature of the financial ins truments, the assess ment of a significant
increase in credit risk is performed on either a n individual basis or a collective basis. When the
assessment is performed on a collective basis, t he financial instruments are grouped based on
shared credit risk characteristics, such as past due status and credit risk ratings.
ECLs are remeasured at each reporting da te to reflect changes in the financial
instrument’s credit risk since initial recogn ition. Any change in the ECL amount is recognised
as an impairment gain or loss in profit or loss. The Group recognises an impairment gain or
loss for all financial instruments with a co rresponding adjustment to their carrying amount
through a loss allowance account, except for inve stments in debt securities that are measured
at FVOCI (recycling), for which the loss allowance is recognised in other comprehensive
income and accumulated in the fair value reserve (recycling).
Credit-impaired financial assets
At each reporting date, the Group assesses whether a financial asset is credit-impaired.
A financial asset is credit-impaired when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-im paired includes the following observable
events:
— significant financial difficulties of the debtor;
— a breach of contract, such as a default or past due event;
— it becoming probable that the borrowe r will enter into bankruptcy or other
financial reorganisation;
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 9–


--- page 459 ---
— significant changes in the technological, market, economic or legal environment
that have an adverse effect on the debtor; or
— the disappearance of an active market for a security because of financial
difficulties of the issuer.
Write-off policy
The gross carrying amount of a financial asset i s written off (either partially or in full) to
the extent that there is no realistic prospect of recovery. This is generally the case when the
Group determines that the debtor does not have assets or sources of income that could
generate sufficient cash flows to rep ay the amounts subject to the write-off.
Subsequent recoveries of a financial asset tha t was previously written off are recognised
as a reversal of impairment in profit or loss in the period in which the recovery occurs.
(ii) Impairment of other non-current assets
Internal and external sources of information a re reviewed at the end of each reporting period
to identify indications that the following assets may be impaired or, except in the case of goodwill,
an impairment loss previously recognis ed no longer exists or may have decreased:
— property, plant and equipment;
— right-of-use assets;
— intangible assets;
— contract costs; and
— investments in subsidiaries in the Company’s statement of financial position.
If any such indication exists, the asset’s rec overable amount is estimated. In addition, for
intangible assets that are not yet available for use a nd intangible assets that have indefinite useful
lives, the recoverable amount is estimated annua lly whether or not there is any indication of
impairment.
— Calculation of recoverable amount
The recoverable amount of an asset is the greater of its fair value less costs of disposal
and value in use. In assessing value in use, th e estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. Where an asset does not generate cash
inflows largely independent of those from other assets, the recoverable amount is determined
for the smallest group of assets that generates cash inflows independently (i.e. a
cash-generating unit). A portion of the carry ing amount of a corporate asset (for example,
head office building) is allocated to an individua l cash-generating unit if the allocation can be
done on a reasonable and consistent basis, or to the smallest group of cash-generating units if
otherwise.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 0–


--- page 460 ---
— Recognition of impairment losses
An impairment loss is recognised in profit or loss if the carrying amount of an asset, or
the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment
losses recognised in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the cash-gene rating unit (or group of units), and then, to
reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata
basis, except that the carrying value of an asset will not be reduced below its individual fair
value less costs of disposal (if measurabl e) or value in use (if determinable).
— Reversals of impairment losses
In respect of assets other than goodwill, an im pairment loss is reversed if there has been
a favourable change in the estimates used to determine the recoverable amount. An
impairment loss in respect of goodwill is not reversed.
A reversal of an impairment loss is limited to the asset’s carrying amount that would
have been determined had no impairment los s been recognised in prior years. Reversals of
impairment losses are credited to profit or loss in the year in which the reversals are
recognised.
(i) Contract assets and Contract liabilities
A contract asset is recognised when the Group recognises revenue (see Note 2(o)(i)) before being
unconditionally entitled to the consideration under t he payment terms set out in the contract. Contract
assets are assessed for expected credit losses (ECL ) in accordance with the policy set out in Note 2(h)(i)
and are reclassified to r eceivables when the right to the consideration has become unconditional (see Note
2(j)).
A contract liability is recognised when the custome r pays non-refundable consideration before the
Group recognises the related revenue (see Note 2(o)(i)). A contract liab ility would also be recognised if the
Group has an unconditional right to receive non-refund able consideration before the Group recognises
the related revenue. In such cases, a corresponding r eceivable would also be recognised (see Note 2(j)).
For a single contract with the customer, either a n et contract asset or a net contract liability is
presented. For multiple contracts, contract assets and contract liabilities of unrelated contracts are not
presented on a net basis.
When the contract includes a significant financing co mponent, the contract balance includes interest
accrued under the effective inter est method (see Note 2(o)(ii)).
(j) Accounts and other receivables
A receivable is recognised when the Group has an unconditional right to receive consideration. A
right to receive consideration is unconditional if only the passage of time is required before payment of
that consideration is due. If revenue has been reco gnised before the Group has an unconditional right to
receive consideration, the amount is presented as a contract asset.
Accounts receivables that do not contain a significan t financing component are initially measured at
their transaction price. Accounts r eceivables that contain a signific ant financing component and other
receivables are initially measured at fair value plu s transaction costs. All receivables are subsequently
stated at amortised cost, using the effective interes t method and including an allowance for credit losses
(see Note 2(h)(i)).
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 1–


--- page 461 ---
(k) Cash and cash equivalents
Cash and cash equivalents comprise cash at ban k and on hand, demand deposits with banks and
other financial institutions, and s hort-term, highly liquid investments that are readily convertible into
known amounts of cash and which are subject to an insi gnificant risk of changes in value, having been
within three months of maturity at acquisition. Cash and cash equivalents are assessed for ECL in
accordance with the policy set out in Note 2(h)(i).
(l) Trade and other payables
Trade and other payables are initially recognised at fair value. Subsequent to initial recognition,
trade and other payables are stated at amortised cost unless the effect of discount ing would be immaterial,
in which case they are stated at invoice amounts.
(m) Employee benefits
(i) Short-term employee benefits and contribut ions to defined contribution retirement plans
Salaries, annual bonuses, paid annual leave, soc ial security contributions such as medical
insurance, work injury insurance, maternity i nsurance and housing fund, and the other cost of
non-monetary benefits are accrued in the year in which the associated services are rendered by
employees.
Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined
contribution basic pension insurance and unemplo yment insurance in the social insurance system
established and managed by government organis ations. The Group makes c ontributions to basic
pension insurance plans and unemployment insuran ce based on the applicable benchmarks and rates
stipulated by the government.
Where payment or settlement is deferred and the effect would be material, these amounts are
stated at their present values.
(ii) Share-based payments
The grant-date fair value of equity-settled share-based payments granted to employees is
measured using the binomial lattice model. The am ount is generally recognised as an expense, with a
corresponding increase in equity, over the vesting period of the awards. The amount recognised as
an expense is adjusted to reflect the number of awa rds for which the related service conditions are
expected to be met, such that the amount ultimate ly recognised is based on the number of awards
that meet the related service conditions at the vesting date.
(n) Income tax
Income tax expense comprises current tax and deferred tax. It is recognised in profit or loss except to
the extent that it relates to a business combinati on, or items recognised directly in equity or in OCI.
Current tax comprises the estimated tax payable or receivable on the taxable income or loss for the
year and any adjustments to the tax payable or receivable in respect of previous years. The amount of
current tax payable or receivable is the best estimate of the tax amount expected to be paid or received
that reflects any uncertainty related to income taxes. It is measured using tax rates enacted or
substantively enacted at the reporting date. Curre nt tax also includes any tax arising from dividends.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 2–


--- page 462 ---
Deferred tax is not recognised for:
— temporary differences on the initial recognitio n of assets or liabilities in a transaction that is
not a business combination and that affects nei ther accounting nor taxable profit or loss and
does not give rise to equal taxable and d eductible temporary differences;
— temporary differences related to investment in subsidiaries, associates and joint venture to the
extent that the Group is able to control the timi ng of the reversal of the temporary differences
and it is probable that they will not reverse in the foreseeable future; and
— taxable temporary differences arisin g on the initial recognition of goodwill;
Deferred tax assets are recognised for unused ta x losses, unused tax credits and deductible
temporary differences to the extent that it is probabl e that future taxable profit s will be available against
which they can be used. Future taxable profits are determined based on the reversal of relevant taxable
temporary differences. If the amount of taxable tem porary differences is insufficient to recognise a
deferred tax asset in full, then fut ure taxable profits, adjusted for r eversals of existing temporary
differences, are considered, based on the business p lans for individual subsidiaries in the Group. Deferred
tax assets are reviewed at each reporting date and a re reduced to the extent that it is no longer probable
that the related tax benefit will be realised; such re ductions are reversed when the probability of future
taxable profits improves.
Current tax balances and deferred tax balances, a nd movements therein, are presented separately
from each other and are not offset. Cur rent tax assets are offset against cu rrent tax liabilities, and deferred
tax assets against deferred tax liabilities, if the Co mpany and the Group has the legally enforceable right
to set off current tax assets against current tax liabi lities and the following additional conditions are met:
— in the case of current tax assets and liabilities, the Company and the Group intends either to
settle on a net basis, or to realise the asset a nd settle the liability simultaneously; or
— in the case of deferred tax assets and liabiliti es, if they relate to income taxes levied by the
same taxation authority on either:
— the same taxable entity; or
— different taxable entities, which, in each f uture period in which significant amounts of
deferred tax liabilities or assets are expected to be settled or recovered, intend to realise
the current tax assets and settle the current t ax liabilities on a net basis or realise and
settle simultaneously.
(o) Revenue recognition
(i) Revenue from contracts with customers
Income is classified by the Group as revenue wh en it arises from the provision of services in
the ordinary course of the Group’s business. The Group derives agency revenue serving as an
insurance agency to distribute insurance produc ts on behalf of insurance companies by which the
Group is entitled to receive commissions from the i nsurance companies based on the premium paid
by the policyholders for the related insurance polic y sold (‘‘sales services’’). For long-term insurance
products, the Group is also entitl ed to receive trailing commissions when the Group completes the
post-sales services (‘‘post-sale s services’’). The Group also derives revenue by providing IT and
consulting services to certain customers.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 3–


--- page 463 ---
Revenue is the gross inflow of economic benefits arising in the course of the Group’s ordinary
activities when the inflows result in increases in sha reholders’ equity, other than increases relating to
contributions from shareholders.
Revenue is recognised when the Group satisfie s the performance obligation in a contract by
transferring control over relevant goods or services to the customers.
Where a contract has two or more performanc e obligations, the Group determines the
stand-alone selling price at contract inception of the distinct service underlying each performance
obligation in the contract and allocates the tra nsaction price in proportion to those stand-alone
selling prices. The Group recognises as revenue the amount of the transaction price that is allocated
to each performance obligation. The stand-alone se lling price is the price at which the Group would
sell a promised service separately to a custome r. If a stand-alone selling price is not directly
observable, the Group considers all informatio n that is reasonably available to the Group and
maximises the use of observable inputs to e stimate the stand-alone selling price.
The transaction price is the amount of considerat ion to which the Group expects to be entitled
in exchange for transferring promised services to a customer, excluding amounts collected on behalf
of third parties. The Group recognises the transaction price only to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not occur
when the uncertainty associated with the varia ble consideration is subsequently resolved.
The Group satisfies a performance obligation o ver time if one of the following criteria is met;
otherwise, the performance obligat ion is satisfied at a point in time:
— the customer simultaneously receives and consumes the benefits provided by the
Group’s performance as the Group performs;
— the customer can control the asset created or enhanced during the Group’s performance;
or
— the Group’s performance does not create an asset with an alternative use to it and the
Group has an enforceable right to payment for performance completed to date.
For a performance obligation satisfied over time, the Group recognises revenue over time by
measuring the progress towards c omplete satisfaction of that performance obligation. When the
outcome of that performance obligation cannot be measured reasonably, but the Group expects to
recover the costs incurred in satisfying the perf ormance obligation, the Group recognises revenue
only to the extent of the costs incurred until such ti me that it can reasonably measure the outcome of
the performance obligation.
For a performance obligation satisfied at a poi nt in time, the Group recognises revenue at the
point in time at which the customer obtains control of the relevant products or services. To
determine whether a customer has obtained contro l of goods or services, the Group considers the
following indicators:
— the Group has a present right to payment for the goods or services;
— the Group has transferred physical possession of the goods to the customer;
— the Group has transferred the legal title of t he goods or the significant risks and rewards
of ownership of the goods to the customer; and
— the customer has accepted the goods or services.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 4–


--- page 464 ---
The Group determines whether it is a princi pal or an agent, based on whether it obtains
control of the specified goods or service before that good or service is transferred to a customer. The
Group is a principal if it controls the specified good or service before that good or service is
transferred to a customer and recognises revenue in the gross amount of consideration which it has
received (or which is receivable). Otherwise, the Group is an agent, and recognises revenue in the
amount of any fee or commission to which it expects to be entitled. The fee or commission is the net
amount of consideration that the Group retains after paying the other party the consideration or is
determined according to the established amount or proportion.
The timing of revenue recognition for the Gr oup’s principal revenue streams is described as
follows:
— Revenue from insurance agency services
The revenue from sales services is reco gnised at a point in time upon successful
distributions of the relevant insurance products.
The revenue from post-sales services for long -term life and health insurance products is
recognised ratably over the period of se rvices according to the contract terms.
— Revenue from IT services
The Group primarily provides IT services to corporate customers by designing and
developing IT solutions based on their needs. The revenue is recognised at a point in time
when the customised software and/or IT system is delivered to and accepted by the customer.
The revenue from other IT services is recognised ratably over the period of services
according to the contract terms.
— Revenue from consulting services
The Group provides HR consulting services and marketing and promotion services to
corporate customers.
HR consulting service revenue is recognis ed at a point in time upon the completion of
the service with a success-based fee. Marketin g and promotion service revenue is recognised
when or as the service is rendered.
(ii) Revenue from other sources and other income
— Interest income
Interest income is recognised as it accrues under the effective interest method using the
rate that exactly discounts estimated futur e cash receipts through the expected life of the
financial asset to the gross carrying amount of the financial asset. For financial assets
measured at amortised cost or FVOCI (recycling) that are not credit-impaired, the effective
interest rate is applied to the gross carrying am ount of the asset. For credit-impaired financial
assets, the effective interest rate is applied to t he amortised cost (i.e. gross carrying amount net
of loss allowance) of the asset (see Note 2(h)).
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 5–


--- page 465 ---
— Government grants
Government grants are recognised in the stat ement of financial position initially when
there is reasonable assurance that they will be received and that the Group will comply with
the conditions attaching to them. Grants that compensate the Group for expenses incurred are
recognised as income in profit or loss on a systematic basis in the same periods in which the
expenses are incurred. Grants that compensate the Group for the cost of an asset are deducted
from the carrying amount of the asset and conse quently are effectively recognised in profit or
loss over the useful life of the asset by way of reduced depreciation expense.
(p) Contract costs
Contract costs are either the incremental costs o f obtaining a contract with a customer or the costs
to fulfil a contract with a customer.
Incremental costs of obtaining a contract are thos e costs that the Group incurs to obtain a contract
with a customer that it would not have incurred if the contract had not been obtained. The Group
recognises as an asset the incremental costs of obtai ning a contract with a customer if it expects to recover
those costs. Other costs of obtaining a contract are expensed when incurred.
If the costs to fulfil a contract with a customer a re not within the scope of inventories or other
accounting standards, the Group recognises an asse t from the costs incurred to fulfil a contract only if
those costs meet all of the following criteria:
— the costs relate directly to an ex isting contract or to a specifica lly identifiable anticipated
contract, including direct labour, direct materia ls, allocations of overheads (or similar costs),
costs that are explicitly chargeable to the cus tomer and other costs that are incurred only
because the Group entered into the contract;
— the costs generate or enhance resources of the Group that will be used in satisfying (or in
continuing to satisfy) performanc e obligations in the future; and
— the costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for the
costs to fulfil a contract (the ‘‘assets related to contract costs’’) are amortised on a systematic basis that is
consistent with the transfer to the customer of the goods or services to which the assets relate and
recognised in profit or loss for the current period.
(q) Provisions and contingent liabilities
Provisions are recognised when the Group has a legal or constructive obligatio n arising as a result of
a past event, it is probable that an outflow of economic benefits will be required to settle the obligation
and a reliable estimate can be made. Where the time val ue of money is material, provisions are stated at
the present value of the expenditure expected to settle the obligation.
Where it is not probable that an outflow of econom ic benefits will be required, or the amount cannot
be estimated reliably, the obligation is disclosed as a contingent li ability, unless the probability of outflow
of economic benefits is remote. Possible obligat ions, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future ev ents are also disclosed as contingent liabilities
unless the probability of outflow of economic benefits is remote.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by
another party, a separate asset is recognised for a ny expected reimbursement that would be virtually
certain. The amount recognised for the reimbursement is limited to the carrying amount of the provision.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 6–


--- page 466 ---
(r) Related parties
(i) A person, or a close member of that person’s family, is related to the Group if that person:
(a) has control or joint control over the Group;
(b) has significant influence over the Group; or
(c) is a member of the key management personnel of the Group or the Group’s parent.
(ii) An entity is related to the Group if any of the following conditions applies:
— The entity and the Group are members of the same Group (which means that each
parent, subsidiary and fellow subs idiary is related to the others).
— One entity is an associate or joint venture o f the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member).
— Both entities are joint ventures of the same third party.
— One entity is a joint venture of a third entit y and the other entity is an associate of the
third entity.
— The entity is a post-employment benefit pla n for the benefit of employees of either the
Group or an entity related to the Group.
— The entity is controlled or jointly cont rolled by a person identified in (i).
— A person identified in (i)(a) has significa nt influence over the entity or is a member of
the key management personnel of the entity (or of a parent of the entity).
— The entity, or any member of a Group of which it is a part, provides key management
personnel services to the Group or to the Group’s parent.
Close members of the family of a person are t hose family members who may be expected to
influence, or be influenced by, that person in their dealings with the entity.
(s) Segment reporting
Operating segments, and the amounts of each segment item reported in the financial statements, are
identified from the financial information provi ded regularly to the Group’s most senior executive
management for the purposes of allocating resources to, and assessing the performance of, the Group’s
various lines of business and geographical locations.
Individually material operating segments are not aggregated for f inancial reporting purposes unless
the segments have similar economic ch aracteristics and are similar in respect of the nature of products and
services, the type or class of customers, the met hods used to distribute the products or provide the
services, and the nature of the regulatory environm ent. Operating segments which are not individually
material may be aggregated if they share a majority of these criteria.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 7–


--- page 467 ---
3 ACCOUNTING JUDGEMENTS AND ESTIMATES
Estimates and judgements are continually evaluate d and are based on experience and other factors,
including expectations of future events that are believe d to be reasonable under the circumstances. The principal
accounting policies are set forth in Note 2. The Group beli eves the following critical accounting policy involves
the most significant judgements and estimates used in th e preparation of the Historical Financial Information.
(a) Recognition of Revenue
In determining the amount and timing of revenue re cognition, the revenue recognition process as
described in Note 2(o) is used, which requires judgem ents and estimates. These judgements and estimates
include determining the transaction price of contract s and determining the standalone selling price for
each distinct performance obligation.
The transaction price is the amount of considerat ion to which the Group expects to be entitled in
exchange for transferring promised services to a custo mer, excluding amounts collected on behalf of third
parties. The Group recognises the transaction pric e only to the extent that it is highly probable that a
significant reversal in the amount of cumulative re venue recognised will not occur when the uncertainty
associated with the variable consid eration is subsequently resolved.
Where a contract has two or more performance obl igations, the Group determines the stand-alone
selling price at contract inception of the distinct s ervice underlying each perf ormance obligation in the
contract and allocates the transaction price in pr oportion to those stand-al one selling prices. The
stand-alone selling price is the price at which the G roup would sell a promised service separately to a
customer. If a stand-alone selling price is not directly observable, the Group considers all information that
is reasonably available to the Group and maximise s the use of observable inputs to estimate the
stand-alone selling price.
4 REVENUE AND SEGMENT REPORTING
The principal activities of the Group are the prov ision of insurance agency services, IT services and
consulting services in the PRC.
(a) Disaggregation of revenue
For the year ended 31 December
For the four months
ended 30 April
2021 2022 2023 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from contracts with customers
within the scope of IFRS 15
Disaggregated by business segment
— Insurance agency business (i) 116,056 130,721 155,748 51,630 54,802
— IT services 1,264 14,953 15,782 1,046 3,218
— Consulting services 2,654 2,724 2,481 749 624
Total 119,974 148,398 174,011 53,425 58,644
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 8–


--- page 468 ---
Note:
(i) The amount of each significant category of r evenue from insurance agency business is as
follows:
Disaggregated by the purchasers of insurance products
For the year ended 31 December
For the four months
ended 30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Household insurance client s 74,641 80,498 91,478 27,189 28,486
Corporate insurance clients 41,415 50,223 64,270 24,441 26,316
Total 116,056 130,721 155,748 51,630 54,802
Disaggregated by major products
For the year ended 31 December
For the four months
ended 30 April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Property insurance product s 39,658 47,620 59,806 22,910 25,733
Life and health insurance products 48,332 36,156 33,757 12,958 8,102
Accident insurance products 16,171 24,096 27,830 7,741 9,162
Automobile insurance products 11,895 22,849 34,355 8,021 11,805
Total 116,056 130,721 155,748 51,630 54,802
Disaggregation of revenue from contracts with cus tomers by the timing of revenue recognition is as
follows:
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Point-in-time 116,328 144,201 159,377 46,560 53,081
Over-time 3,646 4,197 14,634 6,865 5,563
Total 119,974 148,398 174,011 53,425 58,644
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 9–


--- page 469 ---
The Group’s customer base is diversified. Revenue from major customers which accounted for 10%
or more of the Group’s revenue in each year dur ing the Track Record Period are set out below:
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
A 42,046 56,537 62,847 18,195 18,619
B 1 8 , 3 6 4****
C **** 8 , 6 9 1
Note: * Revenue from the customer was less than 10% for the respective years.
(b) Revenue expected to be recognised in the future arising from contracts with customers in existence as at
31 December 2021, 2022, 2023, and as at 30 April 2024
As at 31 December 2021, 2022, 2023, and as at 30 April 2024, the aggregated amount of the
transaction price allocated to the remaining perfo rmance obligations under the Group’s existing contracts
is RMB9,635 thousand, RMB9,602 thousand, RMB9, 852 thousand and RMB9,798 thousand respectively.
The Group will recognise the expected revenue in futu re when or as the post-sales services for insurance
agency business is provided, which is expected to occur over the post-sales service period.
The Group has applied the practical expedient in paragraph 121 of IFRS 15 such that the above
information does not include information about revenue that the Group will be entitled to when it satisfies
the remaining performance obligat ions under the contracts that had an original expected duration of one
year or less.
(c) Segment reporting
The Group manages its business by business lines . In a manner consistent with the way in which
information is reported to the Group’s most senior e xecutive management for the purposes of resource
allocation and performance assessment, the Group has p resented the following th ree reportable segments.
— Insurance agency business
The Group acts as the agent in distributing i nsurance products on behalf of the insurance
companies.
— IT services
The Group offers IT services to insurance compa ny partners, insurance intermediaries and
companies from different industries, by designin g and developing digitali sed solutions based on
their needs.
— Consulting services
The Group provides consulting services includi ng the provision of human resources consulting
services and marketing and promotion services.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 0–


--- page 470 ---
(i) Segment results
For the purposes of assessing segment perform ance and allocating between segments,
the Group’s most senior executive management monitors the results attributable to each
reportable segment on the following bases:
Revenue and expenses are allocated to the reportable segments with reference to revenue
generated by those segments and the cost of s ales incurred by those segments. The measure
used for reporting segment result is gross pr ofit. The items, such as segment expenses and
other income, segment assets a nd liabilities are not regularl y provided to the Group’s most
senior executive management . Assistance provided by one segment to another, including
sharing of assets and technical know-how, is not measured.
Insurance
Agency
Services IT services
Consulting
services Total
RMB’000 RMB’000 RMB’000 RMB’000
Year ended 31 December 2021
Revenue 116,056 1,264 2,654 119,974
Cost of sales (70,902) (457) (566) (71,925)
Gross Profit 45,154 807 2,088 48,049
Year ended 31 December 2022
Revenue 130,721 14,953 2,724 148,398
Cost of sales (72,480) (7,686) (973) (81,139)
Gross Profit 58,241 7,267 1,751 67,259
Year ended 31 December 2023
Revenue 155,748 15,782 2,481 174,011
Cost of sales (91,741) (6,612) (1,145) (99,498)
Gross Profit 64,007 9,170 1,336 74,513
Four months ended 30 April 2023
(unaudited)
Revenue 51,630 1,046 749 53,425
Cost of sales (27,863) (372) (314) (28,549)
Gross Profit 23,767 674 435 24,876
Four months ended 30 April 2024
Revenue 54,802 3,218 624 58,644
Cost of sales (32,213) (1,352) (240) (33,805)
Gross Profit 22,589 1,866 384 24,839
(ii) Geographic information
Most of the Group’s operating assets are located in the PRC, and most operating results
were derived from the PRC during the Track Reco rd Period. Accordingly, no segment analysis
based on geographical locations is provided.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 1–


--- page 471 ---
5 OTHER INCOME
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Realised gains from financial
investments measured at fair value
through profit or loss 5,636 3,871 — — —
Government grants 1,156 649 2,063 413 400
Unrealised gains/(loss) from financial
assets measured at fair value through
profit or loss 120 (830) — — —
Interest income 729 4,444 9,292 3,536 2,585
Others 41 42 (31) (12) 29
Total 7,682 8,176 11,324 3,937 3,014
6 PROFIT BEFORE TAXATION
Profit before taxation is arrived at after charging:
(a) Finance costs
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest expense on lease
liabilities 43 53 47 21 13
Others 133 101 159 19 40
Total 176 154 206 40 53
(b) Staff costs
For the year ended 31 December
For the four months
ended 30 April
2021 2022 2023 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, wages and other benefits 18,390 25,427 29,531 8,613 8,388
Contributions to defined contribution
retirement plans (i) 1,707 2,361 3,192 1,059 889
Total 20,097 27,788 32,723 9,672 9,277
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 2–


--- page 472 ---
Note:
(i) Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined
contribution basic pension insurance and une mployment insurance in the social insurance
system established and managed by gover nment organisations. The Group makes
contributions to basic p ension insurance plans and unemployment insurance based on the
applicable benchmarks and rates stipulated by the government.
(c) Other items
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Referral fees 31,936 50,138 68,170 19,761 25,707
Commission fees 26,234 14,286 14,470 5,612 3,718
Service fees 10,798 5,336 6,004 1,330 1,763
IT subcontracting fees 168 5,358 2,504 40 180
Listing expenses — — 4,754 714 250
Depreciation and amortisation
charges
— Depreciation of property,
plant and equipment 172 214 212 74 52
— Amortisation of intangible
assets 286 286 143 95 —
— Depreciation of right-of-use
assets 533 1,119 1,953 604 451
7 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
(a) Taxation in the consolidated statements of profit or loss:
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current tax
— PRC Enterprise Income Tax 5,637 9,395 9,027 3,304 3,446
Deferred tax
— Reversal of temporary
differences (21) (152) (1) (12) (15)
Total 5,616 9,243 9,026 3,292 3,431
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 3–


--- page 473 ---
(b) Reconciliation between tax expense and accounting profit at applicable tax rates:
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit before taxation 32, 608 45,592 48,019 16,697 18,260
Notional tax on profit before
taxation, calculated at the
rates applicable to profits in
the countries concerned 5 ,974 9,735 9,819 3,589 3,782
Super-deduction of research and
development expense (499) (729) (1,063) (409) (418)
Tax effect of non-deductible
expenses and others 141 237 270 112 67
Total 5,616 9,243 9,026 3,292 3,431
The Company was qualified as a ‘‘high and new t echnology enterprise’’ (‘‘HNTE’’) in November
2019, and received approval from the relevant gover nmental authorities for the renewal of its HNTE
status in December 2022. The Company was entitled to the preferential income tax rate of 15% for the
years ended 31 December 2021, 2022, 2023 and for the four months ended 30 April 2023 and 2024.
Qingdao Haier Insurance Agency Co., Ltd., an en tity wholly held by the Company according to the
Note 1, was subject to an income tax rate of 25%, according to the PRC Enterprise Income Tax Law (the
‘‘EIT Law’’) for the years ended 31 December 2021, 2022, 2023 and for the four months ended 30 April
2023 and 2024.
The Company’s other subsidiaries are recognised as small low-profit enterprises. According to the
relevant tax relief policy during the period from 1 January 2021 to 31 December 2022, the portion of
annual taxable income of a small low-profit enterprise which does not exceed RMB1 million was
computed at a reduced rate of 12.5%, and subject to an enterprise income tax at a rate of 20%. During the
period from 1 January 2023 to 31 December 2023 and the period from 1 January 2024 to 30 April 2024, the
portion of annual taxable income of a small low-prof it enterprise which does not exceed RMB1 million
was computed at a reduced rate of 25%, and subject to an enterprise income tax at a rate of 20%.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 4–


--- page 474 ---
8 DIRECTORS’ EMOLUMENTS
Directors’ emoluments during the Track Record Period are as follows :
Year ended 31 December 2021
Directors’ fees
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
— Mr. Lu Yao — 430 473 36 939
— Mr. Zhang Zhiquan — 774 256 57 1,087
Non-executive director
— M r . Z h a n B o —————
Supervisor
— Ms. Li Tian — 287 124 36 447
Total — 1,491 853 129 2,473
Year ended 31 December 2022
Directors’ fees
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
— Mr. Lu Yao — 415 573 19 1,007
— Mr. Zhang Zhiquan — 759 210 58 1,027
Non-executive director
— M r . Z h a n B o —————
Supervisor
— Ms. Li Tian — 299 155 38 492
Total — 1,473 938 115 2,526
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 5–


--- page 475 ---
Year ended 31 December 2023
Directors’ fees
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
— Mr. Lu Yao — 495 449 41 985
— Mr. Zhang Zhiquan — 757 170 39 966
— Mr. Wang Heping — 514 192 41 747
— Ms. Li Tian — 281 149 41 471
Non-executive director
— M r . Z h a n B o —————
Independent non-executive
director
— M s . F a n g Q i a o l i n g —————
Supervisor
— Mr. Zhu Rongwei — 324 121 41 486
— Ms. Sun Yanlu — 298 105 41 444
— M s . W a n g J i e s i —————
Total — 2,669 1,186 244 4,099
For the four months ended 30 April 2023 (unaudited)
Directors’ fees
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
— Mr. Lu Yao — 167 221 14 402
— Mr. Zhang Zhiquan — 263 61 15 339
— Mr. Wang Heping — 173 62 14 249
— Ms. Li Tian — 46 14 14 74
Non-executive director
— M r . Z h a n B o —————
Independent non-executive
director
— M s . F a n g Q i a o l i n g —————
Supervisor
— Mr. Zhu Rongwei — 108 34 14 156
— Ms. Sun Yanlu — 98 34 14 146
— M s . W a n g J i e s i —————
Total — 855 426 85 1,366
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 6–


--- page 476 ---
For the four months ended 30 April 2024
Directors’ fees
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
— Mr. Lu Yao — 166 172 14 352
— Mr. Zhang Zhiquan — 240 64 14 318
— Mr. Wang Heping — 171 80 14 265
— Ms. Li Tian — 121 79 14 214
Independent non-executive
director
— M s . F a n g Q i a o l i n g —————
Supervisor
— Mr. Zhu Rongwei — 111 48 14 173
— Ms. Sun Yanlu — 100 37 14 151
— M s . W a n g J i e s i —————
Total — 909 480 84 1,473
(i) During the Track Record Period, no emoluments were paid or payable by the Group to the directors
as an inducement to join or upon joining the Group or as compensation for loss of any office in
connection with the management of the affairs of any member of the Group.
(ii) The emoluments of Mr. Zhan Bo and Ms. Wang Jies i were waived with their authorisation. There
was no other arrangement under which a director or a supervisor waived or agreed to waive any
remuneration during the reporting period.
(iii) Mr. Lu Yao and Mr. Zhang Zhiquan were appointed as executive directors of the Company and.
Mr. Zhan Bo was appointed as non-executive direct or of the Company on 10 May 2018. Ms. Li Tian
was appointed as a supervisor of the Company on 6 May 2020.
(iv) After the Company’s share reform, Mr. Zhan Bo was no longer served as non-executive director
since 14 March 2023. Ms. Li Tian, who resigned h er position as the supervisor, was appointed as
executive director of the Company on 14 March 2 023 alongside with Mr. Wang Heping. Besides,
Mr. Zhu Rongwei, Ms. Sun Yanlu and Ms. Wang Jiesi were appointed as supervisor of the
Company on 14 March 2023, and Ms. Fang Qiaoling was appointed as independent non-executive
director on the same date.
(v) The amounts presented above represent the directo rs’ fees, salaries, allowa nces and benefits in kind,
discretionary bonuses and retirement scheme cont ributions paid during the Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 7–


--- page 477 ---
9 INDIVIDUALS WITH HIGHEST EMOLUMENTS
The number of directors, supervisors and others incl uded in the five highest paid individuals for the years
ended 31 December 2021, 2022, 2023 and for the four months ended 30 April 2024 are set forth below:
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
(unaudited)
Directors or Supervisors 32333
O t h e r s 23222
55555
The emoluments of the directors and supervisors are disclosed in Note 8. The aggregate of the emoluments
in respect of the remaining highes t paid individuals are as follows:
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances and benefits in
kind 719 1,161 762 253 252
Discretionary bonuses 221 540 546 135 234
Retirement scheme contributions 72 115 83 28 27
Total 1,012 1,816 1,391 416 513
The emoluments of the above remaining highest p aid individuals are all within the following band:
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
(unaudited)
HKD Nil–HKD1,000,000 23222
During the Track Record Period, no amounts were p aid or payable by the Group to the above remaining
highest paid individuals as an inducement to join or upon joining the Group or as compensation for loss of any
office in connection with the management of the affairs of any member of the Group.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 8–


--- page 478 ---
10 EARNINGS PER SHARE
The calculation of basic earnings per share is based on the profit attributable to equity shareholders of the
Company and the weighted average of shares deemed to be in issue or in issue.
The Company converted into a joint stock company w ith limited liability a nd issued 105,895,600 shares
with the par value of RMB1.0 each on 14 March 2023. For t he purpose of computing basic and diluted earnings
per share, the weighted average number of shares deemed to be in issue before the Company’s conversion into a
joint stock company was determined assuming the conversion into joint stock company had occurred since 1
January 2021, at the conversion ratio established in the conversion in March 2023.
Weighted average number of ordinary shares deemed to be in issue or in issue:
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Ordinary shares deemed to be in issue
or in issue as at 1 January 68,613 83,007 83,007 83,007 105,896
Effect of ordinary shares deemed to be
in issue 13,195 — 21,760 19,294 —
Weighted average number of ordinary
shares (deemed to be) issued as at
31 December/30 April 81,808 83,007 104,767 102,301 105,896
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Net profit attributable to equity
shareholders of the Company
(RMB’000) 27,047 37,776 40,372 13,938 15,067
Weighted average number of ordinary
shares (deemed to be) issued as at 31
December/30 April (’000) 81,808 83,007 104,767 102,301 105,896
Basic earnings per sh are attributable to
equity shareholders of the Company
(in RMB per share) 0.33 0.46 0.39 0.14 0.14
Diluted earnings per share for the years ended 31 December 2021, 2022, 2023 and for the four months
ended 30 April 2023 and 2024 were the same as the basic earnings per share as there were no potential dilutive
ordinary shares in existence during the Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 9–


--- page 479 ---
11 PROPERTY, PLANT AND EQUIPMENT
Electronic
equipment
Office and
other
equipment Total
RMB’000 RMB’000 RMB’000
Cost
As at 1 January 2021 398 256 654
Additions 175 — 175
As at 31 December 2021/1 January 2022 573 256 829
Additions 175 — 175
As at 31 December 2022/1 January 2023 748 256 1,004
Additions 148 47 195
As at 31 December 2023/1 January 2024 896 303 1,199
Additions 1 — 1
As at 30 April 2024 897 303 1,200
Accumulated depreciation:
As at 1 January 2021 (158) (119) (277)
Charge for the year (123) (49) (172)
As at 31 December 2021/1 January 2022 (281) (168) (449)
Charge for the year (165) (49) (214)
As at 31 December 2022/1 January 2023 (446) (217) (663)
Charge for the year (181) (31) (212)
As at 31 December 2023/1 January 2024 (627) (248) (875)
Charge for the period (11) (41) (52)
As at 30 April 2024 (638) (289) (927)
Net book value:
As at 31 December 2021 292 88 380
As at 31 December 2022 302 39 341
As at 31 December 2023 269 55 324
As at 30 April 2024 259 14 273
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 0–


--- page 480 ---
12 INTANGIBLE ASSETS
Software
RMB’000
Cost
As at 1 January 2021 1,430
Additions —
As at 31 December 2021/1 January 2022 1,430
Additions —
As at 31 December 2022/1 January 2023 1,430
Additions —
As at 31 December 2023/1 January 2024 1,430
Additions —
As at 30 April 2024 1,430
Accumulated amortisation:
As at 1 January 2021 (715)
Charge for the year (286)
As at 31 December 2021/1 January 2022 (1,001)
Charge for the year (286)
As at 31 December 2022/1 January 2023 (1,287)
Charge for the year (143)
As at 31 December 2023/1 January 2024 (1,430)
Charge for the period —
As at 30 April 2024 (1,430)
Net book value:
As at 31 December 2021 429
As at 31 December 2022 143
As at 31 December 2023 —
As at 30 April 2024 —
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 1–


--- page 481 ---
13 RIGHT-OF-USE ASSETS
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 649 1,403 1,381 1,011
Inception of leases 866 995 1,924 899
Expiration of leases (112) (1,017) (2,294) (701)
At 31 December/30 April 1,403 1,381 1,011 1,209
Accumulated depreciation:
At 1 January (300) (721) (823) (550)
Charge for year (533) (1,119) (1,953) (451)
Expiration of leases 112 1,017 2,226 475
At 31 December/30 April (721) (823) (550) (526)
Net book value:
At 31 December/30 April 682 558 461 683
The Group has obtained the right to use other pr operties as its place of business through tenancy
agreements. The leases typically run for an initial period of 1 to 3 years.
14 FINANCIAL ASSETS MEASURED AT FA IR VALUE THROUGH PROFIT OR LOSS
As at 31 December
As at
30 April
2021 2022 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000
Current:
Structured notes (i) 238,730 — — —
Total 238,730 — — —
(i) The structured notes as at 31 December 2021 were issued by securities companies in the PRC.
15 ACCOUNTS RECEIVABLES
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Accounts receivables 12,001 21,189 30,897 27,304
Less: loss allowance (13) (57) (91) (130)
Accounts receivables, n et 11,988 21,132 30,806 27,174
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 2–


--- page 482 ---
Ageing analysis
As at the end of each of the Track Record Period, the ageing analysis of accounts receivables, based
on the invoice date and net of loss allowance, is as follows:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months (inclusi ve) 11,851 20,723 28,966 24,854
3 months to 6 months (inclusive) 137 338 455 2,212
Over 6 months — 71 1,385 108
Accounts receivables, n et 11,988 21,132 30,806 27,174
Further details on the Group’s credit policy and cr edit risk arising from accounts receivables are set
out in Note 24(a).
16 CONTRACT COSTS AND OTHER ASSETS
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Costs to fulfil contract s 2,183 1,528 1,263 1,895
Input value-added tax to be deducted 333 406 1,582 139
Prepaid listing expenses — — 7,682 13,749
Prepaid income tax — — — 561
Others 94 148 151 84
Total 2,610 2,082 10,678 16,428
17 CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND TIME DEPOSITS
(a) Cash and cash equivalents:
As at 31 December
As at
30 April
2021 2022 2023 2024
Notes RMB’000 RMB’000 RMB’000 RMB’000
Cash at Haier Finance (i) 16,238 23,307 626 —
Cash at other financial institutions (ii) 1,662 115 76 93
Cash at banks 88 124 202,936 63,584
Total 17,988 23,546 203,638 63,677
(i) Cash at Haier Finance represents cash bal ances kept in Haier Group Finance Co., Ltd., a
related party of the Group, which can be withdrawn by the Group at any time.
(ii) Cash at other financial institutions repres ents cash balances kept in third party payment
platforms, which can be withdrawn by the Group at any time.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 3–


--- page 483 ---
(b) Time deposits:
As at 31 December
As at
30 April
2021 2022 2023 2024
Notes RMB’000 RMB’000 RMB’000 RMB’000
Current assets
— Time deposits (i) — 265,283 — 150,829
Non-current assets
— Time deposits (ii) — — 132,277 133,653
Total — 265,283 132,277 284,482
(i) As at 31 December 2022, current time deposits of the Group represent cash kept in Haier
Consumer Finance Co., Ltd., a related party o f the Group. The terms of the time deposits are
beyond three-month period. As at 30 April 2024, current time deposits of the Group represent
cash kept in China Construction Bank Co ., Ltd. with a term of one-year period.
(ii) Non-Current time deposits of the Group re present cash kept in Hua Xia Bank Co., Ltd. and
China Construction Bank Co., Ltd.. The term s of the time deposits are beyond one-year
period.
(c) Restricted cash:
As at 31 December
As at
30 April
2021 2022 2023 2024
Notes RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
— Guarantee deposits (i) 7,834 8,102 7,545 7,608
Current assets
— Cash collected on behalf of other
parties (ii) 4,193 5,899 4,208 7,488
Total 12,027 14,001 11,753 15,096
(i) As an insurance agency with nationwide Insur ance Intermediary Licence issued by formerly
China Banking Regulatory Commission, the reg istered capital of Qingdao Haier Insurance
Agency Co., Ltd. is required to be no less than RMB50 million, with 15% of which as a
liquidity reserve.
(ii) Cash collected on behalf of ot her parties mainly includes in surance premiums collected on
behalf of insurance companies but not yet remitted as at the balance sheet dates.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 4–


--- page 484 ---
(d) Reconciliation of profit before taxation to cash generated from operations:
For the year ended 31 December
For the four months ended
30 April
2021 2022 2023 2023 2024
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Operating activities
Profit before taxation 32,608 45,592 48,019 16,697 18,260
Adjustments for
Depreciation of property,
plant and equipment 6(c) 172 214 212 74 52
Amortisation of intangible assets 6(c) 286 286 143 95 —
Depreciation of right-of-use assets 6(c) 533 1,119 1,953 604 451
(Reversal of)/provision for
impairment loss (11) 44 34 55 39
Interest expense on lease liabilities 6(a) 43 53 47 21 13
Interest income from time deposits — (3,934) (5,413) (3,092) (2,205)
Unrealised (gains)/loss from
financial assets measured at fair
value through profit or loss 5 (120) 830 — — —
Realised gains from financial
investments measured at fair
value through profit or loss 5 (5,636) (3,871) — — —
Operating profit before changes in
working capital 27,875 40,333 44,995 14,454 16,610
Changes in working capital
(Increase)/decrease in accounts
receivables (1,240) (9,188) (9,708) 84 3,593
(Increase)/decrease in amounts due
from restricted cash (268) (268) 558 (88) (63)
(Increase)/decrease in contract costs
and other assets (2,414) 528 (914) (102) 878
Increase/(decrease) in accounts and
other payables 3,851 3,975 (6,239) (2,688) (1,029)
Increase/(decrease) in contract
liabilities 2,105 (1,106) 172 (60) 820
Increase/(decrease) in accrued
expenses 351 639 787 (189) (1,218)
Cash generated from operations 30,260 34,913 29,651 11,411 19,591
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 5–


--- page 485 ---
(e) Reconciliation of liabilities arising from financing activities:
The table below details changes in the Group’s liabi lities from financing activities, including both
cash and non-cash changes. Liabilities arising from financing activities ar e liabilities for which cash flows
were, or future cash flows will be, c lassified in the Group’s consolidated cash flow statement as cash flows
from financing activities.
Lease liabilities
As at 31 December
As at
30 April
As at30
April
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
As at 1 January 650 1,109 250 250 244
Changes from financing cash
flows:
Capital element of lease rentals
paid (312) (1,838) (1,581) (426) (572)
Interest element of lease rentals
paid (43) (53) (47) (21) (13)
Other changes:
Increase in lease liabilities 866 994 1,924 1,175 899
Interest expenses 43 53 47 21 13
Others (95) (15) (349) 63 191
As at 31 December/30 April 1,109 250 244 1,062 762
18 ACCOUNTS AND OTHER PAYABLES
As at 31 December
As at
30 April
2021 2022 2023 2024
Notes RMB’000 RMB’000 RMB’000 RMB’000
Amounts payable to suppliers (i) 15,092 18,239 13,383 12,890
Insurance premiums payable (ii) 4,090 5,783 1,628 5,449
Others 458 1,315 2,678 1,184
Total 19,640 25,337 17,689 19,523
(i) As at the end of each of the Track Record Period, the ageing analysis of amounts payable to
suppliers, based on the invoice date, is as follows:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months 15,092 18,239 12,178 12,890
3 months to 1 year — — 1,152 —
1t o2y e a r s — — 5 3 —
Total 15,092 18,239 13,383 12,890
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 6–


--- page 486 ---
(ii) Insurance premium payables are insurance premiums collected on behalf of insurance companies but
not yet remitted as at the balance sheet dates.
19 CONTRACT LIABILITIES
(a) Listed by categories:
For the year ended 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Insurance agency services 570 980 794 1,551
IT services 1,590 74 226 440
Consulting services — — 206 55
Total 2,160 1,054 1,226 2,046
(b) Movements in contract liabilities are as below:
For the year ended 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 55 2,160 1,054 1,226
Decrease in contract liabilities as a result of
recognising revenue during the year/period
that was included in the contract liabilities
at the beginning of the year/period (55) (2,160) (1,054) (945)
Increase in contract liabilities of Insurance
agency services 570 980 794 1,270
Increase in contract liabilities of IT services 1,590 74 226 440
Increase in contract liabilities of Consulting
services — — 206 55
Total 2,160 1,054 1,226 2,046
20 LEASE LIABILITIES
As at the end of the reporting periods, the leas e liabilities were repayable as follows:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 1,083 250 244 762
1 year to 2 years 26 — — —
Total 1,109 250 244 762
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 7–


--- page 487 ---
21 ACCRUED EXPENSES
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Accrued staff costs 2,542 3,071 3,840 2,236
Value-added tax and surcharge
payable 94 188 224 612
Others 36 51 33 31
Total 2,672 3,310 4,097 2,879
22 INCOME TAX IN THE CONSOLIDATED ST ATEMENTS OF FINANCIAL POSITION
(a) Current taxation payable in the consolidated statements of financial position represent:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Corporate income tax
payables 2,437 4,122 3,477 3,985
Total 2,437 4,122 3,477 3,985
(b) Deferred tax assets and liabilities recognised
(i) Movement of each component of deferred tax assets and liabilities
The components of deferred tax asse ts/(liabilities) recognised in the consolidated statements of
financial position and their movem ents during the years are as follows:
Deferred tax arising from:
Impairment
loss
Changes in the
fair value Total
RMB’000 RMB’000 RMB’000
At 1 January 2021 6 (165) (159)
(Charged)/Credit to profit or loss
(Note 7(a)) (4) 25 21
At 31 December 2021 and
1 January 2022 2 (140) (138)
Credit to profit or loss (Note 7(a)) 12 140 152
At 31 December 2022 and
1 January 2023 14 — 14
Credit to profit or loss (Note 7(a)) 1— 1
At 31 December 2023 and
1 January 2024 15 — 15
Credit to profit or loss (Note 7(a)) 15 — 15
At 30 April 2024 30 — 30
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 8–


--- page 488 ---
(ii) Reconciliation to the consolidated statements of financial position
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax asset recognised in the
consolidated statements of financial
position — 14 15 30
Net deferred tax liability recognised in
the consolidated statements of
financial position (138) — — —
At the end of the year/period (138) 14 15 30
23 CAPITAL AND RESERVES
(a) Paid-in capital/share capital and capital reserve
In 2021, the paid-in capital and capital reser ve of the Company were increased by RMB126.6
million, which was contributed by Qingdao Haichua ngying Equity Investment Partnership (Limited
Partnership). The Company completed the registrat ion with the Qingdao Municipal Administration for
Market Regulation on 5 February 2021.
On 18 January 2023, Shanghai Zhaoqi Management Cons ulting Partnership (Limited Partnership)
and Qingdao Haizhongjie Management Consulting Ente rprise (Limited Partnership) injected RMB31.2
million to complement their subscribed capital c ontributions in comply with the capital increase
agreements, signed in 2018 and 2019 respectively. Th e paid-in capital of the Company was increased from
RMB83.0 million to RMB105.9 million, and the capi tal reserve of the Company was increased from
RMB118.7 million to RMB127.0 m illion after the injection.
Pursuant to the shareholders’ resolution and the promoters’ agreement dated 6 March 2023, the then
shareholders of the Company agreed to convert the Company into a joint stock company with limited
liability with a registered capi tal of RMB105.9 million (105,895,600 shares with a nominal value of
RMB1.0 each).
(b) PRC statutory reserve
PRC statutory reserve is established in accordance with the relevant PRC rules and regulations and
the articles of association of the companies co mprising the Group incorporated in the PRC.
In accordance with PRC Company Law, the Group ar e required to allocate 10% of their profit after
taxation, as determined in accordance with the rele vant PRC accounting standards, to their respective
statutory reserves until the reserves reach 50% of th eir respective registered capital. For the entity
concerned, statutory reserves can be used to make good previous years’ losses, if any, and may be
converted into capital in proportion to the existing equi ty interests of investors, provided that the balance
of the reserve after such conversion is not less than 25% of the entity’s registered capital.
(c) Dividends
No dividends have been paid by the Company in respect of the Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 9–


--- page 489 ---
(d) Movements in components of equity
The changes of each component of the Group’s consolidated equity during the Track Record Period
is set out in the consolidated statements of changes in equity. Details of changes in the Company’s
individual components of equity from 1 Janua ry 2021 to 30 April 2024 are set out below:
Reserves
Paid-in
capital/
share
capital
Capital
reserve
PRC
statutory
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2021 68,613 6,432 591 5,325 80,961
Changes in equity for 2021 :
Capital contribution from
shareholders 14,394 112,239 — — 126,633
Profit for the year — — — 18,559 18,559
Appropriation to PRC statutory
reserve — — 1,856 (1,856) —
Balance at 31 December 2021 and
1 January 2022 83,007 118,671 2,447 22,028 226,153
Changes in equity for 2022 :
Profit for the year — — — 19,256 19,256
Appropriation to PRC statutory
reserve — — 1,925 (1,925) —
Balance at 31 December 2022 and
1 January 2023 83,007 118,671 4,372 39,359 245,409
Changes in equity for 2023 :
Capital contribution from
shareholders 22,889 8,310 — — 31,199
Profit for the year — — — 24,787 24,787
Appropriation to PRC statutory
reserve — — 2,479 (2,479) —
Balance at 31 December 2023 and
1 January 2024 105,896 126,981 6,851 61,667 301,395
Changes in equity for 2024 :
Profit for the period — — — 8,194 8,194
Balance at 30 April 2024 105,896 126,981 6,851 69,861 309,589
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 0–


--- page 490 ---
24 FINANCIAL RISK MANAGEMENT AND FA IR VALUE OF FINANCIAL INSTRUMENTS
Exposure to credit risk, liquidity risk, interest rate r isk, and fair value measurement arises in the normal
course of the Group’s business. The Group’s exposure to t hese risks and the financial risk management policies
and practises used by the Group to manage these risks are described below.
(a) Credit risk
Credit risk refers to the risk that a counterparty wil l default on its contractual obligations resulting
in a financial loss to the Group. The Group’s credit ris k is primarily attributable to accounts receivables.
The Group’s exposure to credit risk arising from ca sh and cash equivalents, restricted cash and time
deposits is limited because the counterparties are banks and financial institutions, which the Group
considers to have low credit risk.
The Group does not provide any guarantees wh ich would expose the Group to credit risk.
Accounts receivables
In respect of accounts receivables, individua l credit evaluations are performed on all
customers requiring credit over a certain amount . These evaluations focus on the customer’s past
history of making payments when due and current ab ility to pay, and take into account information
specific to the customer as well as pertaining to the economic environment in which the customer
operates. Trade receivable are non-interest bear ing. The credit period offered by the Group is
generally within three months. The Group seeks t o maintain strict control over the outstanding
receivables. Overdue balances are reviewed reg ularly by the management of respective business
segment. The Group does not have any off-balance- sheet credit exposure related to its customers.
The Group’s exposure to credit risk is influen ced mainly by the individua l characteristics of
each customer rather than the industry or country in which the customers operate, and therefore no
significant concentrations of cred it risk primarily arise when the G roup has significant exposure to
individual customers. As at 31 December 2021, 2022, 2023 and 30 April 2024, top five trade
receivables account for 75.50%, 58.26%, 68.27% and 67.50% of total accounts receivables.
The Group measures loss allowances for accounts receivables at an amount equal to lifetime
ECLs, which is calculated with reference to the cu stomer’s external credit rating. As the Group’s
historical credit loss experience does not indicate si gnificantly different loss patterns for different
customer segments, the loss allowance based on pa st due status is not further distinguished between
the Group’s different customer bases.
The following table provides information ab out the Group’s exposure to credit risk and ECLs
for accounts receivables and other receivables as at 31 December 2021, 2022, 2023 and 30 April
2024 :
As at 31 December 2021
Expected
loss rate
Gross carrying
amount
Loss
allowance
RMB’000 RMB’000
Current
— Accounts receivables 0.108% 12,001 13
— Other receivables — 94 —
12,095 13
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 1–


--- page 491 ---
As at 31 December 2022
Expected
loss rate
Gross carrying
amount
Loss
allowance
RMB’000 RMB’000
Current
— Accounts receivables 0.269% 21,189 57
— Other receivables — 148 —
21,337 57
As at 31 December 2023
Expected
loss rate
Gross carrying
amount
Loss
allowance
RMB’000 RMB’000
Current
— Accounts receivables 0.295% 30,897 91
— Other receivables — 151 —
31,048 91
As at 30 April 2024
Expected
loss rate
Gross carrying
amount Loss allowance
RMB’000 RMB’000
Current
— Accounts receivables 0.476% 27,304 130
— Other receivables — 84 —
27,388 130
Movement in the loss allowance account in respect of accounts receivables during the
y e a r / p e r i o di sa sf o l l o w s :
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 24 13 57 91
Loss allowance (reversed)/recognised
during the year/period (11) 44 34 39
Balance at 31 December/30 April 13 57 91 130
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they
become due. The Group’s approach to managing liquidi ty is to ensure, as far as possible, that it has
sufficient cash to meet its liabilities when they are due, under both normal and stressed conditions,
without incurring unacceptable losses or r isking damage to the Group’s reputation.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 2–


--- page 492 ---
The Group’s policy is to regularly monitor curre nt and expected liquidity requirements, and to
ensure that it maintains sufficient reserves of cas h to meet its liquidity requirements in the short and
longer term.
The following tables show the remaining contract ual maturities at the end of the reporting period of
the Group’s non-derivative financial liabilities, w hich are based on contractual undiscounted cash flows
(including interest payments computed using contract ual rates or, if floating, based on rates current at the
end of the reporting period) and the earliest date the Group can be required to pay:
As at 31 December 2021
contractual undiscounted cash outflow
Carrying
amount in
consolidated
statement of
financial
position
Within 1 year or
on demand
More than
1 year but less
than 2 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Accounts and other payables 19,640 — 19,640 19,640
Lease Liabilities 1,132 28 1,160 1,109
Total 20,772 28 20,800 20,749
As at 31 December 2022
contractual undiscounted cash outflow
Carrying
amount in
consolidated
statement of
financial
position
Within 1 year or
on demand
More than
1 year but less
than 2 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Accounts and other payables 25,337 — 25,337 25,337
Lease Liabilities 258 — 258 250
Total 25,595 — 25,595 25,587
As at 31 December 2023
contractual undiscounted cash outflow
Carrying
amount in
consolidated
statement of
financial
position
Within 1 year or
on demand
More than
1 year but less
than 2 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Accounts and other payables 17,689 — 17,689 17,689
Lease Liabilities 247 — 247 244
Total 17,936 — 17,936 17,933
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 3–


--- page 493 ---
As at 30 April 2024
contractual undiscounted cash outflow
Carrying
amount in
consolidated
statement of
financial
position
Within 1 year or
on demand
More than
1 year but less
than 2 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Accounts and other payables 19,523 — 19,523 19,523
Lease Liabilities 774 — 774 762
Total 20,297 — 20,297 20,285
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rate s. The interest risk arisi ng from financial assets
measured at fair value through profit or loss is not si gnificant due to the short-term maturity of these
financial instruments. The Group had no borrowings in the Track Record Period.
(d) Fair value measurement
Fair value hierarchy
The following table presents the fair value of th e Group’s financial instruments measured at
the end of each reporting period on a recurring basi s, categorised into the three-level fair value
hierarchy as defined in IFRS 13, Fair value me asurement. The level into which a fair value
measurement is classified is determined with refer ence to the observability and significance of the
inputs used in the valuation technique as follows:
. Level 1 valuations: Fair value measured usin g only Level 1 inputs i.e. unadjusted quoted
prices in active markets for identical asse ts or liabilities at the measurement date.
. Level 2 valuations: Fair value measured usin g Level 2 inputs i.e. observable inputs which
fail to meet Level 1, and not using signifi cant unobservable inputs. Unobservable inputs
are inputs for which market data are not available.
. Level 3 valuations: Fair value measur ed using significant unobservable inputs.
As at 31 December
As at
30 April
2021 2022 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000
Level 3
Assets
Structured notes (i) 238,730 — — —
Total 238,730 — — —
During the Track Record Period, there were no transfers between Level 1 and Level 2, or
transfers into or out of Level 3. The Group’s polic y is to recognise transfers between levels of fair
value hierarchy as at the end of the reporting period in which they occur.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 4–


--- page 494 ---
Valuation techniques and inputs used in Level 3 fair value measurement:
(i) Wealth management products and structured notes
The carrying amount of wealth management products and structured notes is measured
at fair value in the consolidated statements of financial position. The Group determines the
fair value of structured notes and wealth man agement products by using discounted cash flow
models. The unobservable inputs are the expected annual return rate fixed in the investment
contracts. These expected annual return rates ranged from 2.40% to 2.55% as at 31 December
2021.
As at 31 December 2021, it is estimated that, with all other variables held constant, an
increase of expected annual return rate of 1% w ould have increased the Group’s profit before
taxation by RMB1.5 million.
The movements of structured notes and wealth management products during the Track
Record Period in the balance of these Level 3 fair value measurements are as follows:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period 82,110 238,730 — —
Addition 237,900 — — —
Disposal (81,400) (237,900) — —
Change in fair value 120 (830) — —
At the end of the year/period 238,730 — — —
25 NOTES TO FINANCIAL POSITION OF THE COMPANY
(a) Financial assets at fair value through profit or loss
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current
Structured notes 170,653 — — —
Total 170,653 — — —
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 5–


--- page 495 ---
(b) Accounts receivables
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Accounts receivables 375 3,846 8,438 7,235
Less: loss allowance — — (22) (18)
Accounts receivables, net. 375 3,846 8,416 7,217
Ageing analysis
As at the end of each of the Track Record Period, the ageing analysis of accounts receivables,
based on the invoice date and net o f loss allowance, is as follows:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months (inclusive) 375 3,531 8,259 5,017
3 months to 6 months (inclusive) — 315 157 2,200
Accounts receivables, net. 375 3,846 8,416 7,217
(c) Contract costs and other assets
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Costs to fulfil contract s 1,827 1,528 1,263 1,895
Prepaid listing expenses — — 7,682 13,749
Prepaid income tax — — — 561
Input value-added tax to be deducted — — — 77
O t h e r s 53 33 3 4
Total 1,832 1,561 8,978 16,286
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 6–


--- page 496 ---
(d) Cash and cash equivalents
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash at Haier Finance 3,906 7,852 — —
Cash at other financial institutions 29 28 — —
Cash at banks 20 20 196,087 54,356
Total 3,955 7,900 196,087 54,356
(e) Time deposits
As at 31 December
As at
30 April
2021 2022 2023 2024
Notes RMB’000 RMB’000 RMB’000 RMB’000
Current assets
— Time deposits (i) — 182,195 — 150,829
Non-current assets
— Time deposits (ii) — — 50,770 51,313
Total — 182,195 50,770 202,142
(i) As at 31 December 2022, current time deposits of the Group represent cash kept in Haier
Consumer Finance Co., Ltd., a related party o f the Group. The terms of the time deposits are
beyond three-month period. As at 30 April 2024, current time deposits of the Group represent
cash kept in China Construction Bank Co ., Ltd. with a term of one-year period.
(ii) Time deposits of the Company represent cash kept in Hua Xia Bank Co., Ltd.. The terms of
the time deposits are beyond 1-year period.
(f) Investments in subsidiaries
As at 31 December
As at
30 April
2021 2022 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000
Qingdao Haier Insurance Agency
Co., Ltd. 50,000 50,000 50,000 50,000
Qingdao Zhongmiao Caizhi Human
Resource Management
Consulting Co., Ltd. 2,000 2,000 2,000 2,000
Qingdao Yunhai Lianji Technology
Co., Ltd. (ii) 906 — — —
Qingdao Zhongmiao Shujin
Technology Co., Ltd. — 906 5,906 5,906
Total 52,906 52,906 57,906 57,906
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 7–


--- page 497 ---
(i) Further details of the subsidiaries are set out in Note 1.
(ii) In order to fulfil the obligation of capit al contribution to Qingdao Zhongmiao Shujin
Technology Co., Ltd., the investment in Qingdao Yunhai Lianji Technology Co., Ltd. was
injected to Qingdao Zhongmiao Shujin Technolog y Co., Ltd. by the Company at the price of
RMB906 thousand as at 11 March 2022 and Qingdao Yunhai Lianji Technology Co., Ltd.
became a subsidiary of Qingdao Zhongmiao Shujin Technology Co., Ltd.
(g) Accounts and other payables
As at 31 December
As at
30 April
2021 2022 2023 2024
Notes RMB’000 RMB’000 RMB’000 RMB’000
Amounts payable to suppliers (i) 236 50 1,224 169
Cash collected from subsidiaries (ii) — — 16,051 26,554
Others 46 752 481 74
Total 282 802 17,756 26,797
(i) As at the end of each of the Track Record Period, the ageing analysis of amounts payable to
suppliers, based on the invoice date, is as follows:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months 236 50 1,224 169
Total 236 50 1,224 169
(ii) According to the agreement signed between the Company and China Construction Bank (the
‘‘Bank’’), when the amount of the subsidiaries ’ accounts with the Bank exceeds a certain limit,
the excess amount will be collected to the Company’s account on a weekly basis by the Bank.
(h) Accrued expenses
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Accrued staff costs 1,242 1,432 1,886 1,065
Value Added Tax and surcharge payable 79 113 201 5
Others 12 19 31 29
Total 1,333 1,564 2,118 1,099
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 8–


--- page 498 ---
(i) Current taxation payables
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Corporate income tax payables 753 748 716 —
Total 753 748 716 —
26 MATERIAL RELATED PARTY TRANSACTIONS
(a) Relationship with related parties
Related parties Relationship
Haier Group Corporation C ontrolling shareholder
Haier Group Corporation’s subsidiaries Comp anies controlled by Haier Group Corporation
Haier Group Corporat ion’s affiliated
companies
Companies under common control or significantly
influenced by Haier Group Corporation
Other related parties Persons related to the Group and other entities
identified in note 2(r)
(b) Key management personnel remuneration
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances and benefits
in kind 1,910 1,938 2,669 855 909
Discretionary bonuses 956 1,100 1,186 426 480
Retirement scheme contributions 165 153 244 85 84
Total 3,031 3,191 4,099 1,366 1,473
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 9–


--- page 499 ---
(c) The significant related party transactions are summarised as follows:
For the year ended 31 December
For the four months
e n d e d3 0A p r i l
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Haier Group Corporation and its
subsidiaries and affiliated
companies
Revenue from IT and
consulting services 1,367 8,388 10,192 798 1,950
Referral and service fees (4,204) (3,776) (1,529) (568) (237)
Interest income 460 4,172 3,253 3,173 3
Finance costs (36) (43) (22) (11) (12)
Sales and marketing expenses — (20) (35) (12) (12)
General and administrative
expenses and others (1,607) (2,437) (2,338) (587) (402)
(d) The balances of transactions with related parties:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Haier Group Corporation and its subsidiaries
and affiliated companies
Trade related
Accounts receivable 303 3,335 3,958 2,669
Cash and cash equivalent and restricted cash
kept in related parties 22,055 29,206 4,814 —
Lease Liabilities (763) — — (680)
Accounts and other payables (3 ,893) (5,985) (2,505) (1,947)
Non-trade related
Time deposits kept in related parties — 265,283 — —
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 0–


--- page 500 ---
27 POSSIBLE IMPACT OF AMENDMENTS, NEW ST ANDARDS, AND INTERPRETATIONS ISSUED
BUT NOT YET EFFECTIVE FOR THE TRACK RECORD PERIOD
Up to the date of issue of the Historical Financia l Information, the IASB has issued a number of
amendments, new standards, and interpretations whic h are not yet effective for the Track Record Period and
which have not been adopted in the Historical Financial In formation. These include the following which may be
relevant to the Group:
Effective for
accounting periods
beginning on or after
Amendments to IAS 21, Lack of Exchangeability 1 January 2025
Amendments to IFRS 10 and IAS 28, Sal e or contribution of assets between
an investor and its associate or j oint venture To be determined
Amendments to IFRS 9 and IFRS 7 : Amendments to the Classification and
Measurement of Financial Instruments 1 January 2026
IFRS 18 Presentation and Disclosure i n Financial Statements 1 January 2027
IFRS 19, Subsidiaries without Public Acc ountability: Disclosures 1 January 2027
The Group is in the process of making an assessm ent of what the impact of these amendments, new
standards, and interpretations in the period of initi al application. So far the Group has concluded that the
adoption is unlikely to have a significant impact o n the Group’s Historical Financial Information.
28 SUBSEQUENT EVENTS
No material subsequent events were noted after the end of the Track Record Period.
SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company and its
subsidiaries comprising the Group in respec t of any period subsequent to 30 April 2024.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 1–


--- page 501 ---
The information set forth in this appendix does not form part of the Accountants’ Report
from KPMG, Certified Public Accountants, Hong Kong, the Company’s reporting
accountants, as set forth in Appendix I to this prospectus, and is included herein for
illustrative purpose only.
The unaudited pro forma financial information should be read in conjunction with the
section headed ‘‘Financial Information’’ in t his prospectus and the Accountants’ Report set
forth in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED
NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible
assets of the Group is prepared in accordance with paragraph 4.29 of the Listing Rules and
is set out below to illustrate the effect of th e Global Offering on the consolidated net
tangible assets of the Group attributable to equity shareholders of the Company as at 30
April 2024 as if the Global Offering had taken place on 30 April 2024.
This unaudited pro forma statement of adjusted consolidated net tangible assets has
been prepared for illustrative purposes only and because of its hypothetical nature, it may
not give a true picture of the financial position of the Group had the Global Offering been
completed as at 30 April 2024 or at any future dates.
Consolidated
net tangible
assets
attributable to
equity
shareholders of
the Company as
at 30 April 2024
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
equity
shareholders of
the Company
Unaudited pro forma adjusted
consolidated net tangible assets
attributable to equity shareholders
of the Company per Share
RMB’000 RMB’000 RMB’000 RMB HKD
Note (1) Note (2) Note (3) Note (4)
B a s e do na nO f f e r
Price of HK$7.0
per H Share 380,277 183,813 564,090 4.00 4.38
B a s e do na nO f f e r
Price of
HK$10.2 per
H Share 380,277 281,792 662,069 4.69 5.14
Notes:
(1) The consolidated net tangible assets attribut able to equity shareholders of the Company as at 30
April 2024 is calculated based on the consolidated to tal equity attributable to equity shareholders of
the Company of RMB380,277,000 as at 30 April 2024, which is extracted from the Accountants’
Report as set out in Appendix I to this prospectus.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 1–


--- page 502 ---
(2) The estimated net proceeds from the Global Offering are based on 35,300,000 H Shares expected to
be issued under the Global Offering and the indica tive Offer Prices of HK$7.0 per H Share and
HK$10.2 per H Share, being the low end and high end of the indicative Offer Price range
respectively, after deduction of th e estimated underwriting fees and o ther estimated expenses related
to the Global Offering paid or payable by the Group (excluding the listing expenses charged to
profit or loss during the Track Record Period) and assuming the Over-allotment Option is not
exercised.
The estimated net proceeds from the Global Offer ing is converted into Ren minbi at an exchange rate
of HK$1 to RMB0.9131 published by PBOC prevailing on 19 July 2024. No representation is made
that Hong Kong dollar amounts have been, could have been or may be converted to Renminbi, or
vice versa, at that rate or at any other rate or at all.
(3) The unaudited pro forma adjusted consolidat ed net tangible assets attributable to equity
shareholders of the Company per Share is arrive d at after adjustments as described in note (2)
and on the basis of 141,195,600 Shares in issue imme diately following completion of the Global
Offering, which is calculated based on 105,895,600 Domestic Shares in issue at 30 April 2024 and
35,300,000 H Shares newly issued pursuant to the Global Offering assuming the Over-allotment
Option is not exercised.
(4) The unaudited pro forma adjusted consolidat ed net tangible assets attributable to equity
shareholders of the Company per Share is converted into Hong Kong dollars at an exchange rate
of RMB0.9131 to HK$1 published by PBOC prevailing on 19 July 2024. No representation is made
that Renminbi amounts have been, could have been or may be converted to Hong Kong dollar, or
vice versa, at that rate or at any other rate or at all.
(5) Save for the adjustments made in the preceding paragraphs, no adjustment has been made to the
unaudited pro forma adjusted consolidated net tangi ble assets attributable to equity shareholders of
the Company to reflect any trading results or oth er transactions of the Group subsequent to 30
April 2024.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 2–


--- page 503 ---
B. REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from the reporting accountants, KPMG,
Certified Public Accountants, Hong Kong, in respect of the Group’s pro forma financial
information for the purpose in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
TO THE DIRECTORS OF ZHONGMIAO H OLDINGS (QINGDAO) CO., LTD.
We have completed our assurance engagement to report on the compilation of pro
forma financial information o f Zhongmiao Holdings (Qingdao) Co., Ltd. (the ‘‘Company’’)
and its subsidiaries (collectively the ‘‘Gr oup’’) by the directors of the Company (the
‘‘Directors’’) for illustrative purposes only. T he unaudited pro forma financial information
consists of the unaudited pro forma statement of adjusted consolidated net tangible assets
as at 30 April 2024 and related notes as set out in Part A of Appendix II to the prospectus
dated 29 July 2024 (the ‘‘Prospectus’’) issued by the Company. The applicable criteria on the
basis of which the Directors have compiled the pro forma financial information are
described in Part A of Appendix II to the Prospectus.
The pro forma financial information has be en compiled by the Directors to illustrate
the impact of the proposed offering of the ordinary shares of the Company (the ‘‘Global
Offering’’) on the Group’s financial position as at 30 April 2024 as if the Global Offering
had taken place at 30 April 2024. As part of this process, information about the Group’s
financial position as at 30 April 2024 has bee n extracted by the Directors from the Group’s
historical financial information included in the Accountants’ Report as set out in Appendix
I to the Prospectus.
Directors’ Responsibilities for th e Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and with reference to
Accounting Guideline 7 ‘‘Preparation of Pro Fo rma Financial Information for Inclusion in
Investment Circulars’’ (‘‘AG 7’’) issued by the Hong Kong Institute of Certified Public
Accountants (‘‘HKICPA’’).
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on
fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality and professional behaviour.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 3–


--- page 504 ---
Our firm applies Hong Kong Standard on Quality Management 1 ‘‘Quality
Management for Firms that Perform Audit s or Reviews of Financial Statements, or
Other Assurance or Related Services Engagements’’, which requires the firm to design,
implement and operate a system of quality m anagement including policies or procedures
regarding compliance with ethical requirements, professional standards and applicable legal
and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the pro forma financial information and to report our opinion to you. We
do not accept any responsibilit y for any reports previously given by us on any financial
information used in the compilation of the pro forma financial information beyond that
owed to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements (‘‘HKSAE’’) 3420 ‘‘Assurance Engagements to Report on the Compilation of
Pro Forma Financial Information Included in a Prospectus’’ issued by the HKICPA. This
standard requires that the reporting accountants plan and perform procedures to obtain
reasonable assurance about whether the Directors have compiled the pro forma financial
i n f o r m a t i o ni na c c o r d a n c ew i t hp a r a g r a p h4 . 29 of the Listing Rules, and with reference to
AG 7 issued by the HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the pro forma
financial information, nor have we, in the co urse of this engagement, p erformed an audit or
review of the financial information used in com piling the pro forma financial information.
The purpose of pro forma financial information included in an investment circular is
solely to illustrate the impact of a significant e vent or transaction on unadjusted financial
information of the Group as if the event had occurred or the transaction had been
undertaken at an earlier date selected for pur poses of the illustration. Accordingly, we do
not provide any assurance that the actual outcome of events or transactions as at 30 April
2024 would have been as presented.
A reasonable assurance engagement to rep ort on whether the pro forma financial
information has been properly compiled on th e basis of the applicab le criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the pro forma financial info rmation provide a reasonable basis for
presenting the significant effects directly a ttributable to the event or transaction, and to
obtain sufficient appropria te evidence about whether:
. the related pro forma adjustments give app ropriate effect to those criteria; and
. the pro forma financial information r eflects the proper application of those
adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 4–


--- page 505 ---
The procedures selected depend on the reporting accountants’ judgement, having
regard to the reporting accountants’ understanding of the nature of the Group, the event or
transaction in respect of which the pro forma financial information has been compiled, and
other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma
financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other standards and practises generally accepted
in the United States of America, auditing s tandards of the Public Company Accounting
Oversight Board (United States) or any overse as standards and accordingly should not be
relied upon as if they had been carried out in accordance with those standards and practises.
We make no comments regarding the reasonableness of the amount of net proceeds
from the issuance of the Company’s shares, t he application of those net proceeds, or
whether such use will actually take place as des cribed in the section headed ‘‘Future Plans
and Use of Proceeds’’ in the Prospectus.
Opinion
In our opinion:
a) the pro forma financial information h as been properly compiled on the basis
stated;
b) such basis is consistent with the accounting policies of the Group, and
c) the adjustments are appropriate for the purposes of the pro forma financial
information as disclosed pursuant to par agraph 4.29(1) of the Listing Rules.
Certified Public Accountants
Hong Kong
29 July 2024
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 5–


--- page 506 ---
PRC TAXATION
Taxation of Security Holders
The taxation of income and capital gains of holders of H Shares is subject to the laws
and practises of the PRC and of jurisdictions in which holders of H Shares are resident or
otherwise subject to tax. The following summar y of certain relevant taxation provisions is
based on current effective PRC laws and practises and no predictions are made about
changes or adjustments to relevant laws or policies, and no comments or suggestions will be
made accordingly. The discussion does not deal with all possible tax consequences relating
to an investment in the H Shares, nor does it ta ke into account the specific circumstances of
any particular investor, some of which may be subject to special regulations. Accordingly,
you should consult your own tax adviser regarding the tax consequences of an investment in
H Shares. The discussion is based upon PRC laws and relevant interpretations in effect as at
the date of this prospectus, all of which are subject to change and may have retrospective
effect. Prospective investors are urged to consult their financial adviser regarding the PRC
and other tax consequences of owning and disposing of H Shares.
Taxation on dividends
Individual investors
Pursuant to the Individual Income Tax Law of the PRC ( 《中華人民共和國個人所得稅
法》), which was last amended on 31 August 2018 by the NPC Standing Committee and
came into effect on 1 January 2019, and th e Regulations on Implementation of the
Individual Income Tax Law of the PRC ( 《中華人民共和國個人所得稅法實施條例》), which
were last amended on 18 December 2018 by the State Council and came into effect on 1
January 2019, dividends paid by PRC enterprise s are subject to individual income tax levied
at a flat rate of 20%. For a foreign individual who is not a resident of the PRC, the receipt
of dividends from a PRC 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
an applicable tax treaty.
Pursuant to the Notice of the State Taxation Administration on Issues Concerning the
Levy and Administration of Individual Income Tax After the Repeal of Guo Shui Fa [1993]
No. 45) (Guo Shui Han [2011] No. 348) ( 《國家稅務總局關於國稅發[1993]045 號文件廢止後
有關個人所得稅徵管問題的通知》（國稅函[2011]348 號）) issued by the STA on 28 June 2011,
which came into effect on the same day, domesti c non-foreign-invested enterprises issuing
shares in Hong Kong may, when distributing dividends, withhold individual income tax at
the rate of 10%. For the individual holders of H Shares receiving dividends who are citizens
of countries that have entered into a tax treaty with the PRC with tax rate of lower than
10%, non-foreign-invested enterprises listed in Hong Kong may apply on behalf of such
holders for enjoying the lower preferential tax treatments, and, upon approval by the tax
authorities, the excessive withholding amount will be refunded. For the individual holders
of H Shares receiving dividends who are citizens of countries that have entered into a tax
treaty with the PRC with tax rate of higher than 10% but lower than 20%, the
non-foreign-invested enterprise is required to withhold the tax at the agreed rate under the
treaties, and no application procedures will be necessary. For the individual holders of H
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 1–


--- page 507 ---
Shares receiving dividends who are citizens o f countries without taxation treaties with the
PRC or are under other situations, the non-fo reign-invested enterprise is required to
withhold the tax at a rate of 20%.
Enterprise investors
According to the EIT Law, which was latest amended by the NPC Standing Committee
and implemented on 29 December 2018, and the Implementation Rules for the Enterprise
Income Tax Law of the PRC ( 《中華人民共和國企業所得稅法實施條例》) enacted on 6
December 2007 by the State Council and became effective on 1 January 2008, and amended
on 23 April 2019, 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 it does not have an establishment or premise in the
PRC or has an establishment or premise in th e PRC but its PRC-sourced income has no real
connection with such establishment or premise. The aforesaid income tax payable for
non-resident enterprises is deducted at source, where the payer of the income is required to
withhold the income tax from the amount to be paid to the non-resident enterprise.
The Notice on the Issues Concerning Withholding the Enterprise Income Tax on the
Dividends Paid by Chinese Resident Enterp rises to H-Share Holders Which Are Overseas
Non-resident Enterprises (Guo Shui Han [2008] No. 897) ( 《關於中國居民企業向境外H股非
居民企業股東派發股息代扣代繳企業所得稅有關問題的通知》（國稅函[2008]897 號）), which
was issued and implemented by the STA on 6 November 2008, further clarifies that a
PRC-resident enterprise must withhold en terprise income tax at a rate of 10% on the
dividends of 2008 and onwards that it distributes to overseas non-resident enterprise
shareholders of H Shares. In addition, the Response to Questions on Levying Enterprise
Income Tax on Dividends Derived by Non-resident Enterprise from Holding Stock such as
B Shares (Guo Shui Han [2009] No. 394) ( 《關於非居民企業取得B
股等股票股息徵收企業所
得稅問題的批覆》（財稅函[2009]394 號）) ,w h i c hw a si s s u e db yt h eS T Aa n dc a m ei n t oe f f e c t
on 24 July 2009, further provides that any PRC- resident enterprise whose shares are listed
on overseas stock exchanges must withhold an d remit enterprise income tax at a rate of 10%
on dividends of 2008 and onwards that it distributes to non-resident enterprises. Such tax
rates may be further modified pursuant to the tax treaty or agreement that China has
entered into with a relevant country or region, where applicable.
Pursuant to the Arrangement between the Mainland and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
E v a s i o nw i t hr e s p e c tt oT a x e so nI n c o m e(《內地和香港特別行政區關於對所得避免雙重徵稅
和防止偷漏稅的安排》) (the ‘‘Arrangement ’’), which was signed between the STA and the
Hong Kong Government on 21 August 2006, the PRC Government may levy taxes on the
dividends paid by a PRC company to Hong Kong residents (including resident individual
and resident entities) in an amount not exceeding 10% of the total dividends payable by the
PRC company unless a Hong Kong resident directly holds 25% or more of the equity
interest in the PRC company, then such tax s hall not exceed 5% of the total dividends
payable by the PRC company. The Fifth Protocol to the Arrangement between the
Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double
Taxation and the Prevention of Fiscal E v a s i o nw i t hr e s p e c tt oT a x e so nI n c o m e(《〈內地和
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 2–


--- page 508 ---
香港特別行政區關於對所得避免雙重徵稅和防止偷漏稅的安排〉第五議定書》), which came
into effect on 6 December 2019, added a criter ia 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
gains, 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 STA on the Issues Concerning the
Application of the Dividend Clauses of Tax Agreements (Guo Shui Han [2009] No. 81) ( 《國
家稅務總局關於執行稅收協定股息條款有關問題的通知》（國稅函[2009]81 號）).
Tax Treaties
Non-resident investors residing in jurisdi ctions which have entered into treaties or
adjustments for the avoidance of double taxation with the PRC might be entitled to a
reduction of the PRC enterprise income tax imposed on the dividends received from PRC
enterprises. The PRC currently has entered i nto Avoidance of Double Taxation Treaties or
Arrangements with a number of countries and regions including Hong Kong, Macau,
Australia, Canada, France, Germany, Japan, M alaysia, the Netherlands, Singapore, the
United Kingdom and the United States. No n-PRC resident enterprises entitled to
preferential tax rates in accordance with th e relevant taxation treaties or arrangements
are required to apply to the PRC tax authorities for a refund of the enterprise income tax in
excess of the agreed tax rate, and the refund application is subject to approval by the PRC
tax authorities.
Taxation on share transfer
Value-Added Tax and Local Surcharges
Pursuant to the Notice on the Full Implement ation of Pilot Programme for Transition
from Business Tax to VAT (Cai Shui [2016] No. 36) ( 《關於全面
推開營業稅改徵增值稅試點
的通知》（財稅[2016]36 號）), effective from 1 May 2016, enti ties and individuals engaged in
sales of services within the PRC shall be sub ject to VAT and sales of services within the
PRC refers to the situation where either the se ller or the buyer of a taxable service is located
within the PRC. The notice also provides that transfer of financial products, including
transfer of the ownership of marketable securities, shall be subject to VAT at 6% on the
taxable income (which is the balance of sales price upon deduction of purchase price), for a
general or a foreign VAT taxpayer. However, individuals are exempt from VAT upon
transfer of financial products.
VAT taxpayers are also subject to urban maintenance and construction tax, education
surcharge and local education surcharge (collectively, ‘‘ local surcharges ’’), which is usually
at 12% of the VAT payable, if any. However, pursuant to the Urban Maintenance and
Construction Tax Law of the PRC ( 《中華人民共和國城市維護建設稅法》) which became
effective on 1 September 2021, no urban maintenance and construction tax shall be levied
on value-added tax or consumption tax paid for the sale of labour services, other services
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 3–


--- page 509 ---
and intangible assets in China by overseas entit ies or individuals. Meanwhile, pursuant to
Announcement on the Measures for Determining the Tax Basis of Urban Maintenance and
Construction Tax and Other Matters ( 《關於城市維護建設稅計稅依據確定辦法等事項的公
告》), the basis for calculating and levying education surcharges and local education
surcharges is consistent with the basis fo r calculating the urban maintenance and
construction tax since 1 September 2021. In conclusion, no urban maintenance and
construction tax, education surcharges, and local education surcharges will be levied on
value-added tax paid for the sale of intang ible assets in China by overseas entities or
individuals since 1 September 2021.
However, it is still uncertain whether the non -PRC resident enterprises are required to
pay the PRC VAT for the disposal of H shares in practise. If relevant tariffs are imposed in
the future, the investment value of such holders in H shares may be materially and adversely
affected.
Income Tax
Individual investor
According to the Individual Income Tax Law of the PRC and its implementation rules,
the proceeds from the sale of equity interests in PRC-resident enterprise are subject to
income tax at a tax rate of 20%.
According to the Notice Concerning Continuing Temporary Exemption From
Individual Income Tax on The Income From Stocks Transfer (Cai Shui Zi [1998] No. 61)
(《關於個人轉讓股票所得繼續暫免徵收個人所得稅的通知》（財稅字[1998]61 號）)p r o m u l g a t e d
by the STA and became effective on 30 March 1998, since 1 January 1997, the individual
income tax levied on the individual income from transfer of stocks of listed companies will
continue to be temporarily exempted. In the newly revised Individual Income Tax Law of
the PRC, the STA did not clearly stipulate whether to continue to exempt individuals from
tax on the income from transfer of stocks of listed companies.
Furthermore, the Notice of the State Administration of Taxation on Issues Concerning
the Levy of Individual Income Tax on Incomes from the Transfer of Restricted Shares of
Listed Companies (Cai Shui [2009] No. 167) ( 《關於個人轉讓上市公司限售股所得徵收個人
所得
稅有關問題的通知》（財稅[2009]167 號）) jointly issued by the MOF, the STA and the
CSRC and implemented on 31 December 2009 stipulates that individuals’ income from the
transfer of listed shares obtained from the pub lic offering of listed companies and transfer
market on the Shanghai Stock Exchange and the Shenzhen Stock Exchange shall continue
to be exempted from the individual income tax, provided that it excludes the relevant
restricted shares as defined in the Supplement ary Notice Concerning the Levy of Individual
Income Tax on Incomes from the Transfer of Restricted Shares of Listed Companies (Cai
Shui [2010] No. 70) ( 《關於個人轉讓上市公司限售股所得徵收個人所得稅有關問題的補充通
知》（財稅[2010]70 號）) jointly issued by these departments and implemented on 10
November 2010. As at the Latest Practicable Date, the aforementioned provisions did
not specify whether to impose the individual income tax on the income from the transfer of
shares of PRC-resident enterprise listed on overseas stock exchanges by non-PRC resident
individuals.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 4–


--- page 510 ---
Enterprise investors
In accordance with the EIT Law and its implementation rules, a non-resident
enterprise that has not established an est a b l i s h m e n to rp r e m i s e si nt h eP R Co ri th a s
established an establishment and premises but the income received has no actual connection
with the establishment and premises, it shall pay an enterprise income tax at a rate of 10%
for the income arising within the PRC (including the income from sale of equity interests of
PRC-resident enterprise). The aforesaid income tax payable for non-resident enterprises are
deducted at source, where the payer of the income is required to withhold the income tax
from the amount to be paid to the non-resident enterprise on each payment or when it is
payable on due date. The withholding tax may be reduced pursuant to applicable treaties or
agreements on avoidance of double taxation.
Stamp Duty
In accordance with the Stamp Tax Law of the People’s Republic of China ( 《中華人民
共和國印花稅法》) promulgated by the Standing Committee of the NPC on 10 June 2021 and
came into effect on 1 July 2022, entities and ind ividuals that issue taxable certificates and
conduct securities transactions within the te rritory of PRC, or entities and individuals who
issue taxable certificates and conduct securities transactions outside the territory of PRC to
be used within the territory of the PRC shall subject to stamp duty.
Estate Duty
As at the Latest Practicable Date, no estate duty is levied within the PRC.
PRINCIPAL TAXATION OF OUR COMPANY IN THE PRC
Enterprise Income Tax
The Enterprise Income Tax Law of the PRC ( 《中華人民共和國企業所得稅法》),
promulgated by the National People’s Congress on 16 March 2007, came into effect on 1
January 2008 and last amended on 29 December 2018, as well as the Implementation Rules
of the Enterprise Income Tax Law ( 《中華人民共和國企業所得稅法實施條例》), promulgated
by the State Council on 6 December 2007, came into force on 1 January 2008 and amended
on 23 April 2019, are the principal law and reg ulation governing enterprise income tax in
the PRC. According to the EIT Law and its implem entation rules, enterprises are classified
into resident enterprises and non-resident enterprises. Resident enterprises refer to
enterprises that are legally established in t he PRC, or are established under foreign laws
but whose actual management bodies are located in the PRC. Non-resident enterprises refer
to enterprises that are legally established und er foreign laws and have set up institutions or
sites in the PRC but with no actual management body in the PRC, or enterprises that have
not set up institutions or sites in the PRC but have derived incomes from the PRC. A
uniform income tax rate of 25% applies to all resident enterprises and non-resident
enterprises that have set up institutions or sites in the PRC to the extent that such incomes
are derived from their set-up institutions or sites in the PRC, or such income are obtained
outside the PRC but have an actual connection with the set-up institutions or sites. And
non-resident enterprises that have not set up institutions or sites in the PRC or have set up
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 5–


--- page 511 ---
institutions or sites but the incomes obtained by the said enterprises have no actual
connection with the set-up institutions or sites, shall pay enterprise income tax at the rate of
1 0 %i nr e l a t i o nt ot h e i ri n c o m es o u r c e sf r o mt h eP R C .
Pursuant to the Administrative Measures on Accreditation of High-tech Enterprises
(《高新技術企業認定管理辦法》) promulgated on 14 April 2008 and amended on 29 January
2016, qualifications of an accredited high-tech enterprise shall be valid for three years from
the date of issuance of the certificate. Upon obtaining the qualification as a high-tech
enterprise, the enterprise shall complete tax reduction and exemption formalities with the
tax authorities in charge pursuant to the provisions of Article 4 of these Measures.
Value-Added Tax
The major PRC Law governing value-add ed tax are the Interim Regulations on
Value-added Tax of the PRC ( 《中華人民共和國增值稅暫行條例》) issued on 13 December
1993 by the State Council, came into effect on 1 January 1994, and last revised on 19
November 2017, as well as the Implementation Rules for the Interim Regulations on
Value-Added Tax of the PRC ( 《中華人民共和國增值稅暫行條例實施細則》)i s s u e do n2 5
December 1993 by the MOF, came into effect on the same day and last revised on 28
October 2011, any entities and individuals engaged in the sale of goods, supply of
processing, repair and replacement services, and import of goods within the territory of the
PRC are taxpayers of VAT and shall pay the VAT in accordance with the law and
regulation. The rate of VAT for sale of goods is 17% unless otherwise specified, such as the
rate of VAT for sale of transportation is 11 %. With the VAT reforms in the PRC, the rate
of VAT has been changed several times. The MOF and the STA issued the Notice of on
Adjusting VAT Rates (Cai Shui [2018] No. 32) ( 《關於調整增值稅稅率的通知》（財稅[2018]32
號）) on 4 April 2018 to adjust the tax rates of 17% and 11% applicable to any taxpayer’s
VAT taxable sale or import of goods to 16% and 10%, respectively, and this adjustment
became effect on 1 May 2018. Subsequently, the MOF, the STA and the General
Administration of Customs jointly issued the Announcement on Relevant Policies for
Deepening the VAT Reform ( 《關於深化增值稅改革有關政
策的公告》) on 20 March 2019 to
make a further adjustment, which came into effect on 1 April 2019. The tax rate of 16%
applicable to the VAT taxable sale or import of goods shall be adjusted to 13%, and the tax
rate of 10% applicable thereto shall be adjusted to 9%.
PRC FOREIGN EXCHANGE
The lawful currency of the PRC is Renminbi, which is currently subject to foreign
exchange regulation according to relevant laws and regulations. SAFE, with the
authorisation of the PBOC, is empowered with the functions of administering all matters
relating to foreign exchange, including the enforcement of foreign exchange regulatory
regulations.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 6–


--- page 512 ---
On 29 January 1996, the State Council promu lgated the Regulations of the PRC for
Foreign Exchange Control ( 《中華人民共和國外匯管理條例》)( t h e‘ ‘ Foreign Exchange
Control Regulations ’’) which became effective on 1 April 1996. The Foreign Exchange
Control Regulations classify all international payments and transfers into current items and
capital items. Most of the current items are no longer subject to SAFE’s approval, while
capital items remain unchanged. The Foreign Exchange Control Regulations were
subsequently amended on 14 January 1997 and 5 August 2008. The latest amendment to
the Foreign Exchange Control Regulations clearly states that no restriction will be imposed
on international current payments and transfers.
On 20 June 1996, the PBOC promulgated the Regulations for the Administration of
Settlement, Sale and Payment of Foreign Exchange (Yin Fa [1996] No. 210) ( 《結匯、售匯及
付匯管理規定》（銀發[1996]210 號）), which abolished the remaining restrictions on
convertibility of foreign exchange under current items, while retaining the existing
restrictions on foreign exchange transactions under capital items accounts.
According to the Announcement on Improving the Reform of the Renminbi (the
PBOC Announcement [2005] No. 16) ( 《關於完善人民幣匯率形成機制改革的公告》（中國人
民銀行公告[2005] 第16號）) ,i s s u e db yt h eP B O Co n2 1J u l y2 0 0 5a n de f f e c t i v eo nt h es a m e
date, the PRC began to implement a managed f loating exchange rate system in which the
exchange rate would be determined based on market supply and demand and adjusted with
reference to a basket of currencies. The Renminbi exchange rate was no longer pegged to
the U.S. dollar. The PBOC would publish the closing price of the exchange rate of the
Renminbi against trading currencies such a s the U.S. dollar in the interbank foreign
exchange market after the closing of the mark et on each working day, as the central parity
of the currency against Renminbi transactions on the following working day.
Starting from 4 January 2006, the PBOC introduced over-the-counter transactions into
the interbank spot foreign exchange market for the purpose of improving the formation
mechanism of the central parity of Renminbi exchange rates, and the practise of matching
was kept at the same time. In addition to the above, the PBOC introduced the
market-maker rule to provide liquidity to th e foreign exchange market. On 1 July 2014,
the PBOC further improved the formation mechanism of the RMB exchange rate by
authorising the China Foreign Exchange Trad e System to make inquiries with the market
makers before the interbank foreign exchange market opens every day for their offered
quotations which are used as samples to calculate the central parity of the RMB against the
USD on that day using the weighted average of the remaining market makers’ offered
quotations after excluding the highest and lowest quotations, and announce the central
parity of the RMB against currencies such as the USD at 9 : 15 a.m. on each working day.
On 11 August 2015, the PBOC announced to improve the central parity quotations of RMB
against the USD by authorising market makers to provide central parity quotations to the
China Foreign Exchange Trading System before the interbank foreign exchange market
opens every day with reference to the interbank foreign exchange market closing rate of the
previous day, the supply and demand for foreign exchange as well as changes in major
international currency exchange rates.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 7–


--- page 513 ---
On 5 August 2008, the State Council promulgated the revised Foreign Exchange
Control Regulations of the PRC, which have made substantial changes to the foreign
exchange supervision system of the PRC. First, the regulations have adopted an approach
of balancing the inflow and outflow of foreign exchange. Foreign exchange income received
overseas can be repatriated or deposited ove rseas, and foreign exchange and settlement
funds under the capital account are required to be used only for purposes as approved by
the competent authorities and foreign exchange administrative authorities; second, the
regulations have improved the RMB exchange rate floating system based on market supply
and demand under management; third, in the event that international balance of payment
suffer or may suffer a material misbalance, or the national economy encounters or may
encounter a severe crisis, the State may a dopt necessary safeguard or control measures
against international balance of payment; fourth, the regulations have enhanced the
supervision and administration of foreign exchange transactions and grant extensive
authorities to SAFE to enhance its sup ervisory and administrative powers.
According to the relevant laws and regula tions in the PRC, PRC 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 designated banks that carry foreign exchange business, on the strength
of valid receipts and proof. Foreign investment enterprises which need foreign exchange for
the distribution of profits to their sharehold ers and PRC enterprises which, in accordance
with regulations, are required to pay dividends to their shareholders in foreign exchange
may, after paying taxes in according to the law, on the strength of resolutions of the board
of directors on the distribution of profits, effect payment from foreign exchange accounts
opened at designated banks that carry foreign exchange business, or effect exchange and
p a y m e n ta td e s i g n a t e db a n k s .
The Decisions on Matters including Cancelling and Adjusting a Batch of
Administrative Approval Items (Guo Fa [2014] No. 50) ( 《關於取消和調整一批行政審批項
目等事項的決定》（國發[2014]50 號）) promulgated by the State Council and came into effect
on 23 October 2014 provide to cancel the approval requirement of SAFE and its branches
for the remittance and settlement of the proc eeds raised from the overseas listing of the
foreign shares into RMB domestic accounts.
Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration of
Overseas Listing (Hui Fa [2014] No. 54) ( 《關於境外上市外匯管理有關問題的通知》（匯
發[2014]54 號）) issued by SAFE and became effective on 26 December 2014, a domestic
company shall, within 15 business days of the date of the end of its overseas listing issuance,
register the overseas listing with the branch office of SAFE located at its registered address;
the proceeds from an overseas listing of a domestic company may be repatriated to China or
deposited overseas, provided that the intended use of the proceeds shall be consistent with
the content of the document or other public disclosure documents. A domestic company
(except for bank financial institutions) shall present its certificate of overseas listing to open
a dedicated foreign exchange account at a domestic bank for its initial public offering (or
follow-on offering) and repurchase business to handle the exchange, remittance and transfer
of funds for the business concerned.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 8–


--- page 514 ---
According to the Notice on Further Simp lifying and Improving Policies for the
Foreign Exchange Administration of Direct Investment (Hui Fa [2015] No. 13) ( 《關於進一
步簡化和改進直接投資外匯管理政策的通知》（匯發[2015]13 號）) promulgated by SAFE on
13 February 2015 and became effective on 1 June 2015, and partially repealed on 30
December 2019, the confirmation of foreign exc hange registration under domestic direct
investment and the confirmation of foreign e xchange registration under overseas direct
investment shall be directly examined and handled by banks. SAFE and its branch offices
shall indirectly regulate the foreign exchang e registration of direct investment through
banks.
According to the Notice on Policies for Reforming and Regulating the Control over
Foreign Exchange Settlement of Capital Accounts (Hui Fa [2016] No. 16) ( 《關於改革和規範
資本項目結匯管理政策的通知》（匯發[2016]16 號）) which was promulgated by SAFE and
became effective on 9 June 2016, foreign currenc y earnings in capital account that relevant
policies of willingness exchange settlement have been clearly implemented on (including the
recalling of raised capital by overseas listing) m ay undertake foreign exchange settlement in
the banks according to actual business needs of the domestic institutions. The tentative
percentage of foreign exchange settlement for foreign currency earnings in capital account
of domestic institutions is 100%, subject to adjust of SAFE in due time in accordance with
international revenue and expenditure situations.
According to the Notice on Optimising Administration of Foreign Exchange to
Support the Development of Foreign-related Business (Hui Fa [2020] No. 8) ( 《國家外匯管
理局關於優化外匯管理
支持涉外業務發展的通知》（匯發[2020]8 號）) issued by SAFE and
became effective on 10 April 2020, eligible enterprises are allowed to make domestic
payments by using their capital, foreign credits and the income under capital accounts of
overseas listing, without providing materials to the bank in advance for authenticity
verification on an item-by-item basis, provided that their utilised capital shall be authentic
and in line with provisions, and conform to the pr evailing administrativ e regulations related
to the use of income under capital accounts. The concerned bank shall manage and control
the relevant business risks under the principle of prudent business development and conduct
spot checks afterwards in accordance with the relevant requirements. Local foreign
exchange authorities shall strengthen monitoring and analysis and interim and ex-post
supervision.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 9–


--- page 515 ---
PRC LAWS AND REGULATIONS
This Appendix sets out summaries of certain aspects of PRC laws and regulations,
which are relevant to the Company’s operations and business. Laws and regulations relating
to taxation in the PRC are discussed separa tely in ‘‘Appendix III — Taxation and Foreign
Exchange’’ to this prospectus. The principal objective of this summary is to provide
potential investors with an overview of the principal PRC legal and regulatory provisions
applicable to the Company. This summary is not intended to include all the information
which may be important to potential investors. For more details on laws and regulations
which are relevant to our business, please refer to the section headed ‘‘Regulatory
Overview’’ in this prospectus.
The PRC Legal System
The PRC legal system is based on the PRC Constitution ( 《中華人民共和國憲法》)a n d
is made up of written laws, administrative regulations, local regulations, autonomous
regulations, separate regulati ons, rules and regulations of Sta te Council departments, rules
and regulations of local governments, laws of special administrative regions and
international treaties of which the PRC gove rnment is a signatory, and other regulatory
documents. Court judgements do not constitute legally binding precedents, although they
may be used for the purposes of judicial reference and guidance.
Pursuant to the PRC Constitution and the Legislation Law of the PRC ( 《中華人民共和
國立法法》), the NPC and its Standing Committee are empowered to exercise the legislative
power of the State. The NPC has the power to formulate and amend basic laws governing
State organs, civil, criminal and other matters. The NPC Standing Committee is empowered
to formulate and amend laws other than thos e required to be enacted by the NPC and to
supplement and amend parts of the laws enacted by the NPC during the adjournment of the
NPC, provided that such supplements and amendments are not in conflict with the basic
principles of such laws.
The State Council is the highest organ of s tate administration and has the power to
formulate administrative regulations based on the PRC Constitution and laws.
The people’s congresses of the provinces, autonomous regions and municipalities and
their respective standing committees may formu late local regulations based on the specific
circumstances and actual needs of their respective administrative areas, provided that such
regulations do not contravene any provision of the PRC Constitution, laws or
administrative regulations. The people’s congresses of cit ies with districts and their
respective standing committees may formulate local regulations with respect to urban and
rural construction and administration, environmental protection, historical and cultural
protection and other aspects according to the specific circumstances and actual needs of
such cities, which will become enforceable after being reported to and approved by the
standing committees of the people’s congresses of the relevant provinces or autonomous
regions, provided that such local regulations do not contravene any provision of the PRC
Constitution, laws, administrative regulations and local regulations of their respective
provinces or autonomous regions.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1–


--- page 516 ---
The ministries and commissions of the State Council, PBOC, the National Audit Office
of the PRC and the subordinate institutions with administrative functions directly under the
State Council may formulate rules and regulations within the authorisation of their
respective departments in accordance with the laws and administrative regulations, and the
decisions and orders of the State Council. The people’s governments of the provinces,
autonomous regions, municipalities directly under the central government and cities with
districts may formulate rules and regulations in accordance with the laws, administrative
regulations and local regulations of such provinces, autonomous regions and municipalities
directly under the central government.
The PRC Constitution has supreme legal au thority and no laws, administrative
regulations, local regulations, autonomous regulations or separate regulations may
contravene the PRC Constitution. The PRC laws rank higher than administrative
regulations, local regulations and rules. The administrative regulations rank higher than
local regulations and rules. The rules enacted by the people’s governments of the provinces
or autonomous regions rank higher than the rules enacted by the people’s governments of
the cities with districts and autonomous pref ectures within the administrative areas of such
provinces and the autonomous regions.
The NPC has the power to alter or annul any inappropriate laws enacted by its
Standing Committee, and to annul any autonomous regulations or separate regulations
which have been approved by its Standing Committee, but which contravene the PRC
Constitution or the PRC Legislation Law. The NPC Standing Committee has the power to
annul any administrative regulations that contravene the PRC Constitution and laws, to
annul any local regulations that contravene the PRC Constitution, laws or administrative
regulations, and to annul any autonomous regulations or local regulations which have been
approved by the standing committees of the peo ple’s congresses of the relevant provinces,
autonomous regions or municipalities, but which contravene the PRC Constitution and the
PRC Legislation Law. The State Council has the power to alter or annul any inappropriate
ministerial rules and rules of local governments. The people’s congresses of provinces,
autonomous regions or municipalities have the power to alter or annul any inappropriate
local regulations enacted or approved by their respective standing committees. The standing
committees of local people’s congresses have t he 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 PRC Constitution, the pow e rt oi n t e r p r e tl a w si sv e s t e di nt h eN P C
Standing Committee. Pursuant to the Resolu tion of the Standing Committee of the NPC
Providing an Improved Interpretation of the Law ( 《全國人民代表大會常務委員會關於加強
法律解釋工作的決議》) passed on 10 June 1981, issues related to the further clarification or
supplement of laws should be interpreted or provided by the NPC Standing Committee,
issues related to the specific application of laws and decrees in a court trial should be
interpreted by the Supreme People’s Court, issu e sr e l a t e dt ot h es p e c i f i ca p p l i c a t i o no fl a w s
and decrees in a prosecution process should be interpreted by the Supreme People’s
Procuratorate, and the legal issues other than the above-mentioned s hould be interpreted by
the State Council and the competent authoritie s. If there are differences in principle in the
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 2–


--- page 517 ---
interpretation of the Supreme People’s court and the Supreme People’s Procuratorate, they
shall be submitted to the NPC Standing Committee for interpretation or decision. The State
Council and its ministries and commissions are also vested with the power to give
interpretations of the adminis trative regulations and departmental rules which they have
promulgated. At the regional level, the power to interpret regional laws is vested in the
regional legislative and administrative authorities which promulgate such laws.
The PRC Judicial System
Pursuant to the PRC Constitution and the Law of Organisation of the People’s Courts
of the PRC ( 《中華人民共和國人民法院組織法》) most recently revised on 26 October 2018
and taking effect on 1 January 2019, the peopl e’s courts are classified into the Supreme
People’s Court, the local people’s courts at var ious local levels, and other special people’s
courts. The local people’s courts at various local levels are divided into three levels, namely,
the primary people’s courts, the intermediate people’s courts and the higher people’s courts.
The primary people’s courts are further divided into civil, criminal and economic tribunals.
The intermediate people’s courts have structure similar to those of the primary people’s
courts and other special tribunals, such as the intellectual property courts, military courts
and maritime courts. These two levels of peop le’s courts are subject to supervision by
people’s courts at higher levels. The Supreme People’s Procuratorate is authorised to
supervise the judgement and ruling of the people’s courts at all levels which have been
legally effective, and the people’s procuratora te at a higher level is authorised to supervise
the judgement and ruling of a people’s co urt at a lower level which have been legally
effective. The Supreme People’s Court is the highest judicial authority in the PRC. It
supervises the administration of justi ce by the people’s courts at all levels.
The people’s courts employ a two-tier appellate system. The judgements or rulings of
the second instance at a people’s court are fin al. A party may appeal against the judgement
or ruling of the first instance of a local peop le’s court. The people’s procuratorate may
present a protest to the people’s court 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 court are 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 are
final. Judgements or rulings of the first instance of the Supreme People’s Court are also
final. However, if the Supreme People’s Court or a people’s court at the next higher level
discovers an error in a final and binding judgement or ruling which has taken effect in any
people’s court at a lower level, or the presiding judge of a people’s court finds an error in a
final and binding judgement or ruling which has taken effect in the court over which he
presides, a retrial of the case may be initiat ed according to the judicial supervision
procedures.
The Civil Procedure Law of the PRC ( 《中華人民共和國民事訴訟法》)a d o p t e do n9
April 1991 and most recently amended on 1 September 2023, prescribes the conditions 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 ruling. All parties to a civil action conducted within the PRC must abide by
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 3–


--- page 518 ---
t h eP R CC i v i lP r o c e d u r eL a w .Ac i v i lc a s ei sgenerally heard by the court located in the
defendant’s place of domicile. The court of jurisdiction in respect of a civil action may also
be chosen by explicit agreement among the parties to a contract, provided that the people’s
court having jurisdiction should be located at places directly connected with the disputes,
such as the plaintiff’s or the defendant’s place of domicile, the place where the contract is
executed or signed or the place where the object of the action is located. However, such
choice shall not in any circumstances contrave ne the provisions on grade jurisdiction and
exclusive jurisdiction.
A foreign individual, a person without nationality, a foreign enterprise or a foreign
organisation that institute or respond to proceedings in a people’s court is given the same
litigation rights and obligations as a citizen or legal person of the PRC. Should a foreign
court limit the litigation rights of PRC citize ns and enterprises, the PRC court shall apply
the same limitations to the citizens and ente rprises of such foreign country. A foreign
individual, a person without nationality, a foreign enterprise or a foreign organisation must
e n g a g eaP R Cl a w y e ri nc a s eh e / s h eo ri tn e e d st oe n g a g eal a w y e rf o rt h ep u r p o s eo f
initiating actions or defending against liti gations at a PRC court. In accordance with the
international treaties to which the PRC is a s ignatory or a participant or according to the
principle of reciprocity, a people’s court and a foreign court may request each other to serve
documents, conduct investigation, collect evidence and conduct other actions on its behalf.
A PRC court shall not accommodate any reques t made by a foreign court which will result
in the violation of sovereignty, secu rity or public interests of the PRC.
All parties to a civil action shall perform le gally effective judgements and rulings. If
any party to a civil action refuses to abide by a judgement or ruling made by a people’s
court or an award made by an arbitration tribunal in the PRC, the other party may apply to
the people’s court for the enforcement of the same within two years, subject to application
for postponed enforcement or revocation. If a p arty fails to satisfy within the stipulated
period a judgement which the court has grant ed an enforcement approval, the court may,
upon the application of the other party, mandatorily enforce the judgement.
A party seeking to enforce a judgement or ruling of a people’s court against another
party who is not or whose property is not within the PRC may apply to a foreign court with
jurisdiction over the case for recognition a nd enforcement of such judgement or ruling.
Alternatively, the people’s court may, pursuant to an international treaty concluded or
acceded to by the PRC or in accordance with the principle of reciprocity, request the foreign
court to recognise and execute the judgement or ruling. Likewise, if the PRC has entered
into either a treaty relating to judicial enforcement with the relevant foreign country or
according to the principle of reciprocity, a foreign judgement or ruling may also be
recognised and enforced in accordance with the PRC enforcement procedures by a PRC
court unless the people’s court considers that the recognition or enforcement of such
judgement or ruling would violate the basic legal principles of the PRC, its sovereignty or
national security, or would not be in the public interest.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 4–


--- page 519 ---
The PRC Company Law, Overseas Listing Trial Measures and Guidance for Articles of
Association
A joint stock limited company incorporated in the PRC and seeking a listing on the
Stock Exchange is mainly subject to the following laws and regulations in the PRC:
. The PRC Company Law ( 《中華人民共和國公司法》) which was promulgated on 29
December 2023 and took effect on 1 July 2024;
. The Overseas Listing Trial Measures and five relevant guidelines which were
promulgated by the CSRC on 17 February 2023 pursuant to the PRC Securities Law
and are applicable to the direct and indi rect overseas share offering or listing of
domestic companies; and
. The Guidelines for Articles of Association of Listed Companies ( 《上市公司章程指引》)
(the ‘‘Guidance for Articles of Association ’’) which was most recently amended on 15
December 2023 by the CSRC. The Articles of Association is formulated based on the
Guidance for Articles of Association on a reference basis, the summary of which is set
out in the section entitled ‘‘Appendix V — Summary of the Articles of Association’’ to
this prospectus.
Set out below is a summary of the major provisions of the currently effective PRC
Company Law, the Overseas Listing Trial Measures and the Guidance for Articles of
Association which are applicable to the Company.
General
A joint stock limited company refers to a corporate legal person established in China
under the PRC Company Law with its registered capital divided into shares. All shares of
the company shall be either par value shares o r no par value shares in accordance with the
company’s articles of association. Where par value shares are adopted, each share shall
have equal value. The liability of the company i s limited to the total amount of all assets it
owns and the liability of its shareholders is limited to the extent of the shares they subscribe
for.
The company shall conduct its business in a ccordance with laws and administrative
regulations. It may invest in other limited liability companies and joint stock limited
companies and its liabilities with respect to such invested companies are limited to the
amount invested. Unless otherwise provided by law, the company may not be a contributor
that undertakes joint liabilities for th e debts of the invested companies.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 5–


--- page 520 ---
Incorporation
A company may be incorporated by promotion or floatation. A company shall be
incorporated by a minimum of one but no more than 200 promoters, and at least half of the
promoters must be residents within the PRC. Companies incorporated by promotion are
companies of which the entire registered capit al is subscribed for by the promoters. Shares
in the company incorporated by promotion shall not be offered to others unless the
registered capital has been fully paid up. If laws , administrative regulations and decisions of
the State Council have separate provisions o n paid-in registered capital and the minimum
registered capital, the company should follow such provisions.
For companies incorporated by way of promotion, the promoters shall subscribe in
writing for the shares required to be subscribed for by them and pay up their capital
contributions under the articles of association . Procedures relating to the transfer of titles
to non-monetary assets shall be duly completed if such assets are to be contributed as
capital. Promoters who fail to pay up their capital contributions in accordance with the
foregoing provisions shall assume default lia bilities in accordance with the covenants set
out in the promoters’ agreements. After the promoters have confirmed the capital
contribution under the articles of association, a board of directors and a board of
supervisors shall be elected and the board of directors shall apply for registration of
incorporation by filing the articles of associat ion with the company registration authority,
and other documents as required by laws or administrative regulations.
Where companies are incorporated by floatation, not less than 35% of their total
number of shares must be subscribed for by the promoters, unless otherwise provided for by
laws or administrative regulations. The p romoters shall preside over and convene an
inauguration meeting within thirty days from the date of the full payment of subscription
capital. The inauguration meeting shall be formed by the promoters and subscribers. Where
the shares issued are not fully subscribed for wit hin the offer period stipulated in the share
offering prospectus, or where the promoter fails to convene an inauguration meeting within
thirty days of the subscription capital for the shares issued being fully paid up, the
subscribers may demand that the promoters refund the subscription capital so paid together
with the interest calculated at bank rates of a deposit for the same period. Within thirty
days of the conclusion of the inauguration meeting, the board of directors shall apply to the
registration authority for registration of th e establishment of the company. A company is
formally established and has the status of a l egal person after the registration with the
relevant administration for market regulation has been completed and a business licence has
been issued.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 6–


--- page 521 ---
Share Capital
The promoters may make a capital contribut ion in currencies, or non-monetary assets
such as in kind, intellectual property rights or land use rights which can be appraised with
monetary value and transferre d lawfully, except for assets wh ich are prohibited from being
contributed as capital by laws or administrative regulations. If a capital contribution is
made in non-monetary assets, a valuation of the assets contributed must be carried out
pursuant to the provisions of laws or administrative regulations on valuation without any
over-valuation or under-valuation.
There is no limit under the PRC Company Law as to the percentage of shares held by
an individual shareholder in a company. The shares of a company are represented by stocks.
A stock is a certificate issued by the company to certify the share held by a shareholder. The
stock issued by the company shall be in the form of registered stock.
The issuance of shares shall be conducted in a fair and equitable manner. Each share of
the same class must carry equal rights. Shares i s s u e da tt h es a m et i m ea n dw i t h i nt h es a m e
class must be issued on the same conditions and at the same price. The same price per share
shall be paid by any share subscriber (whether an entity or an individual). The share
offering price may be equal to or greater than the par value of the share, but may not be less
than the par value.
Under the Overseas Listing Trial Measur es, if a domestic company offers shares
overseas, it may raise funds and dividend distributions in foreign currency or Renminbi.
Under the PRC Company Law, a company issuing registered share certificates shall
maintain a shareholder registry wh ich sets forth the following matters:
(i) the name and domicile of each shareholder;
(ii) the number of shares held by each shareholder;
(iii) the serial numbers of shares held by each shareholder; and
(iv) the date on which each shareholder acquired the shares.
Increase in Share Capital
In light of its operational and development needs and in accordance with laws and
regulations, a company may increase its share capital under any of the following methods,
subject to the resolutions be passed at a shareholders’ general meeting: (i) a public offering
of shares; (ii) a private placement of shares; (iii) offering of bonus shares to existing
shareholders; (iv) the conversion of reserve funds into shares; and (v) any other methods
provided in law and administrative regulations and approved by the CSRC.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 7–


--- page 522 ---
Pursuant to the PRC Company Law, a company may, according to its articles of
association, issue the following classified shares, which have different rights from those of
the common shares: (i) shares with priority o r inferior rights to profits or remaining
property in distribution; (ii) shares with more or less voting rights per share than those of
the common shares; (iii) shares whose transfe r is subject to the consent of the company and
other restrictions; (iv) other classified shares provided by the State Council. A company
making a public offering of shares shall not issue any of the classified shares as prescribed
on items (ii) and (iii), except those issued prio r to the public offering. Where a company is
issuing new shares, resolutions shall be pas sed at general meeting in accordance with the
articles of association in respect of the class and amount of the new shares, the issue price of
the new shares, the commencement and end dates for the issue of the new shares and when
the new shares are proposed to be issued to existing shareholders, the class and amount of
such new shares.
To offer shares overseas, the domestic company shall report the application documents
for offering and listing to the CSRC for reco rd-filing within three business days after
submission of the application documents for offering and listing overseas.
Reduction of Share Capital
A company may reduce its registered capital in accordance with the following
procedures prescribed by the PRC Company Law:
(i) the company shall prepare a balance sheet and a list of properties;
(ii) the reduction of registered capital must be approved by shareholders at the general
meeting;
(iii) the company shall notify its creditors of t he reduction in registered capital within ten
days and publish an announcement of the reduction in newspapers within thirty days
of the resolution approving the reduction being passed;
(iv) the creditors of the company may within the statutory time limit require the company
to repay its debts or provide guarantees for covering the debts; and
(v) the company must apply to the relevant company registration authority for
registration of the change and reduction in registered capital.
Repurchase of Shares
Pursuant to the PRC Company Law, a company shall not purchase its own shares
other than in any of the following circumstances:
(i) reducing its registered capital;
(ii) merging with another company which holds its shares;
(iii) utilising the shares for employee stock o wnership plan or stock ownership incentive
scheme;
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 8–


--- page 523 ---
(iv) acquiring its own shares at the request of its shareholders who vote in a shareholders’
general meeting against a resolution regarding a merger or separation;
(v) utilising the shares for conversion of corporate bonds which are convertible into shares
issued by a listed company; and
(vi) where it is necessary for a listed company to maintain its corporate value and
stockholders’ equity.
Any company’s purchase of its own shares for any reason specified in item (i) and item
(ii) of the preceding paragraph shall be subject to a resolution of the general meeting; any
company’s purchase of its own shares for any rea son specified in item (iii), item (v) and item
(vi) of the preceding paragraph may be subject to a resolution of the board meeting with
more than two thirds of directors present, ac cording to the provisions of the articles of
associations or upon authorisation by the general meeting.
The shares acquired under the circumstance stipulated in item (i) hereof shall be
deregistered within ten days from the date of acquisition of shares; the shares shall be
assigned or deregistered within six months if the repurchase of shares is made under the
circumstances stipulated in either item (ii) or item (iv); and the shares held in total by a
company after the repurchase under any of the circumstances stipulated in item (iii), item
(v) or item (vi) shall not exceed 10% of the company’s total outstanding shares, and shall be
assigned or deregistered within three years.
Transfer of Shares
Shares held by shareholders may be transferred in accordance with the relevant laws.
Pursuant to the PRC Company Law, a shareholder should effect a transfer of his shares on
a stock exchange established in accordance with laws or by any other means as required by
the State Council. Registered shares may be tra nsferred after the shareholders endorse the
back of the share certificates or in any other manner specified by laws or administrative
regulations. Following the transfer, the com pany shall enter the names and addresses of the
transferees into its share register. No changes of registration in the share register described
above shall be effected during a period of twenty days prior to convening a shareholders’
general meeting or five days prior to the record date for the purpose of determining
entitlements to dividend distributions, subject to any legal provisions on the registration of
changes in the share register of listed companies.
Pursuant to the PRC Company Law, shares held by promoters may not be transferred
within one year of the establishment of the company. Shares of the company issued prior to
the public offering of shares may not be tran s f e r r e dw i t h i no n ey e a ro ft h ed a t eo ft h e
company’s listing on a stock exchange. Direct ors, supervisors and the senior management
of a company shall declare to the company their shareholdings in the company and any
changes thereof. During their terms of office, they may transfer no more than 25% of the
total number of shares they hold in the company per annum. They shall not transfer the
shares they hold within one year of the date of the company’s listing on a stock exchange,
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 9–


--- page 524 ---
nor within half a year after they leave their positions in the company. The articles of
association may set out other restrictive provisions in respect of the transfer of shares in the
company held by its directors, supervisors and the senior management.
Shareholders
Under the PRC Company Law, the rights of shareholders include the rights:
(i) to receive a return on assets, participate in significant decision-making and select
management personnel;
(ii) to petition the people’s court to revoke any resolution passed on a shareholders’
general meeting or a meeting of the board of directors that has not been convened in
compliance with the laws and regulations or the articles of association or whose voting
has violated the laws, administrative regul ations or the articles of association of the
company, or any resolution the contents of which is in violation of the articles of
association, provided that such petition shall be submitted within sixty days of the
passing of such resolution;
(iii) to transfer the shares according to the app licable laws and regulations and the articles
of association;
(iv) to attend or appoint a proxy to attend shar eholders’ general meetings and exercise the
voting rights;
(v) to inspect the articles of association, share register, counterfoil of company debentures,
minutes of shareholders’ general meetings, b oard resolutions, resolutions of the board
of supervisors and financial and accounting reports, and to make suggestions or
inquiries in respect of the company’s operations;
(vi) to receive dividends in resp e c to ft h en u m b e ro fs h a r e sh e l d ;
(vii) to participate in distribution of residual properties of the company in proportion to
their shareholdings upon the liquidation of the company; and
(viii) any other shareholders’ rights provided for i n laws, administrative regulations, other
normative documents and the articles of association.
The obligations of shareholders include the obligation to abide by the company’s
articles of association, to pay the subscription capital in respect of the shares subscribed for,
to be liable for the company’s debts and liabilities to the extent of the amount of
subscription capital agreed to be paid in respect of the shares taken up by them and any
other shareholder obligation speci fied in the articles of association.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 0–


--- page 525 ---
Shareholders’ General Meetings
The general meeting is the organ of author ity of the company, which exercises its
powers in accordance with the PRC Company L aw. The general meeting may exercise its
powers:
(i) to elect and remove the directors and supervisors (not being representative(s) of
employees) and to decide on the matters rela ting to the remuneration of directors and
supervisors;
(ii) to review and approve the reports of the board of directors;
(iii) to review and approve the reports of the board of supervisors or supervisors;
(iv) to review and approve the company’s annual financial budgets and final accounts plan;
(v) to review and approve the company’s profi t distribution proposals and loss recovery
proposals;
(vi) to decide on any increase or reduction of the company’s registered capital;
(vii) to decide on the issue of corporate bonds;
(viii) to decide on merger, division, dissolution and liquidation of the company or change of
its corporate form;
(ix) to amend the company’s articles of association; and
(x) to exercise any other authority stipulated in the articles of association.
The general meeting may authorise the boar d of directors to make resolutions on the
issuance of corporate bonds.
Pursuant to the PRC Company Law, a shareho lders’ general meeting is required to be
held once every year. An extraordinary general meeting is required to be held within two
months of the occurrence of any of the following circumstances:
(i) the number of directors is less than the number stipulated by the law or less than two
thirds of the number specified in the articles of association;
(ii) the outstanding losses of the company amounted to one-third of the company’s total
share capital;
(iii) shareholders individually or in aggre gate holding 10% or more of the company’s
shares request that an extraordinary general meeting is convened;
(iv) the board of directors deems necessary;
(v) the board of supervisors so proposes; or
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 1–


--- page 526 ---
(vi) any other circumstances as provided for in the articles of association.
A shareholders’ general meeting shall be convened by the board of directors and
presided over by the chairman of the board of directors. In the event that the chairman is
incapable of performing or is not performing his duties, the meeting shall be presided over
by the vice chairman. In the event that the vic e chairman is incapable of performing or is
not performing his duties, a director nominated by half or more of the directors shall
preside over the meeting. Where the board of directors is incapable of performing or is not
performing its duties to convene the general meeting, the board of supervisors shall convene
and preside over such meeting in a timely manner. If the board of supervisors fails to
convene and preside over such meeting, shareholders individually or in aggregate holding
10% or more of the company’s shares for ninety days or more consecutively may
unilaterally convene and preside over such meeting. Where shareholders individually or in
aggregately holding 10% or more of the company’s shares request to convene an
extraordinary general meeting, the board of directors and the board of supervisors shall,
within ten days after receipt of such request, decide whether to convene the extraordinary
general meeting and reply to the shareholders in writing.
In accordance with the PRC Company Law, a no tice of the general meeting stating the
date and venue of the meeting and the matters to be considered at the meeting shall be given
to all shareholders twenty days before the meeting. A notice of extraordinary general
meeting shall be given to all shareholders fifteen days prior to the meeting.
There is no specific provision in the PRC Company Law regarding the number of
shareholders constituting a quorum in a shareholders’ general meeting.
Pursuant to the PRC Company Law, shareholders (excluding classified shareholders)
present at a shareholders’ general meeting have one vote for each share they hold, save that
shares held by the company are not entitled to any voting rights.
An accumulative voting system may be adopted for the election of directors and
supervisors at the general meeting pursuant to the provisions of the articles of association
or a resolution of the general meeting. Under the accumulative voting system, each share
shall be entitled to the number of votes equivalent to the number of directors or supervisors
to be elected at the general meeting, and shareholders may consolidate their votes for one or
more directors or supervisors when casting a vote.
Pursuant to the PRC Company Law, resolutions of the general meeting must be passed
by more than half of the voting rights held by shareholders present at the meeting, with the
exception of resolutions relating to merger, division or dissolution of the company, increase
or reduction of registered share capital, change of corporate form or amendments to the
a r t i c l e so fa s s o c i a t i o n ,w h i c hi ne a c hc a s em u s tb ep a s s e db ym o r et h a nt w o - t h i r d so ft h e
voting rights held by the shareholders present at the meeting. Where the PRC Company
Law and the articles of association provide that the transfer or acquisition of significant
assets or the provision of external guarantees by the company must be approved by way of
resolution of the general meeting, the board of directors shall convene a shareholders’
general meeting promptly to vote on such matters.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 2–


--- page 527 ---
A shareholder may entrust a proxy to attend the general meeting on his/her behalf and
the matters, power and time limit of the proxy sh all be clarified by such shareholder. The
proxy shall present the shareholders’ power of attorney to the company and exercise voting
rights within the scope of authorisation.
Minutes shall be prepared in respect of matters considered at the general meeting and
the chairman and directors attending the meeting shall endorse such minutes by signature.
The chairman of the meeting and directors attending the meeting shall sign to endorse such
minutes. The minutes shall be kept together with the shareholders’ attendance register and
the proxy forms.
Board of Directors
A joint stock limited company shall have a board of directors which shall have at least
three members. For a company that has thre e hundred or more employees, the board of
directors shall include the staff representative unless the board of supervisors has been
established and already included the staff representative supervisor. The term of a director
shall be stipulated in the articles of associati on, provided that no term of office shall last for
more than three years. A director may serve consecutive terms if re-elected. A director shall
continue to perform his/her duties as a directo r in accordance with the laws, administrative
regulations and the articles of association unt il a duly re-elected director takes office, if
re-election is not conducted in a timely manner upon the expiry of his/her term of office or
if the resignation of directors results in the number of directors being less than the quorum.
Under the PRC Company Law, the board of directors may exercise its powers:
(i) to convene shareholders’ general meetings and report on its work to the shareholders’
general meetings;
(ii) to implement the resolutions passed by the shareholders at the shareholders’ general
meetings;
(iii) to decide on the company’s operati onal plans and investment proposals;
(iv) to formulate the company’s profit distrib ution proposals and loss recovery proposals;
(v) to formulate proposals for the increase or reduction of the company’s registered capital
and the issue of corporate bonds;
(vi) to formulate proposals for the merger, division or dissolution of the company or
change of corporate form;
(vii) to decide on the setup of the company’s internal management organs;
(viii) to appoint or dismiss the company’s manager and decide on his/her remuneration and,
based on the manager’s recommendation, to appoint or dismiss any deputy manager
and financial officer of the company and to decide on their remunerations;
(ix) to formulate the company’s basic management system; and
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 3–


--- page 528 ---
(x) to exercise any other authority stipulated in the articles of association.
Any restrictions on the powers of the board of directors set out in the articles of
association may not be claimed against any bona fide third party.
Meetings of the board of directors shall be convened at least twice each year. Notices
of meeting shall be given to all directors and supervisors ten days before the meeting.
Interim board meetings may be proposed to be c onvened by shareholders representing more
than 10% of the voting rights, more than one-third of the directors or the board of
supervisors. The chairman shall convene t he meeting within ten days of receiving such
proposal, and preside over the meeting. The board of directors may otherwise determine the
means and the period of notice for convening an interim board meeting. Meetings of the
board of directors shall be held only if more than half of the directors are present.
Resolutions of the board of directors shall be passed by more than half of all directors.
Each director shall have one vote for a resolution to be approved by the board of directors.
Directors shall attend the meetings of the board of directors in person. If a director is
unable to attend for any reason, he/she may ap point another director to attend the meeting
on his/her behalf by a written power of attorney specifying the scope of authorisation. The
board of directors shall make minutes of the meet ing’s decisions on the matters discussed at
the meeting, and the direc tors attending the meeting shall sign the minutes.
If a resolution of the board of directors violates any laws, administrative regulations or
the articles of association or resolutions of th e general meeting, and as a result of which the
company sustains serious losses, the directors participating in the resolution are liable to
compensate the company. However, if it can be proved that a director expressly objected to
the resolution when the resolution was voted on, and that such objection was recorded in
the minutes of the meeting, such director shall be relieved from that liability.
Under the PRC Company Law, the following person may not serve as a director in a
company:
(i) a person without capacity or restricted c apacity to undertake any civil liabilities;
(ii) a person who has been sentenced to any criminal penalty for corruption, bribery,
embezzlement, misappropriation of property or destruction of the socialist economic
order, or who has been deprived of his political rights due to his crimes and such
sentence has expired for no more than five years, or who is granted probation, if no
more than two years have passed since th e expiration of the probation period;
(iii) a person who has been a former director, factory manager or manager of a company or
an enterprise that has entered into insolven t liquidation and who was personally liable
for the insolvency of such company or enterprise, where no more than three years have
elapsed since the date of the completion of the bankruptcy and liquidation of the
company or enterprise;
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 4–


--- page 529 ---
(iv) a person who has been a legal representative of a company or an enterprise that has
had its business licence revoked due to violations of the law or has been ordered to
close down by law and the person was personally responsible, where less than three
years have elapsed since the date of such revocation or the order to close down; or
(v) a person who is listed as a dishonest person subject to enforcement by the people’s
court due to failure to pay off a large amount of unliquidated mature debts.
Where a company elects or appoints a director to which any of the above
circumstances applies, such election or appointment shall be null and void. A director to
which any of the above circumstances applies during his/her term of office shall be released
of his/her duties by the company.
Pursuant to the PRC Company Law, the board of directors shall appoint a chairman
and may appoint a vice chairman. The chairman and the vice chairman shall be elected with
approval of more than half of all the directors. The chairman shall convene and preside over
board meetings and review the implementation of board resolutions. The vice chairman
shall assist the chairman to perform his/her duties. Where the chairman is incapable of
performing or is not performing his/her duties, the duties shall be performed by the vice
chairman. Where the vice chairman is incapable of performing or is not performing his/her
duties, a director elected by more than half of the directors shall perform his/her duties.
Board of Supervisors
Pursuant to the PRC Company Law, a joint stock limited company shall have a board
of supervisors composed of not less than three members. The board of supervisors shall
consist of representatives of the shareholders and an appropriate proportion of
representatives of the company’s staff, among which the proportion of representatives of
the company’s staff shall not be less than one-third, and the actual proportion shall be
determined in the articles of association. Representatives of the company’s staff at the
board of supervisors shall be democratically elected by the company’s staff at the staff
representative assembly, general staff meetin g or otherwise. The board of supervisors shall
appoint a chairman and may appoint a vice chairman. The chairman and the vice chairman
of the board of supervisors shall be elected by more than half of the supervisors. Directors
and senior management shall not act concurrently as supervisors.
The chairman of the board of supervisors shall convene and preside over board of
supervisors meetings. Where the chairman of the board of supervisors is incapable of
performing or is not performing his/her duties, the vice chairman of the board of
supervisors shall convene and preside over supervisory board meetings. Where the vice
chairman of the board of supervisors is incapable of performing or is not performing his/her
duties, a supervisor nominated by more than half of the supervisors shall convene and
preside over meetings of the board of supervisors.
Each term of office of a supervisor is three years and he/she may serve consecutive
terms if re-elected. A supervisor shall continu et op e r f o r mh i s / h e rd u t i e sa sas u p e r v i s o ri n
accordance with the laws, administrative regu lations and the articles of association until a
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 5–


--- page 530 ---
duly re-elected supervisor takes office, if re -election is not conducted in a timely manner
upon the expiry of his/her term of office or if th e resignation of supervisors results in the
number of supervisors being less than the quorum.
The board of supervisors may exercise its powers:
(i) to review the company’s financial position;
(ii) to supervise the directors and senior management in their performance of their duties
and to propose the removal of directors and senior management who have violated
laws, regulations, the articles of association or shareholders’ resolutions;
(iii) when the acts of directors or senior man agement are detrimental to the company’s
interests, to require the director and s enior management to correct these acts;
(iv) to propose the convening of extraordinary shareholders’ general meetings and to
convene and preside over shareholders’ general meetings when the board fails to
perform the duty of convening and presiding over shareholders’ general meetings
under the PRC Company Law;
(v) to submit proposals to the s hareholders’ general meetings;
(vi) to bring actions against directors and senior management pursuant to the relevant
provisions of the PRC Company Law; and
(vii) to exercise any other authority stipulated in the articles of association.
Supervisors may be present at board meetings and make inquiries or proposals in
respect of the resolutions of the board. The board of supervisors may investigate any
irregularities identified in the operation of the company and, when necessary, may engage
a na c c o u n t i n gf i r mt oa s s i s ti t sw o r ka tt h ec o s to ft h ec o m p a n y .
Manager and Senior Management
Pursuant to the PRC Company Law, a company shall have a manager who shall be
appointed or removed by the board of directors. The manager shall exercise his/her powers
in accordance with the company’s articles of as sociation or the authorization of the board
of directors.
Other provisions in the articles of association on the manager’s powers shall also be
complied with. The manager shall be present at meetings of the board of directors.
However, the manager shall have no voting rights at meetings of the board of directors
unless he/she concurrent ly serves as a director.
Pursuant to the PRC Company Law, senior management refers to the manager, deputy
manager, financial officer, secretary to the board of directors of a listed company and other
personnel as stipulated in the articles of association.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 6–


--- page 531 ---
Duties of Directors, Supervisors, Managers and Other Senior Management
Directors, supervisors and senior management are required under the PRC Company
Law to comply with the relevant laws, regulati ons and the articles of association, and shall
be obliged to be faithful and diligent towar ds the company. Where the controlling
shareholder or actual controller of the company who does not serve as a director but
actually attends to the company’s affairs, shall comply with the foregoing provisions.
Directors, supervisors and management personnel are prohibited from abusing their
authority in accepting bribes or other unlawful income and from misappropriating the
company’s property.
Directors, supervisors and senior management are prohibited from:
(i) seizing the assets of the company or misappropriating company funds;
(ii) depositing company funds into accounts under their own names or the names of other
individuals;
(iii) taking advantage of power to accept bribes or other illegal income;
(iv) accepting commissions paid by a third party for transactions conducted with the
company for their own benefit;
(v) unauthorised divulgence of confiden tial information of the company; and
(vi) other acts in violation of their duty of loyalty to the company.
Where directors, supervisors and senior m anagement directly or indirectly conclude
any contract or engage in transactions with the company, they shall report to the board of
directors or the shareholders’ meeting and s eek approval by resolutions of the board of
directors or the shareholders’ meeting in accordance with the articles of association. The
requirement shall also apply to the conclusion of contracts or engagement in transactions
by close relatives of the directors, supervisor s and senior management or enterprises directly
or indirectly controlled by close relatives of the directors, supervisors and senior
management as well as persons who are otherw ise related to the directors, supervisors
and senior management.
Directors, supervisors and senior management shall not take advantage of duty to seek
business opportunities for themselves or others that would have been directed to the
company, unless such act has been reported to and approved by the board of directors or
the shareholders’ meeting in accordance with the articles of association or the company is
unable to take the business opportunity in accordance with applicable laws, administrative
regulations, and the articles of association.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 7–


--- page 532 ---
Directors, supervisors and senior manageme nt shall not engage in the business similar
to those of the company for themselves or others, unless such act has been reported to and
approved by the board of directors or the shareholders’ meeting in accordance with the
articles of association.
Income generated by directors or senior management in violation of aforementioned
shall be returned to the company.
A director, supervisor or senior management who contravenes any laws, regulations or
the company’s articles of association in the performance of his/her duties resulting in any
loss to the company shall be liable to the company for compensation.
The Guidance for Articles of Association provides that a company’s directors and
senior management shall have duties of dilig ence towards the company, for example, the
directors shall be prudent, serious and diligen t in exercising the aut hority conferred by the
company to ensure that the business activities of the company comply with state’s laws,
administrative regulations and various economic policy requirements and that the business
activities do not go beyond the scope of business activities specified in the company’s
business licence; the directors sh all treat all shareholders equally; the shareholders shall
keep abreast of the company’s business management status; both the directors and the
senior management shall sign written statements confirming periodic reports of the
company and ensure that the information disclosed by the company is true, accurate and
complete; both the directors and the senior man agement shall provide ac curate information
and materials to the board of supervisors and shall not interfere with the performance of
duties by the board of supervisors or individual supervisors; both the directors and the
senior management shall have other diligence duties prescribed by laws, administrative
regulations, departmental rules and the company’s articles of association.
Finance and Accounting
Pursuant to the PRC Company Law, a company shall establish its own financial and
accounting systems according to the laws, admin istrative regulations and the regulations of
the competent financial depar tments of the State Council. At the end of each financial year,
a company shall prepare a financial report which shall be audited by an accounting firm in
accordance with the laws. The financial an d accounting reports shall be prepared in
accordance with the laws, administrative regulations and the regulations of the financial
departments of the State Council.
The company’s financial reports shall be made available for shareholders’ inspection at
the company twenty days before the convening of an annual general meeting. A joint stock
limited company that makes public stock offer ings shall publish its financial reports.
When distributing each year’s profits after taxation, the company shall set aside 10%
of its profits after taxation for the company’ s statutory common reserve fund until the fund
has reached more than 50% of the company’s registered capital. When the company’s
statutory common reserve fund is not sufficient to make up for the company’s losses for the
previous years, the current year’s profits shall first be used to make good the losses before
any allocation is set aside for the statutory common reserve fund. After the company has
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 8–


--- page 533 ---
made allocations to the statutory common reserve fund from its profits after taxation, it
may, upon passing a resolution at a shareholders’ general meeting, make further allocations
from its profits after taxation to the discreti onary common reserve fund. After the company
has made good its losses and made allocations to the abovementioned reserve fund, the
remaining profits after taxation shall be dist ributed in proportion to the number of shares
held by the shareholders, except for those which are not distributed in a proportionate
manner as provided by the articles of association.
Profits distributed to shareholders in violation of the requirements described above
must be returned to the company. The company shall not be entitled to any distribution of
profits in respect of shares held by it.
The premium over the nominal value of the shares of the company on issue and other
income as required by relevant government authorities to be treated as the capital reserve
fund shall be accounted for as the capital reserve fund. The common reserve fund of a
company shall be applied to make good the company’s losses, expand its business
operations or increase its capital. Where any losses need to be covered with reserve fund of
the company, discretionary reserve fund and statutory common reserve fund shall first be
used and if still insufficient, capital reserv e fund can be used in accordance with applicable
provisions. Upon the transfer of the statutory common reserve fund into increasing capital,
the balance of the statutory common fund sha ll not be less than 25% of the registered
capital of the company before such transfer.
The company shall have no accounting books other than the statutory books. The
company’s capital shall not be deposited in any account opened under the name of an
individual.
Appointment and Retirement of Auditors
The Guidance for Articles of Associatio n provides that a company shall engage an
accounting firm which is qualified with the PRC Securities Law to provide services
including the audit of financial statements, t he verification of net assets and other relevant
consultancy services. The engagement term is one year and may be extended.
Pursuant to the PRC Company Law, the appointment or dismissal of an accounting
firm responsible for the company’s auditing shall be determined by shareholders at a
shareholders’ general meeting or 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 general meeting or the board of directors conduct a vote on the
dismissal of the accounting firm. The company should provide true and complete
accounting evidence, accounting books, financial and accounting reports and other
accounting information to the engaged accounting firm without any refusal, withholding
or falsification of information. Furthermo re, the Guidance for Articles of Association
provides that the audit fee for the accounting firm shall also be determined by shareholders
at a general meeting.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 1 9–


--- page 534 ---
Profit Distribution
According to the PRC Company Law, a company shall not distribute profits before
losses are covered and the statutory common reserve fund is provided.
Amendments to the Articles of Association
Pursuant to the PRC Company Law, the resolution of a shareholders’ general meeting
regarding any amendment to a company’s article s of association requires affirmative votes
by more than two-thirds of the votes held by shareholders attending the meeting.
Pursuant to the Guidance for Articles of A ssociation, the company shall amend its
articles of association under any of the following circumstances:
(i) where, after any amendment to the PRC Company Law or any other applicable law or
administrative regulation, the provisions of the articles of association conflict with the
law and/or administrative regulations amended;
(ii) where the company’s circumstances chan ge to such an extent that they are inconsistent
with what is recorded in the articles of association; and
(iii) where the shareholders’ general meeting d ecides to amend the articles of association.
The Guidance for Articles of Association further provides that where any amendment
to the articles of association adopted by a sha reholders’ general meeting is subject to
approval by the competent authorities, such amendment shall be submitted for approval;
where any amendment involves the compan y’s registration items, the company’s
registration with the authority shall also be amended. In addition, an announcement
shall be made in accordance with the applicab le provisions provided that the amendment to
the articles of association is required to be disclosed by any law or regulation.
Dissolution and Liquidation
Pursuant to the PRC Company Law, a company shall be dissolved for any of the
following reasons:
(i) the term of its operation set out in the articles of association has expired or other
events of dissolution specified in the articles of association have occurred;
(ii) the shareholders have resolved at a sh areholders’ general meeting to dissolve the
company;
(iii) the company is dissolved by reason of its merger or division;
(iv) the business licence of the company is revoked or the company is ordered to close down
or to be dissolved in accordance with the laws; or
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 2 0–


--- page 535 ---
(v) the company is dissolved by a people’s cou rt in response to the request of shareholders
holding shares that represent more than 10% of the voting rights of all shareholders of
the company, on the grounds that the operation and management of the company has
suffered serious difficulties that cannot be resolved through other means, rendering
ongoing existence of the company a cause for significant losses to the shareholders’
interests.
On the occurrence of the abovemention ed events, the company shall make an
announcement on the National Enterprise Credit Information Publicity System within ten
days.
In the event of paragraphs (i) and (ii) above, the company may carry on its existence by
amending its articles of association if no property has been distributed to any shareholder.
The amendments to the articles of association in accordance with the provisions described
above shall require the approval of more than two-thirds of voting rights of shareholders
attending a shareholde rs’ general meeting.
Where the company is dissolved under the circumstances set forth in paragraph (i), (ii),
(iv) or (v) above, the liquidation procedures shall be conducted and directors shall be the
company’s liquidation obligor and it should est ablish a liquidation committee within fifteen
days of the date on which the dissolution event occurs. The liquidation committee shall be
composed of directors or any other persons determined by a shareholders’ general meeting.
If a liquidation committee is not established within the prescribed period or the liquidation
fails to effect after the establishment of a liq uidation committee, the interested party may
file an application with a people’s court, requesting that the court appoint relevant
personnel to form a liquidation committee to administer the liquidation. The people’s court
should accept such application and form a liquidation committee to conduct liquidation in
at i m e l ym a n n e r .
The liquidation committee may exercise following powers during the liquidation:
(i) to dispose of the company’s assets and t o prepare a balance sheet and an inventory of
assets;
(ii) to notify the company’s creditors or publish announcements;
(iii) to deal with and settle any outstanding business related to the liquidation;
(iv) to pay any outstanding tax together wi th any tax arising during the liquidation
process;
(v) to settle the company’s claims and liabilities;
(vi) to distribute the company’s remaining assets after its debts have been paid off; and
(vii) to represent the company in any civil procedures.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 2 1–


--- page 536 ---
The liquidation committee shall notify the company’s creditors within ten days from its
establishment, and publish an announcement i n newspapers or on the National Enterprise
Credit Information Publicit y System within sixty days.
A creditor shall lodge his claim with the liquidation committee within thirty days of
receipt of the notification or within forty-five days of the date of the announcement if he
has not received any notification.
A creditor shall, in making his claim, state matters relevant to his creditor’s rights and
furnish relevant evidence. The liquidation committee shall register such creditor’s rights.
The liquidation committee shall not make any settlement to creditors during the period of
the claim.
Upon disposal of the company’s property and preparation of the required balance
sheet and inventory of assets, the liquidation committee shall draw up a liquidation plan
and submit this plan to a shareholders’ general meeting or a people’s court for endorsement.
The remaining assets of the company, after payment of liquidation expenses, employee
wages, social insurance expenses and statutory compensation, outstanding taxes and the
company’s debts, shall be distributed to shareholders in proportion to shares held by them.
The company shall continue to exist during the liquidation period, although it cannot
engage in operating activities that are not related to the liquidation. The company’s
property shall not be distributed to shareholders before repayments are made in accordance
with the requirements described above.
Upon liquidation of the company’s property and preparation of the required balance
sheet and inventory of assets, if the liquidati on committee becomes aware that the company
does not have sufficient assets to repay its liabilities, it must apply to a people’s court for a
declaration of bankruptcy in accordance with the laws. Following such declaration by the
people’s court, the liquidation committee shall hand over the administration matters to the
bankruptcy administrator designated by the people’s court.
Upon completion of the liquidation, the liquidation committee shall prepare a
liquidation report and submit it to the shareholders’ general meeting or a people’s court for
confirmation of its completion, and to the company registration authority to cancel the
company’s registration, and an announcemen t of its termination shall be published.
Members of the liquidation committee are required to discharge their duties in good faith
and in compliance with relevant laws. Me mbers of the liquidation committee shall be
prohibited from abusing their authority in a ccepting bribes or other unlawful income and
from misappropriating the company’s properties. Members of the liquidation committee are
liable to indemnify the company and its creditors in respect of any loss arising from their
wilful or material default.
Liquidation of a company declared bankrup t according to laws shall be processed in
accordance with the laws on corporate bankruptcy.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 2 2–


--- page 537 ---
Overseas Listing
Pursuant to the Overseas Listing Trial Measures, both initial public offerings or
listings in overseas markets shall be filed wit h the CSRC within three business days after the
relevant application is submitted overseas. Subsequent securities offerings of an issuer in
the same overseas market where it has previousl y offered and listed securities shall be filed
with the CSRC within three business days after the offering is completed. Moreover, where
the filing documents are complete and in comp liance with stipulated requirements, the
CSRC will, within twenty business days after r eceiving the filing documents, conclude the
filing procedure and publish the filing results on the CSRC website. Where the filing
documents are incomplete or do not conform to stipulated requirements, the CSRC shall
request supplementation and amendment thereto within five business days after receiving
the filing documents. The issuer shall then c omplete supplementation and amendment
within thirty business days.
Loss of Share Certificates
A shareholder may, in accordance with the public notice procedures set out in the PRC
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 such a declaration has been obtained, the shareholder may apply to the
company for the issue of a rep lacement certificate(s).
Merger and Demerger
Merger of companies may be conducted by absorption or consolidation. If companies
adopt the method of absorption, the absorbed company shall be dissolved. If companies are
incorporated in the form of consolidation, the parties to the merger shall be dissolved.
The parties to the merger shall enter into a merger agreement and prepare a balance
sheet and a list of properties. Within ten days of the date on which the resolution on merger
is made, the creditors shall be notified by the company and a public announcement shall be
in the press or on the National Enterprise Credit Information Publicity System within thirty
days. The creditors may require the company to repay its debts or provide guarantees for
covering the debts within thirty days of receip t of the notification or within forty-five days
of the date of the announcement if the creditor has not received any notification; and in case
of a merger, the credits and debts of the mergi ng parties shall be assumed by the surviving
or the new company.
Where a company merges with another company in which the former holds not less
than 90% of the shares, the acquired company is not required to obtain approval by
resolution of its shareholders’ meeting, but shall notify the other shareholders who have the
right to request the company to buy its equities or shares as a reasonable price. If the price
paid for a company’s merger dose not exceed 10% of the company’s net assets, approval by
resolution of its shareholder’s meeting may not be required unless otherwise provided by the
company’s articles of association. Where a company’s merger is exempt from approval by
resolution of the shareholders’ meeting in the previous two cases, it shall be subject to
approval by resolution of the board of directors.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 2 3–


--- page 538 ---
In case of a division, the company’s assets shall be divided and a balance sheet and an
inventory of assets shall be prepared. Within ten days of the date on which the resolution on
division is made, the creditors shall be notified by the company and a public announcement
shall be made in the press or on the National Enterprise Credit Information Publicity
System within thirty days. The liabilities of t he company which have accrued prior to the
division shall be jointly borne by the separated companies, unless otherwise stipulated in the
agreement in writing entered into by the compan y with creditors in respect of the settlement
of debts prior to division.
The PRC Securities Law, Regulations and Regulatory Regimes
The PRC has promulgated a series of regulat ions that relate to the issue and trading of
the shares and disclosure of information. In Oc tober 1992, the State Council established the
Securities Committee and the CSRC. The Securities Committee is responsible for
coordinating the drafting of securities regulations, formulating securities-related policies,
planning the development of securities markets, directing, coordinating and supervising all
securities related institutions in the PRC and administering the CSRC. The CSRC is the
regulatory arm of the Securities Committee and is responsible for the drafting of regulatory
provisions governing securities markets, supervising securities companies, regulating public
o f f e r i n g so fs e c u r i t i e sb yP R Cc o m p a n i e si nt h eP R Co ro v e r s e a s ,r e g u l a t i n gt h et r a d i n go f
securities, compiling securities-related sta tistics and undertaking relevant research and
analysis. In April 1998, the State Council con solidated the Securities Committee and the
C S R Ca n dr e f o r m e dt h eC S R C .
The PRC Securities Law is the first national securities law in China, and the regulatory
matters include the issuance and trading of securities, the acquisition of listed companies,
information disclosure, obligations and res ponsibilities of stock exchanges, securities
companies and securities regulatory au thorities, etc. The PRC Securities Law
comprehensively regulates activities in the PRC securities market.
Pursuant to the PRC Securities Law, domestic enterprises issuing securities overseas
directly or indirectly or listing and trading their securities overseas shall comply with the
relevant provisions of the State Council. At present, the issuance and trading of shares
issued overseas is mainly regulated by rules an d regulations issued by the State Council and
the CSRC.
Arbitration and Enforcement of Arbitral Awards
The PRC Arbitration Law ( 《中華人民共和國仲裁法》) was enacted by the NPC
Standing Committee on 31 August 1994, which became effective on 1 September 1995 and
was last amended on 1 September 2017. The PRC Arbitration Law provides that an
arbitration committee may, before the promulgation of arbitration regulations by the PRC
Arbitration Association, formulate interi m arbitration rules in accordance with the PRC
Arbitration Law and the PRC Civil Procedure L aw. Where the parties have agreed to settle
disputes by means of arbitration, a people’s court will refuse to handle a legal proceeding
initiated by one of the parties at such people’s court, unless the arbitration agreement is
invalid.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 2 4–


--- page 539 ---
Under the PRC Arbitration Law and the PRC Civil Procedure Law, an arbitral award
shall be final and binding on the parties invo lved in the arbitration. If any party fails to
comply with the arbitral award, the other par ty to the award may apply to a people’s court
for its enforcement.
If the respondent puts forward evidence to prove that the arbitral award is under any
of the following circumstances, the award shall not be enforced upon examination and
verification by an arbitration tribunal of the people’s court:
(i) the parties have no arbitration clause in their contract, nor have subsequently reached
a written agreement on arbitration;
(ii) the matter to be ruled does not fall within the scope of the arbitration agreement or the
arbitration institution has no right to arbitrate;
(iii) the composition of the arbitration tribun al or the arbitration procedure violates the
legal procedure;
(iv) the evidence on which the award is based is forged;
(v) the other party conceals evidence suffici ent to influence the impartial award from the
arbitration institution;
(vi) the arbitrators have committed acts of e mbezzlement, bribery, favouritism and
malpractice, or perverting the law in arbitrating the case.
If the people’s court determines that the enforcement of the award violates the public
interest, the award shall not be enforced.
Any party seeking to enforce an arbitral awar d of a foreign affairs arbitration organ of
the PRC against a party who or whose property is not located within the PRC may apply to
a foreign court with jurisdiction over the case for recognition and enforcement of the award.
Likewise, an arbitral award made by a foreign arbitration body may be recognised and
enforced by a PRC court in accordance with the principle of reciprocity or any international
treaties concluded or acceded to by the PRC.
The PRC acceded to the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards ( 《承認及執行外國仲裁裁決公約》)( t h e‘ ‘New York Convention ’’) adopted
on 10 June 1958 pursuant to a resolution of the NPC Standing Committee passed on 2
December 1986. The New York Convention pr ovides that all arbitral awards made in a
state which is a party to the New York Convention shall be recognised and enforced by
other parties thereto subject to their rights to refuse enforcement under certain
circumstances, including where the enfor cement of the arbitral award is against the
public policy of that state. At the time of the PRC’s accession to the convention, the NPC
Standing Committee declared that (i) the PRC will only apply the New York Convention to
the recognition and enforcement of arbitral awards made in the territory of another
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 2 5–


--- page 540 ---
contracting state based on the principle of reciprocity; and (ii) the New York Convention
will only apply to disputes deemed under PRC law to be arising from contractual or
non-contractual mercantile legal relations.
The Arrangements on the Mutual Enforcement of Arbitral Awards between the
Mainland and the Hong Kong Special Administrative Region ( 《關於內地與香港特別行政區
相互執行仲裁裁決的安排》) were passed at the Judicial Committee meetings of the Supreme
People’s Court on 18 June 1999, which went into effect on 1 February 2000. The
Supplementary Arrangements of Supreme People’s Court on Reciprocal Enforcement of
Arbitration Awards between the Mainland and the Hong Kong Special Administrative
Region (《關於內地與香港特別行政區相互執行仲裁裁決的補充安排》) were promulgated by
the Supreme People’s Court on 26 November 2020. Under these arrangements, if a party
fails to perform the arbitral award rendered in the Mainland or the Hong Kong, the other
party may apply for enforcement to the relevant court in the place where the respondent is
domiciled or where the property is located.
Judicial Judgement and its Enforcement
On 14 January 2019, the Judicial Committee of the Supreme People’s Court adopted
the Arrangement 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 ( 《關於內地與香港特別行政區法院相互認可和執行民商事案件判決的
安排》), which took effect on 29 January 2024 and seeks to establish a mechanism with
greater clarity and certainty for recognition and enforcement of judgements in wider range
of civil and commercial matters between Hong Kong and the mainland China. The
arrangement discontinued the requirement for a choice of court agreement for bilateral
recognition and enforcement. The arrangemen t further regulates, am ong others, the scope
and particulars of judgements, the procedures and methods of the application for
recognition or enforcement, the review of t he jurisdiction of the court that issued the
original judgement, the circumstances where t he recognition and enforcement of judgement
shall be refused, and the approaches towards remedies for the reciprocal recognition and
enforcement of judgements in civil and commercial matters between the courts in mainland
China and those in the Hong Kong. Upon implementation of this Arrangement, the
Arrangement between the Mainland and the H ong Kong Special Administrative Region on
Reciprocal Recognition and Enforcement of J udgements of Civil and Commercial Matters
under Consensual Jurisdiction ( 《關於內地與香港特別行政區法院相互認可和執行當事人協
議管轄的民商事案件判決的安排》 which was adopted by the Judicial Committee of the
Supreme People’s Court on 12 June 2006 and took effect on 1 August 2008 has been
repealed.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
–I V - 2 6–


--- page 541 ---
This Appendix is mainly providing inves tors with an overview on the Articles of
Association of our Company. The following information is only a summary, not covering
all the information that may be material to investors.
SHARES AND REGISTERED CAPITAL
The issuance of the shares of our Company shall be conducted in the principle of
openness, fairness and justness, and each sha re of the same class shall be entitled to equal
rights. For shares issued at the same time and within the same class, it shall be issued in the
same conditions and price; and any subscriber shall pay the same price for each share they
subscribe for. The domestic unlisted shares issued by our Company shall be deposited at a
domestic securities depository and settlement a gency. In accordance with applicable laws of
Hong Kong and the general practise of securities registration and depository, overseas
listed shares issued by our Company may be deposited with the trustee company affiliated
to Hong Kong Securities Clearing Company Limited or may be held by Shareholders in
their personal names.
INCREASE/DECREASE, REPURCHASE AND TRANSFER OF SHARES
Increase/Decrease of Shares
Subject to applicable laws, administrative r egulations, departmental rules, normative
documents, Listing Rules, and requirements by relevant regulatory authorities upon
respective resolution by a Shareholders’ general meeting, our Company may increase its
registered capital by any of the following means:
(1) public offering of shares;
(2) non-public offering of shares;
(3) distribution of bonus shares to existing Shareholders;
(4) converting the reserved funds into share capital;
(5) other means stipulated by applicable laws, administrative regulations,
departmental rules, normative docume nts, Listing Rules and approved by or
filed with the relevant regulatory authorities.
To reduce its registered capital, our Comp any shall proceed it in compliance with the
PRC Company Law, Listing Rules, other rele vant applicable laws , administrative
regulations, departmental rules, normativ e documents and the Articles of Association.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1–


--- page 542 ---
Repurchase of Shares
In any of the following circumstances, our Company may repurchase its issued shares:
(1) reducing the registered capital of our Company;
(2) merging with another company holding shares of our Company;
(3) using shares for stock incentive plans and employee stock plans;
(4) acquiring the shares of Shareholders who vote against any resolution adopted at
the Shareholders’ general meeting on the merger or demerger of our Company and
request our Company to acquire their shares;
(5) using shares for converting corporate bonds issued by our Company;
(6) as required for our Company to maintain corporate value and Shareholders’
interests;
(7) other circumstances approved by applic able laws, administrative regulations,
departmental rules, normative docum ents, Listing Rules and regulatory
authorities.
A resolution of a general meeting is required for repurchasing shares under
circumstances (1) or (2) above. In accordance with the provisions of the Articles of
Association or the authorisation of the Shareho lders’ meeting, a resolution of a meeting of
the Board with a quorum of more than two-thirds of Directors is required for repurchasing
shares under circumstances (3), (5) or (6) above. In compliance with Listing Rules, the
shares acquired under the above circumstance (1), shall be de-registered within 10 days from
the date of repurchase; the shares acquired under the above circumstances (2) or (4), shall
be transferred or de-registered within six mon ths; and the shares acquired under the above
circumstances (3), (5) or (6), shall be transferred or de-registered within six years, and the
shares held in total by our Company shall not exceed 10% of total shares issued by our
Company. For any repurchase in above circums tances (3), (5) or (6), centralised trading
shall be adopted publicly.
Transfer of Shares
Unless otherwise required by applicable laws, a dministrative regulations, departmental
rules, normative documents, Listing Rules a nd the Articles of Association, the fully paid
shares of our Company may be transferred freely, without any lien attached. The transfer of
overseas listed shares shall be registered with the local Hong Kong share registrar entrusted
by our Company.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2–


--- page 543 ---
The Directors, Supervisors and senior management of our Company shall report their
shareholding in our Company (including Preferred Shares (if any)) and changes thereof to
our Company, and during their tenure, the shares transferred each year shall not exceed
25% of the total number of Company shares of the same class held by them; our Company
shares held by them shall not be transferred within one year from the date when the shares
of our Company are listed and traded; within half a year from departure from our
Company, the aforesaid persons shall not transfer our Company shares held by them.
All transfers of overseas listed shares sha ll adopt the written transfer instrument in
general or common format or any other form acceptable to the Board (including the
standard transfer format or transfer form prescribed by HKEX from time to time); the
written transfer documents may be manually sign ed with signatures, or (if the transferor or
the transferee is a corporation) stamped with v alid seals. If the transferor or transferee of
the shares of our Company is a recognised clearing house or its nominee as defined by the
relevant regulations in force from time to time under the laws of Hong Kong, the written
transfer documents may be signed by hand or machine printing. All transfer documents
must be placed at the legal address of our Company or such other place as the Board may
designate from time to time. If our Company ref uses to register the transfer of shares, our
Company shall, within two months from the dat e of the formal application for transfer,
provide the transferor and transferee with a notice of refusal to register the transfer of the
shares.
SHAREHOLDERS AND GENERAL MEETING
Shareholders
Shareholders of our Company are persons who lawfully hold shares of our Company
and whose names are entered in the register of Shareholders. Shareholders enjoy rights and
assume obligations in proportion to the class and numbers of shares they hold;
Shareholders who hold the same class of shares shall enjoy equal rights and assume the
same obligations.
The Shareholders of our Company shall be entitled to the following rights:
(1) receiving dividends and other form of interest distribution in proportion to their
shareholdings;
(2) requiring, convening, chairing, attending by person or by proxy a general meeting
pursuant to the laws, and exercising the voting right at the meeting in proportion
to their shareholdings;
(3) supervising and managing, presenting suggestions on or making inquiries about
the business operation of our Company;
(4) transferring, donating or pledging the shares held by them, in accordance with the
applicable laws, administrative regulatio ns, departmental rules, Listing Rules and
the Articles of Association;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 3–


--- page 544 ---
(5) accessing to the Articles of Association , the register of Shareholders, corporate
bond stubs, minutes of Shareholders’ general meeting, resolutions of Board,
resolutions of Supervisory Committee and publicly disclosed financial data and
accounting reports; upon request of Shareholders to obtain the relevant
information or materials, Shareholder s shall in advance provide our Company
with written documents proving the class and number of shares held by them for
verification;
(6) participating in the distribution of residual assets of our Company in proportion
to their shareholdings, upon termination or liquidation of our Company;
(7) for Shareholders who vote against any resolution adopted at the Shareholders’
general meeting on the merger or demerger of our Company, requesting our
Company to acquire its shares;
(8) any other rights stipulated by applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules or the Articles of
Association.
In the event that any resolution by the general meeting or the Board meeting violates
the applicable laws or administrative regulations, Shareholders may request local people’s
court to invalidate such resolution. In the event that the convening or voting means of the
general meeting or Board meeting violates the laws, administrative regulations or the
Articles of Association, or any resolution violates the Articles of Association, Shareholders
may request local people’s court to withdraw such resolution within 60 days from the date
of resolution other than those with minor defects in the convening or voting procedures,
which do not materially affect the resolutions.
The Shareholders of our Company shall undertake the following obligations:
(1) abiding by applicable laws, administr ative regulations, departmental rules,
normative documents, Listing Rules and the Articles of Association;
(2) making payment for shares subscribed according to the quantity of shares
subscribed for and the manners of subscription;
(3) not withdrawing the shares, unless o therwise required by applicable laws,
administrative regulations, departmental rules, normative documents, Listing
Rules;
(4) not abusing Shareholder’s rights to harm the interests of our Company or other
Shareholders; not abusing the independent legal person status of our Company
and the limited liability of Shareholders t o harm the interests of our Company’s
creditors;
(5) any other obligations stipulated by app licable laws, administrative regulations,
departmental rules, normative documents, Listing Rules and the Articles of
Association.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 4–


--- page 545 ---
Any Shareholder who abuses Shareholder’s rights causing losses to our Company or
other Shareholders shall be liable for compensation pursuant to the laws. Any Shareholder
who abuses the independent legal person status of our Company and the limited liability of
Shareholders to evade debts and severely infringe upon the interests of our Company’s
creditors shall be held jointly and se verally liable for our Company’s debts.
The controlling Shareholder or actual contro ller of our Company shall not utilise its
related-party relationship against the intere sts of our Company, or else, shall compensate
our Company for any loss incurred.
General Rules for General Meetings
The Shareholders’ general meeting is the organ of authority of our Company, and shall
duly exercise following functions and powers:
(1) to determine the operational objectives and investment plans of our Company;
(2) to elect and remove any Director or Supervisor (not including employee
representative(s)), and to determine the remuneration of the relevant Directors
and Supervisors;
(3) to review and approve the reports of the Board;
(4) to review and approve the reports of the Supervisory Committee;
(5) to review and approve our Company’s annual financial budgets and final accounts
plans;
(6) to review and approve our Company’s profit distribution plans and loss recovery
plans;
(7) to resolve on our Company’s increa se/decrease of registered capital;
(8) to resolve on our Company’s issuance of bonds or any class of shares, warrants
and other similar securities as well as the listing;
(9) to resolve on our Company’s merger, division, spin-off, dissolution, liquidation or
change of its corporate form;
(10) to modify the Articles of Association;
(11) to decide on the engagement or dismissal of the appointment of the accounting
firm and the audit fee of the accounting firm or the method of determining the
audit fee;
(12) to review and approve the motions proposed by Shareholder(s) individually or
jointly holding at least 1% voting shares of our Company;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 5–


--- page 546 ---
(13) to review and approve the relevant related -party transactions, financial assistance
and guarantee matters as specifically pr ovided in the Articles of Association;
(14) to review and approve transactions be tween our Company and its affiliates that
meet the requirements for approval by the Shareholders’ meeting under Listing
Rules;
(15) to review and approve our Company’s purchase or disposals of material assets
accumulated within one year in the amount exceeding 30% of latest audited total
assets of our Company;
(16) to review and approve the change in raised proceeds;
(17) to review and approve the stock ince ntive plans and employee stock plans;
(18) to adopt resolutions on certain acquisition of our Company’s own shares by itself
due to the circumstances as specifically provided in the Articles of Association;
(19) to review and approve the plan to purchase the liability insurance for Directors
and senior management;
(20) other matters to be decided by general meeting under the applicable laws,
administrative regulations, departmental rules, normative documents, Listing
Rules and the Articles of Association.
There are two types of general meetings: annual general meeting and extraordinary
general meeting. The annual general meeting shall be convened once a year, and be held
within six months from the end of last accounting year.
The extraordinary general meeting shall be convened when necessary. The Board shall
hold extraordinary general meeting within two months from the date of occurrence of any
of the following events:
(1) the number of Directors is less than the quorum required by the PRC Company
Law, or less than two-thirds of the quorum required by the Articles of
Association;
(2) the outstanding losses of our Company accounts for one-third of our Company’s
total paid-in share capital;
(3) Shareholder(s) individually or jointly holding at least 10% shares of our Company
send(s) a written r equest for meeting;
(4) the Board deems necessary;
(5) the Supervisory Committee proposes to convene the meeting;
(6) more than two independent non-executive Directors propose to convene the
meeting;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 6–


--- page 547 ---
(7) other circumstances under the applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules, or the Articles of
Association.
Convening of General Meetings
Independent Directors (same as independent non-executive director under Listing
Rules) may request to convene an extraordinary general meeting. In accordance with
applicable laws, administrative regulations, departmental rules, normative documents,
Listing Rules and the Articles of Association, the Board shall provide written feedback on
whether to agree or disagree with the proposal to convene such extraordinary general
meeting within 10 days after receiving the proposal. In the event the Board agrees to
convene an extraordinary general meeting, the Board shall issue an extraordinary meeting
notice within five days of making its resolutions. In the event that the Board declines to
convene an extraordinary general meeting, the Board shall specify the reasons and make an
announcement.
The Supervisory Committee may request in writing to convene an extraordinary
general meeting. In accordance with applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules and the Articles of Association,
the Board shall provide written feedback on whether to agree or disagree with the proposal
to convene such extraordinary general meeting within 10 days after receiving the proposal.
In the event the Board agrees to convene an extraordinary general meeting, the Board shall
issue an extraordinary meeting notice withi n five days of making its resolutions. In the
event that the Board declines to convene an extraordinary general meeting or fails to
respond in writing within 10 days, it shall be deemed to be unable or to fail to fulfil its duty
to convene a Shareholders’ meeting and then the Supervisory Committee may convene and
preside over the meeting on its own.
Shareholder(s) individually or jointly holding 10% or more of shares may request in
writing to convene an extraordinary general meeting to the Board. In accordance with
applicable laws, administrative regulations, departmental rules, normative documents,
Listing Rules and the Articles of Association, the Board shall provide written feedback on
whether to agree or disagree with the proposal to convene such extraordinary general
meeting within 10 days after receiving the proposal. In the event the Board agrees to
convene an extraordinary general meeting, the Board shall issue an extraordinary meeting
notice within five days of making its resolutions. In the event that the Board declines to
convene an extraordinary general meeting or fails to respond in writing within 10 days,
Shareholder(s) individually or jointly holding 10% or more of shares may request in writing
to convene an extraordinary general meeting to the Supervisory Committee. In the event the
Supervisory Committee agrees to convene an extraordinary general meeting, the
Supervisory Committee shall issue an extraordinary meeting notice within five days of
making its resolutions. In the event that the Sup ervisory Committee fails to issue the notice
within the time limit, then the Shareholder(s) individually or collectively holding 10% or
more of shares for at least 90 consecutive days may convene the meeting on its/their own.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 7–


--- page 548 ---
In event of Shareholder(s) convening and holding a general meeting on its/their own
due to the failure of the Board or the Supervisory Committee to convene the meeting
according to the above requirements, the rea sonable expenses incurred for such meeting
shall be borne by our Company, and deducted from the amounts owed by our Company to
the negligent Director(s) or Supervisor(s).
Notice of General Meetings
To hold annual general meeting, the convener shall notify all Shareholders by
announcement 20 business days in advance. To hold extraordinary general meeting, the
convener shall notify all Shareholders by announcement 15 days or 10 business days
(whichever is longer) in advan ce, in the form of announcement.
The notice of general meeting shall be ma de in writing and include the following:
(1) the time, place and duration of meeting;
(2) convening method of the meeting;
(3) matters and proposals subm i t t e dt ot h em e e t i n gt or e v i e w ;
(4) if any Director, Supervisor, general manager or other senior officer is an
interested party to a matter to be discussed at the meeting, the nature and degree
of interest shall be disclosed; if the influence of the matter to be discussed on such
a Director, Supervisor, general manager or other senior officer in their capacity as
Shareholders is different from the influence on other Shareholders holding the
same categories of shares; such difference shall be explained;
(5) meeting materials necessary for Shareholder’s voting;
(6) explain in obvious words that all Shareholders have the right to attend the general
meeting of Shareholders and may appoint a proxy in writing to attend the meeting
and participate in the vote, and the Shareholder proxy need not be a Shareholder
of our Company;
(7) state the time and address of deliver y of the power of attorney for the voting
proxy;
(8) share registration date of the Shareholders entitled to attend the general meeting;
(9) the convener and chair of a meeting, the proposer of an extraordinary general
meeting and the proposer’s written proposal;
(10) name and telephone number of the permanent contact person for conference
affairs;
(11) online or other voting time and voting procedures;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 8–


--- page 549 ---
(12) the notice and supplementary notice of the general meeting shall contain
information as required by Listing Rules and the Articles of Association and
shall fully, completely and accurately disclose the specific contents of all
proposals and the specific contents of all proposals intended to enable the
Shareholders to disclose the proposed matters and all information necessary for
the Shareholders to make reasonable judgement on the proposed matters. In case
the opinions of independent Directors are necessary for matters to be discussed,
the opinions and reasons given by independent non-executive Directors shall be
disclosed at the same time when the gen eral meeting notice or supplementary
notice is issued.
Proposals at General Meetings
When our Company convenes a general meeting, the Shareholder(s) individually or
jointly holding 1% or more of shares of our Company are entitled to put forward new
proposals in writing to the Company and submit them to the convener 10 days in advance,
and the convener of our general meeting shall issue a supplemental notice of general
meeting to other Shareholders within two days after receiving such proposal.
Proxy at General Meetings
A Shareholder may appoint a proxy in writing, and the appointing Shareholder or
his/her attorney proxy shall sign a proxy form in writing; if the appointing Shareholder is a
corporate entity, such appointment shall be si gned by its duly authorised representative.
The format of any power of attorney for every Shareholder to appoint its proxy shall
provide the Shareholder with the flexibility to instruct its proxy to vote for or against, and
give directives on each of the resolutions to be decided at the meeting. Such power of
attorney shall specify that the proxy may vote at his/her own discretion in absence of
directives from the Shareholder.
If the appointing Shareholder was deceased, incapacitated, or its appointment or
authorisation was withdrawn, or relevant shares were transferred before voting, the vote
made by the proxy so appointed shall be still valid, as long as our Company did not receive
a notice in writing of such event before meeting.
Resolutions of General Meetings
There are two kinds of resolutions made a t general meeting, namely: ordinary
resolutions and special resolutions. Ordinary resolutions shall be approved by more than
half of voting rights held by the Shareholders (including proxies) attending the general
meeting. Special resolutions shall be approved by above two-thirds of the voting rights held
by Shareholders (including proxies) attending the general meeting.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 9–


--- page 550 ---
A Shareholder or proxy shall exercise its voting rights pertaining to the voting shares
held by it when voting at general meeting, and each share shall have one vote. However,
there is no voting rights attached to the shares held by our Company, and such portion of
shares shall not be included in the total number of shares with voting rights of the
Shareholders who are present at general meeting.
When the matters of related-party transacti ons are reviewed at general meeting, related
Shareholders or their close relative shall not vote, and the number of voting shares held by
them shall not be included in the total number of valid votes. The announcement on
resolution of general meeting shall fully disclose the voting results of non-related
Shareholders.
Under Listing Rules, if any Shareholder is re quired to waive its voting rights in respect
of a certain motion, or any Shareholder is restricted to vote for or against a certain motion,
the votes of such Shareholder or its proxy shall not be counted in event such requirement or
restriction is violated.
The following matters shall be approved by o rdinary resolution at general meeting:
(1) the work report of the Board or the Supervisory Committee;
(2) the profit distribution plan and plan for covering losses formulated by the Board;
(3) the election and removal of members of the Board and the Supervisory Committee
(not being employee representative(s)) and their remunerations and the method of
payment thereof;
(4) our Company’s annual financial budgets and final accounts plans;
(5) the annual reports of our Company;
(6) the engagement or dismissal of the accounting firm and the audit fee of the
accounting firm or the method of determining the audit fee;
(7) the relevant related-party transactions , financial assistance and guarantee matters
as specifically provided in the Articles of Association;
(8) related-party transact ions between our Company and its affiliates that meet the
requirements for approval by the Shareholders’ meeting under the Listing Rules;
(9) change in the use of raised proceeds;
(10) purchase plan of liability insurance for Directors and senior management;
(11) other matters to be decided by general meeting other than approved by a special
resolution under the applicable laws, adm inistrative regulations, departmental
rules, normative documents, Listing Rules and the Articles of Association.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 0–


--- page 551 ---
The following matters shall be approved by special resolution at general meeting:
(1) the increase or decrease of share capital;
(2) the issuance of any class of shares, warrants and other similar securities as well as
the listing;
(3) the division, spin-off, merger, or the change of its corporate form;
(4) the termination, dissolution or liquidation of our Company;
(5) the amendment to the Articles of Association;
(6) the purchase, disposals of material assets or provision of guarantees accumulated
within one year in the amount exceeding 30% of latest audited total assets of our
Company;
(7) the equity stock incentive plans and employee stock plans;
(8) resolutions on certain acquisition of our Company’s own shares by itself due to
the circumstances as specifically prov ided in the Articles of Association;
(9) any other matters to be passed as extraordinary resolution as required by
applicable laws, administrative regul ations, departmental rules, normative
documents, Listing Rules and the Artic les of Association as well as other
matters that are determined by the ordinary resolutions of the Shareholders’
meeting to have a significant impac t on our Company and require special
resolutions to be passed.
DIRECTORS AND THE BOARD OF DIRECTORS
Directors
The Directors of our Company shall be natural persons.
Directors shall be elected or replaced at general meeting, for a tenure of three years.
Upon the expiration of his tenure, a Director may be re-elected and serve consecutive terms.
The tenure of a Director shall be from the date of appointment to the expiry of tenure
of the current Board. If a Director’s tenure expires but an alternate Director is not elected
in time, then before the alternate Director hold ing office, the original Director shall still
perform the duties as Director, in accordance with applicable laws, administrative
regulations, departmental rules, normative documents, Listing Rules and the Articles of
Association.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 1–


--- page 552 ---
A Director may propose resignation befo re expiry of tenure, by filing a resignation
report in writing to the Board. The Board will di sclose the relevant information within two
days, Directors shall not evade their responsib ilities through resignation or other means. If
the resignation of a Director causes the number of board members to be less than the
quorum, then the original Director shall still perform the duties as Director under the
applicable laws, administrative regulations , departmental rules, normative documents and
the Articles of Association. Otherwise, a Dire ctor’s resignation shall be effective from the
time such resignation report is delivered to the Board.
Chairman
The Board shall have one Chairman and may have Deputy Chairman, who shall be
elected or removed by more than half of Directors.
The Chairman of the Board shall exercise the following powers and functions:
(1) presiding over Shareholders’ general meetings, convening and presiding over
Board meetings;
(2) supervising and inspecting the implementation of resolutions of the Board;
(3) signing the securities issued by our Company; and
(4) other duties granted by the Board.
Where the Chairman is incapable of performing or fails to perform its duties, such
duties shall be performed by the Deputy Chairman of the Board (if our Company has two or
more Deputy Chairmen, such duties shall be performed by the Deputy Chairman jointly
elected by a majority of Directors); if the Deputy Chairman of the Board is unable or fails
to perform such duties, such duties shall be performed by a Director jointly elected by a
majority of Directors.
Board
Our Company sets up the Board, composed of seven Directors. Directors of our
Company shall be divided into executive Directors and independent non-executive
Directors. The number of independent non-executive Directors shall account for at least
one-third of the total number of Direc tors and shall be no less than three.
The Board shall be responsible to the gen eral meetings and exercise the following
functions and powers:
(1) convening the general meeting and submitting work reports to the general
meetings;
(2) implementing resolutions of the general meetings;
(3) determining the operating plans and investment schemes of our Company;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 2–


--- page 553 ---
(4) formulating the annual budget plan and final accounts plan of our Company;
(5) formulating the profit distribution plan and loss makeup plan of our Company;
(6) formulating our Company’s plans for increase/decrease of the registered capital,
issuance of corporate bonds or other securities, or listing plans;
(7) contemplating the plans for major ac quisitions, share repurchase, merger,
division, dissolution or change of form of our Company;
(8) deciding, to the extent authorised by the Shareholders’ meeting, our Company’s
external investment, acquisition and sale of assets, mortgage of assets, external
guarantee, entrusted management of wealth, related-party transactions, external
donations and other matters;
(9) deciding on the setup of internal management bodies of our Company;
(10) deciding on the appointment or dismissal of our Company’s general manager,
board secretary and other senior officers and decide on their remuneration,
reward and punishment; deciding on the appointment or dismissal of the deputy
general manager, the finance officer (chief f inancial officer), the technical officer
(chief technology officer) and other senior officers of our Company and deciding
on their remuneration, reward and punishment according to the nomination by
the general manager,
(11) formulating the fundamental management systems of our Company;
(12) formulating the stock incentive plans and employee stock plans;
(13) formulating the modification plan of the Articles of Association;
(14) managing the information disclosure of our Company;
(15) proposing to the Shareholders’ general meeting the engagement or replacement of
the accounting firm which provides audit services to our Company;
(16) hearing the work report by the general manager of our Company and inspect the
work performed by the general manager;
(17) resolving on certain acquisition of o ur Company’s own shares by itself due to the
circumstances as specifically prov ided in the Articles of Association;
(18) any other functions and powers granted by the applicable laws, administrative
regulations, departmental ru les, normative documents, Listing Rules, the Articles
of Association or the general meeting.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 3–


--- page 554 ---
Unless otherwise specified in the Articles o f Association, resolution concerning any of
the above matters may be passed by the affirmative vote of a more than half of the
Directors. Upon the consent of more than half of the Board, the chairman may be
authorised to exercise certain functions and powers of the Board when it is not in session.
However, major matters of our Company shall be decided collectively by the Board. The
functions and powers that should be exercised by the Board shall not be delegated to the
chairman, the general manager or others.
The Board shall explain to general meeting about the non-standard audit opinions
issued by the CPA firm against the financial statements of our Company.
The Board may hold two kinds of meetings, namely: regular meetings and interim
meetings. The Board shall hold at least two m eetings per year, convened by the chairman.
The notice of regular meeting shall be sent in writing to entire Directors and
Supervisors at least 10 days prior to the date of regular meetings. The notice of interim
meeting shall be sent to entire Directors and Supervisors five days prior to the date of
interim meetings by fax, e-mail, or other means.
In emergency requiring the Board to hold an interim meeting as soon as possible, the
notice of meeting may be given by telephone or other oral means, provided that the
convener shall explain at the meeting.
With the consent of all Directors of our Compan y, the notification time limit specified
in the preceding paragraph may be waived.
Am e e t i n go ft h eB o a r dm a yn o tb eh e l dw i t h o u tm o r et h a nh a l fo fD i r e c t o r sb e i n g
present. To determine whether a quorum of meeting exists, any Director who has material
interest in any contract, transactio n or arrangement shall not be counted.
Every Director may cast one vote. A motion at the meeting of the Board may be passed
as resolution by a simple majority of entire Directors unless otherwise required by the
Articles of Association, and any Director mate rially interested in any relating contract,
transaction or arrangement shall abstain from voting.
Where there is an equality of votes cast both for and against a resolution, the chairman
shall have the right to cast one more vote.
Directors shall attend Board meetings in person. A Director who is unable to attend a
meeting for any reason shall appoint another Director to attend a Board meeting on its
behalf in writing, provided that the power of attorney shall contain the scope of
authorisation. The appointed Director shall exercise the rights as Director within the
scope of authorisation. The failure of a Direct or to attend a Board meeting in person or by
proxy shall be deemed as forfeiting his/her voting rights at such meeting.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 4–


--- page 555 ---
Except that the Board has the power to formulate proposal for the Company to issue
bonds, which shall be subject to further approval by a special resolution of the Shareholders
at a general meeting, the Articles of Association do not contain any special provision in
respect of the manner in which borrowing powers may be exercised by the Board.
General Manager and Other Senior Management
Our Company shall have one general manager and one deputy general manager who
shall be appointed or dismissed by the Board. Our Company’s senior management is
composed of general manager, deputy general ma nager, the finance officer (chief financial
officer), the technology officer (chief techn ology officer) and secretary to the Board.
The term of office of the general manager shall be three years and the general manager
may be reappointed.
The general manager reports to the Board, and has the duties to:
(1) chair the production, operation and management of our Company, organise the
implementation of resolutions made at Board meetings and report to the Board;
(2) organise the implementation of the annual operating plan and investing plan of
our Company;
(3) contemplate the internal management setup plan of our Company;
(4) contemplate the fundamental management system;
(5) formulate the specific rules and regulations of our Company;
(6) propose to the Board the appointment or dismissal of the deputy general manager,
the finance officer (chief financial officer) or the technology officer (chief
technology officer);
(7) appoint or dismiss a manager other than those who should be appointed or
dismissed by the Board;
(8) other duties authorised by the Articles of Association or the Board.
The general manager shall preside at Board meetings.
The senior management shall faithfully perform his/her duties and safeguard the
maximum interest of our Company and all Share holders. If the senior management fails to
faithfully perform their duties or violate their integrity obligations, causing damage to the
interest of our Company and the public Sharehol ders, they shall bear compensation liability
in accordance with the law.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 5–


--- page 556 ---
SUPERVISORS AND THE SUPERVISORY COMMITTEE
Supervisors
The Supervisory Committee shall be com posed of Supervisors who are either
Shareholder representatives or staff represent atives. The staff’s representative Supervisors
shall account for at least one third of entir e Supervisors. The staff’s representative
Supervisors shall be democratically elected at our Company’s staff’s representative meeting,
the employees’ meeting or by other means.
A Supervisor shall not be a Director or a member of senior management of our
Company.
Supervisory Committee
The Supervisory Committee is composed of t hree Supervisors, one of whom acts as the
chairman and there can be vice chairman. The election or removal of the chairman and vice
chairman is subject to the approval by at least one half of the members of the Supervisory
Committee through voting.
The Supervisory Committee has the duties to:
(1) examine and give written opinions on our Company’s regular reports prepared by
the Board;
(2) examine the finance of our Company;
(3) supervise the act of Directors and senior management during their performance of
duties and propose the dismissal of any Director or senior management who
contravene applicable laws , administrative regulatio ns, departmental rules,
normative documents, Listing Rules, the Articles of Association or the
resolutions of general meeting;
(4) require a Director or senior management to correct its act that has harmed the
interests of our Company;
(5) propose an extraordinary general meeting, and when the Board fails to perform its
duties to convene or hold the general meeting as required by the PRC Company
Law, convene and hold the general meeting;
(6) submit proposals to the general meeting;
(7) file a lawsuit against a Director or senior management in accordance with Article
189 of the PRC Company Law;
(8) investigate abnormalities identified in the operation of our Company and, where
necessary, to engage an accounting firm, a law firm or any other professional firm
to assist with its work at the expense of our Company;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 6–


--- page 557 ---
(9) other duties under the Articles of A ssociation and the general meeting.
Eligibility and Obligations of Directors, Supervisors, and Senior Management
Any of the following persons shall not act as Director, Supervisor, general manager or
other senior management of our Company:
(1) who has no or limited civil capacity;
(2) who was sentenced to any criminal penalty for corruption, bribery, embezzlement
or misappropriation of properties or destruction of the order of China socialist
market-oriented economy, or who was deprived of political rights due to crime,
and such sentence has expired for no more than five years, or who was granted
probation, if no more than two years ha ve passed since the expiration of the
probation period;
(3) who acted as director, factory manager, manager of a bankrupt or liquidated
company or corporation, and personally liable for the bankruptcy of such
company or corporation, and a three-year period has not elapsed since the
completion of bankruptcy or liquidation of such company or corporation;
(4) who acted as the legal representative of a company or corporation whose business
licence was revoked or which was ordered to close down due to a violation of law
and who is personally accountable for the revocation or closure of such company
or corporation, and a three-year period has not elapsed since the revocation of the
business licence or the order to close down of such company or corporation;
(5) who was listed as a dishonest person subject to enforcement by the people’s court
due to failure to pay off a large amount of unliquidated mature debts;
(6) who has been barred from the securities market by the CSRC for a certain period
o ft i m ea n ds u c hp e r i o dh a sn o te x p i r e dy e t ;
(7) any other circumstances stipulated by app licable laws, administrative regulations,
departmental rules, normative documents and Listing Rules.
The Directors shall comply with the applic able laws, administrative regulations,
departmental rules, normative documents, Listing Rules and the Articles of Association and
assume the duty of loyalty to our Company. Such obligations include:
(1) shall not accept any bribery or other illegal income by using his or her powers and
position;
(2) shall not seize the assets of our Company and shall not misappropriate our
Company’s funds;
(3) shall not open accounts in his/her own name or in the names of others to deposit
f u n d so ra s s e t so fo u rC o m p a n y ;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 7–


--- page 558 ---
(4) shall not lend our Company’s funds to others or pledge Company’s properties to
others in violation of the Articles of Association or without the approval of the
Shareholders’ general meeting or the Board;
(5) shall not accept commissions for transac tions between others and our Company as
personal gains;
(6) shall not take advantage of duty to seek business opportunities for themselves or
others that would have been directed to our Company, unless such act has been
reported to and approved by the Board or the Shareholders’ general meeting in
accordance with the Articles of Association or our Company is unable to take the
business opportunity in accordance wi th applicable laws, administrative
regulations, departmental rules, normative documents, Listing Rules and the
Articles of Association;
(7) shall not engage in the business similar to those of our Company for themselves or
others, unless such act has been reported to and approved by the Board or the
Shareholders’ general meeting in accordance with the Articles of Association;
(8) shall not directly or indirectly conclude any contract with our Company unless
approved by the Board or the Shareholders’ general meeting in accordance with
the Articles of Association, which shall al so apply to the conclusion of contracts
or engagement in transactions by close r elatives of the Directors or enterprises
directly or indirectly controlled by clo se relatives of the Directors as well as
persons who are otherwise related to the Directors;
(9) shall not to disclose any confidential information involving our Company without
authorisation;
(10) shall not impair the interests of our C ompany through affilia ted relationship;
(11) other loyalty obligations in accordance with applicable laws, administrative
regulations, departmental rules, normative documents, Listing Rules and the
Articles of Association.
The senior management assume the aforementioned duty of loyalty.
The Directors shall comply with the applic able laws, administrative regulations,
departmental rules, normative documents, Listing Rules and the Articles of Association and
assume the duty of diligence to our Com pany. Such obligations include:
(1) shall exercise the powers granted by our Company with carefully, faithfully, and
diligently so that the business carried out by our Company is in compliance with
applicable laws, administrative regul ations, departmental rules, normative
documents, Listing Rules and economic po licies, and such business activities
are within the scope of business licence specified in our Company’s business
licence;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 8–


--- page 559 ---
(2) shall treat all Shareholders equally;
(3) shall stay informed with the business and operation of our Company timely;
(4) shall sign written confirmation opinion with regard to regular reports of our
Company and ensure the disclosure mad e by our Company is true, accurate and
complete;
(5) shall report to the Supervisory Comm ittee truthfully and shall not hinder the
Supervisory Committee or the Supervisors from performing their duty;
(6) other diligence obligations in accordan ce with applicable laws, administrative
regulations, departmental rules, normative documents, Listing Rules and the
Articles of Association.
The senior management assume the aforement ioned obligations in items (4), (5) and
(6).
Supervisors shall abide by applicable laws, a dministrative regulations, departmental
rules, normative documents, Listing Rules and the Articles of Association, and shall owe
duties of loyalty and due diligence to our C ompany. Supervisors may not abuse their
authority by accepting bribes or other illega l income, nor may they misappropriate the
property of our Company.
FINANCIAL ACCOUNTING POLICY
Our Company develops the financial and accounting system according to applicable
laws, administrative regulations, departmen tal rules, normative documents and Listing
Rules.
The Board shall submit the financial reports prepared by our Company as required by
the applicable laws, administrative regulations, departmental rules, normative documents
of local governments and authorities as well as the Listing Rules to Shareholders at each
annual general meeting.
Our Company shall not establish other accounting books than those required by laws.
Our Company’s assets shall not be deposited into any account opened in the name of any
individual person.
The financial report shall be made available f or Shareholders’ inspection 20 days prior
to the annual Shareholders’ general meeting. Th e foregoing financial report shall include
the Board of Director’s report, the balance sheet (including various documents as required
to be attached by PRC or other applicable laws, administrative regulations, department
rules, normative documents and the Listin g Rules) and the profit and loss statement
(income statement) or income and expendit ure statement (cash flow statement) or a
financial summary report approved by the Stock Exchange (provided that there will be no
violation of applicable PRC laws, administrative regulations, departmental rules or
normative documents).
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 9–


--- page 560 ---
Our Company shall publish the financial reports at international or Hong Kong
standards twice an accounting year, that is, publish the semiannual report within two
months from the end of the first half of an accounting year, and publish the annual report
within four months from the end of said accounting year.
PROFITS DISTRIBUTION
To distribute after-tax profits of curren t year, our Company shall allocate 10% of
profits for the statutory reserves of our Company. If the cumulative amount of statutory
reserves exceeds 50% of the registered capit al of our Company, no further allocation is
required. If the statutory reserves are insufficient to make up previous losses, then our
Company shall firstly make up previous losses w ith current profits, before any allocation is
made to the statutory reserves in acco rdance with the preceding paragraph.
After foregoing provision for statutory reserves, our Company may also draw
discretionary reserves from after-tax profits, s ubject to the resolution of the Shareholder’s
general meeting.
The remaining after-tax profits after loss m akeup and provisions for reserves shall be
distributed to Shareholders in proportion to their shareholding percentages unless
otherwise provided in the Articles of Association.
If the Shareholder’s general meeting breaches the foregoing provisions and distributes
profits to Shareholders before loss makeup and the statutory reserves, then Shareholders
shall refund the distributed profits to our Company in violation of the foregoing provisions,
and where any losses are incurred to our Compan y, Shareholders and each liable Director,
supervisor and senior management shall be liable for compensation for such losses.
The shares held by our Company per se shall not participate in the profit distribution.
The reserves of our Company are used to make up losses, expand business, or increase
the registered capital of our Co mpany. Where any losses need to be covered with reserves of
our Company, discretionary reserves and statu tory reserves shall first be used and if still
insufficient, capital reserves can be used in accordance with applicable provisions.
When the statutory reserves are reversed int o increasing capital, the remaining amount
of said reserves shall not be less than 25% of the registered capital of our Company before
such reversal.
The amounts paid by Shareholders for shares before calls may incur interest, but
Shareholders may not receive dividends upon the amounts prepaid for shares.
Our Company shall appoint a collection agent for the holders of overseas listed shares,
who shall receive the dividends and other pa yables of our Company in respect of overseas
listed shares, on behalf of said Shareholders, and keep such amounts on their behalf, for
future payment to them.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2 0–


--- page 561 ---
The collection agent appointed by our Company shall meet the requirements of laws of
Hong Kong and the relevant regulations of HKEX.
The collection agent appointed by our Company for the holders of overseas shares
listed in Hong Kong Stock Exchange shall be a trust company registered under the Trustee
Ordinance of Hong Kong.
Subject to the relevant laws and Listing Rules, our Company may forfeit any dividend
unclaimed, provided that such power of forfeiture shall not be exercised before expiration
of its applicable limitation period.
Our Company also has the power to terminate the delivery of a dividend warrant by
post to an offshore listed Shareholder; if the cash on such dividend slip is not withdrawn
consecutively two times or more, our Company may exercise such power of termination.
However, our Company may also exercise t his power if the dividend warrant has been
returned by undeliverable means for which i t has first been delivered to the addressee.
In connection with the issue of warrants to bearer holders in the exercise of this power,
no new warrants shall be issued in lieu of lost warrants unless our Company is satisfied
beyond reasonable doubt that the original warrants held thereby have been destroyed. Our
Company shall have the power to sell the shares of offshore listed Shareholders who have
been unable to contact in such manner as the Board may think fit, provided, however, that:
(1) dividends are distributed onto such shares at least three times within 12 years, but
such shares are unclaimed in such period; and
(2) upon expiration of the 12-year period, our Company shall publish a public
announcement on one or more newspapers in the place of listing, specifying the
intention to sell such shares, and shall notify Hong Kong Stock Exchange.
ENGAGEMENT OF ACCOUNTING FIRM
Our Company shall engage an independent accounting firm in compliance with
relevant laws and regulations, to conduct accounting statement auditing, net asset
verification and other related consulting services.
The accounting firm engaged by our Compan y is entitled to following rights:
(1) to access the books of accounts, records, or vouchers of our Company at any time,
and require the Directors, general manager, or other senior management of our
Company to provide related information and explanations;
(2) to require our Company to take all reasonable measures to obtain from its
subsidiaries all information and notes required for said accounting firm to
perform its duties;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2 1–


--- page 562 ---
(3) to attend general meeting, receive the notice of meeting accessible to any
Shareholder, or other info rmation related to the meeting, and make a speech at
any general meeting in respect of any matter involving its capacity as the
accounting firm of our Company.
If any position of the accounting firm is vacant, the Board may appoint an accounting
firm to fill up such vacancy before the convening of the general meeting. Any other
accounting firm which has been engaged by our Company may continue to act during the
period when such a vacancy exists.
The general meeting may, by means of an ordinary resolution, dismiss such accounting
firm prior to the expiration of its term of office , notwithstanding the terms in the contract
between the accounting firm and our Company, but without prejudice to such accounting
firm’s right, if any, to claim damages from our Company in respect of such dismissal.
The remuneration of the accounting firm or the remuneration calculation method shall
be decided by the general meeting.
The engagement of an accounting firm is deci ded by the Shareholders’ general meeting.
The Board shall not engage an accounting firm prior to the decision by the Shareholders’
general meeting.
Our Company shall send a 15-day prior notice to the accounting firm, in order to
dismiss or not to reappoint the accounting firm, and the said accounting firm is entitled to
give opinions to the Shareholders’ general mee ting. The accounting firm, in order to resign,
shall make representations whether our Company has any improper affairs to the
Shareholders’ general meeting.
MERGER AND DIVISION OF OUR COMPANY
The merger of our Company may take two forms: merger by absorption or merger by
new establishment.
In a merger of our Company, all parties to a merger shall sign the merger agreement
and shall prepare their respective balance sheets and inventory lists of assets. Our Company
shall notify its creditors within 10 days from the date of passing the merger resolution and
to make announcement in newspaper or on the National Enterprise Credit Information
Publicity System within 30 days. Upon the merger, the creditors’ rights and the
indebtedness of each merging party shall be assumed by the surviving entity or the newly
established company resulting from the merger.
W h e r eo u rC o m p a n yi st ob ed i v i d e d ,i t sa s s ets shall be divided accordingly. In the
event of the division of our Company, the parties to such division shall prepare a balance
sheet and a list of assets. Our Company shall notify its creditors within 10 days from the
date of the resolution on such division and shall make a public announcement through
newspapers or the National Enterprise Credit I nformation Publicity System within 30 days
from the date of the resolution on such division. The post-division Company shall be jointly
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2 2–


--- page 563 ---
and severally liable for the pre-division debts of our Company, unless provided otherwise in
a written agreement pertaining to the payment of debts between our Company and its
creditors prior to the division.
Where our Company undergoes a merger or division, changes in the particulars of the
Company shall be registered with our company registration authorities in accordance with
the laws. Where our Company is dissolved, c ancellation of its registration shall be
conducted in accordance with the laws. Where a new company is established, it shall be
registered in accordance with the laws.
DISSOLUTION AND LIQUIDATION OF OUR COMPANY
Our Company shall be dissolved and liquidated upon the occurrence of any of the
following events:
(1) expiry of the valid term of the business or the occurrence of other events of
dissolution as stated in the Articles of Association;
(2) a resolution for dissolution is passe d by a Shareholders’ general meeting;
(3) dissolution is necessary due to a merger or division of our Company;
(4) our Company is revoked of business licence, ordered to close or cancelled
according to law;
(5) serious difficulties arise in the opera tion and management of our Company and its
continued existence would cause material loss to the interests of the Shareholders
and such difficulties cannot be resolved through other means, in which case
Shareholders holding at least 10% of all Shareholders’ voting rights may petition
a people’s court to dissolve our Company.
On the occurrence of the abovementioned events, our Company shall make an
announcement on the National Enterprise Cred it Information Publicity System within 10
days.
Where our Company is dissolved in accordance with the provisions of items (1), (2), (4)
and (5) above, the liquidation procedures shall be conducted and Directors shall be our
Company’s liquidation obligor and a liquidation committee shall be formed within 15 days
a f t e rt h eo c c u r r e n c eo ft h ee v e n to fd i s s o l u t ion to deal with matters of the liquidation. The
members of the liquidation committee shall be Directors or other persons appointed by a
Shareholders’ general meeting. If a liquidation committee is not established in time or the
liquidation fails to effect after the establishm ent of a liquidation committee, the interested
party may apply to the people’s court to establish a liquidation committee by their
appointment to proceed with the liquidation.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2 3–


--- page 564 ---
The liquidation committee shall exercise the following functions and powers during the
period of liquidation:
(1) to dispose of the property of our Company, and to prepare a balance sheet and a
list of properties;
(2) to inform creditors by notice and public announcement;
(3) to dispose of unfinished business of our Company relating to the liquidation;
(4) to pay up all outstanding taxes and tax arising during the liquidation process;
(5) to clear up claims and debts;
(6) to distribute the residual properties of our Company after the full settlement of
debts;
(7) to represent our Company in civil litigations.
The liquidation committee shall notify the creditors within 10 days after its
establishment, and publish announcemen ts in the newspaper(s) or on the National
Enterprise Credit Information Publicity Sys tem within 60 days. Creditors shall, within 30
days from the date of receiving the notice; or for creditors who do not receive the notice,
within 45 days from the date of the public announcement, declare their claims to the
liquidation committee.
The creditor shall provide a description and supporting evidence of the matters relating
to their claims. The liquidation committe e shall register the creditors’ claims.
The liquidation committee shall not make any debt settlement during the period of
declaration of claims.
A liquidation plan shall be formulated by the liquidation committee after the
stocktaking of our Company’s assets has been carried out and the balance sheet and a
detailed inventory of assets have been formulated, and shall be submitted to the
Shareholders’ general meeting or People’s Court for confirmation.
The assets of our Company shall be applied for liquidation in the following order:
payment of liquidation expenses, staff wage s, social insurance expenses and statutory
compensation, payment of outstanding taxes, and payment of our Company’s debts. The
residual assets of our Company after settlemen t of all liabilities in accordance with the
provisions of the preceding article shall be distributed to the Shareholders of our Company
according to the class and proportion of their shareholdings.
During the liquidation period, our Company shall not commence any new business
activities. Before our Company’s debts have been fully repaid in accordance with the
provisions of the preceding paragraph, no assets of our Company shall be distributed to its
Shareholders.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2 4–


--- page 565 ---
Where our Company is liquidated due to its d issolution and the liquidation committee,
having examined our Company’s assets and having prepared a balance sheet and an
inventory of assets, discovers that our Company’s assets are insufficient to pay its debts in
full, it shall immediately apply to the People ’s Court for a declaration of insolvency. Once
the People’s Court has declared our Company insolvent, the liquidation committee shall
turn over any matters regarding the liquidation to the People’s Court.
Following the completion of liquidation, the liquidation committee shall formulate a
report on liquidation, which shall be submitted to the Shareholders’ general meeting or the
People’s Court for confirmation. The liquidation committee shall also submit the aforesaid
documents to our Company registration authority and apply for cancellation of registration
of our Company, and publish an announcement relating to the termination of our
Company.
AMENDMENT TO THE ARTICLES OF ASSOCIATION
Under one of the following circumstances, our Company shall amend the Articles of
Association:
(1) when the Articles of Association contradicts the newly implemented amendments
of PRC Company Law or the relevant applicab le laws, administrative regulations,
departmental rules, normative documents and Listing Rules;
(2) due to any change, when the information of our Company is inconsistent with the
matters set forth in the Articles of Association;
(3) when the Shareholders’ general meeting has made a resolution to amend the
Articles of Association.
In the event that the amendment to the Articles of Association adopted by the
Shareholders’ general meeting needs to be approved by the competent authority, our
Company shall seek approval from releva nt authority and if it involves company
registration matters, change registration sh all be handled in accordance with the law. The
Board shall follow such resolution by the Shareholders’ general meeting and the approval
opinions of relevant authority when amending the Articles of Association.
In the event that an amendment to the Articl es of Association qualifies as required
disclosure under applicable laws , administrative regulations, departmental rules, normative
documents and Listing Rules, such amendment should be publicly announced.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2 5–


--- page 566 ---
A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation of Our Company
Our Company was established in the PRC as a limited liability company on 16 March
2017. On 14 March 2023, our Company was converted to a joint stock company with
limited liability under the PRC Company Law.
We have established a principal place of business in Hong Kong at 5/F, Manulife
Place, 348 Kwun Tong Road, Kowloon, Hong Kong and have been registered with the
Registrar of Companies in Hong Kong as a non-Hong Kong company under Part 16 of the
Companies Ordinance on 19 May 2023. Chan Sau Ling has been appointed as the
authorised representative of our Company for the acceptance of service of process and
notices in Hong Kong. Her address for acceptance of service of process is 5/F, Manulife
Place, 348 Kwun Tong Road, Kowloon, Hong Kong.
As our Company was incorporated in the PRC, our corporate structure and Articles of
Association are subject to the relevant PRC Law. A summary of the relevant PRC Law and
of the Articles of Association is set out in Appendix IV and Appendix V, respectively.
2. Changes in the Share Capital of Our Company
As at the date of the establishment of our Company, our registered capital was
RMB50,000, which was fully paid on 25 April 2017. On 14 March 2023, our Company was
converted to a joint stock company with lim ited liability under the PRC Company Law.
Upon completion of such conversion, the share capital of our Company was
RMB105,895,600 divided into 105,895,600 Shares with a nominal value of RMB1.0 each.
Assuming the Over-allotment Option is not exercised, upon completion of the Global
Offering, our issued share capital will increa se to RMB141,195,600, made up of 105,895,600
Domestic Shares and 35,300,000 H Shares fully paid up or credited as fully paid up,
representing 75.00% and 25.00% of our registered share capital, respectively. For more
details, please refer to the section headed ‘‘History and Development’’ in this prospectus.
Save as disclosed above, there has been no alteration in the share capital of our
Company within two years immediately preceding the date of this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1–


--- page 567 ---
3. Changes in the Share Capital of Our Subsidiaries
Our subsidiaries are set out in the Accountants’ Report, the text of which is set out in
Appendix I to this prospectus. Save for the subsidiaries mentioned in the Accountants’
Report in Appendix I to this prospectus and the section headed ‘‘History and Development
— Our Group Companies — Our Subsidiaries’’ in this prospectus, our Company has no
other subsidiaries.
S a v ea sd i s c l o s e da b o v ea n di nt h es e c t i o nh e a d e d‘ ‘ H i s t o r ya n dD e v e l o p m e n t—O u r
Group Companies — Our Subsidiaries’’ in this prospectus, there are no other alteration in
registered capital of our subsidiaries within the two years immediately preceding the date of
this prospectus.
4. Resolutions Passed at our Company’s Extraordinary General Meeting on 18 May 2023
At the extraordinary general meeting held o n 18 May 2023, the following resolutions,
among other things, were duly passed:
(i) the issue by our Company of H Shares with a nominal value of RMB1.0 each and such
H Shares be listed on the Stock Exchange;
(ii) the number of H shares to be issued shall be up to 35,300,000 H Shares, and the grant
of the Over-allotment Option in respect of no more than 15% of the number of H
Shares issued pursuant to the Global Offering;
(iii) authorisation of the Boar d or its authorised individual to handle all matters relating
to, among other things, the Global Offering, the issue and listing of H Shares on the
Stock Exchange; and
(iv) subject to the completion of the Global Offering, the conditional adoption of the
revised Articles of Association, which shall become effective on the Listing Date.
5. Corporate reorganisation
Our Company has not gone through any corporate reorganisation for the purpose of
the Listing. For more details on the history and development of our Company, please refer
to the section headed ‘‘History and Development’’ in this prospectus.
6. Restrictions on Share Repurchases
For more details, please refer to the sections headed ‘‘Appendix IV — Summary of
Principal Laws and Regulations’’ and ‘‘Appendix V — Summary of Articles of Association’’
in this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2–


--- page 568 ---
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of Material Contracts
The following contracts (not being contracts entered into in the ordinary course of
business) were entered into by our Company o r its subsidiaries within the two years
preceding the date of this prospectus and are or may be material:
(a) the supplemental agreement (II) to the capital increase agreement ( 增資協議之補充協
議（二）) dated 17 March 2023 entered into among our Company, Qingdao Haiyinghui
Management Consulting Co., Ltd. ( 青島海盈匯管理諮詢有限公司) and Shanghai
Zhaoqi Management Consulting Partnership (Limited Partnership) ( 上海曌奇管理諮
詢合夥企業（有限合夥）), pursuant to which certain special shareholder rights
arrangement among the relevant parties th ereto were agreed to be terminated among
the parties;
(b) the supplemental agreement to the capital increase agreement ( 增資協議之補充協議)
dated 17 March 2023 entered into among our Company, Qingdao Haiyinghui
Management Consulting Co., Ltd. ( 青島海盈匯管理諮詢有限公司), Shanghai Zhaoqi
Management Consulting Partnership (Limited Partnership) ( 上海曌奇管理諮詢合夥企
業（有限合夥）), Qingdao Haichuanghui Ronghai Venture Capital Center (Limited
Partnership) ( 青島海創匯融海創業投資中心（有限合夥）) and Qingdao Haizhongjie
Management Consulting Enterprise (Limited Partnership) ( 青島海眾捷管理諮詢企業
（有限合夥）), pursuant to which certain shareholder rights arrangements among the
relevant parties thereto were agreed to be terminated among the parties;
(c) the supplemental agreement (II) to the capital increase agreement ( 增資協議之補充協
議（二）) dated 17 March 2023 entered into among our Company, Qingdao Haiyinghui
Management Consulting Co., Ltd. ( 青島海盈匯管理諮詢有限公司), Shanghai Zhaoqi
Management Consulting Partnership (Limited Partnership) ( 上海曌奇管理諮詢合夥企
業（有限合夥）), Qingdao Haichuanghui Ronghai Venture Capital Center (Limited
Partnership) ( 青島海創匯融海創業投資中心（有限合夥）) and Qingdao Haizhongjie
Management Consulting Enterprise (Limited Partnership) ( 青島海眾捷管理諮詢企業
（有限合夥）), pursuant to which certain shareholder rights arrangements among the
relevant parties thereto were agreed to be terminated among the parties;
(d) the supplemental agreement (II) to the capital increase agreement ( 增資協議之補充協
議（二）) dated 17 March 2023 entered into among our Company, Qingdao Haiyinghui
Management Consulting Co., Ltd. ( 青島海盈匯管理諮詢有限公司), Shanghai Zhaoqi
Management Consulting Partnership (Limited Partnership) ( 上海曌奇管理諮詢合夥企
業（有限合夥）), Qingdao Haichuanghui Ronghai Venture Capital Center (Limited
Partnership) ( 青島海創匯融海創業投資中心（有限合夥）), Qingdao Haizhongjie
Management Consulting Enterprise (Limited Partnership) ( 青島海眾捷管理諮詢企業
（有限合夥）) and Qingdao Haixinsheng Management Consulting Enterprise (Limited
Partnership) ( 青島海欣盛管理諮詢企業（有限合夥）), pursuant to which certain
shareholder rights arrangements among the relevant parties thereto were agreed to
be terminated among the parties;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 3–


--- page 569 ---
(e) the supplemental agreement to the capital increase agreement ( 增資協議之補充協議)
dated 17 March 2023 entered into among our Company, Qingdao Haiyinghui
Management Consulting Co., Ltd. ( 青島海盈匯管理諮詢有限公司), Shanghai Zhaoqi
Management Consulting Partnership (Limited Partnership) ( 上海曌奇管理諮詢合夥企
業（有限合夥）), Qingdao Haichuanghui Ronghai Venture Capital Center (Limited
Partnership) ( 青島海創匯融海創業投資中心（有限合夥）), Qingdao Haizhongjie
Management Consulting Enterprise (Limited Partnership) ( 青島海眾捷管理諮詢企業
（有限合夥）), Qingdao Haixinsheng Management Consulting Enterprise (Limited
Partnership) ( 青島海欣盛管理諮詢企業（有限合夥）) and Qingdao Haichuangying
Equity Investment Partnership (Limited Partnership) ( 青島海創贏股權投資合夥企業
（有限合夥）), pursuant to which certain shareholder rights arrangements among the
relevant parties thereto were agreed to be terminated among the parties;
(f) a cornerstone investment agreement ( 基石投資協議) dated 25 July 2024 entered into
among our Company, Hong Tai International III LPF ( 洪泰國際三號有限合夥基金),
CITIC Securities (Hong Kong) Limited, Ping An of China Capital (Hong Kong)
Company Limited, China PA Securities (Hong Kong) Company Limited, CLSA
Limited and Hong Tai Securities Limited ( 洪泰證券有限公司), pursuant to which Hong
Tai International III LPF ( 洪泰國際三號有限合夥基金) agreed to subscribe at the
Offer Price for such number of Offer Shares (rounded down to the nearest whole board
l o to f5 0 0HS h a r e s )t h a tm a yb ep u r c h a s e df o ra na m o u n to fH K $ 3 6 , 2 3 4 , 0 0 0 ;
(g) a cornerstone investment agreement ( 基石投資協議) dated 25 July 2024 entered into
among our Company, The Reynold Lemkins Group (Asia) Limited, CITIC Securities
(Hong Kong) Limited, Ping An of China Capital (Hong Kong) Company Limited,
C h i n aP AS e c u r i t i e s( H o n gK o n g )C o m p a n yLimited and CLSA Limited, pursuant to
which The Reynold Lemkins Group (Asia) Limited agreed to subscribe at the Offer
Price for such number of Offer Shares (rounded down to the nearest whole board lot of
500 H Shares) that may be purchased for an amount of HK$10,000,000; and
(h) the Hong Kong Underwriting Agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 4–


--- page 570 ---
2. Our Material Intellectual Property Rights
As at the Latest Practicable Date, we have registered the registration of the following
intellectual property rights which are material in relation to our business.
(a) Trademarks
As at the Latest Practicable Date, we have registered the following trademarks which
are material to our business:
No. Trademark Class
Registered
Owner
Place of
Registration
Registration
Number Expiry Date
1.
 42 Our Company PRC 61113494 13 January
2033
2.
 36 Our Company PRC 61121495 13 January
2033
3.
 35 Our Company PRC 61129395 13 August
2032
4.
 36 Our Company PRC 61105768 6 June
2032
5.
 36 Our Company PRC 59065303 6 March
2032
6.
 36 Our Company PRC 59042478 13 March
2032
7.
 36 Our Company PRC 59043941 20 May
2032
8.
 38 Our Company PRC 59059174 13 March
2032
9.
 9 Our Company PRC 59065689 13 March
2032
10.
 41 Our Company PRC 59050590 13 March
2032
11.
 9 Our Company PRC 43694012 27 December
2030
12.
 9 Our Company PRC 43699255 13 January
2031
13.
 42 Our Company PRC 26720895 27 November
2028
14.
 36 Our Company PRC 26701637 13 October
2028
15.
 36 Our Company PRC 26697441 13 September
2028
16.
 42 Our Company PRC 26701978 13 October
2028
17.
 35 Zhongmiao
Caizhi
PRC 50836512 6 July
2031
18.
 45 Zhongmiao
Caizhi
PRC 50820686 6 September
2031
19.
 45 Zhongmiao
Caizhi
PRC 50831398 6 July
2031
20.
 42 Zhongmiao
Caizhi
PRC 50840518 6 July
2031
21.
 36 and 42 Our Company Hong Kong 306172542 19 February
2033
22. ZHONG MIAO
CHUANG KE
36 and 42 Our Company Hong Kong 306172533 19 February
2033
23. 眾淼創科
眾淼創科
36 and 42 Our Company Hong Kong 306172489 19 February
2033
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 5–


--- page 571 ---
(b) Patents
As at the Latest Practicable Date, we have r egistered the following patents which are
material in relation to our business:
No. Patent Name
Registered
Owner Patent Type
Place of
Registration Registration Number
Registration
Date
1. An adaptive-evolutionary-algorithm-based
approach to policy digitisation ( 基於自適應
進化算法的保單數字化方法)
Our Company Invention PRC ZL202110586429.3 5 April 2022
2. A size compression method for insurance
policy identification models ( 一種保單識別
模型尺寸壓縮方法)
Our Company Invention PRC ZL202110795950.8 10 November
2023
3. A SaaS-based insurance automatic question
and answer method and system ( 一種基於
SaaS 的保險自動問答方法及系統)
Our Company Invention PRC ZL202110997831.0 8 March 2024
(c) Copyrights
As at the Latest Practicable Date, we have registered the following copyrights which
are material in relation to our business:
No. Copyright Owner
Registration
Number Registration Date
Place of
Registration
1. Insurance Coverage Liability
Analysis System ( 保障責任分
析系統)
Our Company 2021SR1972117 2 December 2021 PRC
2. ORC Scan King Pro Software
(ORC 掃描王Pro軟件)
Our Company 2021SR1919677 26 November
2021
PRC
3. Automatic Identification
Platform for Car Insurance
Policies ( 車險保單自動識別平
台)
Our Company 2021SR1882741 24 November
2021
PRC
4. AI Insurance Rate Schedule
Automatic Conversion
System (AI 費率表自動轉換系
統)
Our Company 2021SR1861687 24 November
2021
PRC
5. Automatic Renewal Reminder
System for Insurance Policies
(保單續保續費自動提醒系統)
Our Company 2021SR1861878 24 November
2021
PRC
6. Insurance Product Clause AI
Analysis System ( 保險產品條
款AI解析系統)
Our Company 2021SR1574204 27 October 2021 PRC
7. Automatic Identification
Platform for Life Insurance
Policies ( 人身險保單自
動識別
平台)
Our Company 2021SR1302511 1 September 2021 PRC
8. Manual Analysis System for
Insurance Product Coverage
(產品保障責任人工解析系統)
Our Company 2021SR1302432 1 September 2021 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 6–


--- page 572 ---
No. Copyright Owner
Registration
Number Registration Date
Place of
Registration
9. Traditional Insurance Policy
Assurance System ( 傳統保單
保全系統)
Our Company 2021SR1298596 1 September 2021 PRC
10. Insurance Zhanggui Question &
Answer Platform ( 保險掌櫃問
答平台)
Our Company 2021SR1302510 1 September 2021 PRC
11. Zhanggui Community Platform
(掌櫃社區平台)
Our Company 2020SR1069180 9 September 2020 PRC
12. Product Platform for Insurance
E-commerce Card Type ( 保險
電商卡單式產品平台)
Our Company 2020SR1038985 3 September 2020 PRC
13. Zhanggui Academy Platform
(掌櫃學堂平台)
Our Company 2020SR1008993 31 August 2020 PRC
14. Quanzhanggui Visitor Pooling
System ( 全掌櫃訪客匯集系統)
Our Company 2020SR0974378 24 August 2020 PRC
15. Insurance Plan Platform ( 保險
計劃書平台)
Our Company 2020SR0944214 18 August 2020 PRC
16. Quanzhanggui Intelligent
Business Management
System ( 全掌櫃智能業務管理
系統)
Our Company 2019SR0930673 6 September 2019 PRC
17. Quanzhanggui Smart
Configuration Activity
Programme System ( 全掌櫃智
能配置活動方案系統)
Our Company 2019SR0929407 6 September 2019 PRC
18. Quanzhanggui Intelligent
Customer Management
System ( 全掌櫃智能客戶管理
系統)
Our Company 2019SR0882218 26 August 2019 PRC
19. Quanzhanggui Intelligent
Organisation Management
System ( 全掌櫃智能組織架構
管理系統)
Our Company 2019SR0632473 19 June 2019 PRC
20. Quanzhanggui Smart Eco-chain
Management System ( 全掌櫃
智能生態鏈管理系統)
Our Company 2019SR0608921 13 June 2019 PRC
21. Quanzhanggui Intelligent
Financial Management
System ( 全掌櫃智能財務管理
系統)
Our Company 2019SR0608963 13 June 2019 PRC
22. Quanzhanggui Intelligent
Marketing System ( 全掌櫃智
能營銷系統)
Our Company 2019SR0192238 27 February 2019 PRC
23. Quanzhanggui Performance
Enquiry System ( 全掌櫃業績
查詢系統)
Our Company 2019SR0192241 27 February 2019 PRC
24. Quanzhanggui Intelligent Car
Service System ( 全掌櫃智能汽
車服務系統)
Our Company 2019SR0192335 27 February 2019 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 7–


--- page 573 ---
No. Copyright Owner
Registration
Number Registration Date
Place of
Registration
25. Quanzhanggui Intelligent Car
Insurance System ( 全掌櫃智
能車險投保系統)
Our Company 2019SR0192331 27 February 2019 PRC
26. Quanzhanggui Free Insurance
Collection System ( 全掌櫃贈
險領取系統)
Our Company 2019SR0186399 26 February 2019 PRC
27. Quanzhanggui Order Enquiry
System ( 全掌櫃訂單查詢系統)
Our Company 2019SR0186476 26 February 2019 PRC
28. Quanzhanggui Insurance
Function System ( 全掌櫃保險
功能系統)
Our Company 2019SR0186190 26 February 2019 PRC
29. Quanzhanggui Intelligent
Recommendation System ( 全
掌櫃智能推薦系統)
Our Company 2019SR0186396 26 February 2019 PRC
30. Quanzhanggui Intelligent Social
System ( 全掌櫃智能社交系統)
Our Company 2019SR0179934 25 February 2019 PRC
31. Quanzhanggui Intelligent
Insurance Testing System
(全掌櫃智能保險測試系統)
Our Company 2019SR0179134 25 February 2019 PRC
32. Quanzhanggui Technology
Insurance Billing Platform
Software ( 全掌櫃科技保險出
單平台軟件)
Our Company 2018SR535735 10 July 2018 PRC
33. Inkjet Coding Detection System
Software V1.0 ( 噴碼檢測系統
軟件V1.0)
Our Company 2023SR0592540 7 June 2023 PRC
34. Industrial Solder Joint
Detection and Identification
System V1.0 ( 工業焊點檢測識
別系統V1.0)
Our Company 2023SR0592535 7 June 2023 PRC
35. Entry Certificate Identification
and Verification System V1.0
(入職證件識別核驗系統V1.0)
Our Company 2023SR0573506 30 May 2023 PRC
36. Building Monitoring Detection
and Identification System
V1.0 ( 大樓監控檢測識別系統
V1.0)
Our Company 2023SR0573505 30 May 2023 PRC
37. Suit Customisation Human
Body Key Point Detection
System V1.0 ( 西裝定製人體關
鍵點檢測系統V1.0)
Our Company 2023SR0573507 30 May 2023 PRC
38. Commercial Invoice
Identification System
Software V1.0 ( 商票識別系統
軟件V1.0)
Our Company 2023SR0995390 1 September 2023 PRC
39. Banknote Identification System
Software V1.0 ( 銀票識別系統
軟件V1.0)
Our Company 2023SR0573508 30 May 2023 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 8–


--- page 574 ---
No. Copyright Owner
Registration
Number Registration Date
Place of
Registration
40. Group Insurance Online
Insurance Approval System
V1.0 ( 團體險在線投保批單系
統V1.0)
Our Company 2023SR0592536 7 June 2023 PRC
41. Quantitative Trading System
Software V1.0 ( 量化交易系統
軟件V1.0)
Our Company 2023SR0592534 7 June 2023 PRC
42. Intelligent Outbound Call
System V1.0 ( 智能外呼系統
V1.0)
Our Company 2023SR0573509 30 May 2023 PRC
43. Scan King Pro Tool System
(掃描王Pro工具系統)
Haier
Insurance
Agency
2021SR2029169 9 December 2021 PRC
44. Online Event Operation System
(線上活動運營系統)
Haier
Insurance
Agency
2019SR1128887 8 November 2019 PRC
45. Quanzhanggui Exhibition
System ( 全掌櫃展業系統)
Haier
Insurance
Agency
2019SR1115159 4 November 2019 PRC
46. Quanzhanggui Staff
Management System ( 全掌櫃
人員管理系統)
Haier
Insurance
Agency
2019SR1058951 18 October 2019 PRC
47. Quanzhanggui Cockpit
Management System (
全掌櫃
駕駛艙管理系統)
Haier
Insurance
Agency
2019SR1057518 18 October 2019 PRC
48. Quanzhanggui Policy
Management System ( 全掌櫃
保單管理系統)
Haier
Insurance
Agency
2019SR1057779 18 October 2019 PRC
49. Quanzhanggui Claims
Management System ( 全掌櫃
理賠管理系統)
Haier
Insurance
Agency
2019SR1058943 18 October 2019 PRC
(d) Domain Names
As at the Latest Practicable Date, we hav e registered the following domain names
which are material in relation to our business:
No. Domain name Registrant Registration Date Expiry Date
1. zonemio.cn Our Company 15 December 2022 15 December 2025
2. zonemio.com Our Company 15 December 2022 15 December 2025
3. zonemio.net Our Company 15 December 2022 15 December 2025
4. haierbx.net Haier Insurance Agency 5 August 2017 5 August 2025
5. qzg001.com Haier Insurance Agency 18 April 2017 18 April 2025
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 9–


--- page 575 ---
C. FURTHER INFORMATION ABOUT OUR DIRECTORS, SUPERVISORS AND
SUBSTANTIAL SHAREHOLDERS
1. Disclosure of Interests
(a) Interests of our Directors, Supervisors and Chief Executive of Our Company
Immediately following completion of the Global Offering (assuming the
Over-allotment Option is not exercised), t he interests and/or short positions (as
applicable) of our Directors, Supervisors and chief executive of our Company in the
Shares, underlying Shares and debentures of our Company and any interests and/or short
positions (as applicable) in shares, underlying Shares or debentures of any of our
Company’s associated corporations (within the meaning of Part XV of the SFO) which (i)
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/or short positions (as applicable)
which they are taken or deemed to have under such provisions of the SFO), (ii) will be
required, pursuant to Section 352 of the SFO, to be entered in the register referred to
therein or (iii) will be required, pursuant to the Model Code for Securities Transactions by
Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules, to be notified to
our Company and the Stock Exchange, in each case once the H Shares are listed on the
Stock Exchange, will be as follows:
(i) Interest in our Company
Immediately following completion of the
Global Offering
(without taking into account any Shares
which may be issued pursuant to the exercise
of the Over-allotment Option)
Name of Director, Supervisor or
Chief Executive Nature of Interest (1)
Number
of Shares
Approximate
Percentage of
Shareholding
Interest (2)
Mr. Lu (3) Interest in controlled
corporation
27,501,600 19.48%
Mr. Zhang (4) Interest in controlled
corporation and interest of
spouse
(4)
24,000,000 17.00%
Notes:
1. All interests stated are long positions.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 0–


--- page 576 ---
2. The calculation is based on the total number of 141, 195,600 Shares in issue immediately following the
Global Offering and without taking into account any Shares which may be issued pursuant to the exercise
of the Over-allotment Option.
3. Immediately following the completion of the Global O ffering (assuming the Over-allotment Option is not
exercised), our Company will be owned as to 17. 00%, 2.08% and 0.40% by Shanghai Zhaoqi, Qingdao
Haizhongjie and Qingdao Haixinsheng, each of them i s a limited partnership with Qingdao Haichuang
(wholly owned by Mr. Lu) as its general partner. The refore, Mr. Lu is deemed to be interested in the
Shares held by Shanghai Zhaoqi, Qingdao Haiz hongjie and Qingdao Haixinsheng under the SFO.
4. Immediately following the completion of the Global O ffering (assuming the Over-allotment Option is not
exercised), Shanghai Zhaoqi will be owned as t o (i) 31.40% by Mr. Zhang; (ii) 28.60% by Beijing
Quanzhanggui (who is a limited liability company owned as to 70.00% by Mr. Zhang and 30.00% by Li
Jia ( 李佳), spouse of Mr. Zhang). Therefore, Mr. Zhang is deemed to be interested in the Shares held by
Shanghai Zhaoqi under the SFO.
(b) Interests of the Substantial Shareholders
For more details on the persons who will, immediately following the completion of the
Global Offering without taking into account any Shares which may be issued pursuant to
the exercise of the Over-allotment Option, have interests or short positions in our Shares or
underlying Shares which would be required to be disclosed to us and the Stock Exchange
under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who will directly and/or
indirectly, be interested in 10% or more of the nominal value of any class of share capital
carrying the rights to vote in all circumstances at general meetings of our Company or of
any member of our Group, please refer to the section headed ‘‘Substantial Shareholders’’ in
this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 1–


--- page 577 ---
2. Directors’ and Supervisors’ Servic e Contracts and Letters of Appointment
We have entered into a service contract or letter of appointment with each of our
Directors and Supervisors in respect of, among other things (i) compliance of relevant laws
and regulations; (ii) observance of the Arti cles of Association; and (iii) provisions on
arbitration. The principal particulars of these service contracts and letters of appointment
include (i) the term of service; and (ii) are subject to termination in accordance with their
respective term. The service contracts or letters of appointment may be renewed in
accordance with our Articles of Associa tion and the applicable Listing Rules.
Save as disclosed above, none of the Directors or Supervisors has entered into any
service contracts as a director or supervisor with any member of our Group (excluding
contracts expiring or determinable by the employer within one year without payment of
compensation (other than statutory compensation)).
3. Remuneration of Directors and Supervisors
The aggregate remuneration (including fe es, salaries, contributions to pension
schemes, housing allowances and other allowa nces and benefits in kind and discretionary
bonuses) paid to our Directors and Supervis ors for the years ended 31 December 2021, 2022
and 2023 and the four months ended 30 Apri l 2024 was approximately RMB2.5 million,
RMB2.5 million, RMB4.1 million and RMB1.5 million, respectively.
Save as disclosed above, no other payments have been made or are payable, in respect
of the years ended 31 December 2021, 2022 and 2023 and the four months ended 30 April
2024, by any of member of our Group to any of our Directors or Supervisors.
Our independent non-executive Directors’ have been appointed for a term of three
years. Our Company intends to pay a director’s fee of HK$180,000 per annum to each of
the independent non-executive Directors. Save for the director’s fee, none of our
independent non-executive Directors is expected to receive any other remuneration for
holding his/her office as an independent non-executive Director.
Under the arrangement currently in force, the aggregate remuneration (including
directors’ fees, salaries, allowances, benefit s in kind, discretionary bonuses and retirement
scheme contributions) of our Directors and Supervisors for the year ending 31 December
2024 is estimated to be no more than RMB5.0 million.
The aggregate amount of remuneration which were paid or payable by our Group to
our five highest paid individuals for the thr ee years ended 31 December 2021, 2022 and 2023
and the four months ended 30 April 2024 we re approximately RMB3.5 million, RMB3.9
million, RMB4.1 million and RMB1.4 million, respectively.
During the Track Record Period, no fees were paid by our Group to any of our
Directors, Supervisors or the five highest paid individuals as an inducement to join us or as
compensation for loss of office. The emoluments of Mr. Zhan Bo and Ms. Wang Jiesi were
waived with their authorisation. There ha s been no other arrangement under which a
Director or Supervisor has waived or agreed to waive any emoluments.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 2–


--- page 578 ---
4. Directors’ and Supervisors’ Competing Interests
None of our Directors or Supervisors is interested in any business apart from our
Group’s business which competes or is likely to compete, directly or indirectly, with the
business of our Group.
5. Disclaimers
(a) save as disclosed in this Appendix and the section headed ‘‘Substantial Shareholders’’
in this prospectus, none of our Directors or chief executive of our Company has any
interests or short positions in the shares, underlying shares and debentures of our
Company or our associated corporations (within the meaning of Part XV of the SFO)
which will be required to be notified to our Company and the Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short
positions which he is taken or deemed to have taken under such provisions of the SFO)
or which will be required, pursuant to Section 352 of the SFO, to be entered in the
register referred to in that section, or which will be required, pursuant to the Model
Code for Securities Transactions by Directors of Listed Issuers, to be notified to our
Company and the Stock Exchange, once the Shares are listed on the Stock Exchange;
(b) save as disclosed in this Appendix and the section headed ‘‘Substantial Shareholders’’
in this prospectus, so far as is known to any Director or chief executive of our
Company, no person has an interest or short position in the Shares and underlying
Shares which would fall to be disclosed to our Company and the Stock Exchange under
the provisions of Divisions 2 and 3 of Part XV of the SFO, or is, directly or indirectly,
interested in 10% or more of the nominal value of any class of share capital carrying
rights to vote in all circumstances at general meetings of any other member of our
Group;
(c) none of our Directors nor any of the persons listed in ‘‘D. Other Information — 5.
Qualification of Experts’’ below is inter e s t e di nt h ep r o m o t i o no f ,o ri na n ya s s e t s
which have been, within the two years i mmediately preceding the issue 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;
(d) save as disclosed in this Appendix and the section headed ‘‘Business — Our
Customers’’ in this prospectus, none of our Directors nor any of the persons listed
in ‘‘D. Other Information — 5. Qualification o f Experts’’ below is materially interested
in any contract or arrangement with our Group subsisting at the date of this
prospectus which is unusual in its nature or conditions or which is significant in
relation to the business of our Group as a whole;
(e) save in connection with Underwriting Agr eements, none of the persons listed in ‘‘D.
Other Information — 5. Qualification of Exp erts’’ below 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;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 3–


--- page 579 ---
(f) none of our Directors has entered or has proposed to enter into any service agreements
with our Company or any member of our Group (other than contracts expiring or
determinable by the employer within one year without payment of compensation other
than statutory compensation); and
(g) save as disclosed in the sections headed ‘‘Business — Our Customers’’, ‘‘Business —
Our Suppliers’’ and ‘‘Business — Sales and Marketing — Strategic Channel Partners’’
in this prospectus, none of our Directors, their respective 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 interest in our Company’s five largest customers
and five largest suppliers.
D. OTHER INFORMATION
1. Estate duty
Our Directors have been advised that no material liability for estate duty is likely to
fall on our Group.
2. Litigation
As at the Latest Practicable Date, save as disclosed in ‘‘Business — Legal Proceedings
and Compliance’’, no member of our Group was engaged in any litigation, arbitration or
claim of material importance, and no litigatio n, arbitration or claim of material importance
was known to our Directors to be pending or threatened by or against our Group, that
would have a material adverse effect on its business, financial condition or results of
operations.
3. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing Committee
for the listing of, and permission to deal in, our H Shares.
CITIC Securities (Hong Kong) Limited satisf ies the independence criteria applicable to
sponsors set out in Rule 3A.07 of the Listing Rules.
Ping An Insurance (Group) Company of China, Ltd. is the holding company of both
Ping An of China Capital (Hong Kong) Company Limited (‘‘ Ping An Capital ’’) and Ping An
Property and Casualty Insurance Company of China, Ltd.. Ping An Property and Casualty
Insurance Company of China, Ltd. was one of our largest customers in each year/period of
the Track Record Period and therefore the Ping An Capital group may be viewed to have a
business relationship with our Group. As such, Ping An Capital does not satisfy the
independence criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules.
The Joint Sponsors will receive an aggreg ate fee of RMB4.6 million for acting as the
sponsors for the Listing.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 4–


--- page 580 ---
4. No Material Adverse Change
Our Directors confirm that there has been n o material adverse change in the financial
or trading position or prospects of our Group since 30 April 2024 (being the date to which
the latest audited consolidated financial statements of our Group were prepared).
5. Qualification of Experts
The following are the qualifications of the e xperts (as defined under the Listing Rules
and the Companies (Winding Up and Miscellane ous Provisions) Ordinance) who have given
opinions or advice which are contained in this prospectus:
Name Qualification
CITIC Securities (Hong
Kong) Limited
Licensed corporation under the SFO to engage in type 4
(advising on securities) and type 6 (advising on corporate
finance) regulated activities
Ping An of China
Capital (Hong Kong)
Company Limited
Licensed corporation under the SFO to engage in type 6
(advising on corporate finance) regulated activity
KPMG Certified Public Accountants
Public Interest Entity Auditor registered in accordance with the
Accounting and Financial Reporting Council Ordinance
Fangda Partners Legal advisers as to PRC Law
Frost & Sullivan
(Beijing) Inc.,
Shanghai Branch Co.
Industry consultant
6. Consents of Experts
Each of the experts as referred to in ‘‘D. O ther Information — 5. Qualification of
Experts’’ in this Appendix has given and has not withdrawn their respective written
consents to the issue of this prospectus with the inclusion of their opinion, reports, letters
and/or legal opinion (as the case may be) and references to their names included in the form
and context in which they respectively appear.
Save as disclosed in the section headed ‘‘Underwriting’’ in this prospectus, 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.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 5–


--- page 581 ---
7. Promoter
Our Company entered into a promoters’ agreement with Qingdao Haiyinghui,
Shanghai Zhaoqi, Qingdao Haichuanghui, Q ingdao Haizhongjie, Qingdao Haixinsheng
and Qingdao Haichuangying on 6 March 2023, pursuant to which the then shareholders of
our Company agreed to convert our Company into a joint stock company with limited
liability with a registered capital of RMB105 ,895,600. Save as disclosed in the section
headed ‘‘History and Development — Our Corporate History and Development —
Conversion into a Joint Stock Company with Li mited Liability’’ in this prospectus, within
the two years immediately preceding the date of this prospectus, no cash, securities or other
benefit has been paid, allotted or given nor are any proposed to be paid, allotted or given to
any promoters in connection with the Global Offering and the related transactions
described in this prospectus.
8. Preliminary Expenses
As at the Latest Practicable Date, our Comp any did not incur any material preliminary
expenses.
9. Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty if
such sale, purchase and transfer are affected on the H Share register of members of our
Company, including in circumstances where s uch transactions are effected on the Stock
Exchange. The current rate of Hong Kong stamp duty for such sale, purchase and transfer
is 0.1% of the consideration or, if higher, the fair value of the H Shares being sold or
transferred.
10. Application for Listing
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 H Shares. All necessary
arrangements have been made to enable th e securities to be admitted into CCASS.
11. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance of this
prospectus, of rendering all persons concerned bound by all of the provisions (other than
the penal provisions) of Sections 44A and 44B of the Companies (Winding Up and
Miscellaneous Provisions) Ord inance insofar as applicable.
12. Bilingual Prospectus
The English language and Chinese languag e versions of this prospectus are being
published separately, in reliance upon the exemption provided by Section 4 of the
Companies (Exemption of Companies and Prospectuses from Compliance with Provisions)
Notice (Chapter 32L of the laws of Hong Kong).
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 6–


--- page 582 ---
This prospectus is written in the English language and contains a Chinese translation
for information purpose only. Should there be any discrepancy between the English
language of this prospectus and the Chinese translation, the English language version of
this prospectus shall prevail.
13. Miscellaneous
(a) Save as disclosed in this prospectus,
(i) within the two years immediately preceding the date of this prospectus, neither we
nor any of our subsidiaries has issued or agreed to issue any share or loan capital
fully or partly paid up either for cash or for a consideration other than cash;
(ii) no share or loan capital of our Company or any of our subsidiaries is under
option or is agreed conditionally or unconditionally to be put under option;
(iii) within the two years immediately preceding the date of this prospectus, no
commissions, discounts, brokerage or o ther special terms have been granted in
connection with the issue or sale of any shares or loan capital of any member of
our Group;
(iv) no commission has been paid or payable (except commission to sub-underwriters)
to any persons for subscription, agreeing to subscribe, procuring subscription or
agreeing to procure subscription of any shares of our Company or any of our
subsidiaries;
(v) no founder, management or deferred shares of our Company or any of our
subsidiaries have been issued or agreed to be issued; and
(vi) there is no arrangement under which future dividends are waived or agreed to be
waived.
(b) Our Directors confirm that:
(i) since 30 April 2024 (being the date on which the latest audited consolidated
financial statements of our Group were made up), there has been no material
adverse change in our financial or trading position or prospects;
(ii) there has not been any interruption in the business of our Company which may
have or have had a material adverse effect on the financial position of our
Company in the 12 months immediately preceding the date of this prospectus; and
(iii) our Company has no outstanding conver tible debt securities or debentures.
(c) Our Company currently does not intend to a pply for the status of a foreign investment
joint stock limited company.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 7–


--- page 583 ---
A. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to a copy of this pro spectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) copies of each of the material contract s referred to in ‘‘Statutory and General
Information — B. Further Information a bout Our Business — 1. Summary of Material
Contracts’’ in Appendix VI; and
( b ) t h ew r i t t e nc o n s e n t sr e f e r r e dt oi n‘ ‘ S t a t u t o r ya n dG e n e r a lI n f o r m a t i o n—D .O t h e r
Information — 6. Consents of Experts’’ in Appendix VI.
B. DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be published on the website of the Stock
Exchange at www.hkexnews.hk and our website at www.haierbx.net up to and including the
date which is 14 days from the date of this prospectus:
(a) the Articles of Association;
(b) the accountants’ report from KPMG, the text of which is set forth in Appendix I;
(c) the report on the unaudited pro forma financial information from KPMG, the text of
w h i c hi ss e tf o r t hi nA p p e n d i xI I ;
(d) the audited consolidated financial statements of our Company for the financial years
ended 31 December 2021, 2022 and 2023 a nd the four months ended 30 April 2024;
(e) the PRC legal opinion issued by Fangda Pa rtners, our PRC Legal Advisers in respect
of certain aspects of our Group;
(f) the Frost & Sullivan Report;
(g) the PRC Company Law, the PRC Securities Law and the Trial Administrative
Measures of Overseas Securities Offering and Listing by Domestic Companies,
together with their unofficial English translations;
(h) the material contracts referred to in ‘‘Sta tutory and General Info rmation — B. Further
Information about Our Business — 1. Summary of Material Contracts’’ in Appendix
VI;
( i ) t h ew r i t t e nc o n s e n t sr e f e r r e dt oi n‘ ‘ S t a t u t o r ya n dG e n e r a lI n f o r m a t i o n—D .O t h e r
Information — 6. Consents of Experts’’ in Appendix VI; and
(j) service contracts and letters of appointment referred to in ‘‘Statutory and General
Information — C. Further Information about Our Directors, Supervisors and
Substantial Shareholders — 2. Directors’ and Supervisors’ Service Contracts and
Letters of Appointment’’ in Appendix VI.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND DOCUMENTS ON DISPLAY
–V I I - 1–


--- page 584 ---
Zhongmiao Holdings (Qingdao) Co., Ltd.
眾淼控股 （ 青島 ） 股份有限公司
Zhongmiao Holdings (Qingdao) Co., Ltd.
眾淼控股 （ 青島 ） 股份有限公司
GLOBAL
OFFERING
专业价值PING AN OF CHINA CAPITAL (HONG KONG)
专业 价值 PING AN OF CHINA CAPITAL (HONG KONG)
专业 价值 PA SECURITIES (HK)
Joint Sponsors (in alphabetical order)
Overall Coordinators, Joint Global Coordinators  (in alphabetical order)
(in alphabetical order)
Joint Bookrunners and Joint Lead Managers  (in alphabetical order)
专业 价值 PA SECURITIES (HK)
Zhongmiao Holdings (Qingdao) Co., Ltd.
眾淼控股 （ 青島 ） 股份有限公司
(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock Code : 1471
