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Stock Code : 2431
(a joint stock company incorporated in the People's Republic of China with limited liability)
深圳佑駕創新科技股份有限公司
MINIEYE TECHNOLOGY CO., L TD
GLOBAL OFFERING
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Joint Lead Managers


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If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
Minieye Technology Co., Ltd
ʮ̡
(a joint stock company incorporated in the People’ s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the
Global Offering
: 39,190,000 H Shares (subject to the
Over-allotment Option)
Number of Hong Kong Offer Shares : 3,919,000 H Shares (subject to
adjustment)
Number of International Placing Shares : 35,271,000 H Shares (subject to
adjustment and the Over-allotment
Option)
Maximum Offer Price : HK$20.20 per H Share, plus brokerage
of 1.0%, SFC transaction levy of
0.0027%, AFRC transaction levy of
0.00015% and Hong Kong Stock
Exchange trading fee of 0.00565%
(payable in full on application in Hong
Kong dollars and subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 2431
Joint Sponsors, Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this prospectus,
make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in re liance upon the whole or any part of the contents
of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Documents Delivered to the Registrar of Companies in Hong Kong and Avai lable on Display” 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 of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the conte nts of this prospectus or any other
documents referred to above.
The Offer Price is expected to be fixed by agreement between the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and u s on the Price Determination Date. The Price
Determination Date is expected to be on or around Monday, December 23, 2024 (Hong Kong time) and, in any event, not later than 12:00 noon on Monday, Decem ber 23, 2024 (Hong Kong time). The
Offer Price will be no more than HK$20.20 and is currently expected to be not less than HK$17.00 per Offer Share. If, for any reason, the Offer Price is not agreed by 12:00 noon on Monday, December
23, 2024 (Hong Kong time) between the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and us, the Global Offering wil l not proceed and will lapse.
Applicants for Hong Kong Offer Share may be required to pay, on application (subject to application channels), the maximum Offer Price of HK$20.20 for each Hong Kong Offer Share together with
a brokerage fee of 1.0%, a SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and a Hong Kong Stock Exchange trading fee of 0.00565%, sub ject to refund if the Offer Price as finally
determined is less than HK$20.20.
The Overall Coordinators, for themselves and on behalf of the Underwriters, and with our consent may, where considered appropriate, reduce the numbe r of Hong Kong Offer Shares and/or
the indicative Offer Price range below that is stated in this prospectus (which is HK$17.00 to HK$20.20) at any time prior to the morning of the last day f or lodging applications under the
Hong Kong Public Offering. In such a case, an announcement will be published on the website of our Company at www.minieye.cc and on the website of the Hon g Kong Stock Exchange at
www.hkexnews.hk and the offer will be canceled and relaunched at the revised number of Offer Shares and/or the revised Offer Price range and the requir ements under Rule 11.13 of the Hong
Kong Listing Rules (which include the issue of a supplemental prospectus or a new prospectus (as appropriate)), as soon as practicable following the d ecision to make such reduction, and in
any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public Offering. Further details are se t forth in “Structure of the Global
Offering” and “How to Apply for the Hong Kong Offer Shares” in this prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters) if certain grounds arise prior to 8:00 a.m. on the Listing Date. See “Underwriting — Grounds for Termination” of this Prospect us.
The Offer Shares have not been and will not be registered under the US Securities Act or any state securities law in the United States and may be offered an d sold only outside the United States in offshore
transactions in accordance with Regulation S under the US Securities Act.
IMPORTANT
December 17, 2024


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering. We will not provide printed copies of this Prospectus to the public
in relation to the Hong Kong Public Offering.
This Prospectus is available at the website of the Hong Kong Stock Exchange
at www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing
Information ” section, and our website at www.minieye.cc. If you require a printed
copy of this Prospectus, you may download and print from the website addresses
above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online via the HK eIPO White Form service at www.hkeipo.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian who
is a HKSCC Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer Shares on your
behalf.
We will not provide any physical channels to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this Prospectus
are identical to the printed 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 is available online at the website
addresses above.
See “How to Apply for the Hong Kong Offer Shares” for further details on the
procedures through which you can apply for Hong Kong Offer Shares electronically.
IMPORTANT
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Y our application through the HK eIPO White Form service or the HKSCC EIPO channel
must be for a minimum of 200 Hong Kong Offer Shares and in one of the numbers set out in
the table.
If you are applying through the HK eIPO White Form service, you may refer to the table
below for the amount payable for the number of Shares you have selected. Y ou must pay the
respective amount payable on application in full upon application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, you are required to pre-fund your
application based on the amount specified by your broker or custodian, as determined based on
the applicable laws and regulations in Hong Kong.
No. of
Hong Kong
Offer Shares
applied for
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$
200 4,080.75 4,000 81,614.87 60,000 1,224,223.02 800,000 16,322,973.60
400 8,161.49 5,000 102,018.59 70,000 1,428,260.19 900,000 18,363,345.30
600 12,242.23 6,000 122,422.30 80,000 1,632,297.35 1,000,000 20,403,717.00
800 16,322.97 7,000 142,826.02 90,000 1,836,334.54 1,200,000 24,484,460.40
1,000 20,403.72 8,000 163,229.73 100,000 2,040,371.70 1,400,000 28,565,203.80
1,200 24,484.46 9,000 183,633.45 200,000 4,080,743.40 1,600,000 32,645,947.20
1,400 28,565.20 10,000 204,037.16 300,000 6,121,115.10 1,800,000 36,726,690.60
1,600 32,645.95 20,000 408,074.35 400,000 8,161,486.80 1,959,400
(1) 39,979,043.09
1,800 36,726.68 30,000 612,111.51 500,000 10,201,858.50
2,000 40,807.43 40,000 816,148.68 600,000 12,242,230.20
3,000 61,211.15 50,000 1,020,185.86 700,000 14,282,601.90
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is approximately 50% of the
Hong Kong Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and
AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for
applications made through the application channel of the HK eIPO White Form Service Provider)
while the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will be
paid to the SFC, the Stock Exchange and the AFRC, respectively.
No application for any other number of the Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
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If there is any change in the following expected timetable of the Hong Kong Public
Offering, we will issue an announcement in Hong Kong to be published on the Company’ s
website at www.minieye.cc and the website of the Stock Exchange at www.hkexnews.hk .
Hong Kong Public Offering
commences at 9:00 a.m. on ......................... T uesday, December 17, 2024
Latest time for completing electronic applications
under the HK eIPO White Form service
through the designated website at www.hkeipo.hk (2) ............ 1 1:30 a.m. on Friday,
December 20, 2024
Application lists of the Hong Kong Public Offering open (3) ........ 1 1:45 a.m. on Friday,
December 20, 2024
Latest time for (a) completing payment of the HK eIPO White Form
applications by effecting PPS payment transfer(s) and
(b) giving electronic application instructions
to HKSCC
(4) ......................................... .12:00 noon on Friday,
December 20, 2024
If you are instructing your broker or custodian who is a 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 of the Hong Kong Public Offering
close (3) ............................................. .12:00 noon on Friday,
December 20, 2024
Expected Price Determination Date (5) ............... o no r before 12:00 noon, Monday,
December 23, 2024
(1) Announcement of
 the final Offer Price;
 an indication of the level of interest in the International Placing;
 the level of applications in the Hong Kong Public Offering; and
 the basis of allocation of the Hong Kong Offer Shares under the Hong Kong Public
Offering;
to be published on the websites of the Stock Exchange
at www.hkexnews.hk and our Company at
www.minieye.cc (6)
on or before ................................... T uesday, December 24, 2024
EXPECTED TIMETABLE (1)
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(2) Announcement of results of allocations in the
Hong Kong Public Offering to be available through
a variety of channels as described in the section headed
“How to Apply for the Hong Kong Offer Shares—
B. Publication of Results” ......................... T uesday, December 24, 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.minieye.cc (6)
from ......................................... T uesday, December 24, 2024
Results of allocations in the Hong Kong Public Offering
(with successful applicants’ identification document
numbers where applicable) available through a variety of
channels as described in “How to Apply for the Hong
Kong Offer Shares—B. Publication of Results” from
“Allotment Results” page in the designated results of
allocations website at www.tricorglobal.com.hk/ipo/result
or www.hkeipo.hk/IPOResult
with a “search by ID number” function from ................ 1 1:00 p.m. on Tuesday,
December 24, 2024
to 12:00 midnight on Monday,
December 30, 2024
Allocation results telephone enquiry line by calling
+852 3691 8488 between 9:00 a.m. and 6:00 p.m. ........ .Friday, December 27, 2024
to Thursday, January 2, 2025
(excluding Saturday, Sunday and
public holiday in Hong Kong)
Despatch of H Share certificates or deposit of
the H Share certificates into CCASS in respect of wholly
or partially successful applications pursuant to the
Hong Kong Public Offering on or before
(7) ............. T uesday, December 24, 2024
HK eIPO White Form e-Auto Refund payment
instructions/refund checks in respect
of wholly and partially successful applications
(if applicable) or wholly or partially unsuccessful
applications to be despatched on or
before
(8)(9) ....................................... .Friday, December 27, 2024
Dealings in H Shares on the Stock Exchange expected
to commence on .................................. .Friday, December 27, 2024
EXPECTED TIMETABLE (1)
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Notes:
(1) All times and dates refer to Hong Kong local times and dates.
(2) Y ou will not be permitted to submit your application under the HK eIPO White Form service through the
designated website at www.hkeipo.hk after 11:30 a.m. on the last day for submitting applications. If you have
already submitted your application and obtained an application reference number from the designated website
prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of
application monies) until 12:00 noon on the last day for submitting applications, when the application lists
close.
(3) If there is/are a tropical cyclone warning signal number 8 or above, or a “black” rainstorm warning and/or
Extreme Conditions, collectively (“ Bad Weather Signals ”) in force in Hong Kong at any time between 9:00
a.m. and 12:00 noon on Friday, December 20, 2024, the application lists will not open and will close on that
day. Further information is set out in “How to Apply for the Hong Kong Offer Shares—E. Bad Weather
Arrangements.”
(4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC via
HKSCC’s FINI system should see “How to Apply for the Hong Kong Offer Shares—A. Applications for Hong
Kong Offer Shares—2. Application Channels.”
(5) The Price Determination Date is expected to be on or about Monday, December 23, 2024, and in any event,
not later than 12:00 noon on Monday, December 23, 2024. If, for any reason, the Offer Price is not agreed
between the Overall Coordinators (for themselves and on behalf of the Underwriters and the Capital Market
Intermediaries) and us on or before 12:00 noon on Monday, December 23, 2024, the Global Offering will not
proceed and will lapse.
(6) None of the websites or any of the information contained on the websites forms part of this prospectus.
(7) H Share certificates are expected to be issued on Tuesday, December 24, 2024 but will only become valid at
around 8:00 a.m. on the Listing Date provided that the Global Offering has become unconditional in all
respects and the right of termination described in the section headed “Underwriting—Underwriting
Arrangements and Expenses—Hong Kong Public Offering—Grounds for Termination” has not been exercised.
Investors who trade H Shares before the receipt of H Share certificates or before they become valid do so
entirely of their own risk.
(8) e-AutoRefund payment instructions/refund checks will be issued in respect of wholly or partially unsuccessful
applications pursuant to the Hong Kong Public Offering and also in respect of wholly or partially successful
applications if the Offer Price is less than the price per Offer Share payable on application. Part of the
applicant’s identification document number, or, if the application is made by joint applicants, part of the
identification document number of the first-named applicant, provided by the applicant(s) may be printed on
the refund check, if any. Such data would also be transferred to a third party for refund purposes. Banks may
require verification of an applicant’s identification document number before encashment of the refund check.
Inaccurate completion of an applicant’s identification document number may invalidate or delay encashment
of the refund check.
(9) Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer
to the section headed “How to Apply for the Hong Kong Offer Shares—D. Despatch/Collection of H Share
certificates and Refund of Application Monies” for details.
For applicants who apply through the HK eIPO White Form service and paid the application monies from a
single bank account, e-Auto Refund payment instructions (if any) will be despatched to their application
payment bank account on Friday, December 27, 2024. For applicants who apply through the HK eIPO White
Form service and used multi-bank accounts to pay the application monies, refund check in favor of the
applicant (or, in the case of joint applications, the first-named applicant) (if any) will be despatched to the
address specified in their electronic application instruction to the HK eIPO White Form Service Provider on
or before Friday, December 27, 2024 at their own risk.
EXPECTED TIMETABLE (1)
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H Share certificates and/or refund checks for applicants who have applied for Hong Kong Offer Shares will
be despatched by ordinary post, at the applicants’ risk, to the addresses specified in the relevant applications.
Further information is set out in the sections headed “How to Apply for the Hong Kong Offer Shares—D.
Despatch/Collection of H Share certificates and Refund of Application Monies.”
The above expected timetable is a summary only. Y ou should read carefully the sections
headed “Underwriting,” “Structure of the Global Offering” and “How to Apply for the Hong
Kong Offer Shares” for details relating to the structure of the Global Offering, procedures on
the applications for Hong Kong Offer Shares and the expected timetable, including conditions,
Bad Weather Arrangement and the despatch of refund checks and H Share certificates.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by our Company solely in connection with the Hong Kong
Public Offering and the Hong Kong Offer Shares and does not constitute an offer to sell
or a solicitation of an offer to subscribe for or buy any security other than the Hong Kong
Offer Shares. This prospectus may not be used for the purpose of, and does not constitute,
an offer to sell or a solicitation of an offer to subscribe for or buy any security in any
other jurisdiction or in any other circumstances. No action has been taken to permit a
public offering of the Offer Shares or the distribution of this prospectus in any
jurisdiction other than Hong Kong. The distribution of this prospectus and the offering
and sale of the Offer Shares in other jurisdictions are subject to restrictions and may not
be made except as permitted under the applicable securities laws of such jurisdictions
pursuant to registration with or authorization by the relevant securities regulatory
authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. We have not authorized anyone to provide you with information that
is different from what is contained in this prospectus. Any information or representation
not included in this prospectus must not be relied on by you as having been authorized
by us, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, the
Underwriters, any of our or their respective directors or advisors or any other person or
party involved in the Global Offering. Information contained on our website, located at
www.minieye.cc , does not form part of this prospectus.
Page
Expected Timetable ................................................. i i i
Contents ......................................................... v i i
Summary ......................................................... 1
Definitions ........................................................ 2 7
Glossary of Technical Terms ......................................... 4 2
Forward-Looking Statements ......................................... 4 9
Risk Factors ...................................................... 5 1
Waivers from Strict Compliance with the Hong Kong Listing Rules .......... 8 3
Information about this Prospectus and the Global Offering ................ 9 0
CONTENTS
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Directors, Supervisors and Parties Involved in the Global Offering .......... 9 5
Corporate Information .............................................. 1 0 2
Industry Overview ................................................. 1 0 4
Regulatory Overview ................................................ 1 2 9
History, Development and Corporate Structure .......................... 1 6 3
Business .......................................................... 2 0 2
Directors, Supervisors and Senior Management .......................... 3 3 1
Relationship with our Single Largest Group of Shareholders ................ 3 5 1
Share Capital ..................................................... 3 5 5
Cornerstone Investors ............................................... 3 6 1
Substantial Shareholders ............................................ 3 6 8
Financial Information ............................................... 3 7 2
Future Plans and Use of Proceeds ..................................... 4 3 4
Underwriting ...................................................... 4 3 9
Structure of the Global Offering ...................................... 4 5 5
How to Apply for the Hong Kong Offer Shares ........................... 4 6 6
Appendix I – Accountant’s Report ............................. I - 1
Appendix II – Unaudited Pro Forma Financial Information ........... II-1
Appendix III – Taxation and Foreign Exchange ..................... III-1
Appendix IV – Summary of Principal Legal and Regulatory Provisions . . IV-1
Appendix V – Summary of Articles of Association .................. V - 1
Appendix VI – Statutory and General Information .................. VI-1
Appendix VII – Documents Delivered to the Registrar of Companies in
Hong Kong and Available on Display ............... VII-1
CONTENTS
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This summary aims to give you an overview of the information contained in this
prospectus. As it is a summary, it does not contain all the information that may be
important to you and is qualified in its entirety by, and should be in conjunction with, the
full text of this prospectus. 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” in this prospectus. You should
read that section carefully before you decide to invest in the Offer Shares.
OVERVIEW
Who We Are
We are an intelligent driving and cabin solutions provider in China, offering solutions for
critical aspects of the driving experience, including piloting, parking and in-cabin functions.
With advanced R&D and commercialization capabilities, we empower intelligent vehicles,
enhancing safety and driving experiences while promoting vehicle automation. We are devoted
to becoming a leader in the automotive intelligence solutions industry adhering to an
incremental approach of intelligent driving development, which means that we gradually
develop our intelligent driving solutions of increasing degrees of automation.
We provide Level 0 to Level 2+ intelligent driving solutions that are in-house developed and
proven by mass production, and we have also been proactively developing more advanced
autonomous driving technologies. As of the Latest Practicable Date, we had accumulatively
undertaken mass production for 35 automotive original equipment manufacturers (OEMs). We
have deployed in the sectors of individual vehicle intelligence and vehicle infrastructure
cooperative system, and we aim to create a more comprehensive solutions portfolio that meets
diverse customer needs, contributing to the establishment of an automotive intelligence
ecosystem. Our in-house platform-based technologies, software-hardware-integrated R&D
capabilities and solid mass production capabilities provide our solutions with significant
technical advantages and cost-effective features.
Our Solutions
Our solutions comprise intelligent driving solutions, intelligent cabin solutions and
vehicle infrastructure cooperative systems. We have achieved remarkable accomplishments in
each of our business lines:
 Intelligent driving solutions . Our intelligent driving solutions primarily include the
iSafety and iPilot series. Our iSafety solutions, developed based on advanced driver
assistance system (ADAS) technologies, feature: (i) a rich array of cost-effective
functions enhancing automotive intelligence and safety; and (ii) high compatibility
with various vehicle models, system-on-chip (SoC) platforms and other components.
Leveraging our technological capabilities at higher levels of intelligent driving
SUMMARY
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techniques, we provide iPilot solutions to accommodate needs of OEMs for more
innovative automation functions of their vehicles in a wide range of application
scenarios. Furthermore, we are developing automated driving system (ADS)
functions and expect to deliver our iRobo solutions in the first quarter of 2025,
which are currently in the testing phase. Our iRobo solutions can support fully
autonomous driving in specific areas and operating scenarios. In 2021, 2022, 2023
and the six months ended June 30, 2024, we had design wins under development for
our intelligent driving solutions for 18, 19, 20 and 25 vehicle models with 12, 13,
14 and 16 OEMs, respectively, and had undertaken mass production for 22, 50, 56
and 67 vehicle models with 10, 17, 20 and 22 OEMs, respectively. According to
CIC, our market share among all intelligent driving solutions providers in China was
0.6% in terms of revenue of Level 0 to Level 2+ solutions in 2023.
 Intelligent cabin solutions . Our intelligent cabin solutions are centered around
in-cabin sensing and in-cabin interaction, primary comprising Driver Monitoring
System (DMS), Occupant Monitoring System (OMS) and other solutions. Supported
by our in-house proprietary algorithms, our intelligent cabin solutions are able to
achieve high stability and accuracy while performing a broad spectrum of functions
that enrich the in-vehicle user experience and automotive safety. In 2021, 2022,
2023 and the six months ended June 30, 2024, we had design wins under
development for our intelligent cabin solutions for 4, 17, 31 and 16 vehicle models
with 3, 9, 9 and 8 OEMs, respectively, and had undertaken mass production for nil,
3, 10 and 30 vehicle models with nil, 2, 7 and 9 OEMs, respectively. According to
CIC, we are among the first batch of suppliers of DMS solutions in China that
successfully supported OEMs in obtaining driver drowsiness and attention warning
(DDAW) certifications for their vehicle models under the EU General Safety
Regulation (GSR).
 V ehicle infrastructure cooperative systems . We have been proactively developing
vehicle infrastructure cooperative systems, expecting to advance intelligent
transportation infrastructure and smart cities. With the intelligent collaborations
among the on-board devices of individual vehicle intelligence and the roadside
devices of vehicle infrastructure cooperative system, we have been promoting
vehicle-to-infrastructure connectivity, and we are committed to achieving further
commercialization in this sector. We offer vehicle infrastructure cooperative systems
that integrate in-house designed sensor devices, such as radars and cameras, our
in-house developed algorithm structures, and advanced “vehicle-to-everything
(V2X)” technologies. We generally work with customers in the transportation
infrastructure sector aiming to augment road safety and traffic efficiency, and also
help customers manage traffic flows in industry parks and parking areas. During the
Track Record Period and up to the Latest Practicable Date, we had participated in
21 typical vehicle infrastructure cooperative system projects in China.
SUMMARY
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Highway
& Intersection
Management
Industry Parks
& Parking Space
Management
iSafety
iPilot
iRobo
DMS
OMS
We have strategically laid out and advanced our three principal business lines based on
our three core strengths in algorithm development, software engineering and hardware design.
This strategy aligns with the market demand and technology development in the automotive
intelligence solutions industry.
Intelligent driving solutions are the core and foundation of our business. The market’s
recognition and application of intelligent driving technologies is a step-by-step process, and we
have accordingly adopted an incremental strategy. Starting from basic ADAS functions, we
have been continually refining and enhancing our solutions. Our intelligent driving solutions
portfolio is tailored to meet the requirements of various driving scenarios and diverse vehicle
models of OEMs. The technological capabilities, accumulated experience, expansive customer
base and esteemed reputation we have cultivated since our inception provide a robust
foundation for our future growth.
Intelligent cabin solutions significantly elevate the safety and comfort of journeys for
both drivers and passengers, creating synergies with intelligent driving solutions. As
automotive intelligence advances to higher levels, the importance of the interaction among
various driving and cabin solutions becomes more prominent. Intelligent cabin solutions not
only bolster safety by monitoring driver behavior and status and timely intervening during
intelligent driving, but also provide interactive and intelligent in-cabin functions, offering
differentiated driver and passenger experiences. With our strengths in both sectors, we are well
positioned to deliver advanced solutions in line with the trend of “crossover and integration”
as advocated by mainstream OEMs.
SUMMARY
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The vehicle infrastructure cooperative systems stand as pivotal elements in realizing
overall automotive intelligence. In response to the development of intelligent transportation
infrastructure and smart cities, in addition to focusing on individual vehicle intelligence, we
have also entered broader application scenarios and new markets by offering solutions in
relation to vehicle infrastructure cooperative systems. By fostering vehicle-to-infrastructure
connectivity and information interaction, our solutions empower vehicles with extended
perception capabilities, acting as a driving force for the widespread adoption of intelligent
driving technologies.
During the Track Record Period, our solutions were deployed in a growing number of
vehicle models. As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had design
wins under development for 20, 36, 51 and 41 vehicle models with 14, 20, 21 and 22 OEMs,
respectively, and had undertaken mass production for 22, 53, 64 and 94 vehicle models with
9, 19, 26 and 29 OEMs, respectively. Our design wins boast a high conversion rate to mass
production, underscoring our strength in project execution. In the intelligent driving solutions
segment, for design wins secured in 2021, 2022 and 2023, the rate of commencing mass
production by the end of the Track Record Period was 96.2%, 83.9% and 50.0%, respectively;
for design wins secured in 2023 and the six months ended June 30, 2024, the rate of
commencing mass production by the Latest Practicable Date was 90.9% and 58.3%,
respectively. In the intelligent cabin solutions segment, for design wins secured in 2021, 2022
and 2023, the rate of commencing mass production by the end of the Track Record Period was
100.0%, 100.0% and 63.2%, respectively; for design wins secured in 2023 and the six months
ended June 30, 2024, the rate of commencing mass production by the Latest Practicable Date
was 89.5% and 11.1%, respectively. Despite the growing number of design wins obtained by
us during the Track Record Period, there is no guarantee that such projects will eventually
reach mass production nor any guarantee on the respective selling prices and commercial terms
of our solutions.
Our revenue increased from RMB175.2 million in 2021 to RMB279.4 million in 2022 and
further increased to RMB476.2 million in 2023, representing a CAGR of 64.9% from 2021 to
2023. Our revenue increased by 44.5% from RMB163.8 million for the six months ended June
30, 2023 to RMB236.7 million for the same period in 2024.
Our experienced and visionary management has built a comprehensive team covering
R&D, procurement, production, and marketing and sales, consistently creating value for our
shareholders and customers. As a pioneer of incremental intelligent driving development in
China, we are committed to shaping an automotive intelligence ecosystem through
technological innovations to improve road safety and enhance driving experiences.
SUMMARY
–4–


--- page 15 ---
The following diagram illustrates the respective roles of all the stakeholders along the
value chain:
 Sensors
 Chips
Positioning systems
 Other raw materials
and components
Algorithm and
software development


Hardware design
and validation
 Test  and validation
 System integration
 Production
 Quality control and
after-sales services
Our Company
(Solution provider)
Raw material and
component suppliers
 Quality control and
after-sales services
OEMs
 System integration
 Production
Tier-one suppliers

 High precision maps
We operate as a solution provider in the industry value chain. Upstream, we source
critical raw materials and components, including sensors, chips, high precision maps,
positioning systems and other necessary materials. Our core activities encompass algorithm
and software development, hardware design, testing and validation, system integration,
production, quality control and after-sales services. These activities enable us to create
comprehensive intelligent driving and cabin solutions that enhance vehicle intelligence, safety
and in-vehicle experiences. For details of our competitive strengths compared to our peers, see
“Business—Our Strengths.” Downstream, our solutions reach the market through two primary
channels. We supply solutions directly to OEMs, collaborating closely with them to customize
and integrate our technologies into their vehicle models. We also provide solutions to tier-one
suppliers, who then integrate our technologies into their products before supplying them to
OEMs.
Our Technologies
Our in-house R&D capabilities serve as the foundation for comprehensive technological
advancements and iterations, enhancing the autonomy of our solutions and enabling us to
extend into different business lines. Our in-house R&D capabilities enable us to swiftly
commercialize our R&D achievements and form a more flexible solutions delivery model. We
believe our in-house R&D capabilities are the key factor that sets us apart in the automotive
intelligence solutions industry and the cornerstone for the commercialization of our future
R&D achievements. Our in-house R&D capabilities enable us to quickly respond to market
changes, strengthen customer cooperation, establish competitive advantages, and enhance our
industry reputation.
SUMMARY
–5–


--- page 16 ---
Our technologies possess the following core advantages that allow us to achieve
commercialization efficiently:
 Core Algorithms. Our in-house developed core algorithms, encompassing the four
main intelligent driving modules, i.e. perception, fusion, mapping and localization
and planning and control, enable us to quickly respond to the needs of our customers
cost-effectively.
 Compatible and Portable Technologies. Our algorithms and middleware can be
flexibly embedded on multiple mainstream SoC platforms, thereby ensuring high
reusability across various vehicle models and streamlining the development process.
 Software-Hardware-Integrated Design Capabilities. By concurrently designing
software and hardware, we can build a more holistic and optimized system,
improving the compatibility, stability and overall performance of our solutions.
See “Business—Our Technologies.”
Research and Development
Our R&D team collaborates with our production and supply chain teams in order to
continually optimize and improve manufacturing processes and supply chain management. As
of June 30, 2024, our R&D team comprised 304 employees, 53.9% holding a bachelor’s degree
and 28.9% holding a master’s degree or above. In 2021, 2022 and 2023 and the six months
ended June 30, 2023 and 2024, we recorded R&D expenses of RMB82.2 million, RMB139.3
million, RMB149.8 million, RMB81.4 million and RMB63.3 million, respectively. See
“Business—Research and Development.”
Our Production
We commenced production at our Bao’an Production Base in July 2022, which has a gross
floor area of approximately 2,500 square meters. Its design annual production capacity is
approximately 377,400 units. In 2023 and the six months ended June 30, 2024, the production
volume of our Bao’an Production Base was around 212,200 units and 93,300 units,
respectively, and the utilization rate was 56.2% and 53.5%, respectively.
Currently, our Bao’an Production Base primarily focuses on three final production
procedures: three-proof coating, assembly and packaging. To enhance our control over the
entire production process, especially procedures of surface mount technology (SMT), dual
in-line package (DIP) and depaneling, we have established our Guangzhou Production Base.
We commenced production at our Guangzhou Production Base in the third quarter of 2024. Our
Guangzhou Production Base has a total gross floor area of approximately 3,400 square meters.
SUMMARY
–6–


--- page 17 ---
During the Track Record Period, certain production processes were performed by our
contract manufacturers. After our Bao’an Production Base was put into operation in July 2022,
we have been able to handle the production processes of three-proof coating, assembly and
packaging for some of our solutions. In 2023 and the six months ended June 30, 2024, 24.4%
and 21.0% of our solutions delivered in the form of hardware were produced by our own
production base, respectively, and the rest were manufactured by our contract manufacturers.
See “Business—Our Production.”
Competitive Landscape of the Chinese Intelligent Driving Solutions Industry
The Chinese intelligent driving solutions industry is experiencing rapid growth, attracting
a broad range of participants. Currently, overseas providers dominate the market with
significant market shares. According to CIC, the collective market share of the eight major
overseas traditional tier-one suppliers in the Chinese market was approximately 60.0% in terms
of revenue of Level 0 to Level 2+ solutions in 2023. Chinese domestic providers are gaining
ground through rapid product iterations and high product adaptability. The market share of
domestic intelligent driving solutions providers increased from 6% in 2019 to 18% in 2023. In
terms of revenue from Level 0 to Level 2+ solutions in 2023, our market share among domestic
and all intelligent driving solutions providers in China was 3.2% and 0.6%, respectively,
according to CIC.
OUR STRENGTHS
We believe that the following competitive strengths contribute to our success: (i) pioneer
of incremental intelligent driving development in China well-positioned for extensive growth
opportunities; (ii) comprehensive solutions portfolio addressing customer needs with proven
commercialization capabilities; (iii) full-stack in-house R&D capabilities driving swift and
efficient commercialization of our R&D achievements; (iv) platform-based and software-
hardware-integrated R&D capabilities enabling algorithmic optimization advantages and
solutions cost-effectiveness; (v) solid mass production capabilities underpinning solutions
competitiveness; (vi) top-tier customer base and proven track record with a solid foundation for
overseas expansion; and (vii) visionary management team with strong shareholder support and
experienced workforce committed to our mission and values. See “Business—Our Strengths.”
OUR STRATEGIES
We have formulated the following strategies in line with our mission and vision: (i)
continuously focusing on technological innovation and optimizing our solutions; (ii)
developing individual vehicle intelligence and vehicle infrastructure cooperative system to
empower the automotive intelligence ecosystem; (iii) consistently promoting globalization to
become a leader in the automotive intelligence solutions industry; (iv) continuously enhancing
intelligent production capability to accelerate commercialization; (v) continuously attracting
talent for technological innovation; and (vi) further developing customer base and exploring
new business pathways. See “Business—Our Strategies.”
SUMMARY
–7–


--- page 18 ---
OUR CUSTOMERS AND SUPPLIERS
Our customers primarily consist of OEMs and tier-one suppliers, the majority of which
are located in the PRC. For the years ended December 31, 2021, 2022 and 2023 and the six
months ended June 30, 2024, the revenue from our five largest customers for the respective
years/period in aggregate accounted for 78.0%, 42.7%, 37.0% and 39.8% of our total revenue,
respectively, and our largest customer for the respective years/period contributed 31.7%,
16.6%, 11.4% and 10.5% of our total revenue, respectively.
Our suppliers primarily consist of raw materials and components suppliers, including
suppliers for, among others, electronic components, structure components and camera module,
the majority of which are located in the PRC. For the years ended December 31, 2021, 2022
and 2023 and the six months ended June 30, 2024, our five largest suppliers for the respective
years/period in aggregate accounted for 41.9%, 36.3%, 41.7% and 38.9% of our total purchase
amount, respectively, and our largest supplier for the respective years/period contributed
15.3%, 8.0%, 11.7% and 3.2% of our total purchase amount, respectively.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
Summary of Consolidated Statements of Comprehensive Loss
The following table summarizes our results of operations for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue
(RMB in thousands, except for percentages)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118175,174 100.0 279,358 100.0 476,206 100.0 163,834 100.0 236,675 100.0
Cost of sales /H1118/H1118/H1118/H1118(158,173) (90.3) (245,788) (88.0) (408,184) (85.7) (150,173) (91.7) (203,254) (85.9)
Gross profit /H1118/H1118/H1118/H111817,001 9.7 33,570 12.0 68,022 14.3 13,661 8.3 33,421 14.1
Selling expenses /H1118/H1118(51,717) (29.5) (63,374) (22.7) (72,735) (15.3) (33,118) (20.2) (32,015) (13.5)
General and
administrative
expenses /H1118/H1118/H1118/H1118/H1118(45,454) (25.9) (54,769) (19.6) (74,294) (15.6) (30,836) (18.8) (50,196) (21.2)
Research and
development
expenses /H1118/H1118/H1118/H1118/H1118(82,201) (46.9) (139,349) (49.9) (149,826) (31.5) (81,389) (49.7) (63,310) (26.7)
Net impairment
losses on financial
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,196) (1.3) (7,517) (2.7) (6,116) (1.3) (4,603) (2.8) (6,595) (2.8)
SUMMARY
–8–


--- page 19 ---
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue
(RMB in thousands, except for percentages)
(unaudited)
Other income /H1118/H1118/H1118/H111823,908 13.6 4,734 1.7 27,922 5.9 3,160 1.9 6,259 2.6
Other gains – net /H1118/H11182,016 1.2 6,334 2.3 1,338 0.3 822 0.5 2,501 1.1
Operating loss /H1118/H1118/H1118(138,643) (79.1) (220,371) (78.9) (205,689) (43.2) (132,303) (80.8) (109,935) (46.4)
Finance costs – net /H1118 (704) (0.4) (287) (0.1) (1,406) (0.3) (496) (0.3) (2,113) (0.9)
Loss before income
tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(139,347) (79.5) (220,658) (79.0) (207,095) (43.5) (132,799) (81.1) (112,048) (47.3)
Income tax expense /H1118 (450) (0.3) (172) (0.1) (60) (0.0) (33) (0.0) – –
Loss for the
year/period /H1118/H1118/H1118/H1118(139,797) (79.8) (220,830) (79.0) (207,155) (43.5) (132,832) (81.1) (112,048) (47.3)
Loss for the
year/period
attributable to:
Owners of the
Company /H1118/H1118/H1118/H1118(132,220) (75.5) (214,864) (76.9) (197,238) (41.4) (125,830) (76.8) (108,135) (45.7)
Non-controlling
interest /H1118/H1118/H1118/H1118/H1118(7,577) (4.3) (5,966) (2.1) (9,917) (2.1) (7,002) (4.3) (3,913) (1.6)
Non-IFRS Measures
To supplement our consolidated financial statements, which are presented in accordance
with IFRS, we also use adjusted net loss (non-IFRS measure) and adjusted net loss margin
(non-IFRS measure) as additional financial measures, which are not required by, or presented
in accordance with IFRS. We believe these non-IFRS measures, when shown in conjunction
with the corresponding IFRS measures, facilitate comparisons of operating performance from
period to period and company to company by eliminating potential impacts of items.
We believe these measures provide useful information to investors and others in
understanding and evaluating our consolidated results of operations in the same manner as they
help our management. However, our presentation of adjusted net loss (non-IFRS measure) may
not be comparable to similarly titled measures presented by other companies. The use of these
non-IFRS measures has limitations as an analytical tool, and you should not consider them in
isolation from, or as a substitute for an analysis of, our results of operations or financial
condition as reported under IFRS. We define adjusted net loss (non-IFRS measure) as net loss
for the year/period adjusted by adding back share-based payment and listing expenses and
adjusted net loss margin (non-IFRS measure) as adjusted net loss (non-IFRS measure) divided
by revenue. The adjustments have been consistently made during the Track Record Period.
SUMMARY
–9–


--- page 20 ---
The following table reconciles our adjusted net loss (non-IFRS measure) for the
year/period indicated with our net loss, or loss for the year/period presented in accordance with
IFRS:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Loss for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118(139,797) (220,830) (207,155) (132,832) (112,048)
Add:
Share-based
payment (1) /H1118/H1118/H1118/H1118/H11188,802 14,960 22,401 11,200 15,311
Listing expenses /H1118/H1118 –––– 14,298
Adjusted net loss
(non-IFRS
measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130,995) (205,870) (184,754) (121,632) (82,439)
Adjusted net loss
margin (non-IFRS
measure)
(2) /H1118/H1118/H1118/H1118/H1118/H1118(74.8)% (73.7)% (38.8)% (74.2)% (34.8)%
Notes:
(1) Share-based payment is a non-cash expense arising from granting share-based awards to selected
employees. It mainly represents the arrangement that we receive services from employees as
consideration for our equity instruments. Share-based payment is not expected to result in future cash
payments. Share-based payment is recorded under our selling expenses, general and administrative
expenses and research and development expenses; and share-based payment in the above table
represents the sum of that recorded under each type of such expenses.
(2) Adjusted net loss margin (non-IFRS measure) equals adjusted net loss (non-IFRS measure) for the
year/period divided by revenue for the year/period and multiplied by 100%.
For details, see “Financial Information—Non-IFRS Measures.”
Our revenue increased from RMB175.2 million in 2021 to RMB279.4 million in 2022,
and further increased to RMB476.2 million in 2023, primarily driven by: (i) year-on-year
revenue growth of our intelligent driving solutions, mainly due to (a) an increase in the number
of design wins we obtained from OEMs, which was in line with increased market demand for
intelligent driving solutions in 2022 and 2023, and (b) an increase in the number of delivered
projects of iPilot solutions in 2023; and (ii) increased revenue from our vehicle infrastructure
cooperative systems in 2023, primarily due to the delivery of more large-scale projects in 2023
as compared to a few small-scale projects delivered in 2022 when we first started delivering
for this business, as our offerings of vehicle infrastructure cooperative systems became more
established and versatile. Our revenue increased from RMB163.8 million in the six months
SUMMARY
–1 0–


--- page 21 ---
ended June 30, 2023 to RMB236.7 million in the six months ended June 30, 2024, primarily
driven by (i) an increase in revenue from our intelligent driving solutions primarily due to: (a)
an increase in the number of design wins we obtained from OEMs, which was in line with the
increased market demand for intelligent driving solutions; and (b) an increase in the delivered
projects of our iSafety and iPilot solutions, and (ii) the ramping up of our intelligent cabin
solutions and vehicle infrastructure cooperative systems.
In 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, we incurred
net loss of RMB139.8 million, RMB220.8 million, RMB207.2 million, RMB132.8 million and
RMB112.0 million, respectively. Our net losses occurred primarily because we were still at a
ramp-up stage and aim at long-term business success and financial return in the automotive
intelligence solutions industry, rather than seeking near-term profitability at the expense of
long-term market potential. See “—Business Sustainability” and “Financial
Information—Period-to-Period Comparison of Results of Operations.”
Summary of Consolidated Statements of Balance Sheets
The following table sets forth a summary of our consolidated statement of financial
position as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,539 58,085 95,701 140,866
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118705,146 758,922 992,107 946,893
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118745,685 817,007 1,087,808 1,087,759
Non-current liabilities /H1118/H1118/H1118/H1118/H111810,457 21,013 50,780 69,150
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118318,168 251,921 283,954 362,272
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118328,625 272,934 334,734 431,422
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118386,978 507,001 708,153 584,621
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118417,060 544,073 753,074 656,337
Non-controlling interests /H1118/H1118/H1118(9,543) 14,491 19,574 15,661
SUMMARY
–1 1–


--- page 22 ---
Our net current assets increased by 31.0% from RMB387.0 million as of December 31,
2021 to RMB507.0 million as of December 31, 2022, primarily due to (i) an increase of
RMB116.8 million in trade and notes receivables, which was in line with our business growth,
and (ii) a decrease of RMB193.4 million in other payables and accruals, primarily due to a
decrease in the advance receipts of financing we received in 2021 following the completion of
the capital increase in 2022, partially offset by (i) a decrease of RMB90.6 million in financial
assets at FVPL in relation to our investments in structured deposits and wealth management
products, and (ii) an increase of RMB79.0 million in trade and notes payables in line with our
business growth. Our net current assets further increased by 39.7% from RMB507.0 million as
of December 31, 2022 to RMB708.2 million as of December 31, 2023, primarily due to (i) an
increase of RMB115.9 million in trade and notes receivables, which was in line with our
business growth, and (ii) an increase of RMB166.0 million in financial assets at FVPL in
relation to our investments in structured deposits and wealth management products. Our net
current assets decreased by 17.5% from RMB708.2 million as of December 31, 2023 to
RMB584.6 million as of June 30, 2024, primarily due to (i) a decrease of RMB89.7 million in
financial assets at FVPL in relation to our investments in structured deposits and wealth
management products, and (ii) an increase of RMB59.4 million in our current borrowings as
we optimized our debt structure by making better utilization of our debt financing resources,
partially offset by an increase of RMB64.8 million in trade and notes receivables, which was
in line with our business growth.
Our net assets increased from RMB417.1 million as of December 31, 2021 to RMB544.1
million as of December 31, 2022, primarily due to the capital contributions from owners of the
Company of RMB305.9 million, partially offset by the net loss of RMB220.8 million in 2022.
Our net assets further increased from RMB544.1 million as of December 31, 2022 to
RMB753.1 million as of December 31, 2023, primarily due to the capital contributions from
owners of the Company of RMB348.5 million, partially offset by the net loss of RMB207.2
million in 2023. Our net assets decreased from RMB753.1 million as of December 31, 2023 to
RMB656.3 million as of June 30, 2024, primarily attributable to the net loss of RMB112.0
million in the six months ended June 30, 2024, partially offset by share-based payment of
RMB15.3 million in the six months ended June 30, 2024.
SUMMARY
–1 2–


--- page 23 ---
Summary of the Consolidated Statements of Cash Flows
The following table sets forth selected cash flow statement information for the
years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Operating loss before
changes in working
capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(121,327) (186,842) (150,302) (101,565) (67,299)
Changes in working
capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130,516) (69,380) (127,943) (13,822) (18,934)
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213 1,234 1,967 1,015 1,669
Income taxes paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118(450) (172) (60) (60) (15)
Net cash used in operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(252,080) (255,160) (276,338) (114,432) (84,579)
Net cash (used in)/generated
from investing activities /H1118 (55,405) 75,411 (188,357) (47,975) 32,653
Net cash generated from
financing activities /H1118/H1118/H1118/H1118/H1118535,336 150,589 418,870 44,458 74,105
Net (decrease)/increase in
cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118227,851 (29,160) (45,825) (117,949) 22,179
Cash and cash equivalents
at the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,001 272,824 243,785 243,785 197,934
Effects of exchange rate
changes on cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28) 121 (26) 68 12
Cash and cash equivalents
at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272,824 243,785 197,934 125,904 220,125
SUMMARY
–1 3–


--- page 24 ---
We had net cash outflows from operating activities during the Track Record Period. In
2021, we had net cash used in operating activities of RMB252.1 million, which represents our
loss before income tax of RMB139.3 million, as adjusted by non-cash and non-operating items,
and movements in working capital primarily consisting of (i) an increase in inventories of
RMB82.2 million, primarily because we procured and maintained a relatively high level of
semiconductor chips inventory in 2021 to ensure that our production would not be disrupted
in light of any supply crunch, see “Business—Impact of the COVID-19 Pandemic and the
Global Shortage of Semiconductor Chips,” and (ii) an increase in financial assets at fair value
through other comprehensive income of RMB35.2 million, primarily due to the increase in our
notes receivables classified as financial assets at fair value through other comprehensive
income (“FVOCI”) in 2021, see Note 23 to the Accountant’s Report in Appendix I to this
prospectus. In 2022, we had net cash used in operating activities of RMB255.2 million, which
represents our loss before income tax of RMB220.7 million, as adjusted by non-cash and
non-operating items and movements in working capital primarily consisting of an increase in
trade and notes receivables of RMB127.7 million in line with our business growth, partially
offset by an increase in trade payables of RMB79.0 million, primarily due to an increase in our
procurement of raw materials in line with our business expansion. In 2023, we had net cash
used in operating activities of RMB276.3 million, which represents our loss before income tax
of RMB207.1 million, as adjusted by non-cash and non-operating items and movements in
working capital primarily consisting of an increase in trade and notes receivables of RMB120.1
million in line with our business growth. In the six months ended June 30, 2024, we had net
cash used in operating activities of RMB84.6 million, which represents our loss before income
tax of RMB112.0 million, as adjusted by non-cash and non-operating items and movements in
working capital primarily consisting of (i) a decrease in financial assets at FVOCI of RMB29.5
million, mainly due to a decrease in our notes receivables classified as financial assets at
FVOCI in the first half of 2024; and (ii) an increase in trade payables and accruals of RMB19.4
million, primarily due to an increase in our procurement of raw materials in line with our
business expansion, partially offset by an increase in trade and notes receivables of RMB68.2
million in line with our business growth. See “Risk factors—Risks Relating to Our Business
and Industry—We recorded net losses and had net operating cash outflows during the Track
Record Period” and “Financial Information—Liquidity and Capital Resources.”
SUMMARY
–1 4–


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KEY OPERATING DATA
The following tables set forth our key operating data for the periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2021 2022 2023 2023 2024
Intelligent Driving
Solutions
Revenue (RMB in
thousands) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173,019 267,312 386,150 142,617 182,279
iSafety /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173,007 231,501 334,780 125,307 152,867
iPilot /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 35,811 51,370 17,310 29,412
Gross profit (RMB in
thousands) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,496 26,954 53,094 11,398 25,290
iSafety /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,486 18,832 39,694 10,779 15,730
iPilot /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 8,122 13,400 619 9,560
Gross profit margin (%) /H1118/H1118/H111810.7% 10.1% 13.7% 8.0% 13.9%
iSafety /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.7% 8.1% 11.9% 8.6% 10.3%
iPilot /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885.2% 22.7% 26.1% 3.6% 32.5%
Delivery volume (units in
thousands) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118207.5 320.1 785.4 386.3 386.0
Average selling price
(RMB per unit) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118833.9 835.0 491.6 369.2 472.2
Intelligent Cabin Solutions
Revenue (RMB in
thousands) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118696 1,565 18,346 4,089 30,540
Gross profit (RMB in
thousands) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12) 712 1,076 (414) 1,607
Gross profit margin (%) /H1118/H1118/H1118(1.7)% 45.5% 5.9% (10.1)% 5.3%
Delivery volume (units in
thousands) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
(1) 0.4 32.5 11.2 87.0
Average selling price
(RMB per unit) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–(2) –(2) 565.0 366.5 351.1
V ehicle infrastructure
cooperative systems
Revenue (RMB in
thousands) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 722 71,454 16,965 23,626
Gross profit (RMB in
thousands) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 74 14,138 2,643 6,885
Gross profit margin (%) /H1118/H1118/H1118 – 10.2% 19.8% 15.6% 29.1%
Notes:
(1) Less than 50 units
(2) Average selling price not meaningful given negligible delivery volume
SUMMARY
–1 5–


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As of or for the year ended December 31,
As of or for
the six months
ended June 30,
20242021 2022 2023
Number of design-wins as
of the end of the
relevant year/period
(1) /H1118/H1118 20 36 51 41
Number of SOPs as of the
end of the relevant
year/period
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 53 64 94
Rate of conversion from
design-win (3) to SOP as
of the Latest Practicable
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896.4% 87.0% 93.1% 38.1%
(4)
Notes:
(1) Refers to the number of design-wins as of the end of the relevant year or period, calculated by adding
newly secured design-wins and deducting design-wins converted to SOPs during the relevant year or
period. The number of design-wins grew steadily from December 31, 2021 to December 31, 2023. The
number of design-wins decreased from December 31, 2023 to June 30, 2024 because we had a relatively
larger number of design-wins converted to SOPs during this period.
(2) Refers to the number of SOPs as of the end of the relevant year or period. The number of SOPs grew
steadily throughout the Track Record Period.
(3) Refers to the number of design-wins obtained during the respective year or period.
(4) The conversion rate for this period was relatively low because of the proximity between June 30, 2024
and the Latest Practicable Date.
Intelligent Driving Solutions
Our revenue from intelligent driving solutions generally increased throughout the Track
Record Period, mainly attributable to: (i) an increase in the number of design wins we obtained
from OEMs, which was in line with the increased market demand for intelligent driving solutions;
and (ii) an increase in the delivered projects of iSafety and iPilot. The revenue, gross profit and
gross profit margin of our iPilot solutions in 2021 were not representative due to negligible delivery
volume. Since then, we experienced significant growth in revenue and gross profit of iPilot
solutions. The gross margin of our iSafety solutions decreased from 2021 to 2022 as a result of the
changes in product mix and a decrease in the unit price of earlier product series. As a result, our
gross profit from iSafety solutions increased slightly from 2021 to 2022. The gross margin of
iSafety increased from 2022 to 2023 and from the six months ended June 30, 2023 to the same
period in 2024 as we launched new product series with relatively higher margins in the second half
of 2023. The gross margin of our iPilot solutions was relatively high in 2021 primarily because we
were able to secure relatively high selling prices from customers due to our significant efforts to
develop such prototype samples and limited supply of comparable products in the market. The
gross margin of our iPilot solutions increased significantly from the six months ended June 30,
2023 to the same period in 2024 as we advanced the product specifications and performance of our
iPilot solutions, which boosted our selling prices and gross profit margin.
SUMMARY
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The average selling price of our intelligent driving solutions remained relatively stable as
we reduced the unit price of earlier series of iSafety solutions while we ramped up delivery of
iPilot solutions, which had relatively high selling prices. The average selling price of our
intelligent driving solutions decreased from 2022 to 2023, primarily attributable to (i) changes
in our product mix where, instead of delivering solutions that integrated both controllers and
sensors, we delivered a large amount of solutions in 2023 that consisted of controllers only and
had relatively low selling prices; and (ii) a decrease in selling prices of our earlier product
series. Our delivery volume of intelligent driving solutions increased significantly from 2022
to 2023 primarily as we captured the increased market demand of such solutions through the
aforementioned adjustments in product mix and pricing. Our average selling price of intelligent
driving solutions increased from the six months ended June 30, 2023 to the same period in
2024, primarily because we reduced delivery of certain solutions that had relatively low selling
price and delivered certain customized advanced iPilot solutions on demand with relatively
high selling prices in the first half of 2024. As a result, our delivery volume of intelligent
driving solutions remained relatively stable in the six months ended June 30, 2023 and 2024.
Intelligent Cabin Solutions
The operating data of our intelligent cabin solution business in 2021, 2022 and the six
months ended June 30, 2023 were not representative due to very limited delivery volume
during the initial prototype sample phase. The relatively high gross margin in 2022 was
primarily attributable to the relatively high selling prices resulted from our significant efforts
to develop such prototype samples and limited supply of such finished products. We gradually
ramped up this business segment since the second half of 2023 and our delivery volume
increased significantly from the six months ended June 30, 2023 to the same period in 2024.
Vehicle Infrastructure Cooperative Systems
Our revenue and gross profit of vehicle infrastructure cooperative system in 2022 was low
as we only delivered a few small-scale projects in 2022 when we first started delivering for this
business. As our vehicle infrastructure cooperative system business became more established
in the second half of 2023 and we had obtained and delivered more large-scale projects that had
relatively higher gross margin, our revenue, gross profit and gross profit margin increased from
2022 to 2023, and from the six months ended June 30, 2023 to the same period in 2024.
During the Track Record Period, the gross profit margin of our intelligent cabin solutions
was generally lower than that of our intelligent driving solutions, primarily because our
intelligent driving solution business was more established and we had begun benefiting from
economies of scale for this segment while we were still gradually ramping up our intelligent
cabin solution business and strategically lowered our selling prices to capture market
opportunities. During the Track Record Period, we had relatively high gross profit margins for
our vehicle infrastructure cooperative systems primarily because projects in such segment were
generally large in scale and broad in scope. In addition, we were able to utilize technology
developed for the intelligent driving solutions in developing our vehicle infrastructure
cooperative systems and thus realized relatively high gross margin through such synergistic
effect.
SUMMARY
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BUSINESS SUSTAINABILITY
We achieved strong revenue growth during the Track Record Period, from RMB175.2
million in 2021 to RMB476.2 million in 2023 and from RMB163.8 million in the six months
ended June 30, 2023 to RMB236.7 million in the six months ended June 30, 2024. However,
our growth in revenue had yet been able to fully cover the various costs and expenses incurred
during the Track Record Period. The automotive intelligence solutions market in which we
operate is highly competitive, and the technologies are rapidly evolving. According to CIC, the
top 10 domestic intelligent driving solutions providers collectively held only a 14.7% market
share in 2023, and the technology enhancements in the computing power of chips, more
complex suites of sensors and highly adaptable algorithms, among other things, have
significantly propelled the performance of intelligent driving solutions in the past few years.
In the early stages of our development, we strategically invested heavily in our research and
development to better understand the fast-paced product demand iterations and continuous
technological innovations characteristic of this fast-developing industry, and actively increased
our sales force to strengthen our customer base and drive future growth. Our focus has always
been on enhancing our core technological capabilities and steadily launching new solutions to
strengthen our customer base, rather than pursuing short-term profitability.
In 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, we had net
losses of RMB139.8 million, RMB220.8 million, RMB207.2 million, RMB132.8 million and
RMB112.0 million, respectively. Our loss-making position is primarily a result of the
combination of: (i) procurement costs of raw materials and consumables; (ii) investment in
R&D; and (iii) investment in attracting and retaining talent. Our net loss increased from
RMB139.8 million in 2021 to RMB220.8 million in 2022, primarily due to increases in our
procurement costs of raw materials and consumables and research and development expenses.
The expansion of our R&D team, coupled with increased service fees for specific projects,
aimed to support the continual enhancement of our technological capabilities and the expansion
of our solutions portfolio. Our net loss decreased from RMB220.8 million in 2022 to
RMB207.2 million in 2023, primarily due to (i) an increase in our revenue that outpaced the
growth in our cost of sales as we began to benefit from economies of scale, (ii) an increase in
the revenue contribution of our solutions under the intelligent driving solutions and vehicle
infrastructure cooperative systems businesses with a higher gross margin, and (iii) a decrease
in our operating expenses as a percentage of total revenue attributable to our enhancement of
operating efficiency. Our net loss decreased from RMB132.8 million in the six months ended
June 30, 2023 to RMB112.0 million in the six months ended June 30, 2024, primarily due to
(i) an increase in our gross profit due to (a) the achievement of economies of scale as we scaled
up our business, and (b) an increase in the revenue contribution of intelligent driving solutions
with a higher gross margin, such as the iPilot, and (ii) a decrease in our research and
development expenses as we had benefited from earlier R&D achievements and incurred less
non-project-specific research and development costs, which are categorized as research and
development expenses, in the six months ended June 30, 2024.
SUMMARY
–1 8–


--- page 29 ---
Our loss-making position is primarily a result of the complexity involved in the R&D of
intelligent driving solutions. Below are the major aspects of our R&D activities that
contributed substantially to our loss-making position during the Track Record Period:
 Building comprehensive R&D capabilities. We established various specialized R&D
teams across hardware, software and algorithm development. Our algorithm
engineers cover four specialities throughout the development cycle: perception,
fusion, mapping and localization, and planning and control. We believe the
full-cycle R&D capabilities allow us to achieve high cost-efficiency in technology
upgrade and product iteration.
 Investment in cutting-edge laboratories and equipment. Intelligent driving demands
high precision and reliability. During the Track Record Period, we established
several advanced facilities, including a reliability lab, a full-vehicle calibration
facility, a simulation testing lab and several advanced visualization systems. These
industry-leading equipment and facilities help us achieve high precision and
accuracy in essential R&D steps.
 Development of innovative algorithms. To ensure the competitiveness of our
intelligent driving solutions, we continuously develop innovative algorithms and
enhance existing algorithms. For example, we developed bird-eye view (BEV)
technology and monocular 3D object detection technology, and further improved the
performance of algorithms for iPilot solutions during the Track Record Period.
 Joint development by perception division and planning and control division. Our
intelligent driving solutions provide over twenty functions, and each of these
functions requires the joint development and testing by a substantial number of
R&D personnel from two divisions: perception division and planning and control
division. The joint development process of the two divisions encompasses numerous
delicate aspects and demands intensive coordination.
 Establishment of a new domain control platform. Building the new domain control
platform is highly complex, because it requires seamless integration of various
hardware, software and algorithms and involves the joint efforts of dozens of
engineers from these three specialty areas. Our engineers dedicated considerable
time to fine-tune the platform design to ensure its compatibility and its ability to
accommodate customization requests from different customers.
SUMMARY
–1 9–


--- page 30 ---
We intend to maintain sustainability and achieve profitability by:
 Driving Revenue Growth. We intend to achieve sustainable revenue growth by: (i)
implementing the incremental development strategy to facilitate penetration across
various product lines; (ii) enhancing in-house R&D capabilities to achieve greater
efficiency through efficient chip utilization, development autonomy and high
adaptivity; (iii) leveraging cross-domain expertise to maximize synergies of the
three business segments; (iv) capitalizing the existing design wins for mass
production; (v) deepening our relationships with existing customers; (vi) attracting
new customers through a diversification strategy; (vii) expanding to new
geographies; and (viii) refining our solutions.
 Improving Gross Margin. We intend to improve our gross margin by: (i)
optimizing the cost structure of our solutions with continuous innovation; (ii)
enhancing economies of scale with strong supply chain capabilities; (iii) improving
product mix with higher margin solutions and services; and (iv) enhancing
manufacturing efficiency with intelligent facilities.
 Enhancing Operating Leverage. During the Track Record Period, we incurred
significant operating expenses, including research and development expenses,
selling expenses and general and administrative expenses. We expect our operating
expenses as a percentage of revenue to further decrease as we continue to ramp up
our production and achieve revenue growth and improve the efficiency of our R&D,
sales and marketing and administrative activities and our spending on such
activities.
 Optimizing Working Capital Efficiency. We have sufficient cash balance to
support our business operations and future expansion. As of October 31, 2024, we
had unutilized banking facilities of RMB45.0 million. We are also proactively
seeking ways to optimize our liquidity and capital management. We expect our
profitability to improve and can further solidify our working capital sufficiency.
For details, see “Business—Business Sustainability.”
SUMMARY
–2 0–


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KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios as of the dates or for the
years/period indicated:
As of or for the year ended December 31,
As of or
for the six
months
ended
June 30,
20242021 2022 2023
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H11189.7% 12.0% 14.3% 14.1%
Net loss margin (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(79.8)% (79.0)% (43.5)% (47.3)%
Current ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.22x 3.01x 3.49x 2.61x
Adjusted net loss margin
(non-IFRS measure) (4) /H1118/H1118/H1118(74.8)% (73.7)% (38.8)% (34.8)%
Asset-liability ratio (5) /H1118/H1118/H1118/H1118/H1118/H11182.27x 2.99x 3.25x 2.52x
Notes:
(1) Gross profit margin equals gross profit divided by revenue for the year/period indicated and multiplied
by 100%.
(2) Net loss margin equals net loss divided by revenue for the year/period indicated and multiplied by
100%.
(3) Current ratio equals total current assets divided by total current liabilities as of the date indicated.
(4) Adjusted net loss margin (non-IFRS measure) equals adjusted net loss (non-IFRS measure) divided by
revenue for the year/period indicated and multiplied by 100%.
(5) Asset-liability ratio equals total assets divided by total liabilities as of the date indicated.
For details, see “Financial Information—Key Financial Ratios.”
GLOBAL OFFERING STATISTICS
All statistics presented in the table below are based on the assumption that the
Over-allotment Option is not exercised:
Based on
minimum
indicative Offer
Price of
HK$17.00
Based on
maximum
indicative Offer
Price of
HK$20.20
Market capitalization of our H Shares after
completion of the Global Offering (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$5,263.4
million
HK$6,254.2
million
Market capitalization of our Shares after the
Completion of Global Offering (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$6,786.2
million
HK$8,063.6
million
Unaudited pro forma adjusted net tangible asset
value per Share (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$3.23 HK$3.54
SUMMARY
–2 1–


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Notes:
(1) The calculation of market capitalization is based on the 309,613,108 H Shares expected to be issued
immediately upon completion of the Global Offering.
(2) The calculation of market capitalization is based on the 399,190,000 Shares expected to be issued
immediately upon completion of the Global Offering.
(3) The unaudited pro forma net tangible assets per Share is arrived at after the adjustments referred to in
the preceding paragraphs and on the basis that 399,190,000 Shares were in issue assuming that the
Global Offering have been completed on June 30, 2024 but takes no account of any Shares which may
be allotted and issued upon the exercise of the Over-allotment Option. For the purpose of this unaudited
pro forma adjusted net tangible assets per Share, the amounts stated in Renminbi are converted into
Hong Kong dollars at the rate of HK$1.00 to RMB0.93252.
IMPACT OF THE COVID-19 PANDEMIC AND THE GLOBAL SHORTAGE OF
SEMICONDUCTOR CHIPS
On January 30, 2020, the International Health Regulations Emergency Committee of the
World Health Organization declared the novel coronavirus disease 2019 (the “COVID-19”)
outbreak a public health emergency of international concern, and on March 11, 2020, the World
Health Organization declared the global COVID-19 outbreak a pandemic. The COVID-19 virus
continued to spread rapidly worldwide in 2022. Furthermore, a global supply shortage from
late 2021 to the second half of 2022 resulted in the supply crunch of semiconductor chips.
According to CIC, the average selling price of commonly used chips for intelligent driving
solutions rose to RMB351.6 per unit in 2022 from RMB307.9 per unit in 2021, reflecting a
year-on-year increase of 14.2%. In anticipation of the supply crunch, we procured and
maintained a relatively high level of semiconductor chips inventory in 2021 to avoid disruption
to our production. By the end of the Track Record Period, 95.1% of the semiconductor chips
we procured in 2021 had been utilized. In 2021, 2022 and 2023 and the six months ended June
30, 2024, our procurement cost of chips contributed to 35.0%, 11.3%, 12.9% and 14.9% of our
total procurement cost, respectively. However, neither the COVID-19 pandemic nor the global
shortage of semiconductor chips had any material adverse impact on our operations and
financial performance during the Track Record Period and up to the Latest Practicable Date,
primarily taking into consideration that (i) we had not experienced any difficulty in securing
sufficient and prompt chip supplies, (ii) we had not experienced significant increases in our
cost of sales, (iii) there was no suspension to our or our contract manufacturers’ production
facilities due to the COVID-19 pandemic, and (iv) we had not experienced any material labor
shortage, as a result of the COVID-19 pandemic or the supply crunch of semiconductor chips.
Based on their current best knowledge and belief, our Directors do not anticipate any further
impact from COVID-19 or supply crunch of semiconductor chips going forward. Our cost of
sales primarily represents procurement costs of raw materials and consumables, which
accounted for 77.5%, 73.8%, 73.4%, 74.9% and 69.5% of our total revenue in 2021, 2022 and
2023 and the six months ended June 30, 2023 and 2024, respectively. As of the Latest
Practicable Date, according to CIC, the global supply of semiconductor chips had returned to
normal.
SUMMARY
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USE OF PROCEEDS
Assuming that the Over-allotment Option is not exercised, after deducting the
underwriting commissions and other estimated offering expenses payable by us in connection
with the Global Offering, and assuming an Offer Price of HK$18.60 per Share (being the
mid-point of the indicative Offer Price range of HK$17.00 to HK$20.20), we estimate that we
will receive net proceeds of approximately HK$665.9 million from the Global Offering. We
intend to use the proceeds from the Global Offering for the purposes and in the amounts set
forth below:
 Approximately 40% of the net proceeds, or HK$266.3 million, for enhancing our
R&D capabilities as well as recruiting and retaining relevant R&D talents to
(i) research artificial intelligence technologies, (ii) refine our product R&D abilities
and reinforce our capabilities to commercialize innovations, and (iii) boost the
scalability as well as efficiency and effectiveness of our R&D process;
 Approximately 30% of the net proceeds, or HK$199.8 million, for increasing our
production efficiency and solution competitiveness by (i) switching certain
production processes that are currently done by external parties to in-house
production, (ii) introducing advanced automated production equipment and systems
to further enhance the intelligence of our production lines, and (iii) vertically
integrating certain parts of our supply chain, specifically by developing in-house
advanced sensors and establishing production lines for such sensors;
 Approximately 20% of the net proceeds, or HK$133.2 million, for reinforcing our
sales and marketing capabilities; and
 Approximately 10% of the net proceeds, or HK$66.6 million, for working capital
and general corporate purposes.
For details, see “Future Plans and Use of Proceeds.”
DIVIDEND
We did not declare or pay dividends on our Shares during and after the Track Record
Period. We currently expect to retain all future earnings for use in operation and expansion of
our business, and do not anticipate paying cash dividends in the foreseeable future. The
declaration and payment of any dividends in the future will be determined by our Board and
subject to our Articles of Association and the PRC Company Law, and will depend on a number
of factors, including our earnings and financial condition, operating requirements, capital
requirements and any other conditions that our Directors may deem relevant. As confirmed by
our PRC Legal Advisor, any future net profit that we make will have to be applied to make up
for our historically accumulated losses in accordance with the PRC laws, after which we will
be obliged to allocate 10% of our profit to our statutory common reserve fund until such fund
has reached more than 50% of our registered capital. We will therefore only be able to declare
SUMMARY
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--- page 34 ---
dividends after (i) all our historically accumulated losses have been made up for, and (ii) we
have allocated sufficient profit to our statutory common reserve fund as described above. In
addition, according to our dividend policy, any distribution of dividends shall be subject to (i)
our remaining after-tax profit after making up losses and allocation of common reserve fund
being positive, and our belief that our cash flow is adequate and such distribution would not
affect our business sustainability, (ii) our auditors issuing a standard unqualified audit report
for the year of the distribution, and (iii) the absence of major investment plans or significant
capital expenditures (except for investment projects with raised funds) in the next 12 months.
Currently, our Company does not have any pre-determined dividend distribution ratio.
RISK FACTORS
Our business and the Global Offering involve certain risks as set out in “Risk Factors.”
Y ou should read that section in its entirety carefully before you decide to invest in our Shares.
Some of the major risks we face include: (i) the industry in which we operate is highly
competitive. If we fail to compete successfully with our existing or potential competitors, our
business, results of operations and financial condition may be materially and adversely
affected; (ii) if we are unable to develop and introduce new solutions that adapt to changing
market demand and customer needs in a timely manner, our future business, results of
operations, financial condition and competitive position would be materially and adversely
affected; (iii) we have been and intend to continue investing significantly in R&D, which may
not generate the results we expect and therefore may adversely affect our short-term cash flow,
liquidity and profitability; (iv) we recorded net losses and had net operating cash outflows
during the Track Record Period; and (v) there can be no assurance that our efforts in seeking
design wins for our solutions will succeed.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commission and other fees
incurred in connection with the Global Offering. Listing expenses to be borne by us are
estimated to be approximately RMB58.7 million (HK$63.0 million), comprising: (i)
underwriting fees of RMB25.8 million (HK$27.7 million); and (ii) non-underwriting-related
expenses of RMB32.9 million (HK$35.3 million), which are further categorized into: (a) fees
and expenses of legal advisors and accountants of RMB20.3 million (HK$21.8 million); and
(b) other fees and expenses of RMB12.6 million (HK$13.5 million), assuming the Over-
allotment Option is not exercised and based on the Offer Price of HK$18.60 per Offer Share
(being the mid-point of the Offer Price range), approximately RMB28.1 million (HK$30.1
million) of which was charged or is expected to be charged to our consolidated statements of
profit or loss, and approximately RMB30.6 million (HK$32.9 million) of which is expected to
be deducted from equity upon the completion of the Global Offering. The listing expenses are
expected to represent approximately 8.6% of the gross proceeds of the Global Offering,
assuming an Offer Price of HK$18.60 per Offer Share (being the mid-point of the indicative
Offer Price range) and that the Over-allotment Option is not exercised. The listing expenses
above are the latest practicable estimate for reference only, and the actual amount may differ
from this estimate.
SUMMARY
–2 4–


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APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Hong Kong Stock Exchange for the granting of the listing of, and
permission to deal in, our H Shares to be converted from Unlisted Shares and issued pursuant
to the Global Offering, on the basis that we satisfy the market capitalization/revenue test under
Rule 8.05(3) of the Listing Rules with reference to (i) our revenue of RMB476.2 million for
the year ended December 31, 2023, which exceeds HK$500 million, and (ii) our expected
market capitalization at the time of Global Offering, which exceeds HK$4 billion.
OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou Xiang, Mr. Wang Qicheng, Mr. Y an Shengye
and Mr. Wu Jianxin entered into the Concert Party Agreement in June 2019, as amended and
replaced by the Amended Concert Party Agreement entered into in May 2024. The Amended
Concert Party Agreement served to reaffirm their concert party arrangement, to confirm and
formalize the effective date and termination date of the concert party arrangement, and to
clarify that only the Shares beneficially owned by the members of the Concert Party Group are
subject to the concert party arrangement, and it does not affect the ownership continuity of our
Company as required under Rule 8.05(3)(c) of the Listing Rules. Pursuant to the Amended
Concert Party Agreement, each of Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou Xiang, Mr.
Wang Qicheng, Mr. Y an Shengye and Mr. Wu Jianxin agreed to be parties acting in concert (i)
aligning their votes in the board meetings of our Company, and (ii) aligning their votes in the
Shareholders’ meeting of our Company in respect of the Shares in our Company beneficially
owned by each of them from time to time, since they became and remained as Directors or
Shareholders of our Company, and that members of the Concert Party Group will follow Dr.
Liu Guoqing’s vote to arrive at a unanimous consent in case of any disagreement. As of the
Latest Practicable Date, the Concert Party Group held approximately 24.35% of the Shares, and
will hold approximately 21.96% of the Shares immediately following the completion of the
Global Offering (assuming the Over-allotment Option is not exercised).
Dr. Liu Guoqing acts as the general partner of each of the ESOP Holding Entities, and is
therefore deemed to be interested in the Shares held by the ESOP Holding Entities in our
Company. As of the Latest Practicable Date, the ESOP Holding Entities collectively held
approximately 5.86% of the Shares, and will hold approximately 5.29% of the Shares
immediately following the completion of the Global Offering (assuming the Over-allotment
Option is not exercised). The ESOP Holding Entities are not parties to the Concert Party
Agreement or the Amended Concert Party Agreement, and do not form part of the Concert
Party Group.
Accordingly, the Concert Party Group and the ESOP Holding Entities collectively form
the Single Largest Group of Shareholders. As of the Latest Practicable Date, the Single Largest
Group of Shareholders in aggregate held approximately 30.22% of the Shares, and will hold
approximately 27.25% of the Shares immediately following the completion of the Global
Offering (assuming the Over-allotment Option is not exercised). Therefore, our Company will
not have any controlling shareholders as defined under the Listing Rules upon Listing.
SUMMARY
–2 5–


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PRE-IPO INVESTMENTS
Since our establishment, we have attracted certain Pre-IPO Investors and completed
several rounds of financing to raise funds for the development of our business. For further
information of the principal terms of the Pre-IPO Investments and the identity and background
of our major Pre-IPO Investors, see “History, Development and Corporate Structure—Pre-IPO
Investments.”
RECENT DEVELOPMENT
In November 2024, we supported one of our OEM customers in obtaining both the
advanced driver distraction warning (ADDW) system certifications and driver drowsiness and
attention warning (DDAW) certifications under the EU General Safety Regulation (GSR) for
its vehicle model. According to CIC, we are among the first batch of suppliers of driver
monitoring system (DMS) solutions in China that successfully supported OEMs in obtaining
ADDW and DDAW certifications for their vehicle models under the EU GSR.
Subsequent to the Track Record Period, we have witnessed growth in our business
operations. Since July 1, 2024 and up to the Latest Practicable Date, we obtained new design
wins for 19 vehicle models with 14 OEMs, and achieved SOP for 22 vehicle models with 17
OEMs. Based on our management account, our revenue increased in the ten months ended
October 31, 2024 compared to the same period in 2023. As of October 31, 2024, we had cash
and cash equivalent of RMB179.1 million and unutilized banking facilities of RMB45.0
million.
We expect to incur net losses for the year ending December 31, 2024, mainly because we
expect to continually ramp up our business in the year ending December 31, 2024 to achieve
economies of scale, and despite our continued efforts in improving our operational efficiency
and gross margin during the Track Record Period, our net margins are expected to be adversely
affected by a number of factors including: (i) significant research and development expenses,
as we will continue to devote resources to researching new intelligent driving solutions and
cutting-edge technologies; (ii) share-based payment expenses, as we provide long-term
incentive programs to employees to motivate and retain talent; and (iii) listing expenses. Based
on our current development plan and our management’s estimates, we do not expect to generate
any net profit before 2026.
Our Directors have confirmed that up to the date of this prospectus there has been no
material adverse change in our financial or trading position or prospects since June 30, 2024
(being the end of the period reported in the Accountant’s Report set out in Appendix I to this
prospectus) and there has been no event since June 30, 2024 which would materially affect the
information shown in the Accountant’s Report set out in Appendix I to this prospectus.
Pursuant to the Trial Administrative Measures on the Overseas Securities Offering and
Listing of Domestic Companies (), we
submitted a filing to the CSRC for application of listing of the H Shares on the Stock Exchange
and the Global Offering on May 30, 2024. We received the CSRC filing clearance on October
28, 2024.
SUMMARY
–2 6–


--- page 37 ---
In this prospectus, unless the context otherwise requires, the following terms and
expressions have the meanings set forth below. Certain other terms are explained in “Glossary
of Technical Terms” in this Prospectus.
“Accountant’s Report” the accountant’s report of our Company, the text of which
is set out in Appendix I to this prospectus
“affiliate” any other person, directly or indirectly, controlling or
controlled by or under direct or indirect common control
with such specified person
“AFRC” the Accounting and Financial Reporting Council
“Articles of Association” or
“Articles”
the articles of association of our Company, conditionally
adopted on May 13, 2024 with effect from the Listing
Date, and as amended from time to time, a summary of
which is set out in the section headed “Appendix
V—Summary of Articles of Association”
“Amended Concert Party
Agreement”
the amended concert party agreement entered into by Dr.
Liu Guoqing ( ᄎ਷૶), Mr. Y ang Guang ( เᄿ), Mr. Zhou
Xiang ( մജ), Mr. Wang Qicheng ( ˮ઼೻), Mr. Y an
Shengye ( ₢௷ุ) and Mr. Wu Jianxin (㒥)i nM a y
2024
“Bao’an Production Base” our current production base, which is located in Bao’an
District, Shenzhen, Guangdong Province, China
“BIS” the U.S. Bureau of Industry and Security
“Board” or “Board of Directors” the board of Directors of our Company
“Business day” or “business day” a day on which banks in Hong Kong are generally open
for normal banking business to the public and which is
not a Saturday, Sunday or public holiday in Hong Kong
“Capital Market Intermediaries” the capital market intermediaries participating in the
Global Offering and has the meaning ascribed thereto
under the Hong Kong Listing Rules
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
DEFINITIONS
–2 7–


--- page 38 ---
“China”, “Mainland China” or
“PRC”
the People’s Republic of China, for the purpose of this
prospectus and for geographical reference only, except
where the context requires, references in this prospectus
to “China,” “Mainland China” or the “PRC” do not apply
to Hong Kong, Macau and Taiwan
“Chongqing Y ongnuo Xincheng” Chongqing Y ongnuo Xincheng Technology Service Co.,
Ltd. (ʮ̡), a company
established under the laws of the PRC on April 25, 2021,
which was formerly a non-wholly-owned subsidiary of
our Company and was subsequently deregistered on April
17, 2024
“Chongqing Y oujia” Chongqing Y oujia Innovation Technology Co., Ltd. (ᅅ
ப΂ʮ̡), a company established
under the laws of the PRC on March 14, 2019 and a
non-wholly-owned subsidiary of our Company
“CIC” or “Industry Consultant” China Insights Industry Consultancy Limited, the
industry consultant of our Company
“CNIPA” National Intellectual Property Administration of the PRC
(ᗆପᛆ҅)
“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
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Company,” “our Company” or
“the Company”
Minieye Technology Co., Ltd (΅Ϟ
ʮ̡) (formerly known as Shenzhen Y oujia Innov Tech
Co., Ltd.), a limited liability company established under
the laws of the PRC on December 10, 2014 and converted
into a joint stock limited liability company in the PRC on
June 7, 2023
“Company Law” or “PRC
Company Law”
Company Law of the People’s Republic of China ( ʕശɛ
جas developed or improved from time to
time
DEFINITIONS
–2 8–


--- page 39 ---
“Compliance Advisor” has the meaning ascribed to it under the Listing Rules
“Concert Party Agreement” the concert party agreement entered into by Dr. Liu
Guoqing ( ᄎ਷૶), Mr. Y ang Guang ( เᄿ), Mr. Zhou
Xiang ( մജ), Mr. Wang Qicheng ( ˮ઼೻), Mr. Y an
Shengye ( ₢௷ุ) and Mr. Wu Jianxin (㒥) in June
2019 as amended and replaced by the Amended Concert
Party Agreement
“Concert Party Group” collectively, Dr. Liu Guoqing ( ᄎ਷૶), Mr. Zhou Xiang
(մജ), Mr. Y ang Guang ( เᄿ), Mr. Wang Qicheng ( ˮ઼
೻), Mr. Y an Shengye ( ₢௷ุ) and Mr. Wu Jianxin (ܔ
㒥)
“Conversion of Unlisted Shares
into H Shares”
the conversion of 270,423,108 Unlisted Shares in
aggregate held by 56 existing Shareholders into H Shares
upon the completion of the Global Offering. Such
conversion of Unlisted Shares into H Shares and an
application for H Shares to be listed on the Hong Kong
Stock Exchange has been filed with the CSRC on May
30, 2024. The CSRC issued the filing notice on October
28, 2024 in respect of the Global Offering and the
application for listing of our H Shares on the Stock
Exchange
“CPCA” China Passenger Car Association (ࢩ
ึ)
“CSDC” China Securities Depositary and Clearing Corporation
Limited (ப΂ʮ̡)
“CSDC (Hong Kong)” China Securities Depository and Clearing (Hong Kong)
Company Limited
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ
ึ)
“Designated Bank” HKSCC Participant’s Designated Bank under FINI
“Director(s)” director(s) of our Company
“EIT Law” Enterprise Income Tax Law of the People’s Republic of
China (جas amended,
supplemented or otherwise modified from time to time
DEFINITIONS
–2 9–


--- page 40 ---
“electronic application
instruction(s)”
instruction(s) given by a HKSCC Participant
electronically via HKSCC’s FINI system to HKSCC,
being one of the methods to apply for the Offer Shares
“Employee Incentive Scheme” the pre-IPO employee incentive scheme adopted by the
Company, the principal terms of which are set out in the
section headed “Appendix VI—Statutory and General
Information—D. Employee Incentive Scheme”
“ESOP Holding Entities” Y oujia Licheng, Y oujia Qingcheng and Y oujia
Zhongcheng
“EU” the European Union
“Exchange Participant(s)” a person: (a) who, in accordance with the Hong Kong
Listing Rules, may trade on or through the Hong Kong
Stock Exchange; and (b) whose name is entered in a list,
register or roll kept by the Hong Kong Stock Exchange as
a person who may trade on or through the Hong Kong
Stock Exchange
“Extreme Conditions” the occurrence of “extreme conditions” as announced by
any government authority of Hong Kong due to serious
disruption of public transport services, extensive
flooding, major landslides, large-scale power outage or
any other adverse conditions before Typhoon Signal No.
8 or above is replaced with Typhoon Signal No. 3 or
below
“FINI” 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 listing of
securities
“GDP” gross domestic product
“Global Offering” the Hong Kong Public Offering and the International
Placing
“General Rules of HKSCC” General Rules of HKSCC published by the Stock
Exchange and as amended from time to time
DEFINITIONS
–3 0–


--- page 41 ---
“Group,” “our Group,” “we” or
“us”
our Company and its subsidiaries (or our Company and
any one or more of its subsidiaries, as the context may
require)
“GSR” General Safety Regulation, a regulation that sets
minimum safety standards for motor vehicles and their
trailers in the European Union
“Guangzhou Production Base” our production base currently under planning and
construction, which is located in Guangzhou, Guangdong
Province, China
“Guangzhou Y oujia” Guangzhou Y oujia Innovation Technology Co., Ltd. ( ᄿ
ʮ̡), a company established under
the laws of the PRC on May 18, 2023, and a wholly-
owned subsidiary of our Company
“Guangzhou Y oujia Intelligent” Guangzhou Y oujia Intelligent Technology Co., Ltd. ( ᄿψ
ʮ̡), a company established under
the laws of the PRC on June 14, 2024, and a wholly-
owned subsidiary of our Company, which was
deregistered on August 20, 2024
“Guide for New Listing
Applicants”
the Guide for New Listing Applicants issued by the Stock
Exchange, as amended, supplemented or otherwise
modified from time to time
“H Share(s)” overseas listed foreign shares in the share capital of our
Company with nominal value of RMB1.00 each, which
are to be subscribed for and traded in HK dollars and are
to be listed on the Hong Kong Stock Exchange
“H Share Registrar” Tricor Investor Services Limited
“HK$” or “HK dollars” Hong Kong dollars and cents, respectively, the lawful
currency of Hong Kong
“HK eIPO White Form ” the application for Hong Kong Offer Shares to be issued
in the applicant’s own name, submitted online through
the designated website at www.hkeipo.hk
“HK eIPO White Form Service
Provider”
the HK eIPO White Form service provider designated
by our Company as specified on the designated website at
www.hkeipo.hk
DEFINITIONS
–3 1–


--- page 42 ---
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO channel” the arrangement in these HKSCC Operational Procedures
for instructions to be given electronically to HKSCC by
Participants via FINI for applications to be made on their
behalf for new issue shares and for the payment of
application moneys, and for those instructions to be acted
upon
“HKSCC Nominees” HKSCC Nominees Limited, a wholly owned subsidiary
of HKSCC
“HKSCC Operational
Procedures”
the operational procedures of the HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of the systems established,
operated and/or otherwise provided by or through
HKSCC (including FINI and CCASS) as from time to
time in force
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
“Hong Kong Listing Rules” or
“Listing Rules”
the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (as amended
from time to time)
“Hong Kong Offer Shares” the 3,919,000 H Shares initially offered by our Company
for subscription at the Offer Price pursuant to the Hong
Kong Public Offering (subject to reallocation as
described in “Structure of the Global Offering” in this
prospectus)
DEFINITIONS
–3 2–


--- page 43 ---
“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscription
by the public in Hong Kong (subject to adjustment as
described in “Structure of the Global Offering” in this
prospectus) at the Offer Price (plus brokerage, SFC
transaction levies and Hong Kong Stock Exchange
trading fees), on and subject to the terms and conditions
described in this prospectus as further described in the
section headed “Structure of the Global Offering — The
Hong Kong Public Offering”
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed
in the section headed “Underwriting—Hong Kong
Underwriters”
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated December 16, 2024
relating to the Hong Kong Public Offering and entered
into by, among others, our Company, Liu Guoqing ( ᄎ਷
૶), Zhou Xiang ( մജ), Y ang Guang ( เᄿ), Wang
Qicheng ( ˮ઼೻) and the Hong Kong Underwriters, as
further described in the section headed
“Underwriting—Underwriting Arrangements and
Expenses”
“Hubei Y oujia” Hubei Y oujia Technology Co., Ltd. (ʮ
̡), a company established under the laws of the PRC on
December 22, 2017, and a wholly-owned subsidiary of
our Company
“Hunan Y ouxiang” Hunan Y ouxiang Wanglian Intelligent Technology Co.,
Ltd. (ʮ̡), a company
established under the laws of the PRC on November 16,
2020, and a wholly-owned subsidiary of our Company
“IFRS” International Financial Reporting Standards, which
include standards, amendments and interpretations
promulgated by the International Accounting Standards
Board and the International Accounting Standards and
interpretation issued by the International Accounting
Standards Committee
DEFINITIONS
–3 3–


--- page 44 ---
“Independent Third Party(ies)” any entity or person who is not a connected person of our
Company within the meaning ascribed thereto under the
Listing Rules
“International Placing Shares” the 35,271,000 H Shares initially offered by our
Company for subscription pursuant to the International
Placing together with, where relevant, any additional
Shares which may be issued by our Company pursuant to
the exercise of the Over-allotment Option (subject to
reallocation as described in the section headed “Structure
of the Global Offering”)
“International Placing” the offer of the International Placing Shares by the
International Underwriters at the Offer Price outside the
United States in offshore transactions in accordance with
Regulation S or any other available exemption from
registration under the US Securities Act, as further
described in the section headed “Structure of the Global
Offering”
“International Underwriters” the group of international underwriters, led by the
Overall Coordinators, who are expected to enter into the
International Underwriting Agreement to underwrite the
International Placing
“International Underwriting
Agreement”
the underwriting agreement expected to be entered into
on or around December 23, 2024 by, among others, our
Company and the International Underwriters in respect of
the International Placing, as further described in the
section headed “Underwriting—The International
Placing”
“Jiangsu Y uanshi” Jiangsu Y uanshi Technology Co., Ltd. (ҦϞ
ʮ̡), a company established under the laws of the
PRC on June 17, 2022 and a non-wholly-owned
subsidiary of our Company
“Joint Bookrunners” the joint bookrunners as named in “Directors,
Supervisors and Parties involved in the Global Offering”
in this Prospectus
“Joint Global Coordinators” the joint global coordinators as named “Directors,
Supervisors and Parties involved in the Global Offering”
in this Prospectus
DEFINITIONS
–3 4–


--- page 45 ---
“Joint Lead Managers” the joint lead managers as named in “Directors,
Supervisors and Parties involved in the Global Offering”
in this Prospectus
“Joint Sponsors” the joint sponsors as named in “Directors, Supervisors
and Parties involved in the Global Offering” in this
Prospectus
“Latest Practicable Date” December 10, 2024, being the latest practicable date for
the purpose of ascertaining certain information contained
in this prospectus prior to its publication
“Legal Advisor as to U.S. export
control laws”
Hogan Lovells, the legal advisor of our Company as to
U.S. export control laws
“Listing” listing of the H Shares on the Main Board of the Hong
Kong Stock Exchange
“Listing Date” the date, expected to be on or around Friday,
December 27, 2024, on which our H Shares are listed and
from which dealings therein are permitted to take place
on the Hong Kong Stock Exchange
“Macau” the Macau Special Administrative Region of the PRC
“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
“MIIT” the Ministry of Industry and Information Technology of
the PRC (ʷ௅)
“Minsight SG” MINSIGHT PTE. LTD. (Ҧ(อ̋ս)ʮ
̡), a company established under the laws of Singapore
on November 20, 2023 and a non-wholly owned
subsidiary of our Company
“Ministry of Finance” or “MOF” the Ministry of Finance of the PRC (݁
௅)
“MOFCOM” Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ
௅)
DEFINITIONS
–3 5–


--- page 46 ---
“Nanjing Kaiyun” Nanjing Kaiyun Shuchuang Technology Co., Ltd. (ԯ
ʮ̡), a company established under
the laws of the PRC on August 9, 2022 and a wholly-
owned subsidiary of our Company
“Nanjing Y oujia” Nanjing Y oujia Technology Co., Ltd. (ࠢ
ʮ̡), a company established under the laws of the PRC
on February 24, 2018 and a wholly-owned subsidiary of
our Company
“NDRC” the National Development and Reform Commission of
the PRC (ึ)
“Negative List” the Special Administrative Measures for Foreign
Investment Access (Negative List) (2021 Edition) ( ̮
݄(૶ఊ)(2021و))
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍
ɽึ)
“Offer Price” the final offer price per Offer Share in Hong Kong dollars
(exclusive of brokerage fee of 1%, SFC transaction levy
of 0.0027%, AFRC transaction levy of 0.00015% and
Stock Exchange trading fee of 0.00565%) at which Hong
Kong Offer Shares are to be subscribed as described in
the section headed “Structure of the Global
Offering—Pricing and Allocation”
“Offer Share(s)” the Hong Kong Offer Shares and the International
Placing Shares, together with, where relevant, any
additional H Shares which may be issued by our
Company pursuant to the exercise of the Over-allotment
Option
“OICA” the International Organization of Motor V ehicle
Manufacturers ( ਷ყӛԓႡிਠ՘ึ)
“Overall Coordinators” the overall coordinators as named in the section headed
“Directors, Supervisors and Parties involved in the
Global Offering”
DEFINITIONS
–3 6–


--- page 47 ---
“Over-allotment Option” the option expected to be granted by our Company to the
International Underwriters, exercisable by the Overall
Coordinators (for themselves and on behalf of the
International Underwriters) pursuant to the International
Underwriting Agreement, pursuant to which our
Company may be required to allot and issue up to an
aggregate of 5,878,400 additional H Shares at the Offer
Price to, among other things, cover over-allocations in
the International Placing, if any, further details of which
are described in the section headed “Structure of the
Global Offering”
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC GAAP” generally accepted accounting principles of PRC
“PRC Legal Advisor” AllBright Law Offices, the legal advisor of our Company
as to PRC laws
“Pre-IPO Investment(s)” the Pre-IPO investments in our Company undertaken by
the Pre-IPO Investors, details of which are set out in the
section headed “History, Development and Corporate
Structure”
“Pre-IPO Investor(s)” the investor(s) who participated in our Pre-IPO
Investments, details of which are set out in the section
headed “History, Development and Corporate Structure”
“Price Determination Agreement” the agreement to be entered into by the Overall
Coordinators (for themselves and on behalf of the Hong
Kong Underwriters) and our Company on the Price
Determination Date to record and fix the Offer Price
“Price Determination Date” the date, expected to be on or before Monday,
December 23, 2024 (Hong Kong time) on which the Offer
Price is determined, or such later time as the Overall
Coordinators (for themselves and on behalf of the Hong
Kong Underwriters) and our Company may agree, but in
any event no later than 12:00 noon on Monday, December
23, 2024
“prospectus” or “Prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
DEFINITIONS
–3 7–


--- page 48 ---
“province” a province or, where the context requires, a provincial
level autonomous region or municipality, under the direct
supervision of the central government of the PRC
“R&D” research and development
“Regulation S” Regulation S under the US Securities Act
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“Ruijian Zhixing” Hangzhou Ruijian Zhixing Technology Co., Ltd. (ψቚ
ʮ̡), a company established under the
laws of the PRC on November 17, 2022 and a non-
wholly-owned subsidiary of our Company
“SAC” the Securities Association of China ( ʕ਷ᗇՎุ՘ึ)
“SAFE” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“SAMR” State Administration for Market Regulation
“SASAC” State-owned Assets Supervision and Administration
Commission of the State Council ( ਷ਕ৫਷Ϟ༟ପ္ຖ
ึ)
“SA T” the State Administration of Taxation of the PRC (೼
ਕᐼ҅)
“Securities and Futures
Ordinance” or “SFO”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Securities Law” the Securities Law of the People’s Republic of China ( ʕ
جas amended, supplemented or
otherwise modified from time to time
“SFC” the Securities and Futures Commission of Hong Kong
“Shaanxi Y oujia” Shaanxi Y oujia Zhixing Technology Co., Ltd. ( ৯ГСቷ
ʮ̡), a company established under the
laws of the PRC on March 1, 2024, and a non-wholly-
owned subsidiary of our Company
DEFINITIONS
–3 8–


--- page 49 ---
“Shanghai Stock Exchange” the Shanghai Stock Exchange (ה׸)
Shanghai Y ouqu” Shanghai Y ouqu Information Technology Co., Ltd. ( ɪऎ
ʮ̡), a company established under
the laws of the PRC on June 30, 2020, and a non-wholly-
owned subsidiary of our Company
“Shanghai Y ouxing” Shanghai Y ouxing Automotive Electronics Co., Ltd. ( ɪ
ʮ̡), a company established under
the laws of the PRC on October 14, 2020, and a
non-wholly-owned subsidiary of our Company
“Share(s)” ordinary shares in the capital of our Company with a
nominal value of RMB1.00 each, comprising Unlisted
Shares and H Shares
“Shareholders(s)” holder(s) of the Share(s)
“Shenzhen Stock Exchange” the Shenzhen Stock Exchange (ה׸)
Single Largest Group of
Shareholders”
collectively, the Concert Party Group and the ESOP
Holding Entities
“Stabilizing Manager” CLSA Limited
“State Council” State Council of the People’s Republic of China ( ʕശɛ
͏΍ձ਷਷ਕ৫)
“subsidiary(ies)” has the meaning ascribed to it in section 15 of the
Companies Ordinance
“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 Buybacks
issued by the SFC, as amended, supplemented or
otherwise modified from time to time
“Tongxiang Wuzhen Y oujia” Tongxiang Wuzhen Y oujia Intelligent Automobile Co.,
Ltd. (ʮ̡), a company
established under the laws of the PRC on September 25,
2023 and a wholly-owned subsidiary of our Company
“Track Record Period” the years ended December 31, 2021, 2022 and 2023 and
the six months ended June 30, 2024
DEFINITIONS
–3 9–


--- page 50 ---
“UK” the United Kingdom
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“Unlisted Share(s)” ordinary share(s) in the share capital of our Company,
with a nominal value of RMB1.00 each, which are not
listed on any stock exchange
“US” or “United States” the United States of America, its territories, its
possessions and all areas subject to its jurisdiction
“US Securities Act” the United States Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder
“US$” or “US dollars” United States dollars, the lawful currency of the United
States
“V A T” value-added tax
“Wuhan Y oujia” Wuhan Y oujia Innovation Technology Co., Ltd. (ဏС
ʮ̡), a company established under the
laws of the PRC on August 16, 2022, and a wholly-owned
subsidiary of our Company
“Y oujia Beijing” Y oujia Innovation (Beijing) Technology Co., Ltd. ( Сቷ
௴อ(̏ԯ)ʮ̡), a company established under
the laws of the PRC on December 14, 2020, and a
wholly-owned subsidiary of our Company
“Y oujia Data Technology” Shenzhen Y oujia Data Technology Co., Ltd. ( ଉέСቷᅰ
ʮ̡), a company established under the laws
of the PRC on April 16, 2020, which was formerly a
wholly-owned subsidiary of our Company and was
subsequently deregistered on April 9, 2024
“Y oujia Licheng” Shenzhen Y oujia Licheng Investment Partnership
(Limited Partnership) ( ଉέСቷᘥϓҳ༟ΥྫΆุ(ࠢ
Υྫ)), a limited partnership established under the laws
of the PRC on May 28, 2021, and one of the ESOP
Holding Entities
DEFINITIONS
–4 0–


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“Y oujia Qingcheng” Shenzhen Y oujia Qingcheng Investment Partnership
(Limited Partnership) ( ଉέСቷ૶ϓҳ༟ΥྫΆุ(ࠢ
Υྫ)), a limited partnership established under the laws
of the PRC on December 10, 2020, and one of the ESOP
Holding Entities
“Y oujia Zhixing” Shanghai Y oujia Zhixing Electronic Technology Co., Ltd.
(ʮ̡), a company
established under the laws of the PRC on September 27,
2023 and a wholly-owned subsidiary of our Company
“Y oujia Zhongcheng” Shenzhen Y oujia Zhongcheng Investment Partnership
(Limited Partnership) ( ଉέСቷ଺ϓҳ༟ΥྫΆุ(ࠢ
Υྫ)), a limited partnership established under the laws
of the PRC on April 29, 2021, and one of the ESOP
Holding Entities
“ZF Group” a customer of our Group headquartered in Germany,
supplying advanced mobility products and systems for
vehicles and industrial technology
“Zhongyan Y oujia” Zhongyan Y oujia Intelligent Technology (Shanghai) Co.,
Ltd. (Ҧ(ɪऎ)ʮ̡), a company
established under the laws of the PRC on January 25,
2022, and a non-wholly-owned subsidiary of our
Company
“%” percent
In this prospectus, the terms “associate”, “close associate”, “connected person”, “core
connected person”, “connected transaction” and “substantial shareholder” shall have the
meanings given to such terms in the Hong Kong Listing Rules, unless the context otherwise
requires.
Certain amounts and percentage figures included in this prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures preceding them. Any discrepancies in any table or chart between the
total shown and the sum of the amounts listed are due to rounding.
For ease of reference, the names of the PRC established companies or entities, laws or
regulations have been included in this prospectus in both the Chinese and English languages
and in the event of any inconsistency, the Chinese versions shall prevail.
DEFINITIONS
–4 1–


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This glossary of technical terms contains explanations of certain technical terms
used in this prospectus. As such, these terms and their meanings may not correspond to
standard industry meanings or usage of these terms.
“3D” three spatial dimensions of width, height and depth
“ACC” Adaptive Cruise Control
“ADAS” advanced driver assistance system, referring to electronic
systems developed to automate, adapt and enhance
vehicle systems for safety and better driving, normally
featuring Level 1 and Level 2 (including Level 2+
automation) driving automation on a vehicle supporting
human drivers
“AEB” Autonomous Emergency Braking
“ADS” automated driving system, referring to the hardware and
software that are collectively capable of performing the
entire dynamic driving task on a sustained basis,
regardless of whether it is limited to a specific
operational design domain, used specifically to describe a
Level 3 to Level 5 driving automation system
“ASPICE” Automotive Software Process Improvement and
Capability Determination
“APA” Automatic Parking Assist
“A VM” Around View Monitor
“BEV” bird-eye view, an elevated view of an object or location
from a very steep viewing angle, creating a perspective as
if the observer were a bird in flight looking downwards
“BSD” Blind Spot Detection
“CAGR” compound annual growth rate
“C-NCAP” the China New Car Assessment Program, a car safety
assessment program run by the China Automotive
Technology and Research Center
GLOSSARY OF TECHNICAL TERMS
–4 2–


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“CP” control plan, a document or set of documents that
describes the control measures to be implemented during
the manufacturing process to ensure product quality
meets specified standards
“CPU” central processing unit, a complex set of electronic
circuitry that runs the machine’s operating system and
applications
“DCLC” Driver Confirmed Lane Change
“DCU” domain control unit, a type of ECU that comprehensively
processes data and makes decisions in an in-vehicle
system and commands the operation of the vehicle
“DDAW” driver drowsiness and attention warning, a system that
assesses the driver’s alertness through vehicle systems
analysis and, where needed, provides a warning to the
driver
“DIP” dual in-line package, an electronic component package
with a rectangular housing and two parallel rows of
electrical connecting pins
“DMS” Driver Monitoring System
“domain controller(s)” a computer that controls a set of vehicle functions related
to a specific area or domain. Functional domains that
require a domain controller are typically compute-
intensive and connect to a large number of input and
output devices. Examples of relevant domains include
intelligent driving, cockpit, powertrain, chassis and body
“DOW” Door Open Warning
“ECU” electronic control unit, an embedded system in a vehicle
that controls one or several electrical systems in that
vehicle
“ELK” Emergency Lane Keeping
GLOSSARY OF TECHNICAL TERMS
–4 3–


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“E-NCAP” The European New Car Assessment Programme,
providing consumers with a safety performance
assessment for the majority of the most popular cars in
Europe
“ERP” enterprise resource planning
“EV” battery electric vehicle
“FCTA” Front Cross Traffic Alert
“FCW” Forward Collision Warning
“HA VP” Home Automated V alet Parking
“HNOA” Highway Navigate on Autopilot
“IA TF16949” International technical specification of automotive
industry quality management system, which is prepared
by International Automotive Task Force (IA TF) and ISO
(International Organization for Standardization)
“ICA” Integrated Cruise Assist
“ICE” internal combustion engine, a type of engine that
converts internal energy into mechanical energy through
the combustion of fossil fuels
“IHBC” Intelligence High Beam Control
“IMS” In-cabin Monitoring System
“IPQC” in-process quality control, refers to quality control
activities performed during the manufacturing process at
various stages
“IQC” incoming quality control, refers to the quality control
procedures and inspections carried out on incoming raw
materials, components or parts before they are accepted
into the production process
“ISO” International Organization for Standardization
GLOSSARY OF TECHNICAL TERMS
–4 4–


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“ISO 9001” a standard under ISO used for certification or registration
and contractual purposes by organisations seeking
recognition of their quality management, which specifies
the requirement for quality management systems for any
organisation that needs to demonstrate its ability to
consistently provide products that meet its requisite
standards
“ISO 14001” a standard under ISO for environmental management
which is primarily concerned with what an organisation
does to comply with legal requirements to minimise the
harmful effects on the environment caused by its
activities and which sets requirements for what an
organisation must do to manage processes influencing the
impact of its activities on the environment
“ISO 21434” a standard under ISO for the electrical and electronic
(E/E) systems of mass-produced road vehicles, including
software and related components and interfaces
“ISO 26262” a standard under ISO for functional safety applied to
safety-related systems that include one or more electrical
and/or electronic (E/E) systems and that are installed in
series production cars with a maximum gross vehicle
mass up to 3,500 kg
“ISO 45001” a standard under ISO setting out requirements for an
occupational health and safety management system
developed for managing the occupational health and
safety risks associated with a business
“km/h” kilometer per hour
“LDW” Lane Departure Warning
“LiDAR” light detection and ranging, a method for determining
ranges by targeting an object or a surface with a laser and
measuring the time for the reflected light to return to the
receiver
“LCC” Lane Centering Control
“LKA” Lane Keeping Assist
GLOSSARY OF TECHNICAL TERMS
–4 5–


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“MCU” microcontroller units, small computers on a single IC
containing a processor core, memory and programmable
input and output
“MES” manufacturing execution system used in manufacturing
to track and document the transformation of raw
materials to finished products in a production plant
“middleware” software framework that acts as a bridge between the
upper-layer application and the underlying operating
system
“millimeter-wave radar” radar that use millimeter wave frequencies to detect
objects in real-time, providing information from four
dimensions including their range, azimuth, elevation and
velocity
“mm” millimeter
“MPV” multi-purpose vehicle
“NEV” new energy vehicle
“NOA” Navigate on Autopilot
“NPU” neural processing unit, a specialized processor designed
for executing machine learning algorithms
“OEM” automotive original equipment manufacturer
“OMS” Occupant Monitoring System
“OQC” Outgoing quality control, the final quality control process
performed on solutions that are ready to be delivered
“OTA” over-the-air, a technology that updates vehicle software
and firmware remotely through cloud network
“PCB” printed circuit board, the circuit base board which
provide an electrical pathway to components mounted on
the board
“PCW” Pedestrian Collision Warning
GLOSSARY OF TECHNICAL TERMS
–4 6–


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“PDC” Parking Distance Control
“RCTA” Rear Cross Traffic Alert
“RCW” Rear Collision Warning
“RPA” Remote Parking Assist
“S&G” Stop and Go
“sensor” a device that detects and responds to some type of input
from the physical environment (such as light, heat and
motion) and output is generally a signal that is converted
to display at the sensor location or transmitted for reading
or further processing
“SMT” surface mount technology, a method in which the
electrical components are mounted directly onto the
surface of a printed circuit board
“SoC” systems-on-chip, programmable integrated circuit that
integrates CPU, memory interfaces, on-chip input/output
devices, input/output interfaces and secondary storage
interfaces, often alongside other components such as
radio modems and a graphics processing unit, all on a
single substrate or microchip
“SOP” start of production, which signifies the transition from
the development and testing phase to manufacturing and
commercialization, when the solutions are ready for mass
production and delivery
“SUV” Sport utility vehicle
“tier-one supplier” automotive system integrator, company that supply
assembled components or systems directly to OEMs
“TJA” Traffic Jam Assist, an advanced driver assistance system
designed to control the vehicle to automatically follow
the vehicle ahead and stay in the center of the lane during
traffic jam
GLOSSARY OF TECHNICAL TERMS
–4 7–


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“TOPS” Tera Operations per Second, a measurement for how
many trillions, or tera, of operations a NPU can perform
per second
“TSR” Traffic Sign Recognition, a system that recognizes traffic
signs and relays the information displayed on the sign to
the driver
“UNOA” Urban Navigate on Autopilot, an advanced driving
assistance system designed to enhance urban driving
experiences by automating certain driving tasks in city
environments
“V2X” vehicle-to-everything, referring to the communication
between a vehicle and any entity that may affect, or may
be affected by, the vehicle
GLOSSARY OF TECHNICAL TERMS
–4 8–


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This prospectus includes forward-looking statements. All statements other than
statements of historical facts contained in this prospectus, including, without limitation, those
regarding our future financial position, our strategy, plans, objectives, goals, targets and future
developments in the markets where we participate or are seeking to participate, and any
statements preceded by, followed by or that include the words “believe,” “expect,” “estimate,”
“predict,” “aim,” “intend,” “will,” “may,” “plan,” “consider,” “anticipate,” “seek,” “should,”
“could,” “would,” “continue,” or similar expressions or the negative thereof, are forward-
looking statements. These forward-looking statements involve known and unknown risks,
uncertainties and other factors, some of which are beyond our control, which may cause our
actual results, performance or achievements or industry results, to be materially different from
any future results, performance or achievements expressed or implied by the forward-looking
statements. These forward-looking statements are based on numerous assumptions regarding
our present and future business strategies and the environment in which we will operate in the
future. Important factors that could cause our actual performance or achievements to differ
materially from those in the forward-looking statements include, among others, the following:
 general political and economic conditions, including those related to the PRC;
 our business prospects and our ability to successfully implement our business plans
and strategies;
 future developments, trends and conditions in the industry and markets in which we
operate or into which we intend to expand;
 our capital expenditure plans;
 the actions and developments of our competitors;
 our financial condition and performance;
 our dividend policy;
 any changes in the laws, rules and regulations of the central and local governments
in the PRC and other relevant jurisdictions and the rules, regulations and policies of
the relevant governmental authorities relating to all aspects of our business and our
business plans;
 changes or volatility in interest rates, foreign exchange rates, equity prices or other
rates or prices, including those pertaining to the PRC and the industry and markets
in which we operate;
 various business opportunities that we may pursue; and
 capital market developments, changes in the global economic conditions and
material volatility in the global financial markets.
FORW ARD-LOOKING STATEMENTS
–4 9–


--- page 60 ---
Additional factors that could cause actual performance or achievements to differ
materially include, but are not limited to, those discussed under “Risk Factors” and elsewhere
in this prospectus. We caution you not to place undue reliance on these forward-looking
statements, which reflect our management’s view only as of the date of this prospectus. We
undertake no obligation to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this prospectus might not occur. All
forward-looking statements contained in this prospectus are qualified by reference to the
cautionary statements set out in this section.
FORW ARD-LOOKING STATEMENTS
–5 0–


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An investment in our H Shares involves risks. You should carefully consider all of
the information in this prospectus, including our consolidated financial statements and
related notes before making an investment in our H Shares.
Our business, financial conditions, results of operations and prospects could be
materially and adversely affected by any of these risks. The trading price of our H Shares
may decline due to any of these risks, and you may lose all or part of your investment.
This prospectus also contains forward-looking information that involves risks and
uncertainties. Our actual results could differ materially from those anticipated in the
forward-looking statements as a result of many factors, including the risks described
below and elsewhere in this prospectus.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
The industry in which we operate is highly competitive. If we fail to compete successfully
with our existing or potential competitors, our business, results of operations and
financial condition may be materially and adversely affected.
The automotive intelligence solutions industry in which we operate is highly competitive.
We primarily compete with other companies that focus on developing and commercializing
intelligent driving solutions, intelligent cabin solutions and vehicle infrastructure cooperative
systems. Our future success will depend on our ability to emerge and sustain as a leader in our
targeted markets by continuing to develop and deliver intelligent driving and in-cabin solutions
in a timely manner and to effectively compete with existing and new competitors. If we do not
have or in the future gain more financial resources, more sophisticated technological
capabilities, broader customer base and more stable relationships than our competitors, we may
not be able to respond more quickly and effectively to new or changing opportunities,
technologies, regulatory requirements or user demand than our competitors.
We may also face competition from new entrants who may offer lower prices or new
technologies and solutions, and thus the industry in which we operate may be more competitive
in the future. Increased competition could result in lower sales, prices or profit margins or loss
of market share. Further, we may be required to make substantial additional investments in
R&D, marketing and sales, recruiting and retaining top scientists and innovative talents and
acquiring technologies complementary to, or necessary for, our current and future solutions in
order to respond to such competitive threats, and we cannot assure you that such measures will
be effective.
If we are unable to compete successfully, or if we need to take costly actions in response
to the actions of our competitors, our business, results of operations and financial condition
may be materially and adversely affected.
RISK FACTORS
–5 1–


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If we are unable to develop and introduce new solutions that adapt to changing market
demand and customer needs in a timely manner, our future business, results of operations,
financial condition and competitive position would be materially and adversely affected.
Our success depends on our ability to develop and introduce new solutions that
incorporate and integrate the latest technological advancements. A swift change in the
technologies that our customers prefer would significantly affect our business prospects.
Failure to adapt to the rapidly evolving technology environment could damage our
relationships with customers and lead them to seek alternative sources of supply. To remain
competitive, we must continue to enhance and improve the responsiveness, functionality and
features of our solutions. However, there can be no assurance that we will be able to keep up
with the technology evolution, or effectively use new technologies, recoup the costs of
developing new technologies or adapt our proprietary technologies or solutions in a
cost-effective and timely manner to meet customer requirements or emerging industry
standards.
We may encounter significant unexpected technical and production challenges or delays
in completing the development of new and enhanced solutions in a cost-effective manner. As
such, we need to invest significant resources in R&D, design innovative, accurate and safety-
and comfort-enhancing functions that differentiate our solutions from those of our competitors,
continually improve the reliability of our intelligent driving technologies, cooperate effectively
on new designs and development with our customers, suppliers and business partners, respond
effectively to technological changes and solutions announcements by our competitors and
adjust to changing customer requirements, market conditions and regulatory standards quickly
and cost-effectively.
If there are delays in, or if we fail to complete as expected or at all, the development of
new and enhanced solutions, we may not be able to satisfy our customers’ requirements,
acquire additional design wins with existing or new customers, or achieve broader market
acceptance of our solutions, and hence our business, results of operations, financial condition
and competitive position would be materially and adversely affected.
We have been and intend to continue investing significantly in R&D, which may not
generate the results we expect and therefore may adversely affect our short-term cash
flow, liquidity and profitability.
We are focusing on our R&D efforts across intelligent driving solutions, intelligent cabin
solutions and vehicle infrastructure cooperative systems. We have been investing heavily in our
R&D. Our research and development expenses were RMB82.2 million, RMB139.3 million,
RMB149.8 million, RMB81.4 million and RMB63.3 million in 2021, 2022 and 2023 and the
six months ended June 30, 2023 and 2024, respectively, representing 46.9%, 49.9%, 31.5%,
49.7% and 26.7% of our total revenue, respectively. We may continue to incur significant
research and development expenses in the future.
RISK FACTORS
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However, there can be no assurance that our efforts will deliver the benefits we anticipate.
The results of our development activities are inherently uncertain, and we may not be able to
obtain and retain qualified R&D personnel. Even if we succeed in R&D and generate the
results we expect, we may still encounter practical difficulties in commercializing our
development results. New technologies could render our technologies, technological
infrastructure or solutions that we are developing or plan to develop obsolete or unattractive,
thereby limiting our ability to recover related development costs, which could adversely affect
our revenue, profitability and market share. As such, our R&D efforts may not contribute to our
future results of operations and such contribution may not meet our expectations or even cover
the costs of our R&D efforts, which may materially and adversely affect our business, results
of operations, financial condition and competitive position.
We recorded net losses and had net operating cash outflows during the Track Record
Period.
In 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, we recorded
loss for the year/period of RMB139.8 million, RMB220.8 million, RMB207.2 million,
RMB132.8 million and RMB112.0 million, respectively. Furthermore, during the same
years/periods, we recorded net cash used in operating activities of RMB252.1 million,
RMB255.2 million, RMB276.3 million, RMB114.4 million and RMB84.6 million,
respectively. Our net losses and net operating cash outflows were primarily because we were
still at a ramp-up stage and aim at long-term business success and financial return in the
automotive intelligence solutions industry, rather than seeking near-term profitability at the
expense of long-term market potential. Based on our current development plan and our
management’s estimates, we do not expect to generate any net profit before 2026.
Our historical performance may not be indicative of our future performance. Our ability
to generate revenue and achieve profitability will depend on the performance of our existing
solutions and the successful implementation of our strategic initiatives. Our profitability could
also be affected by a number of factors, many of which are beyond our control, including
regulatory evolvement, changes in economic condition and competition. If we are unable to
effectively manage our business growth and expand our business operations, we may be unable
to successfully implement the strategies necessary to further our business prospects on
schedule or within our budget, or at all. Accordingly, there can be no assurance that we can
achieve future profitability. In addition, there can be no assurance that we will be able to
generate positive cash flows from operating activities in the future. If we have negative cash
flows from operating activities in the future, our business, results of operations and liquidity
may be adversely affected.
RISK FACTORS
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There can be no assurance that our efforts in seeking design wins for our solutions will
succeed.
We invest significant efforts in obtaining design wins from our initial contact with an
automotive OEM to its choosing our solutions for incorporation into one or more of its specific
vehicle models. We may invest significant resources pursuing, but fail to achieve, a design win
for our solutions. In addition, after a design win, it is typically difficult for a solution or
technology that did not receive the design win to displace the winner until the automotive OEM
issues a new request for quotation, because an automotive OEM will generally not change
complex technologies already integrated in its systems until a vehicle model is revamped. The
company with the winning design may also have an advantage with the automotive OEM
henceforth because of its established relationship with the automotive OEM, which would
make it more difficult for competitors to win the designs for other vehicle models of the same
OEM. In addition, despite the growing number of design wins obtained by us during the Track
Record Period, there is no guarantee that such projects will eventually reach mass production
nor any guarantee on the respective selling prices and commercial terms of our solutions. If we
fail to obtain design wins in the future, our business, results of operations and financial
condition will be materially and adversely affected.
Our existing OEM customers may not purchase our solutions in any certain quantity or
at any certain price.
We typically receive preliminary estimates from automotive OEMs of their anticipated
production volumes for the models after we obtain the design win. Those estimates may be
revised significantly by the OEMs, potentially multiple times, and may not be representative
of future production volumes. Accordingly, there can be no assurance that these customers will
purchase our solutions in large quantities or at all and at a price that will be profitable to us.
If a vehicle model for which we obtain the design win is unsuccessful or an automotive OEM
decides to delay, discontinue or reduce production of a vehicle model or the use of our
solutions in a vehicle model, our sales could be less than what we anticipate, and our
anticipation of revenue stream or inventory management may also be adversely impacted.
Moreover, pricing estimates are made at the time of a request for quotation by an automotive
OEM, and, as a result, changing market or other conditions may require us to sell our solutions
for a lower price than we initially expected. If we are unable to save sufficient production cost
or introduce solutions with additional features and functionality at a higher price to offset price
reductions, our business, results of operations and financial condition may be materially and
adversely affected.
Pricing pressures from our OEM customers who possess significant bargaining power
may materially and adversely affect our business prospects and results of operations.
Many of our current and target customers, particularly automotive OEMs, possess
significant bargaining power over their suppliers, including us, because they are large
corporations with stringent standards for procured solutions and potentially competitive
internal solutions. The supply chain for automotive OEMs is highly competitive, serving a
RISK FACTORS
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limited number of automotive OEMs. The growing competition among established players and
new market entrants in such supply chain further exacerbates the pricing pressures we face. As
such, we may face continued pricing pressure from automotive OEMs and other major
customers to reduce prices, and as a result our business, results of operations and financial
condition may be materially and adversely affected. Pricing pressures beyond our expectations
may further intensify as automotive OEMs pursue restructuring, consolidation and cost-cutting
initiatives. Under such circumstances, if we are unable to offset price reductions or introduce
new solutions with higher sale prices or gross profit margins, our profitability would be
materially and adversely affected.
Our development strategies may not succeed, which may materially and adversely affect
our business, financial condition and results of operations.
We have implemented comprehensive business strategies, including developing new
technologies and expanding our operations. We have been and will continue introducing new
solutions and improving existing ones to meet market demand and customer needs.
However, there can be no assurance that our strategies are accurate or correct in terms of
aligning with the market development, including technological advancements, industry trends
and end-user preferences. If any of our business strategies are proven to deviate from such
market development, it could have a negative impact on our business, financial condition and
results of operations. In addition, we may fail to obtain the necessary resources to fund our
future plans or employ suitable personnel to manage our expanded business. If we are unable
to develop and introduce new solutions and improve existing solutions in a cost-effective and
timely manner, our business, financial condition, results of operations and competitive position
would be materially and adversely affected.
Changes in international trade policies, geopolitics and trade protection measures, export
control and economic or trade sanctions may materially and adversely affect our business,
financial condition and results of operations.
Our operations may be negatively affected by any deterioration in the political and
economic relations among countries and sanctions and export controls administered by the
government authorities in the countries in which we operate, and other geopolitical challenges,
including, but not limited to, economic and labor conditions, increased duties, taxes and other
costs and political instability. For example, the U.S. government imposed economic and trade
sanctions directly or indirectly affecting China-based technology companies. Such laws and
regulations are likely subject to frequent changes, and their interpretation and enforcement
involves substantial uncertainties, which may be heightened by national security concerns or
driven by political or other factors that are beyond our control. There is also risk relating to
the future relationship between the United States and China with respect to trade policies,
treaties, government regulations and tariffs. Such potential uncertainties and restrictions, as
well as any associated inquiries or investigations or any other government actions, may be
difficult or costly to comply with and may, among other things, delay or impede the
development of our technology and solutions, hinder the stability of our supply chain,
RISK FACTORS
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negatively affect the market demand for our solutions, result in negative publicity, require
significant management’s attention and subject us to fines, penalties or orders that we cease or
modify our existing business practices. For example, increased tariffs imposed by the U.S.
government on certain imported goods from China in recent years may have a negative impact
on the competitiveness of Chinese OEMs in the U.S. market. Additionally, the European Union
has implemented certain tariffs on Chinese-made EVs, which could adversely impact the
competitiveness of our customers in the EU market. The United States and the European Union
may continue to increase tariffs on Chinese-made EVs and other goods in the future. While
these tariffs are subject to further negotiations and uncertainties, they may indirectly affect the
demand for our products among Chinese EV manufacturers who have business in the EU
market. Moreover, the escalated Palestinian-Israeli conflict, the war in Ukraine and the
imposition of broad economic sanctions on Russia could raise energy prices and disrupt global
markets. Unrest, terrorist threats and the potential for war in the Middle East and elsewhere
may increase market volatility across the globe. Any circumstance mentioned above may have
a material and adverse effect on our business, financial condition and results of operations.
In recent years, the United States has increased export controls restrictions on China
through the Export Administration Regulations (the “ EAR”), administered by the Bureau of
Industry and Security of the U.S. Department of Commerce, which includes a list of foreign
persons on which certain trade restrictions are imposed, including businesses, research
institutions, government and private organizations, individuals and other types of legal persons
(the “ Entity List ”). Where a foreign person is included on the Entity List, the export, re-export
and/or transfer (in-country) of items which are subject to the EAR generally is prohibited
unless the specified license requirements are met. If certain customers and suppliers are listed
on the Entity List and subject to restrictions from sourcing or selling technologies, software or
products and solutions from/to us, there can be no guarantee that we will be able to obtain as
well as extend and maintain the requisite regulatory permits in relation to our transactions with
these customers and suppliers, or that such permits will cover all our existing and potential
transactions with such customers and suppliers. There can be no assurance that the export
control actions the U.S. government may take will not impact our business, suppliers or
customers. The U.S. government could further expand the scope of items subject to the EAR
in a manner that captures our solutions. Additional actions could also take the form of
additional designations on the Entity List, which could make our solutions subject to the EAR
for certain transactions if involving those parties.
Further, the United States has implemented and has proposed additional restrictions, some
of which may impact Chinese companies. For example, on June 21, 2024, the U.S. Department
of the Treasury issued proposed regulations in a Notice of Proposed Rulemaking (the
“NPRM ”) to implement Executive Order (“ E.O. ”) 14105, which addresses U.S. investments in
certain national security technologies and products in mainland China, Hong Kong and Macau.
Consistent with the E.O., the proposed regulations focus on advanced semiconductors and
microelectronics, quantum computing and related technologies, and specific types of artificial
intelligence. On October 28, 2024, the U.S. Department of the Treasury released a final rule
to implement the E.O., which is expected to become effective on January 2, 2025. The E.O.
targets investments involving persons and entities associated with “countries of concern,”
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currently only China, and it imposes investment prohibition and notification requirements on
a wide range of investments in companies engaged in activities relating to three sectors: (i)
advanced microchips and microelectronics, (ii) quantum computing, and (iii) artificial
intelligence systems, with persons from countries of concern engaged in these technologies
defined as “Covered Foreign Persons.” Investments by U.S. persons subject to the E.O., which
are defined as “covered transactions,” include acquisitions of equity interests (including
purchases of shares in an initial public offering), certain debt financing, joint ventures, and
certain investments as a limited partner in a non-U.S. person pooled investment fund. The E.O.
excludes some investments from the scope of covered transactions, including those in publicly
traded securities listed on a non-U.S. stock exchange. The E.O. is aimed at exerting greater
U.S. government oversight over U.S. direct and indirect investments involving China, and may
introduce new hurdles and uncertainties for cross-border collaborations, investments, and
funding opportunities of China-based issuers including us. Due to such E.O., our ability to raise
such capital may be significantly and negatively affected, which could be detrimental to our
capital raising capacity and our business, financial condition and prospects.
In addition, EAR also maintains a list of items, software and technology that are subject
to export controls (the “ Commerce Control List ”o r“ CCL”). While the CCL is primarily
based on multilateral export control lists, such as the Wassenaar Arrangement’s List of
Dual-Use Goods and Technologies and Munitions List, the BIS can also implement unilateral
licensing requirements and other controls on items subject to U.S. export controls jurisdiction
that can restrict exports and reexports to certain countries, as well as transfers within a country
to a different end-user or end-use. On October 7, 2022, the U.S. Department of Commerce, the
BIS published rules that introduce new restrictions related to semiconductors, semiconductor
manufacturing, supercomputers and advanced computing items and end uses in Mainland
China, Hong Kong SAR or Macau SAR (the “ U.S. Chip Export Restrictions ”). See
“Regulatory Overview—Regulations on the Import and Export of Goods—the United
States—Export Control Law” for more details. BIS’ rules on advanced computing and
semiconductor manufacturing were implemented in two key areas. First, these rules impose
restrictive export controls on certain advanced computing semiconductor chips and software,
transactions for supercomputer end-uses and transactions involving certain entities on the
Entity List. Second, these rules impose new controls on certain semiconductor manufacturing
items and on transactions for certain integrated circuit end uses.
On October 17, 2023, BIS released additional interim final rules making changes to the
U.S. Chip Export Restrictions. These rules, which took effect on November 17, 2023, included
expanded controls on the export of certain advanced computing and other items to China. We
procured certain materials and components from various U.S. and non-U.S. suppliers, primarily
including chips, among other things. In 2021, 2022 and 2023 and the six months ended June
30, 2024, our procurement cost of chips contributed to 35.0%, 11.3%, 12.9% and 14.9% of our
total procurement cost, respectively. We had not experienced and are currently not aware of any
sourcing restrictions from U.S. or non-U.S. suppliers. Furthermore, since the U.S. Chip Export
Restrictions has been in force for years, as advised by our Legal Advisor as to U.S. export
control laws, we expect that any such restrictions would have already been mentioned by U.S.
or non-U.S. suppliers if applicable to the chips supplied to us.
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On September 23, 2024, the BIS issued a NPRM that would prohibit the sale in or import
into the United States of connected vehicles integrating specific hardware and software, or
those components or software if sold or imported separately, with a sufficient nexus to certain
foreign adversaries including China and The Russian Federation (Russia) (the “ Proposed
Rule ”). The Proposed Rule identifies significant national security concerns associated with
connected vehicles and related connect components and software designed, developed,
manufactured or supplied by companies located in or headquartered in China or Russia, and is
expected to have a major impact on the automotive and ICTS sectors. Specifically, the
Proposed Rule bans the importation and sale of hardware and software components integrated
into V ehicle Connectivity Systems (“ VCS”) (largely technology that connects the vehicle to the
internet) and software integrated into ADS (but excluding ADAS) absent a general or specific
authorization. It also prohibits connected vehicle manufacturers that are owned by, controlled
by, or subject to the jurisdiction of China or Russia from selling connected vehicles that
incorporate VCS hardware or covered software in the United States. If adopted, prohibitions
on software would go into effect for model year 2027 vehicles and prohibitions on hardware
would take effect for Model Y ear 2030 vehicles, or January 1, 2029 for units without a model
year. The Proposed Rule establishes a requirement that connected vehicle manufacturers,
which would be most OEMs and all importers, submit declarations of conformity, sets out the
conditions for general and specific authorizations, establishes a process for industry
stakeholders to seek an advisory opinion from BIS with respect to specific transactions, and
establishes a process to inform VCS hardware importers and connected vehicle manufacturers
that a specific authorization may be required. Although as of the Latest Practicable Date we did
not sell our products to customers in the United States or to customers who incorporated them
into products for sale to the United States to our best knowledge, and we do not intend to
actively develop our business in the United States as a major market in the future, the Proposed
Rule or similar regulations could limit the potential market for our solutions. Other countries
could also consider and adopt similar technology restrictions. Accordingly, we may be
adversely affected by new sanctions and export controls or other trade-related measures and
our business, financial condition and results of operation may suffer as a result.
As advised by our Legal Advisor as to U.S. export control laws, during the Track Record
Period, (i) our customers are not designated on BIS’ Entity List, Denied Persons List or
Unverified List or headquartered in or ordinarily resident in, or owned or controlled by a
government of, any Countries or Regions Subject to Comprehensive Trade Embargos
(collectively, the “ Sanctioned Targets ”)); and (ii) our activities do not involve operations or
transactions that have violated or would violate (a) the restrictions on Sanctioned Targets; and
(b) the EAR restrictions on the end-uses set forth in the U.S. Chip Export Restrictions. See
“Business—Compliance with Regulations on the U.S. Chip Export Restrictions” for more
details. In addition, during the Track Record Period and up to the Latest Practicable Date, we
had not sold semiconductor-incorporated products to any countries under prohibition (such as
Russia, Belarus and North Korea) and/or for any prohibited end uses (such as supercomputing)
to our best knowledge having made all reasonable enquiries.
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During the Track Record Period and up to the Latest Practicable Date, our business
activities had not been affected by the U.S. Chip Export Restrictions or U.S. export control
laws in any material respect. However, as the Entity List and other U.S. export control laws and
regulations continue to expand and evolve, future U.S. export controls may materially affect
or target some of our significant suppliers or customers, raw material and key components
necessary for our operations, in which event our business may be affected if we fail to promptly
secure alternative sources of supply or demand on terms acceptable to us. These sanctions and
export controls could adversely affect us and/or our supply chain, business partners or
customers, and our business, financial condition and results of operations may be significantly
affected by the continued international trade and political tensions. We cannot provide any
assurance that our future business will be free of sanctions and export controls risk or our
business will conform to the expectations and requirements of the authorities of U.S. or any
other jurisdictions. If any of the foregoing happens, we may need to source new product or
collaborate other suppliers as an alternative, which may not be successful, and our business,
results of operations and financial condition would be adversely affected.
Furthermore, other countries may continue to adopt semiconductor-focused export
controls that could impact our solutions and operations. The aforementioned restrictions, and
similar or more expansive restrictions or sanctions, including sanctions currently imposed or
may be imposed in the future by the Office of Foreign Assets Control of the United States or
other relevant authorities in other jurisdictions, may materially and adversely affect our
customers’ and suppliers’ ability to acquire or use technologies, systems, software, devices or
components that may be critical to their products, service offerings and business operations,
which in turn may adversely affect our business, results of operations and financial condition.
We are susceptible to supply shortages and increased costs of raw materials and key
components, which may materially and adversely affect our business, financial condition
and results of operations.
During the Track Record Period, we sourced raw materials and components from both
PRC and overseas suppliers. Any shortages or delay in the supply of our raw materials and key
components could result in occasional price adjustments or delays in our production and
delivery to customers. We may in the future experience supply shortages and price fluctuations
of certain raw materials and components, and the predictability of the availability and pricing
of these raw materials and components may be limited. In the event of a shortage, supply
interruption or price increase by suppliers of these raw materials and components, we may not
be able to develop alternative sources in a timely manner or at all. Developing alternative
sources of supply for these raw materials and components may be time-consuming, difficult
and costly, and we may not be able to source these raw materials and components on terms that
are commercially acceptable to us, or at all, which may increase our production costs or
undermine our ability to fill customer orders in a timely manner. In addition, the loss of any
supplier for any reason could lead to design changes, production delays and potential loss of
access to important technologies, any of which could result in quality issues, delays and
disruptions in our delivery of solutions, negative publicity and damage to our brand name.
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Unsatisfactory performance of or defects in our solutions, or failure to maintain an
effective quality management system, may harm our reputation, lead to returns or recalls
and materially and adversely affect our business, financial condition and results of
operations.
We may offer solutions that are affected by substandard quality or unsatisfactory
performance due to design and manufacturing defects. We may also be exposed to potential
product liabilities. See “Business—Our Customers—After-Sales and Warranty.” The
consequences of such solution defects may be severe and we may be subject to claims for
contract breaches or be liable for property damage or even bodily injuries and harms. Further,
the causes of solution defects may be manifold and sometimes beyond our control. Besides
errors in the design, R&D and production of our solutions, defects may also be caused by
defective raw materials and components delivered by our suppliers and integrated in our
solutions. As we do not have direct control over the quality of the materials and intermediate
products manufactured or supplied by third parties, we are exposed to risks relating to the
quality of such materials and intermediate solutions. Furthermore, notwithstanding our
established quality control and supplier management systems, there is no assurance that we will
be able to identify all quality issues, particularly those arising from defective raw materials and
components delivered by our suppliers, which could materially and adversely affect our
reputation and operation.
In addition, we may manufacture particular solutions pursuant to specifications and
quality requirements set by our customers. If our solutions do not meet the specifications and
quality requirements stipulated by our customers, relevant production may be discontinued
until the cause of the solution defect has been identified and remedied, and we may also be
subject to litigation, lose customers, suffer negative publicity and our business, results of
operations and financial condition could be adversely affected. During the Track Record
Period, we also strategically engaged several third-party contract manufacturers and technical
service providers for production and testing of our solutions. See “—Risks Relating to Our
Business and Industry—We are subject to risks relating to the engagement of third-party
contract manufacturers and technical service providers for the production and testing of our
solutions.”
Therefore, our failure to maintain the consistent quality control throughout our
production process may result in the substandard quality or unsatisfactory performance of our
solutions, which may cause significant damage to our market reputation and lead to a decrease
in our sales volume. If we deliver any defective solutions, or if there is a perception that our
solutions are of substandard quality or unsatisfactory performance, our market reputation and
sales volumes may be adversely affected. See “Business—Our Customers—Solution Returns
and Replacement.”
In addition, as our OEM customers may incorporate our solutions to their vehicle models,
and after their assembly process, sell such vehicle models to end consumers, we may be also
exposed to potential product liability claims from end consumers, in case that any safety
damage results from the use of our solutions even though we do not directly sell to such end
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consumers. During the Track Record Period and up to the Latest Practicable Date, we had not,
due to material solution quality issues, (i) received fines, product recall orders or other
penalties from the PRC government or other regulatory bodies, (ii) received any solution return
requests, or (iii) received complaints from our customers that have a material adverse effect on
our business, financial condition and results of operations. However, there can be no assurance
that we will not experience any material product liability losses in the future, or that we will
be able to defend such claims at a contained level of cost.
If additional capital for our business growth is not available, we may experience liquidity
constraints and our business, results of operations and financial condition may be
materially and adversely affected.
Our ability to sustain growth and remain competitive currently requires significant
investment in various aspects of our business, including technology development, market
expansion and talent acquisition. During the Track Record Period, we primarily funded our
cash requirements from bank borrowings and proceeds we received from Pre-IPO Investments.
However, we may face pressure on our capital position if our future capital requirements
exceed our available funds. A shortage of funds may impede our ability to maintain adequate
investment in R&D, hinder the adoption of new technologies and delay the development of new
solutions. Furthermore, inadequate financing may limit our marketing and business expansion
efforts, hamper our ability to fulfill our obligations and negatively impact our business
prospects, operations and performance. Additionally, a strained financial position may hinder
our ability to attract and retain top talents, thereby undermining our competitiveness and
hindering our ability to execute our growth strategy.
Furthermore, our financing capacity may be limited by factors beyond our control, such
as macroeconomic policies, economic conditions, interest rate environment and market
sentiments. If our financing capacity become restricted, we may experience liquidity
constraints that could adversely affect our ability to operate and grow our business. As a result,
we may require additional capital resources to fund our future growth and development, but we
may not be able to obtain financing on commercially favorable terms, or at all. Any failure to
secure financing on acceptable terms could negatively impact our business, results of
operations, financial condition and prospects. We may also be required to accept unfavorable
financing terms, which could dilute our Shareholders’ ownership interests, increase our
financing costs, or restrict our financial flexibility. Such financing terms may also contain
covenants that could limit our operations, including our ability to incur additional debt or make
certain investments, which may adversely impact our business.
If we fail to manage our inventory effectively, our results of operations, financial
condition and liquidity may be materially and adversely affected.
Our inventories primarily comprise (i) raw materials, (ii) finished goods and (iii) contract
fulfillment costs. As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had
inventories of RMB122.8 million, RMB168.5 million, RMB145.0 million and RMB129.6
million, respectively. We emphasize the prediction of market demand and production plans to
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ensure adequate inventory to meet our customer demand while optimizing relevant costs.
However, our ability to forecast market demand for our solutions could be affected by many
factors beyond our control. Unpredicted fluctuations in the customer demand for or production
plans of our solutions may affect our ability to keep sufficient inventories to deliver solutions
in a cost-effective and timely manner.
Additionally, our mismanagement of inventory could result in inventory levels in excess
of customer demand, inventory write-downs and the sale of excess inventory at discounted
prices. Our inventory turnover days were 194 days, 216 days, 140 days and 123 days in 2021,
2022 and 2023 and the six months ended June 30, 2024, respectively. As our business expands,
our inventory obsolescence risk may also increase with the increase in our inventories and our
inventory turnover days, which may adversely affect our business, financial condition and
results of operations.
The sales results of our solutions will partially depend on effective deployment and
operation by third parties on, and overall user experience of, the end products.
The sales results of our solutions will partially depend on our OEM customers and
business partners effectively deploying and operating our solutions on their vehicle models.
For example, our intelligent driving solutions control various vehicle functions including
steering, navigation and braking, and should be integrated effectively with the other systems
of the vehicles developed by the automotive OEMs. Although we did not experience any issue
or receive any complaint on the interoperability of our systems with the vehicle models
developed by our OEM customers during the Track Record Period, there can be no assurance
that our solutions will always be integrated effectively at the requisite level of interoperability
in the vehicle models. In addition, the sales results of a vehicle model depend on the overall
user experience of, among other things, human machine interface, vehicle space, vehicle
interior and operability, which are all beyond our control. The vehicle models integrated with
our solutions may generate poor sales results due to poor overall user experience of such
vehicle models, which, in turn, may materially and adversely affect the sales results of our
solutions.
Our operational results are subject to risks inherent to the automotive market.
We provide intelligent driving solutions and intelligent cabin solutions for vehicle models
of the automotive OEMs. As a result, our operational results are subject to the risks inherent
to the automotive market. The nature, timing and extent of changes in industry-wide conditions
are largely unpredictable. In particular, the automotive market is still rapidly evolving,
characterized by changing technologies, prices and competitive landscape, government
regulations, industry standards and consumer demand and behaviors. Our future growth is to
a certain extent dependent on the demand for, and upon consumers’ willingness to purchase,
the vehicles of OEMs, which may be affected by a number of factors, many of which are
beyond our control, including changes in economic condition, regulatory evolvement,
purchasing power, fuel prices and advancements in alternative transportation technologies. For
example, in periods of economic downturn or uncertainties, consumers may defer or reduce
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their spending on new vehicles, which would lead to a decrease in the demand for our
solutions. If the automotive market does not develop as we expect or develops more slowly
than we expect, our business, prospects, financial condition and results of operations will be
materially and adversely affected.
Negative publicity and allegations involving us, our Shareholders, Directors, officers,
employees and business partners may affect our reputation and, as a result, our business,
financial condition and results of operations may be negatively affected.
Negative publicity and allegations involving us, our Shareholders, Directors, officers,
employees and business partners, or the intelligent driving market as a whole, may materially
and adversely harm our brand image and reputation, and cause deterioration in the level of
market recognition of, and trust in, the solutions provided by us, thereby resulting in reduced
sales volumes and revenue, potential loss of business partners as well as the loss of highly
qualified personnel with specialized skills. In addition, such negative publicity may come from
malicious harassment or unfair competition acts by third parties, which are beyond our control.
Such negative publicity may also result in the diversion of management’s attention, and
governmental investigations or other forms of scrutiny, which may have a material and adverse
effect on our business, financial condition, results of operations and prospects.
We may not be able to protect our intellectual property rights, and our ability to compete
could be harmed if our intellectual property rights are infringed by third parties.
There can be no assurance that we can prevent third parties from infringing upon our
intellectual property rights. Unauthorized use of our intellectual properties, unfair competition,
defamation or other violations of our rights by our employees and/or third parties may harm
our brand and reputation, and the expenses incurred in protecting our intellectual property
rights may materially and adversely affect our business. We may, from time to time, be required
to institute litigation, arbitration or other proceedings to enforce our intellectual property
rights, which may be time-consuming and expensive to resolve and could divert our
management’s attention regardless of the outcome, and adversely affect our business, financial
condition and results of operations.
It can be difficult to register, maintain and enforce intellectual property rights in the
jurisdictions where we operate. Laws and regulations are subject to judicial interpretation and
enforcement and may not be applied consistently. Preventing any unauthorized use of our
intellectual properties is difficult and costly and the steps we take may be inadequate to prevent
the misappropriation of our intellectual properties. In addition, our trade secrets may be leaked
or otherwise become available to, or be independently discovered by, our competitors. Any
failure in protecting or enforcing our intellectual property rights may have a material and
adverse effect on our business, financial condition, results of operations and prospects.
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We may infringe intellectual property rights of third parties, which can lead to
time-consuming and costly intellectual property infringement claims.
We may, from time to time, be subject to legal proceedings and claims relating to the
intellectual property rights of third parties. In addition, there may be third-party trademarks,
patents, copyrights, know-how or other intellectual property rights that are infringed upon by
our solutions, services or other aspects of our business without our knowledge. Holders of such
intellectual property rights may seek to enforce such intellectual property rights against us in
the PRC or other jurisdictions. If any third-party infringement claims are brought against us,
we may be forced to divert our management’s attention and other resources from our business
and operations to defend these claims, regardless of their merits.
Additionally, the application and interpretation of the PRC laws relating to intellectual
properties, and the procedures and the standards for granting trademarks, patents, copyrights,
know-how or other intellectual property rights in the PRC are still evolving, and there can be
no assurance that the PRC courts or regulatory authorities would agree with our analysis. If we
were found to have violated the intellectual property rights of any third party, we may be
subject to liability for our infringing activities or may be prohibited from using such
intellectual properties, and we may incur licensing fees or be forced to develop alternatives of
our own. In such events, our business, financial condition, results of operations and prospects
may be materially and adversely affected.
Confidentiality agreements and non-compete covenants with employees may not
adequately protect our proprietary rights.
We have devoted substantial resources to the development of our technology and
know-how. Although we enter into employment agreements with confidentiality, non-compete
covenants and intellectual property ownership clauses with our key employees, there can be no
assurance that these agreements will not be breached, that we will have adequate remedies for
any breach in time or at all, or that our proprietary technology, know-how or other intellectual
properties will not otherwise become known to third parties. Costly and time-consuming
litigation could be necessary to enforce and determine the scope of our proprietary rights, and
failure to obtain or maintain protection for our proprietary rights could adversely affect our
business, financial condition, results of operations and competitive position.
The termination of any collaboration with our business partners regarding R&D projects
may adversely affect our operations, revenue and profitability.
We engage in strategic R&D collaborations with certain of our customers, suppliers and
academic institutions. See “Business—Research and Development—R&D Team.” There can be
no assurance that our business partners will continue to collaborate with us on commercially
reasonable terms or at all. Moreover, there can be no assurance that we will be able to establish
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new business partner relationships, or extend existing relationships with our business partners
when our agreements with them expire. If we are unable to maintain our collaborations with
our key business partners, our operations, revenue and profitability could be adversely
affected.
We are subject to risks relating to the engagement of third-party contract manufacturers
and technical service providers for the production and testing of our solutions.
During the Track Record Period, we strategically engaged several third-party contract
manufacturers for the production of our solutions. See “Business—Our Production—Contract
Manufacturing.” In addition, during the Track Record Period, we procure certain technical
services, including, among other things, testing and validation for our solutions, from
third-party technical service providers.
If we are unable to maintain our contractual relationships with such third parties, or if we
are unable to continue using or obtaining these services on commercially reasonable terms, we
may not be able to secure alternatives in a timely manner or at all, which may, in turn,
materially and adversely affect our business, results of operations, financial condition and
competitive position.
In addition, while the quality of the services provided by the foregoing third parties
depends to same extent on the effectiveness of our quality control, there can be no assurance
that our quality control procedures will be effective in consistently preventing deviations by
third parties from our quality standards. The failure of our third-party contract manufacturers
and technical service providers to follow the manufacturing or service schedule, maintain
service quality or comply with production and service standards can affect our ability to fulfill
our obligations to customers and may expose us to potential liabilities. While we may seek
indemnities from these third-party contract manufacturers and technical service providers, any
such attempt can be costly and time-consuming, and any indemnities obtained may not fully
cover our losses.
The expansion of our in-house manufacturing capabilities may be subject to delays,
disruptions, cost overruns, or may not produce expected benefits.
We plan to further enhance our manufacturing capabilities to accelerate our
commercialization. See “Business—Our Strategies—Continuously Enhancing Intelligent
Production Capability to Accelerate Commercialization” and “Business—Our Production” for
detail. Pursuant to our production expansion plan, we expect to achieve full in-house
production by 2026. However, the expansion could experience delays or other difficulties, and
will require significant capital. Any failure to complete the expansion on schedule and within
budget could adversely affect our financial condition, production capacity, and results of
operations.
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We have a limited number of key customers and suppliers.
For the years ended December 31, 2021, 2022 and 2023 and the six months ended June
30, 2024, the revenue from our five largest customers for the respective years/period in
aggregate accounted for 78.0%, 42.7%, 37.0% and 39.8% of our total revenue, respectively,
and our largest customer for the respective years/period contributed 31.7%, 16.6%, 11.4% and
10.5% of our total revenue, respectively. See “Business—Our Customers—Major Customers.”
Any failure by such customers to meet their payment obligations or contractual commitments
could have a material adverse effect on our business, financial condition and results of
operations.
For the years ended December 31, 2021, 2022 and 2023 and the six months ended June
30, 2024, our five largest suppliers for the respective years/period in aggregate accounted for
41.9%, 36.3%, 41.7% and 38.9% of our total purchase amount, respectively, and our largest
supplier for the respective years/period contributed 15.3%, 8.0%, 11.7% and 13.2% of our total
purchase amount, respectively. See “Business—Our Suppliers—Major Suppliers.” Any
significant delay in the delivery by such suppliers, the inability of such suppliers to meet their
quantity or quality obligations, or the unavailability of alternative suppliers, could have a
material adverse effect on our business, financial condition and results of operations.
Any reduction or discontinuation of preferential tax treatment or government grants may
adversely affect our financial condition and results of operations.
We enjoyed preferential tax treatment and government grants during the Track Record
Period. The PRC EIT Law and its implementation rules have adopted a statutory enterprise
income tax rate of 25%. However, the income tax of an enterprise that has been determined to
be a national High and New Technology Enterprise (“ HNTE ”) can be reduced to a preferential
rate of 15%. We were recognized as a national HNTE in 2020 and 2023, and hence is entitled
to a preferential income tax rate of 15% from 2020 until three years after 2023. In addition, one
of our subsidiaries was also recognized as a national HNTE. Meanwhile, during the Track
Record Period, certain of our PRC subsidiaries were qualified as “small low-profit enterprises”
under the EIT Law of the PRC and enjoyed a preferential income tax rate of 20% for certain
portion of their respective taxable income pursuant to relevant legal requirements. See
“Financial Information—Description of Key Components of Our Results of
Operations—Income Tax Expense.” If we cease to be entitled to preferential tax treatment or
if the relevant PRC laws and regulations change, our income tax expenses may increase, which
would adversely affect our financial condition and results of operations.
We also receive government grants from time to time. In 2021, 2022, 2023 and the six
months ended June 30, 2023 and 2024, the government grants we recognized as other income
were RMB23.9 million, RMB4.7 million, RMB27.9 million, RMB3.2 million and RMB6.3
million, respectively. See “Financial Information—Description of Key Components of Our
Results of Operations—Other Income.” There can be no assurance that we will continue to
receive and benefit from government grants in the future.
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Our success relies on key management and other highly qualified personnel with
specialized skills.
Our future success largely depends on the continued service of our management and
highly qualified personnel with specialized skills. Our ability to compete effectively depends
to some extent on our ability to retain and motivate existing employees and attract new talents.
We may need to offer higher compensation and other benefits to attract and retain key
personnel and our compensation and benefits payments may increase unexpectedly or at a
greater rate than expected. If we lose the services of any member of our management or
qualified personnel, we may not be able to locate suitable or qualified replacements in a timely
manner and/or at reasonable cost, or at all. Our failure to attract and retain key management
or qualified personnel and any increase in staffing costs to retain such personnel could have a
negative impact on our ability to maintain our competitive position and grow our business, and
may have a material adverse effect on our business, financial condition, results of operations
and prospects.
Our key employees are subject to confidentiality terms and non-compete arrangements.
However, there can be no assurance that such terms or arrangements can be fully enforced. If
any of our management or other key personnel joins or establishes a competing business, we
may lose some of our customers, which may have a material adverse effect on our business,
results of operations and financial condition.
We are subject to the evolving regulatory requirements regarding the end markets of our
solutions.
Government regulations have imposed stringent requirements on vehicle safety in general
and in the context of intelligent driving. While we believe that the enhancement of automotive
safety standards could present a market opportunity for our solutions, evolving regulatory
requirements could also be challenging to satisfy and may adversely affect our solutions
portfolio and business operations. Government safety regulations are subject to changes driven
by a number of factors that are beyond our control, including new technologies, adverse
publicity regarding recalls and safety risks of intelligent and autonomous driving, accidents
involving intelligent and autonomous driving, domestic and foreign political situations, and
litigation relating to intelligent and autonomous driving as well as data privacy. New
legislation or changes in the regulatory requirements, as well as changes or evolution in court
interpretation of those regulations, with respect to the automotive intelligence solutions
industry could adversely affect our business, and requires continuous monitoring of laws and
regulations and an ongoing compliance process to ensure that we are in compliance with
existing laws and regulations in each market where we operate. Our compliance cost could be
substantial given the evolving nature and complexity of the relevant laws and regulations.
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Failure to renew our leases or to comply with PRC property-related laws and regulations
regarding certain of our leased properties could adversely affect our business.
As of the Latest Practicable Date, we leased 13 properties in China, which were used for
R&D, production and office purposes. We generally enter into long-term lease agreements with
our lessors. However, there can be no assurance that we would be able to renew the relevant
lease agreements at reasonable cost, or at all; if we fail to do so, we may be compelled to
relocate from the affected premises. Such relocation may result in additional expenses or
business interruption, or we may not be able to find suitable alternatives in a timely manner,
or at all, which could, in turn, have an adverse effect on our business, financial condition and
results of operations.
As of the Latest Practicable Date, we had not completed lease registration for such 13
leased properties. As advised by our PRC Legal Advisor, failure to register such lease
agreements as required by the relevant competent authorities may subject us to a fine of
RMB1,000 to RMB10,000 for each unregistered lease agreement. In addition, certain lessors
failed to provide us with their real estate ownership certificates or proof of authorizations from
the property owners. As advised by our PRC Legal Advisor, without valid real estate ownership
certificates or proof of authorizations from the relevant lessors or property owners, we may not
be entitled to use these leased properties or may be affected by third parties’ claims or
challenges against the relevant leases. See “Business—Properties.” If we are challenged by
third parties or government authorities in connection with our use of the foregoing leased
properties, we may be subject to fines and may be forced to relocate, as the case may be, and,
as a result, our business, results of operations and financial condition may be adversely
affected. Furthermore, if we are not able to find a suitable location on commercially reasonable
terms or in a timely manner or at all, our operations may be interrupted.
If we fail to obtain and maintain the requisite licenses and approvals, our results of
operation and financial condition may be materially and adversely affected.
The automotive intelligence solutions industry in which we operate is highly regulated.
In accordance with the PRC laws and regulations, we are required to maintain certain
approvals, licenses and permits in order to operate our businesses in the PRC. As advised by
our PRC Legal Advisor, we had obtained the requisite licenses, permits, approvals and
certificates from applicable authorities which are material to our operations, and such licenses,
permits, approvals and certificates are valid and effective as of the Latest Practicable Date. See
“Business—Licenses, Approvals and Permits.”
Nevertheless, there can be no assurance that we will be able to obtain and/or renew all
of the approvals, licenses and permits required for our existing business operations upon
expiration in a timely manner, or at all. If we fail to obtain or maintain any of the required
licenses or approvals or make the necessary filings in any of the jurisdiction where we operate,
we may be subject to penalties such as the imposition of fines and discontinuation or restriction
of our operations. Any such penalties may disrupt our business operations and materially and
adversely affect our business, results of operations and financial condition.
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Any failure to offer high-quality maintenance and support services for our customers may
harm our relationships with them and, consequently, our business.
As we continue to grow our customer base, we need to be able to continue to provide
efficient customer support that meets our customer demand at scale. We may not be able to
recruit or retain sufficient qualified support personnel with experiences in supporting
customers of our solutions. As a result, we may be unable to quickly respond to accommodate
short-term increases in customer demand for technical support or maintenance assistance. We
also may be unable to modify the future scope of our maintenance services and technical
support to compete with changes in the technical services provided by our competitors. Any
failure to maintain high-quality maintenance and support services would harm our business. If
we experience increased customer demand for support and maintenance, we may face increased
costs that might harm our results of operations. If we are unable to provide efficient customer
maintenance and support, our business may be harmed. Our ability to attract new customers is
highly dependent on our business reputation and positive recommendations from our existing
customers. Any failure to maintain high-quality maintenance and support services, or any
market perception that we do not maintain high-quality maintenance and support services for
our customers, would harm our business.
Any significant cost overruns may materially and adversely affect our business, financial
condition and results of operations.
Cost overruns may stem from unexpected increases in the cost of materials or labor, or
technological development challenges that were not anticipated, and can lead to a significant
strain on our financial condition. As a result, our financial condition can be adversely affected
as we may have to allocate more capital to cover these overruns, potentially leading to the
increased debt. This can also affect our creditworthiness and our ability to secure future
financing on favorable terms. There is no assurance that our actual costs incurred will not
exceed the estimated costs, due to under-estimation of costs, excessive wastage, inefficiency,
damage or unforeseen additional costs incurred during the course of our business. Any
under-estimation of costs, delay or other circumstances resulting in cost overruns may
adversely affect our profitability, business operation and financial performance.
Any failure to comply with data privacy and security laws may adversely and materially
impact our business, financial condition and results of operations.
We are subject to various laws and regulations concerning data security and privacy.
Recently, the governments worldwide have placed increasing emphasis on privacy and data
protection regulations. The PRC government, in particular, has implemented a series of laws,
regulations and policies to safeguard personal data.
For instance, on June 10, 2021, the Standing Committee of the National People’s
Congress promulgated the Data Security Law of the People’s Republic of China ( ʕശɛ͏
) (the “ Data Security Law ,” effective since September 1, 2021). The Data
Security Law sets out a number of obligations on data security and privacy undertaken by
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entities and individuals engaged in data-related activities. It also prohibits any individual or
entity in China from providing data stored in China to foreign judicial or law enforcement
departments without the approval of the competent authorities in China. Besides, the Measures
on Security Assessment of Cross-border Data Transfer (), which
was promulgated by Cyberspace Administration of China on July 7, 2022 and became effective
on September 1, 2022, stipulates the obligation that before applying for the security assessment
of outbound data transfer, data processors shall conduct a self-assessment of the risks in the
outbound data transfer. And on November 7, 2016, the Standing Committee of the National
People’s Congress promulgated the Cybersecurity Law of the People’s Republic of China ( ʕ
, effective since June 1, 2017), and pursuant to which, the CSRC
is to advance the development of a socialized service system for cybersecurity, and encourage
related businesses and institutions to carry out cybersecurity services such as certification,
testing and risk assessment. According to the Measures for Cybersecurity Review ( ၣഖτΌ
) jointly promulgated by the Cyberspace Administration of China (the “ CAC”), the
NDRC, the MIIT, the MPS, the Ministry of State Security (the “ MSS”), the MOF, the
MOFCOM, the PBOC, the SAMR, the National Radio and Television Administration (the
“NRTA”), the CSRC, the National Administration of State Secrets Protection (the “ NASSP ”)
and the State Cryptography Administration (the “ SCA”) on December 28, 2021 and effective
on February 15, 2022, entities meeting certain standards shall apply for a cybersecurity review.
Meanwhile, the Network Data Security Management Regulations (Draft for Comments) ( ၣ
ഖᅰኽτΌ၍ଣૢԷ(ᅄӋจԈᇃ)) and Several Provisions on the Management of
Automobile Data Security (for Trial Implementation) (֛(༊Б))
further provide rules on network data security and automobile data process.
As such, our failure or perceived failure to comply with data privacy and security laws
could lead to potential legal proceedings or actions initiated by government entities or other
parties, which may materially and adversely impact our reputation, thereby harming our
business, financial condition and results of operations.
Our employees and business partners may engage in intentional or negligent misconduct,
or violate our internal policies and laws, which could impair the quality of our solutions
and service, cause us to lose customers or subject us to liabilities.
We risk compromising the quality of our solutions if our employees and business partners,
such as suppliers of raw materials and components, contract manufacturers and technical
service providers, do not perform in accordance with our standards. We have internal policies
and guidelines to monitor and ensure the solutions delivered to our customers are of
satisfactory standard. In addition, we have adopted and strictly implemented a series of
procedures designed to verify the integrity and qualifications of our employees before they are
engaged, and of partners prior to any cooperation. However, there can be no assurance that
such verification procedures will always be effective.
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Nevertheless, we cannot guarantee that our employees and business partners will not
engage in any intentional or negligent misconduct. Furthermore, we may be exposed to the
risks of fraud or other unlawful activities committed by our employees and business partners.
Fraud or other unlawful activities by our employees and business partners may include making
unauthorized misrepresentation to our customers, misappropriating third-party intellectual
property and other proprietary rights, misusing sensitive customer information and engaging in
bribery or other unlawful payments. In any such event, we could incur liability to our
customers or any other third parties.
Any claims could subject us to costly litigation and affect our financial condition, and
may distract the attention of our management regardless of whether the claims have merit. Any
claims could result in complaints from our customers or other third parties, regulatory or legal
liabilities or damages to our reputation.
We might experience work stoppage, labor shortage and other labor related matters,
which may disrupt our normal operation and adversely affect our reputation and results
of operations.
We have implemented comprehensive policies and measures to protect the welfare and
working conditions of our employees, including providing competitive remuneration packages,
including salary and allowances, performance-based bonuses and long-term incentive
programs, including but not limited to an employee stock ownership plan for managers,
high-potential talent and key technical professionals. See “Business—Employees.” Despite our
best efforts, we cannot guarantee we will not face any labor-related issues, including labor
disputes, strikes or the inability to attract and retain qualified workers, which may lead to work
stoppages or labor shortages and significantly impact our ability to meet customer demands and
fulfill orders within the expected time frames. Furthermore, such labor-related matters could
incur addition costs associated with resolving labor disputes, hiring temporary workers or
implementing contingent plans to mitigate the impact of labor shortages. These additional
expenses, coupled with potential revenue losses from delayed deliveries, may negatively affect
our profitability and overall results of operations.
Failure to make adequate contributions to various employee benefit plans as required by
PRC regulations may subject us to penalties.
PRC laws and regulations require us to participate in various employee benefit plans.
These benefit plans include social insurance, housing provident fund and other welfare-
oriented payment obligations. According to applicable PRC laws and regulations, employers
must open social insurance registration accounts and housing provident fund accounts and pay
social insurance premiums and housing provident fund contributions for employees. PRC laws
require that we contribute to the plans in amounts equal to certain percentages of salaries,
including bonus and allowances, of our employees up to the maximum amounts specified by
the local government at locations where we operate our business. Local governments in China
have not consistently implemented requirements regarding employee benefit plans.
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During the Track Record Period, we did not make full social insurance and housing
provident fund contributions for certain employees in accordance with the relevant PRC laws
and regulations, and certain of our subsidiaries engaged third-party human resource agencies
to pay social insurance premium and housing provident funds for certain of our employees in
certain locations where they work. See “Business—Employees.” As of the Latest Practicable
Date, no competent government authorities imposed administrative actions, fines or penalties
on us with respect to this incident or required us to settle the outstanding amount of social
insurance payments and housing provident fund contributions. However, there can be no
assurance that the competent government authorities will not require us to settle the
outstanding amount within the specified time limit or impose late payment penalties on us,
which may adversely affect our financial position and results of operations.
We are subject to risks related to payment and defaults of customers.
We are exposed to credit risk related to delay in payment and defaults of our various
customers. As of December 31, 2021, 2022 and 2023 and June 30, 2024, our trade and notes
receivables amounted to RMB100.9 million, RMB217.7 million, RMB333.6 million and
RMB398.4 million, respectively. As of the same dates, we recorded the provision for
impairment of trade and notes receivables of RMB4.4 million, RMB9.9 million, RMB13.9
million and RMB19.5 million, respectively. Our trade and notes receivables turnover days in
2021, 2022 and 2023 and the six months ended June 30, 2024 were 191 days, 217 days, 220
days and 294 days, respectively. See “Financial Information—Discussion of Certain Key
Balance Sheet Items—Trade and Notes Receivables.” We may not be able to collect all of our
trade and notes receivables due to factors beyond our control, such as adverse operating
conditions or financial conditions of our customers, and customers’ inability to pay due to
delays in payment from their own end users. If our customers delay or default on their
payments to us, we may need to make impairment provisions and write off the relevant
receivables. This would have a negative impact on our liquidity and financial condition.
We are subject to various risks relating to third-party payment.
During the Track Record Period, a few of our customers were unable to directly settle
with us amounts owed to us in connection with their purchases of our solutions for varying
reasons and had third parties make the relevant payments to us. In 2021, 2022 and 2023 and
the six months ended June 30, 2024, such payments settled through third parties amounted to
RMB0.2 million, RMB0.5 million, RMB0.5 million and RMB0.1 million, respectively. As of
March 31, 2024, we have ceased such payment arrangements. Although such payments were
made in accordance with normal commercial terms and were properly validated by relevant
customers, as we have not entered into contractual relationships with such third-party payers,
we are subject to risks relating to such third-party payment arrangements, including possible
claims from third-party payers for the return of funds. If such claims arise, our results of
operations and financial condition may be adversely affected.
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We are exposed to risks associated with the fair value change in financial assets at fair
value through profit or loss and valuation uncertainty regarding the use of unobservable
inputs.
We had net fair value gains on financial assets at fair value through profit or loss
(“FVPL”), which were primarily in relation to our investments in the structured deposits and
wealth management products, of RMB2.7 million, RMB8.1 million, RMB3.8 million, RMB1.4
million and RMB2.4 million in 2021, 2022 and 2023 and the six months ended June 30, 2023
and 2024, respectively. As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had
financial assets at FVPL of RMB135.2 million, RMB44.6 million, RMB210.6 million and
RMB120.9 million, respectively. See “Financial Information—Description of Key Components
of Our Results of Operations—Other Gains—Net” and “Financial Information—Discussion of
Certain Key Balance Sheet Items—Financial Assets at FVPL.”
Our fair value of our financial assets at FVPL is estimated by using valuation techniques
and on the basis of unobservable inputs. The use of unobservable inputs renders valuation
uncertain, as changes of unobservable inputs such as expected rate of return may change the
fair value of the financial asset. The fluctuation of our financial assets at FVPL may continue
to affect our results of operations in the future. We cannot assure you that market conditions
and regulatory environment will create fair value gains on the financial asset or we will not
incur any fair value losses on our financial asset at FVPL in the future. If we incur such fair
value losses, our results of operations, financial condition and prospects may be adversely
affected. For fair value measurement of financial instruments, see Note 24 to the Accountant’s
Report in Appendix I to this prospectus.
We have granted, and may continue to grant, certain awards under our employee
incentive plans, which may result in increased share-based compensation expenses and
cause shareholding dilution to our Shareholders.
To attract and retain talents and to provide incentives to our employees for our long-term
development, we established three ESOP Holding Entities, namely Y oujia Qingcheng, Y oujia
Zhongcheng and Y oujia Licheng. See “Appendix VI—Statutory and General Information—D.
Employee Incentive Scheme.” We recorded share-based payment expenses of RMB8.8 million,
RMB15.0 million, RMB22.4 million, RMB11.2 million and RMB15.3 million in 2021, 2022
and 2023 and the six months ended June 30, 2023 and 2024, respectively. We believe such
share-based awards are important to our ability to attract, retain and motivate our key
individuals, and we may continue to grant share-based awards in the future. As a result, our
share-based payment expenses may increase, which may adversely affect our results of
operations and financial condition. In addition, issuance of additional H Shares with respect to
such share-based payments may dilute the shareholding of our Shareholders and could result
in a decline in the value of our H Shares.
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Our operations are subject to seasonal fluctuations.
Our revenue, cash flow and results of operations are affected by seasonal fluctuations in
demand for our solutions, which are primarily driven by the seasonal nature of the automotive
industry which influences our customer demands. For example, given our OEMs customers
usually deliver more of their vehicle models towards the year end, it can have an impact on our
delivery of our intelligent driving and intelligent cabin solutions in the fourth quarter of each
year. As a result, our delivery of relevant solutions typically increase in the second half of the
year. See “Business—Seasonality” and “Financial Information—Key Factors Affecting Our
Results of Operations—Seasonality.” As we believe that this pattern is likely to continue in the
foreseeable future, quarterly comparisons of our operating results may not be useful and our
results of operations in any particular period will not necessarily be indicative of the results of
operations to be expected for any future period. If our growth rate declines or seasonal
spending becomes more pronounced, seasonality could have a material impact on our revenue,
cash flow and operating results from period to period.
Our risk management and internal control systems may not be adequate or effective.
We have developed and implemented comprehensive risk management and internal
control policies that encompass various aspects of our business operations to supervise and
address a spectrum of operational, financial, legal and market risks that may be or have been
identified. While we seek to improve our risk management and internal control systems on a
continuous basis, we cannot assure you that these systems are sufficiently effective. See
“Business—Risk Management and Internal Control.” Since our risk management and internal
control systems depend on implementation by our employees, we cannot assure you that our
employees or other related third parties are sufficiently or fully trained to implement these
systems, or that their implementation will be free from human error or mistakes. If we fail to
timely update, implement and modify, or fail to deploy sufficient human resources to maintain
our risk management policies and procedures, our business, results of operations, financial
condition and prospects could be materially and adversely affected.
We may be involved in legal proceedings and disputes, which could materially and
adversely affect our reputation, business, results of operations and financial condition.
We may be involved in legal proceedings and commercial or contractual disputes in the
ordinary course of our business. We cannot assure you that we will not be involved in various
legal proceedings and other disputes in the future, which may expose us to additional risks and
losses. In addition, we may have to pay legal costs associated with such disputes, including
fees relating to appraisal, auction, execution and legal advisory services. Litigation and other
disputes may lead to inquiries, investigations and proceedings by regulatory authorities and
other governmental agencies and may result in damage to our reputation, additional operating
costs and diversion of resources and management’s attention from our core business. The
disruption of our business due to judgment, arbitration and legal proceedings against us or
adverse adjudications in proceedings against our Directors, senior management or key
employees may materially and adversely affect our reputation, business, results of operations,
financial condition and prospects.
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Changes in Environmental, Social and Governance (ESG) compliance requirements could
have an adverse impact on our business, operating results and financial condition.
With the rising awareness of ESG issues, including with respect to waste disposal,
packaging waste, greenhouse gas emissions and environmental protection, more stringent laws
and regulations that affect our business operations may be adopted. Accordingly, we may need
to devote more effort and resources to ensure our compliance with such laws or regulations. We
have adopted a series of measures aiming to ensure our compliance with the ESG-related laws
and regulations applicable to us. See “Business—Environmental, Social and Governance.”
There can be no assurance that these measures can effectively help us to navigate the complex
and evolving regulatory environment. Changes in existing ESG-related laws and regulations or
the promulgation of new ESG-related laws and regulations may increase our compliance costs,
and accordingly may have an adverse impact on our business, results of operations and
financial performance.
Our information technology networks and systems may encounter malfunction,
unexpected system failure, interruption, insufficiency or security breaches which could
materially and adversely affect our reputation, business and results of operations.
We rely on information technology networks and systems for electronic communications
among our personnel, customers, manufacturers and suppliers and for synchronization with our
manufacturers and logistics providers on demand forecast, order placements and manufacturing
and service status and capacity. These information technology systems, some of which are
managed by third parties, may be susceptible to damage, disruptions or shutdowns due to
failures during the process of upgrading or replacing software, databases or components, power
outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication
failures, user errors or catastrophic events. If our information technology systems suffer
damage, disruption or shutdown, we may incur substantial costs in repairing or replacing these
systems. Failures in information technology systems, especially those related to automotive
safety and associated data, could potentially lead to problems with our solutions, resulting in
physical injuries or even fatalities to drivers, passengers and other individuals. If we do not
effectively resolve the issues in a timely manner, our business, results of operations and
financial condition may be materially and adversely affected, and we could experience delays
in reporting our financial results.
Our insurance coverage may not be sufficient to cover all losses or potential claims by our
customers which would affect our business, results of operations and financial condition.
We face various risks in connection with our business, and may lack adequate insurance
coverage or have no relevant insurance coverage. As of the Latest Practicable Date, we had
obtained and maintained insurance policies that we believe are customary for businesses of our
size and type and in line with standard commercial practice in China. As of the Latest
Practicable Date, we had not maintained product liability insurance, and do not carry any
business interruption or litigation insurance. See “Business—Insurance.” We cannot guarantee
that a product liability claim or other litigation will not be brought against us in the future, or
RISK FACTORS
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that we will be able to purchase product liability insurance or other related insurance on
acceptable terms. If we were to incur substantial losses or liabilities due to fire, explosions,
floods or other natural disasters, disruption in our network infrastructure, production facilities
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 suffering any loss and there is no certainty that we will be able to successfully claim our
losses under our current insurance policy on a timely basis, or at all. If we were held liable for
uninsured losses or amounts and claims for insured losses exceeding the limits of our insurance
coverage, our business, financial condition and results of operations may be materially and
adversely affected.
Our business may be materially and adversely affected by force majeure events, natural
disasters or outbreaks of contagious diseases.
Any future occurrence of force majeure events, natural disasters or outbreaks of
epidemics and contagious diseases, including COVID-19 pandemic, avian influenza, severe
acute respiratory syndrome, H1N1 influenza or Ebola virus, may materially and adversely
affect our business, financial condition and results of operations. An outbreak of an epidemic
or contagious disease could result in a widespread health crisis and restrict the level of business
activities in affected areas, which may, in turn, materially and adversely affect our business.
Moreover, natural disasters such as snowstorms, earthquakes, fires and floods can cause
physical damage to our production facilities, equipment and inventory which could result in
production delays, inventory shortages and obsolete, which could increase our impairment and
costs for repairs and replacements. Additionally, these events can lead to power outages,
communication interruptions and transportation disruptions, further hampering business
operations.
RISKS RELATING TO JURISDICTIONS WHERE WE OPERATE
Changes in economic, political and social conditions, as well as government policies, laws
and regulations, and industry practice guidelines in the jurisdictions where we operate
could have a material and adverse effect on our business, financial condition, results of
operations and prospects.
Substantially all of our business, assets and operations are located in China. Accordingly,
our business, financial condition and results of operations are subject to the economic,
political, social and regulatory environment in the PRC.
During the past decades, the PRC government has taken various actions to promote the
market economy and the establishment of sound corporate governance of business entities.
Through strategically allocating resources, controlling the payment of foreign currency-
denominated obligations, setting monetary policy and providing governmental policy support
to particular industry or companies, it also exerts significant influence over China’s economic
growth.
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Our performance has been and will continue to be affected by China’s economy, which,
in turn, is influenced by the global economy. The uncertainties relating to the global economy
as well as the political environment in various regions of the world will continue to impact
China’s economic growth. There can be no assurance that we will be able to predict all the risks
and uncertainties that we face in relation to current economic, political, social and regulatory
developments, which might be beyond our control, and materially and adversely affect our
business and operations as well as our financial performance.
Changes in currency conversion policies may adversely affect the value of your
investment.
We may convert a portion of our revenue into other currencies to meet our foreign
currency obligations, such as payments of operating costs and expenses and payments of
dividends declared in respect of our H Shares, if any. Shortages in the availability of foreign
currency may restrict our ability to remit sufficient foreign currency to pay dividends, or
otherwise satisfy our foreign currency-denominated obligations. Under existing PRC foreign
exchange regulations, the foreign exchange expenditure under the current items shall be paid
by an institution with its self-owned foreign exchange upon valid documents or with the
foreign exchange purchased from any financial institution operating the foreign exchange sale
or settlement business in accordance with the administrative provisions of the foreign exchange
administrative department of the State Council on the payment and purchase of foreign
exchange. In addition, the foreign exchange expenditure under the capital items shall be paid
by an institution with its self-owned foreign exchange upon valid documents or with the
foreign exchange purchased from any financial institution operating the foreign exchange sale
or settlement business in accordance with the administrative provisions of the foreign exchange
administrative department of the State Council on the payment and purchase of foreign
exchange. If the administrative provisions require the approval of a foreign exchange
administrative organ, the approval must be obtained before making foreign exchange
payments. According to relevant foreign exchange rules, where any material imbalance in
international receipts and payments occurs or may occur, the PRC government may implement
necessary safeguards and other measures. There can be no assurance that regulations regarding
the remittance of RMB into or out of the PRC will not change in the future.
Holders of our H Shares may be subject to income tax obligations in China.
Under the current tax laws and regulations in China, non-Chinese resident individuals and
non-Chinese resident enterprises are subject to different tax obligations with respect to the
dividends paid to them by us and the gains realized upon the sale or other disposition of our
H Shares.
Non-Chinese resident individuals are required to pay individual income tax at a rate of
20% under IIT law for the interests, dividends and bonuses they obtain from China.
Accordingly, we are required to withhold such tax from dividend payments, unless applicable
tax treaties between China and the jurisdiction in which the foreign individual resides reduce
or provide an exemption for the relevant tax obligations. Generally, in accordance with the
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Notice on Matters Concerning the Levy and Administration of Individual Income Tax After the
Repeal of Guo Shui Fa [1993] No. 045 issued by the SA T (਷೼೯
[1993]045), when a tax rate of 10% is not
applicable, the withholding company shall: (i) return the excess tax amount pursuant to due
procedures if the applicable tax rate is lower than 10%; (ii) withhold such foreign individual
income tax at the effective tax rate agreed on if the applicable tax rate is between 10% and
20%; or (iii) withhold such foreign individual income tax at a rate of 20% if no taxation treaty
is applicable.
For non Chinese-resident enterprises that do not have establishments or premises in
China, and for those who have establishments or premises in China but whose income is not
related to such establishments or premises under the EIT law, dividends paid by us and gains
realized by such foreign enterprises upon the sale or other disposition of Shares are ordinarily
subject to China enterprise income tax at a rate of 20%. In accordance with the Circular on
Issues Relating to the Withholding of Enterprise Income Tax by Chinese Resident Enterprises
on Dividends Paid to Overseas Non-Chinese Resident Enterprise Shareholders of H Shares
(͏ΆุΣྤ̮ Hஷ
) issued by the SA T, such tax rate has been reduced to 10%.
If there is any change to applicable tax laws and regulations or in the interpretation or
application of such laws and regulations, the value of your investment in our H Shares may be
materially affected.
Payment of dividends is subject to laws and regulations in regions where we operate.
Under the PRC laws, dividends may be paid only out of distributable profits. Our
distributable profits represent our distributable net profits less appropriations to statutory
surplus reserve, general reserve, and discretionary surplus reserve (as approved by our
Shareholders’ meeting). Our distributable net profit represents the lowest of (i) our net profit
attributable to our equity holders for a period plus distributable profits or net of accumulated
losses, if any, at the beginning of such period, as determined under PRC GAAP , and (ii) our
net profit attributable to our equity holders for the period plus distributable profits or net of
accumulated losses, if any, at the beginning of such period, as determined under IFRS
Accounting Standards. As a result, we may not have sufficient distributable profits to make
dividend distributions to our Shareholders in the future, including in respect of periods where
we register an accounting profit. Any distributable profits that are not distributed in a given
year are retained and available for distribution in subsequent years.
Investors may experience difficulties in effecting service of legal process and enforcing
judgments against us and our Directors, Supervisors and management.
Substantially all of our assets are located in China and the majority of our executive
Directors and senior management reside in China. Therefore, it may be difficult for investors
to directly effect service of legal process within Hong Kong or elsewhere outside of China
upon us or our Directors or senior management.
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On July 14, 2006, China and Hong Kong signed the Arrangement on Reciprocal
Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of
the Mainland and of the Hong Kong Special Administrative Region Pursuant to Choice of
Court Agreements between Parties Concerned (ج
τર)( “ Arrangement ”), which
came into effect on August 1, 2008. Pursuant to the Arrangement, a party with an enforceable
final court judgment rendered by any designated Mainland court or any designated Hong Kong
Special Administrative Region court requiring payment of money in a civil and commercial
case according to a choice of court agreement in writing may apply for recognition and
enforcement of the judgment in the relevant Mainland court or Hong Kong Special
Administrative Region court. Similarly, a party with an enforceable final judgment rendered by
a Mainland court requiring payment of money in a civil and commercial case pursuant to a
choice of court agreement in writing may apply for recognition and enforcement of such
judgment in Hong Kong. A choice of court agreement in writing is defined as any agreement
in writing entered into between parties after the effective date of the Arrangement, in which a
Hong Kong Special Administrative Region court or a Mainland court is expressly identified as
the court having sole jurisdiction for the dispute. Therefore, it may not be possible to enforce
a Hong Kong Special Administrative Region court’s verdict in the PRC if the parties to the
dispute did not agree to a written choice of court agreement. On January 18, 2019, the Supreme
People’s Court of the PRC and Hong Kong Department of Justice entered into the Arrangement
on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by
the Courts of the Mainland and of the Hong Kong Special Administrative Region (ʫή
τર) (the “ New Arrangement ”),
which seeks to establish a bilateral legal mechanism that provides clarity and certainty for the
recognition and enforcement of judgments in a wider range of civil and commercial matters
between Hong Kong and mainland China, based on criteria other than a written choice of court
agreement. The Arrangement was superseded upon the effectiveness of the New Arrangement
on January 29, 2024 but remained applicable to a “written choice of court agreement” entered
into before the New Arrangement taking effect. However, there can be no assurance that all
final judgments will be recognized and effectively enforced by the relevant courts.
RISKS RELATING TO THE GLOBAL OFFERING
No public market currently exists for our H Shares, and an active trading market for our
H Shares may not develop or be sustained.
Prior to completion of the Global Offering, there has been no public market for our H
Shares. We have applied to the Stock Exchange for the listing of, and permission to deal in,
our H Shares. However, there can be no assurance that an active trading market for our H
Shares will develop or be sustained after completion of the Global Offering. Pursuant to
applicable PRC laws, all of the Shares in issue as of the date of this prospectus will be subject
to a lock-up period of one year from the Listing Date. If an active public market for our H
Shares does not develop following completion of the Global Offering, the market price and
liquidity of our H Shares could be materially and adversely affected. The Offer Price is the
result of negotiations between our Company and the Overall Coordinators (for themselves and
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on behalf of the Underwriters), which may differ significantly from the market price at which
our H Shares will be traded following completion of the Global Offering. The market price of
our H Shares may drop below the Offer Price at any time after completion of the Global
Offering.
A future or perceived significant increase in the supply of our H Shares in public markets
could cause the market price of our H Shares to decrease significantly, and dilute
shareholdings of holders of H Shares.
The market price of our H Shares could decline as a result of future sales of a substantial
number of our H Shares or other securities relating to our H Shares in the public market, or the
issuance of new shares or other securities, or the perception that such sales or issuances may
occur. Future sales, or anticipated sales, of substantial amounts of our securities, including any
future offerings, could also materially and adversely affect our ability to raise capital at a
specific time and on terms favorable to us. In addition, our Shareholders may experience
dilution in their holdings if we issue more securities in the future. New shares or shares-linked
securities issued by us may also confer rights and privileges that take priority over those
conferred by the H Shares.
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 Shares or other securities convertible into or exchangeable for our 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 debt financing, certain restrictions may be imposed
on our operations, which may further limit our ability or discretion to pay dividends, increase
our risks in adverse economic conditions, adversely affect our cash flows or limit our
flexibility in business development and strategic plans.
We cannot assure you whether and when we will declare and pay dividends in the future.
Distribution of dividends shall be formulated by our Board of Directors at their discretion
and may be subject to Shareholders’ approval. 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 results of operations, cash flows and financial conditions, operating and capital expenditure
requirements, distributable profits as determined under IFRS, our Articles of Association,
market conditions, our strategic plans and prospects for business development, contractual
limits and obligations, payment of dividends to us by our operating subsidiaries, taxation and
any other factor determined by our Board of Directors from time to time as being relevant to
the declaration of dividend payments. As a result, our historical dividend distributions are not
indicative of our future dividend distribution policy. There can be no assurance whether, when
and in what form we will pay dividends in the future or that we will pay dividends in
accordance with our dividend policy. See “Financial Information — Dividend.”
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Because the Offer Price per Share is higher than the net tangible book value per Share,
purchasers of our H Shares in the Global Offering will experience immediate dilution.
The Offer Price of our H Shares is higher than the net tangible book value per Share
immediately prior to the Global Offering. Therefore, purchasers of our H Shares in the Global
Offering will experience an immediate dilution. Existing Shareholders will receive an increase
in the pro forma adjusted consolidated net tangible assets value per share of their shares. See
Unaudited Pro Forma Financial Information in Appendix II to this prospectus for details.
Any possible conversion of Domestic Shares into H Shares could increase the supply of H
Shares in the market, which may negatively impact the market price of H Shares.
According to the stipulations by the State Council’s securities regulatory authority and the
Articles of Association, our Domestic Shares may be converted into H Shares and such
converted H Shares may be listed or traded on an overseas stock exchange, provided that prior
to the conversion and trading of such converted shares, the requisite internal approval
processes (but without the necessity of Shareholders’ approval) have been duly completed and
the filing with the CSRC has been completed. In addition, such conversion, trading and listing
must comply with the regulations prescribed by the State Council’s securities regulatory
authorities and the regulations, requirements and procedures prescribed by the relevant
overseas stock exchange. We can apply for the listing of all or any portion of our Domestic
Shares on the Hong Kong Stock Exchange as H Shares in advance of any proposed conversion
to ensure that the conversion process can be completed promptly upon notice to the Hong Kong
Stock Exchange and delivery of shares for entry on the H Share register. This could increase
the supply of H Shares in the market, and any future sales, or perceived sales, of the converted
H Shares may adversely affect the trading price of H Shares.
Certain facts, forecasts and statistics derived from official government sources contained
in this Prospectus may not be reliable and the market opportunity estimates may not be
accurate.
We have derived certain facts and other statistics in this Prospectus, particularly those
relating to the general economy, digital payment, e-commerce and financial services industry,
from information provided by official government sources and other third-party sources. We
have not independently verified information and statistics from official government sources,
and there can be no assurance as to the accuracy and reliability of such facts and statistics. Due
to possibly flawed or ineffective collection methods or discrepancies between published
information and market practice and other data problems, the statistics herein may be
inaccurate. Y ou should consider carefully how much weight or importance you should attach
to or place on such facts or statistics.
Market opportunity estimates included in this Prospectus, including our ability to capture
a meaningful share of the relevant markets, are subject to significant uncertainty and are based
on assumptions and estimates that may not prove to be accurate. The variables that go into the
calculation of our market opportunity are subject to change over time, and there can be no
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assurance that our market opportunity estimates will materialize as anticipated. Any expansion
in our market depends on a number of factors, including the cost, performance and perceived
value associated with our business and those of our competitors. Even if the market in which
we compete meets the size estimates and growth forecasted in this Prospectus, our business
could fail to grow at similar rates, if at all. Our growth is subject to many factors, including
our success in implementing our business strategy, which is inherently subject to certain risks
and uncertainties.
Forward-looking statements contained in this prospectus are subject to risks and
uncertainties.
This document contains certain statements and information that are forward-looking and
uses forward-looking terminology such as “anticipate,” “believe,” “could,” “going forward,”
“intend,” “plan,” “project,” “seek,” “expect,” “may,” “ought to,” “should,” “would” or “will”
and similar expressions. Y ou are cautioned that reliance on any forward-looking statement
involves risks and uncertainties and that any or all of those assumptions could prove to be
inaccurate and as a result, the forward-looking statements based on those assumptions could
also be incorrect. In light of these and other risks and uncertainties, the inclusion of
forward-looking statements in this document should not be regarded as representations or
warranties by us that our plans and objectives will be achieved, and these forward-looking
statements should be considered in light of various important factors, including those set forth
in this section. Subject to the requirements of the Listing Rules, we do not intend publicly to
update or otherwise revise the forward-looking statements in this Prospectus, whether as a
result of new information, future events or otherwise. Accordingly, you should not place undue
reliance on any forward-looking information. All forward-looking statements in this Prospectus
are qualified by reference to this cautionary statement.
Investors should read the entire prospectus carefully and should not consider any
particular statements in this prospectus or in published media reports without carefully
considering the risks and other information contained in this prospectus.
The Global Offering is being made solely on the basis of the information and
representations contained in this Prospectus, which are true and accurate to the best of our
knowledge and belief. Any information not contained in this Prospectus should not be relied
upon in making an investment decision with respect to the securities being offered.
Prior to the publication of this Prospectus, there has been coverage in the media regarding
us and the Global Offering, which may have contained among other things, certain financial
information, projections, valuations and other forward-looking information about us and the
Global Offering. Investors should be aware that information and opinions published by
third-party sources may have been based on outdated, incomplete, or inaccurate information.
These sources may also have conflicts of interest, and their opinions may not be independent
or objective. The media’s coverage of our Company and the Global Offering may be influenced
by a wide range of factors, including the bias of individual journalists, the preferences of media
outlets and the demands of advertisers.
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In preparation for the Listing, we have sought the following waivers from strict
compliance with certain provisions of the Listing Rules.
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, our Company must have sufficient
management presence in Hong Kong. This normally means that at least two of our 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 of the Listing Rules may be waived by having regard
to, among other considerations, the applicant’s arrangements for maintaining regular
communication with the Stock Exchange.
Our principal business operations are primarily located, managed and conducted in the
PRC and will continue to be based in the PRC, and our Company’s head office is located in
Shenzhen, the PRC. Our executive Directors and senior management members ordinarily reside
in the PRC and play important roles in our business operations, principally responsible for the
overall management, corporate strategy, planning, business development and control of our
Group’s business, it is important for them to remain in close proximity to our Group’s
operations located in the PRC. We consider that it would be practically difficult and
commercially unreasonable for us to arrange for two executive Directors to be ordinarily
resident in Hong Kong, either by relocation of our existing executive Directors or by
appointment of additional executive Directors. For the above reasons, we do not have, and do
not contemplate in the foreseeable future that we will have, sufficient management presence in
Hong Kong for the purpose of satisfying the requirements under Rule 8.12 of the Listing Rules.
Accordingly, pursuant to Rule 19A.15 of the Listing Rules, we have applied to the Stock
Exchange for, and the Stock Exchange has granted us, a waiver from strict compliance with the
requirements set out in Rule 8.12 of the Listing Rules subject to the following conditions:
(i) we have appointed Dr. Liu Guoqing ( ᄎ਷૶) and Ms. Lam Wing Chi (ٺa st h e
authorized representatives of our Company (the “ Authorized Representatives ”) for
purpose of Rule 3.05 of the Listing Rules. The Authorized Representatives will act
as our Company’s principal channel of communication with the Stock Exchange and
will be readily contactable by phone, facsimile and email to deal promptly with
enquiries from the Stock Exchange. Our Company will provide contact details of the
Authorized Representatives to the Stock Exchange and will inform the Stock
Exchange as soon as practicable in respect of any changes in Authorized
Representatives. Accordingly, our Authorized Representatives will be able to meet
with the relevant members of the Stock Exchange to discuss any matters in relation
to our Company within a reasonable period of time. See “Directors, Supervisors and
Senior Management” for further biographical details of our Authorized
Representatives;
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(ii) to facilitate communication with the Stock Exchange, we have provided our
Authorized Representatives and the Stock Exchange with the contact details
(including mobile phone number, office phone number and/or email address) of each
of our Directors. When the Stock Exchange wishes to contact our Directors on any
matter, each of the Authorized Representatives will have all necessary means to
contact our Directors;
(iii) to the best of our knowledge and information, each Director who is not ordinarily
resident in Hong Kong possesses or can apply for valid travel documents to visit
Hong Kong and can meet with the Stock Exchange within a reasonable period upon
request by the Stock Exchange; and
(iv) our Company has appointed SBI China Capital Hong Kong Securities Limited as our
Compliance Advisor with effect from the Listing in accordance with Rule 3A.19 of
the Listing Rules. The Compliance Advisor will, among other things and in addition
to the Authorized Representatives, provide us with professional advice on
continuing obligations under the Listing Rules and act as additional channel of
communication of the Company with the Stock Exchange during the period from the
Listing Date to the date on which the Company complies with Rule 13.46 of the
Listing Rules in respect of our financial results for the first full financial year
immediately after the Listing. The Compliance Advisor will act as the additional and
alternative channel of communication with the Stock Exchange when the Authorized
Representatives are not available and its representatives will be readily available to
answer enquiries from the Stock Exchange.
W AIVER IN RESPECT OF APPOINTMENT OF JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, we must appoint a company
secretary who, by virtue of his/her academic or professional qualifications or relevant
experience, is, in the opinion of the Stock Exchange, capable of discharging the functions of
the company secretary. Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock
Exchange considers the following academic or professional qualifications to be acceptable:
(i) a member of The Hong Kong Chartered Governance Institute;
(ii) a solicitor or barrister (as defined in the Legal Practitioners Ordinance (Chapter 159
of the Laws of Hong Kong)); and
(iii) a certified public accountant (as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong)).
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In addition, pursuant to Note 2 to Rule 3.28 of the Listing Rules, the Stock Exchange will
consider the following factors in assessing the individual’s “relevant experience”:
(i) length of employment with the issuer and other issuers and the roles he/she played;
(ii) familiarity with the Listing Rules and other relevant law and regulations including
the Securities and Futures Ordinance, the Companies Ordinance, the Companies
(Winding Up and Miscellaneous Provisions) Ordinance and the Takeovers Code;
(iii) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(iv) professional qualifications in other jurisdictions.
Pursuant to Chapter 3.10 of the Guide for New Listing Applicants, the waiver under Rule
3.28 of the Listing Rules will be granted for a fixed period of time but in any event not
exceeding three years from the date of listing and on the following conditions: (i) the relevant
company secretary must be assisted by a person who possesses the qualifications or experience
as required under Rule 3.28 of the Listing Rules and is appointed as joint company secretary
throughout the waiver period; and (ii) the waiver can be revoked in the event of a material
breach of the Listing Rules by the Company.
We have appointed Mr. Wen Qi ( ၲփ)( “ Mr. Wen ”) and Ms. Lam Wing Chi (ٺ)
“(Ms. Lam ”) as the joint company secretaries of our Company. Mr. Wen has served as the chief
financial officer and Board secretary of our Company since December 2020, and has been
responsible for overseeing financial, taxation and board secretarial affairs of the Group since
then. Through such experiences, Mr. Wen has acquired extensive expertise in handling
corporate governance and administrative matters. See “Directors, Supervisors and Senior
Management” for further biographical details of Mr. Wen and Ms. Lam. By virtue of Mr. Wen’s
substantial experience in corporate governance and finance matters and his experience and
familiarity with our Group, we believe that he is capable of discharging the duties as one of
the joint company secretaries and is suitable to act in this capacity. See “Directors, Supervisors
and Senior Management” for further biographical details of Mr. Wen and Ms. Lam.
Furthermore, given that the key operations of our Group are located in the PRC, we believe that
it would be in the interest of our Company and our corporate governance to have Mr. Wen, who
possesses the relevant background and experience in the PRC, to act as our joint company
secretary.
Accordingly, while Mr. Wen personally does not possess the formal qualifications
required of a company secretary under Rule 3.28 of the Listing Rules, we have applied to the
Stock Exchange for, and the Stock Exchange has granted us with, a waiver from strict
compliance with the requirements under Rules 3.28 and 8.17 of the Listing Rules such that Mr.
Wen will act as our joint company secretary. The waiver has been granted for a three-year
period commencing from the Listing Date (the “ Waiver Period ”), on the condition that:
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(i) Mr. Wen will endeavor to attend relevant training courses to enhance his knowledge
of the Listing Rules during the Waiver Period, and comply with the annual
professional training requirement under Rule 3.29 of the Listing Rules;
(ii) Ms. Lam, as a joint company secretary of our Company, will provide assistance to,
and work closely with, Mr. Wen in the discharge of his duties and responsibilities
as our company secretary during the Waiver Period;
(iii) Ms. Lam is suitably qualified to render assistance to Mr. Wen so as to enable him
to acquire the relevant experience (as required under Rule 3.28 of the Listing Rules)
during the Waiver Period; and
(iv) such waiver will be revoked if there are material breaches of the Listing Rules by
the Company.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us with, a waiver from strict compliance with Rule 3.28 and 8.17 of the Listing Rules.
Such waiver will be revoked immediately if and when Ms. Lam ceases to provide assistance
to Mr. Wen or there are material breaches of the Listing Rules by our Company. At the expiry
of the Waiver Period, the qualifications and experience of Mr. Wen and the need for on-going
assistance from Ms. Lam will be evaluated by our Company. Our Company will liaise with the
Stock Exchange to enable it to assess whether, having benefited from the assistance of Ms. Lam
for the preceding three years, Mr. Wen has attained the relevant experience (within the meaning
of Note 2 to Rule 3.28 of the Listing Rules) and is capable of discharging the duties of a
company secretary so that a further partial waiver will not be necessary.
W AIVER IN RESPECT OF SUBSCRIPTION OF OFFER SHARES BY EXISTING
SHAREHOLDER
Rule 10.04 of the Listing Rules provides that a person who is an existing shareholder of
the issuer may only subscribe for or purchase any securities for which listing is sought which
are being marketed by or on behalf of a new applicant either in his or its own name or through
nominees if the conditions in Rules 10.03(1) and (2) of the Listing Rules are fulfilled.
The conditions in Rules 10.03(1) and (2) of the Listing Rules are as follows: (i) no
securities are offered to the existing shareholders on a preferential basis and no preferential
treatment is given to them in the allocation of the securities; and (ii) the minimum prescribed
percentage of public shareholders required by Rule 8.08(1) of the Listing Rules is achieved.
Paragraph 5(2) of Appendix F1 to the Listing Rules provides that, unless with the prior
written consent of the Stock Exchange, no allocations will be permitted to directors or existing
shareholders of the applicant or their close associates, whether in their own names or through
nominees unless the conditions set out in Rules 10.03 and 10.04 of the Listing Rules are
fulfilled.
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Chapter 4.15 of the Guide for New Listing Applicants ( “Guide”) sets out the basis and
conditions for the Stock Exchange to grant a consent and waiver from Rule 10.04 to placing
to existing shareholders. It also provides that placings to cornerstone investors are generally
permitted based on the principles listed therein. Furthermore, paragraph 15(ii) of Chapter 4.15
of the Guide provides that the Stock Exchange will generally not presume that there is
preferential treatment, and the fulfilment of the existing shareholders conditions (as defined in
the Guide) is not required, for existing shareholders purchasing securities pursuant to an
anti-dilution provision.
KCH International Investment Limited was held as to 70% and 30% by Tianjin
Kangchengheng Enterprise Management Consultation Partnership (Limited Partnership)
(̹ੰϓЖΆุ၍ଣፔ༔ΥྫΆุ(Υྫ)) (“ Tianjin KCH ”) and Fortuna Capital
Management (“ Fortuna Capital ”), respectively, as at the Latest Practicable Date.
Tianjin KCH was in turn held as to (i) 1% by its general partner, Kangchengheng and (ii)
as to 99% by its limited partner, Zhuji Kangchengheng Huiying Investment Partnership
(Limited Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)), respectively, as at the
Latest Practicable Date. Zhuji Kangchengheng Huiying Investment Partnership (Limited
Partnership) was held as to (i) 1% by its general partner, Kangchengheng and (ii) 99% its
limited partner, Zhuji Economic Development and Financing Investment Co., Ltd. ( መ࿬຾ක
ʮ̡), which was ultimately controlled by Zhuji Municipal Finance Bureau ( መ
҅), respectively, as at the Latest Practicable Date. Therefore, KCH International
Investment Limited is a close associate of Kangchengheng. Fortuna Capital is a company
incorporated in the British Virgin Islands in November 2023, and is principally engaged in
equity investment, including primary and secondary equity markets in Hong Kong and the
U.S., with a focus in the technology, consumer and healthcare sectors. Its ultimate beneficial
owner is Y ANG Dehui ( เᅃึ), who is an Independent Third Party. Fortuna Capital holds a
minority stake and is a passive investor in KCH International Investment Limited. As Fortuna
Capital does not control any controlling stake or the board of directors of KCH International
Investment Limited, it has no decision-making power in respect of the actions taken by KCH
International Investment Limited. As at the Latest Practicable Date, KCH International
Investment Limited was ultimately controlled by Kangchengheng, see “History, Development
and Corporate Structure–Pre-IPO Investments–Information about our Major Pre-IPO
Investors–9. Kangchengheng” in this prospectus for details of Kangchengheng. Save as
disclosed above, KCH International Investment Limited is not a close associate of any other
existing shareholders of the Company. Kangchengheng will become a substantial shareholder
of the Company upon completion of the Global Offering. Given that KCH International
Investment Limited is a close associate of Kangchengheng, the participation of KCH
International Investment Limited in the Global Offering is therefore subject to a waiver from
strict compliance with Rule 10.04 of the Listing Rules and a written consent from the Stock
Exchange in accordance with Paragraph 5(2) of Appendix F1 to the Listing Rules.
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We have applied to the Stock Exchange for a waiver from strict compliance with Rule
10.04 of the Listing Rules and sought a written consent from the Stock Exchange under
paragraph 5(2) of Appendix F1 to the Listing Rules, and the Stock Exchange has granted us
such waiver and consent to permit us to allocate the Offer Shares in the placing tranche to KCH
International Investment Limited as a cornerstone investor, on the following grounds which are
consistent with the conditions as set out in Chapter 4.15 of the Guide:
(a) Kangchengheng, in aggregate, hold less than 5% of the Company’s voting rights
prior to the completion of the Global Offering.
(b) Neither of Kangchengheng nor KCH International Investment Limited is a core
connected person (as defined under the Listing Rules) of the Company or any close
associate (as defined under the Listing Rules) of any such core connected person
immediately prior to the completion of the Global Offering.
(c) Kangchengheng does not have the power to appoint Directors of the Company or
any other special rights which entitle it to influence and control the Company before
and after Listing.
(d) The allocation to KCH International Investment Limited will not affect the
Company’s ability to satisfy the public float requirement under Rule 8.08 of the
Listing Rules.
(e) Details of the allocation to KCH International Investment Limited will be disclosed
in this prospectus and/or the Company’s allotment results announcement.
(f) The Offer Shares to be subscribed by and allocated to KCH International Investment
Limited under the Global Offering will be at the same Offer Price and on
substantially the same terms as the other cornerstone investor.
(g) The Joint Sponsors confirm to the Stock Exchange in writing that (i)
Kangchengheng holds less than 5% of the voting rights in the Company immediately
before the completion of the Global Offering, holding currently approximately
4.01% of the voting rights of the Company; (ii) Kangchengheng is not a core
connected person of the Company nor a close associate of a core connected person
before the Listing; (iii) Kangchengheng does not have the power to appoint directors
or any other special rights upon Listing; (iv) the allocation of Shares to KCH
International Investment Limited will not affect the Company’s ability to satisfy the
public float requirement of Rule 8.08 of the Listing Rules; and (v) based on the Joint
Sponsors’ discussions with the Company and the Overall Coordinators, the Joint
Sponsors have no reason to believe that KCH International Investment Limited will
receive any preferential treatment in the allocation of the Global Offering as a
cornerstone investor by virtue of its relationship with the Company other than the
preferential treatment of assured entitlement under the cornerstone investment to
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KCH International Investment Limited following the principles set out in Chapter
4.15 of the Guide, and details of the allocation will be disclosed in this prospectus
and allotment results announcement.
(h) The Overall Coordinators confirm to the Stock Exchange in writing that to the best
of their knowledge and belief, that no preferential treatment has been, nor will be,
given to Kangchengheng or KCH International Investment Limited by virtue of their
relationship with the Company in any allocation in the placing tranche of the Global
Offering.
(i) The Company confirms to the Stock Exchange in writing that (1) the cornerstone
investment agreement does not contain any material term which is more favourable
to Kangchengheng or KCH International Investment Limited than those in other
cornerstone investment agreements (if any); and (2) save for the assured entitlement
for KCH International Investment Limited as provided under the Cornerstone
Investment Agreement, no preferential treatment has been, nor will be, given to
Kangchengheng or KCH International Investment Limited by virtue of their
relationship with the Company in any allocation in the placing tranche of the Global
Offering.
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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors (including any proposed director who is named
as such in this prospectus) collectively and individually accept full responsibility, includes
particulars given in compliance with the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V
of the Laws of Hong Kong) and the Listing Rules for the purpose of giving information to the
public with regard to our Group. Our Directors, having made all reasonable enquiries, confirm
that to the best of their knowledge and belief, the information contained in this prospectus is
accurate and complete in all material respects and not misleading or deceptive, and there are
no other matters the omission of which would make this prospectus or any statement herein
misleading.
CSRC FILING
The CSRC accepted the Company’s filing application on June 6, 2024, and issued the
filing notice on October 28, 2024 in respect of the Global Offering and the application for
listing of our H Shares on the Stock Exchange. No other approvals under the PRC laws and
regulations are required to be obtained for the listing of the H Shares on the Stock Exchange.
INFORMATION ABOUT THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering,
which form 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. See “How
to Apply for the Hong Kong Offer Shares” for details of the procedures for applying for the
Hong Kong Offer Shares. The Global Offering comprises the Hong Kong Public Offering of
initially 3,919,000 Offer Shares and the International Placing of initially 35,271,000 Offer
Shares (subject to reallocation on the basis as set out in the section headed “Structure of the
Global Offering”) and, in case of the International Placing, any exercise of the Over-allotment
Option.
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 conditions set out herein and
therein. No person has been authorized to give any information or make any representations
other than those contained in this prospectus and, if given or made, such information or
representations must not be relied on as having been authorized by us, the Joint Sponsors, the
Sponsor-OC, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Underwriters, the Capital Market Intermediaries, any of our or
their affiliates or any of their respective directors, officers, employees or agents or any other
person or party involved in the Global Offering. Neither the delivery of this prospectus nor any
offering, sale or delivery made in connection with our 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
in this prospectus is correct as of any subsequent time.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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STRUCTURE OF THE GLOBAL OFFERING AND UNDERWRITING
See “Structure of the Global Offering” for details of the structure of the Global Offering,
including its conditions and the arrangements relating to the Over-allotment Option and
stabilization.
The Listing is sponsored by the Joint Sponsors and the Global Offering is managed by the
Overall Coordinators.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
pursuant to the Hong Kong Underwriting Agreement. The International Underwriting
Agreement relating to the International Placing is expected to be entered into on or around the
Price Determination Date, subject to agreement on the Offer Price between the Overall
Coordinators (for themselves and on behalf of the Underwriters and the Capital Market
Intermediaries) and us. The Global Offering is managed by the Sponsor-OC and the Overall
Coordinators. If, for any reason, the Offer Price is not agreed, the Global Offering will not
proceed and will lapse. See “Underwriting” for details of the Underwriters and the
underwriting arrangements.
RESTRICTIONS ON OFFER OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to confirm, and is deemed by his acquisition of Hong Kong Offer Shares to
have confirmed, that he is aware of the restrictions on offers of the Offer Shares described in
this prospectus and that he is not acquiring, and has not been offered, any Offer Shares in
circumstances that contravene any such restrictions.
No action has been taken to permit a public offering of the Offer Shares or the distribution
of this prospectus in any jurisdiction other than Hong Kong. Accordingly, without limitation
to the following, this prospectus may not be used for the purpose of, and does not constitute,
an offer or invitation in any jurisdiction or in any circumstances in which such an offer or
invitation is not authorized or to any person to whom it is unlawful to make such an offer or
invitation. The distribution of this prospectus and the offering of the Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under the
securities laws of such jurisdiction pursuant to registration with or an authorization by the
relevant securities regulatory authorities or an exemption therefrom. In particular, the Offer
Shares have not been publicly offered and sold, and will not be offered or sold, directly or
indirectly in the PRC or the United States.
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APPLICATION FOR LISTING ON THE STOCK EXCHANGE
Our Company has applied to the Stock Exchange for the granting of the listing of and
permission to deal in the H Shares to be issued pursuant to the Global Offering (including the
additional H Shares which may be issued pursuant to the exercise of the Over-allotment
Option) and our H Shares to be converted from our Unlisted Shares. Dealings in the H Shares
on the Hong Kong Stock Exchange are expected to commence on Friday, December 27, 2024.
Save as disclosed in this prospectus, no part of our share capital or loan capital is listed
on or dealt in on any other stock exchange and no such listing or permission to list is being or
proposed to be sought in the near future.
All the Offer Shares will be registered on our H Share Registrar in order to enable them
to be traded on the Stock Exchange.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of,
and permission to deal in, the H Shares on the Stock Exchange is refused before the expiration
of three weeks from the date of the closing of the application lists, or such longer period (not
exceeding six weeks) as may, within the said three weeks, be notified to our Company by or
on behalf of the Stock Exchange.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the Hong Kong Stock Exchange granting the listing of, and permission to deal
in, our H Shares on the Hong Kong Stock Exchange and we complying with the stock
admission requirements of HKSCC, our H Shares will be accepted as eligible securities by
HKSCC for deposit, clearance and settlement in CCASS with effect from the Listing Date or
any other date as determined by HKSCC.
Settlement of transactions between participants of the Stock Exchange is required to take
place in CCASS on the second settlement day after any trading day. All necessary arrangements
have been made for the H Shares to be admitted into CCASS. All activities under CCASS are
subject to the general rules of HKSCC and HKSCC Operational Procedures in effect from time
to time. Y ou should seek the advice of your stockbroker or other professional adviser for details
of those settlement arrangements as such arrangements will affect your rights and interests.
H SHARE REGISTER AND STAMP DUTY
All H Shares issued by us pursuant to applications made in the Hong Kong Public
Offering will be registered on our H share register to be maintained by our H Share Registrar,
Tricor Investor Services Limited, in Hong Kong. Our principal register of members will be
maintained by us at our head office in the PRC.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Dealings in the H Shares registered on our H share register in Hong Kong will be subject
to Hong Kong stamp duty. See “Appendix III — Taxation and Foreign Exchange.”
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisers if they are in any doubt as to the taxation implications of subscribing for, purchasing,
holding, disposing of, dealing in or exercising any rights in relation to, the H Shares. None of
us, the Joint Sponsors, the Sponsor-OC, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital
Market Intermediaries, any of our or their affiliates or any of their respective directors,
officers, employees or agents or any other person or party involved in the Global Offering
accepts responsibility for any tax effects on, or liabilities of, any person resulting from the
subscription for, purchase, holding, disposition of, dealing in, or exercising any rights in
relation to, the H Shares.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
We have instructed Tricor Investor Services Limited, our H Share Registrar, and it has
agreed, not to register the subscription, purchase or transfer of any H Shares in the name of any
particular holder unless and until the holder delivers a signed form to our H Share Registrar
in respect of those H Shares bearing statements to the effect that the holder:
(i) agrees with us, for ourselves and for the benefit of each Shareholder, and we agree
with each Shareholder, to observe and comply with the Company Law, the
Companies Ordinance, the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, the Special Regulations, and the Articles of Association;
(ii) agrees with us, for ourselves and for the benefit of each Shareholder and each of our
Directors, Supervisors, managers and other senior officers, and we, acting for
ourselves and on behalf of each Shareholder and each of our Directors, Supervisors,
managers and senior officers, agree with each Shareholder to refer all differences
and claims arising from the Articles of Association or any rights or obligations
conferred or imposed by the Company Law or other relevant laws and administrative
regulations concerning the affairs of the Company to arbitration in accordance with
the Articles of Association, and that the arbitration tribunal may conduct hearings in
open sessions and to publish its award, which shall be final and conclusive. See
“Appendix V—Summary of the Articles of Association”;
(iii) agrees with us, for ourselves and for the benefit of each Shareholder that the H
Shares are freely transferable by their holders; and
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(iv) authorizes us to enter into a contract on his behalf with each of our Directors,
Supervisors and senior officers whereby each such Director, Supervisor and senior
officer undertakes to observe and comply with his obligations to our Shareholders
as stipulated in the Articles of Association. Persons applying for or purchasing H
Shares under the Global Offering are deemed, by their making an application or
purchase, to have represented that they are not close associates (as defined in the
Listing Rules) of any of the Directors, Supervisors or an existing Shareholder of our
Company or a nominee of any of the foregoing.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Company, dividends payable in Hong Kong dollars
in respect of our H Shares will be paid to the Shareholders as recorded on the H Share register
of members of our Company in Hong Kong and sent 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 RMB
amounts into Hong Kong dollars at a specified rate. Unless we indicate otherwise, the
translations of RMB into Hong Kong dollars and vice versa have been made at the rate of
HK$1.00 to RMB0.93252 in this prospectus.
No representation is made that any amount in RMB or Hong Kong dollars can be or could
be, or have been, converted at the above rate or any other rate or at all.
See “Appendix III—Taxation and Foreign Exchange” for further details on exchange
rates.
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, this
prospectus shall prevail. For ease of reference, the names of Chinese laws and regulations,
governmental authorities, institutions, natural persons or other entities (including certain of our
subsidiaries) have been included in this prospectus in both the Chinese and English languages
and in the event of any inconsistency, the Chinese versions shall prevail.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures preceding them.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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DIRECTORS
Name Address Nationality
Executive Directors
Liu Guoqing ( ᄎ਷૶) Unit 3A, Building 1
Huahui Y unmen, Nanshan District
Shenzhen, Guangdong Province
PRC
Chinese
Y ang Guang ( เᄿ) Unit 1204, Building A
Langjingyuan, Nanshan District
Shenzhen, Guangdong Province
PRC
Chinese
Zhou Xiang ( մജ) Unit 101, Building 9
Renheng City Starlight
Nanjing, Jiangsu Province
PRC
Chinese
Wang Qicheng ( ˮ઼೻) Unit 1103, Building C
Langjingyuan, Nanshan District
Shenzhen, Guangdong Province
PRC
Chinese
Non-executive Directors
Bi Lei ( ଭᓍ) 8C, Unit 4, Building 2
Shijicheng Qingxueyuan
Haidian District, Beijing
PRC
Chinese
Liu Yiran (್) Unit 3602, Building 3
Xincheng International
No. 6, Chaoyangmen Outer Street
Chaoyang District, Beijing
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Name Address Nationality
Independent non-executive Directors
Xiang Y ang ( ධජ) Flat 6B, Tower 3
Hong Kong University of Science and
Technology
Clear Water Bay
Kowloon, Hong Kong
Chinese
Tan Kaiguo ( ᗈක਷) Room 1001, No. 20, Lane 1185
Changde Road
Putuo District, Shanghai
PRC
Chinese
Tan Mingkui (۲׼D1-602, South China
University of Technology
No. 382, Waihuan East Road
Panyu District
Guangzhou, Guangdong Province
PRC
Chinese
SUPERVISORS
Name Address Nationality
Liao Diguang (ᄿ) Unit 17A, Building 12
Jinxiu Jiangnan Phase IV
Longhua District
Shenzhen, Guangdong Province
PRC
Chinese
Ao Zhengguang (Έ) Unit 31D, Block 4, Building 1
Area A, Phase 6
Lemeng Spring Garden
Mintang Road
Longhua District
Shenzhen, Guangdong Province
PRC
Chinese
Wan Hao (ख) Room 508, Unit 2, Building 10
Shuixie Y angguang Garden
No. 48 Ningdan Road
Y uhuatai District
Nanjing, Jiangsu Province
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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For biographies and other relevant information of our Directors and Supervisors, see
“Directors, Supervisors and Senior Management.”
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors CITIC Securities (Hong Kong) Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Sponsor-Overall Coordinator CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Overall Coordinators and Joint Global
Coordinators
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
SBI China Capital Financial Services
Limited
4/F, Henley Building
No. 5 Queen’s Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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SDICS International Securities
(Hong Kong) Limited (formerly known as
Essence International Securities
(Hong Kong) Limited)
39/F, One Exchange Square
Central
Hong Kong
Long Bridge HK Limited
Unit 3302, 33/F, West Tower
Shun Tak Centre
No. 168-200 Connaught Road Central
Hong Kong
Joint Bookrunners,
Joint Lead Managers and
Capital Market Intermediaries
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
SBI China Capital Financial Services
Limited
4/F, Henley Building
No. 5 Queen’s Road Central
Hong Kong
SDICS International Securities
(Hong Kong) Limited (formerly known as
Essence International Securities
(Hong Kong) Limited)
39/F, One Exchange Square
Central
Hong Kong
Long Bridge HK Limited
Unit 3302, 33/F, West Tower
Shun Tak Centre
No. 168-200 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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ABCI Capital Limited
(Only as a Joint Bookrunner)
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
CMBC Securities Company Limited
45/F, One Exchange Square
8 Connaught Place
Central, Hong Kong
Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty, Hong Kong
Phillip Securities (Hong Kong) Limited
11/F United Centre
95 Queensway
Hong Kong
Shenwan Hongyuan Securities (H.K.)
Limited
Level 6, Three Pacific Place
1 Queen’s Road East
Hong Kong
SPDB International Capital Limited
33/F, SPD Bank Tower
One Hennessy
1 Hennessy Road
Hong Kong
Tiger Brokers (HK) Global Limited
1/F
308 Des V oeux Road Central
Sheung Wan
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 110 ---
TradeGo Markets Limited
Room 3405, West Tower
Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
Joint Lead Managers and Capital
Market Intermediaries
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Fosun International Securities Limited
Suite 2101-2105, 21/F
Champion Tower
3 Garden Road
Central
Hong Kong
Patrons Securities Limited
Unit 3214, 32/F
Cosco Tower
183 Queen’s Road Central
Sheung Wan
Hong Kong
Legal Advisors to our Company As to Hong Kong and U.S. laws:
Linklaters
11/F, Alexandra House
Chater Road
Central
Hong Kong
As to PRC laws:
AllBright Law Offices
9, 11, 12/F, Shanghai Tower
No. 501, Yincheng Middle Road
Pudong New Area
Shanghai
PRC
As to U.S. export control laws:
Hogan Lovells
11/F, One Pacific Place
88 Queensway
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 111 ---
Legal Advisors to the Joint Sponsors
and the Underwriters
As to Hong Kong laws:
Deacons
5/F Alexandra House
18 Chater Road
Central
Hong Kong
Grandall Law Firm (Shanghai)
25-28/F, Suhe Centre
99 North Shanxi Road
Jing’an District, Shanghai
PRC
Auditor and Reporting Accountant PricewaterhouseCoopers
Certified Public Accountants
Registered Public Interest Entity Auditor
22/F, Prince’s Building
Central
Hong Kong
Industry Consultant China Insights Industry Consultancy
Limited
10/F, Block B, Jing’an International Center
88 Puji Road
Jing’an District, Shanghai
PRC
Compliance Advisor SBI China Capital Hong Kong
Securities Limited
4/F, Henley Building
No. 5 Queen’s Road Central
Hong Kong
Receiving Bank CMB Wing Lung Bank Limited
45 Des V oeux Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 112 ---
Registered Office, Headquarters and
Principal Place of Business in the PRC
25th Floor, Tower A, Building 1
Zhongzhou Binhai Commercial Center
No. 9285 Binhe Avenue
Shangsha Community, Sha Tau Street
Futian District, Shenzhen
Guangdong Province, PRC
Principal Place of Business in Hong Kong 5/F, Manulife Place
348 Kwun Tong Road
Kowloon, Hong Kong
Company’s Website www.minieye.cc
(Information contained on this website does
not form part of this prospectus)
Joint Company Secretaries Mr. Wen Qi
25th Floor, Tower A, Building 1
Zhongzhou Binhai Commercial Center
No. 9285 Binhe Avenue
Shangsha Community, Sha Tau Street
Futian District, Shenzhen
Guangdong Province, PRC
Ms. Lam Wing Chi
ACG, HKACG
5/F, Manulife Place
348 Kwun Tong Road
Kowloon, Hong Kong
Authorized Representatives Dr. Liu Guoqing
25th Floor, Tower A, Building 1
Zhongzhou Binhai Commercial Center
No. 9285 Binhe Avenue
Shangsha Community, Sha Tau Street
Futian District, Shenzhen
Guangdong Province, PRC
Ms. Lam Wing Chi
5/F, Manulife Place
348 Kwun Tong Road
Kowloon, Hong Kong
CORPORATE INFORMATION
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--- page 113 ---
Audit Committee Dr. Xiang Y ang
Mr. Tan Kaiguo (Chairperson)
Dr. Tan Mingkui
Remuneration and Appraisal Committee Dr. Xiang Y ang
Mr. Tan Kaiguo
Dr. Tan Mingkui (Chairperson)
Nomination Committee Dr. Liu Guoqing
Dr. Xiang Y ang (Chairperson)
Dr. Tan Mingkui
Strategy Committee Dr. Liu Guoqing (Chairperson)
Mr. Y ang Guang
Dr. Tan Mingkui
H Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Banks China Merchants Bank Co., Ltd.
Shenzhen Branch
China Merchants Bank Shenzhen Branch
Building
No. 2016 Shennan Avenue, Lianhua Street
Futian District, Shenzhen
Guangdong Province, PRC
China Construction Bank Corporation
Shenzhen Branch
Shenzhen China Construction Bank Building
Lianhua Street
Futian District, Shenzhen
Guangdong Province, PRC
Industrial and Commercial Bank of China
Limited Shenzhen Branch
North Tower, Financial Center
Shennan East Street
Luohu District, Shenzhen
Guangdong Province, PRC
CORPORATE INFORMATION
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--- page 114 ---
The information and statistics set out in this section and other sections of this
prospectus were extracted from different official government publications, available
sources from public market research and other sources from independent suppliers, and
from the independent industry report prepared by China Insights Consultancy (the “ CIC
Report ”). We engaged CIC to prepare the CIC Report, an independent industry report,
in connection with the Global Offering. 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, 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 correctness or accuracy.
OVERVIEW OF GLOBAL AND CHINESE AUTOMOTIVE INTELLIGENCE
SOLUTIONS INDUSTRY
Ongoing technology advancements and growing customer desire for safer and better
driving experiences are fueling the progress of automotive intelligence solutions, which is of
importance for the automobile industry with a focus on two pivotal segments: intelligent
driving solutions and intelligent cabin solutions. Specifically, intelligent driving solutions
strive to augment travel safety and efficiency, while intelligent cabin solutions aim to enhance
driving experience with heightened convenience and enjoyment. According to CIC, the global
market size for automotive intelligence solutions in terms of revenue, encompassing intelligent
driving solutions and intelligent cabin solutions, reached RMB589.9 billion in 2023, and is
projected to increase to RMB1,330.3 billion in 2028 with a CAGR of 15.5% from 2024 to
2028.
China stands as the largest automobile market globally, giving rise to the world’s
dominant market of automotive intelligence solutions. According to CIC, the sales volume of
automobiles in China reached 30.5 million units in 2023, accounting for 32.9% of the global
sales volume of automobiles, and is anticipated to reach 35.0 million units in 2028. Meanwhile,
rapid advancements in related technologies have effectively satisfied consumer demand for
smart experience, leading to a growing adoption of intelligent features in automobiles. The
stable growth of automobile sales and the rising penetration of intelligent solutions are
expected to drive continuous developments within the Chinese automotive intelligence
solutions industry. The market size for Chinese automotive intelligence solutions in terms of
revenue, encompassing intelligent driving solutions and intelligent cabin solutions, reached
RMB175.0 billion in 2023, and is expected to reach RMB431.2 billion in 2028 with a CAGR
of 16.8% from 2024 to 2028.
INDUSTRY OVERVIEW
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ANALYSIS OF GLOBAL AND CHINESE INTELLIGENT DRIVING SOLUTIONS
INDUSTRY
Definition and Classification of Intelligent Driving Solutions
Intelligent driving solutions refer to solutions that enable vehicles to achieve varying
degrees of safe and comfortable driving or parking functions in various traffic scenarios by
utilizing a combination of hardware, software and algorithms to process real-time data from the
vehicle’s surroundings and make decisions based on autonomous computing.
Intelligent driving solutions include solutions enabling Level 0 to Level 5 automation.
Solutions enabling Level 0 automation can detect and respond to a part of the objects and
events, but are unable to execute sustained vehicle motion control tasks. Solutions enabling
Level 1 to Level 5 automation are commonly known as autonomous driving solutions, which
can execute varying degrees of sustained vehicle motion control in dynamic driving tasks.
According to the functionality and the extent to which the driving system takes control
of the vehicle, autonomous driving solutions can be classified into advanced driver assistance
system (ADAS) solutions and automated driving system (ADS) solutions.
ADAS solutions refer to solutions enabling Level 1 to Level 2 automation, which can
continuously take over varying degrees of lateral and longitudinal vehicle control in dynamic
driving tasks. Currently, global intelligent driving solutions industry is progressing towards
Level 2+ vehicle autonomy. Level 2+ solutions enable vehicles to perform functions beyond
Level 2 automation, including HNOA, UNOA and HA VP , while the driver remains responsible
for object and event detection and response. Although Level 2+ has not been officially defined
by regulatory authorities, it is recognized within the industry as a distinct category positioned
between Level 2 and Level 3. Market participants, including OEMs and intelligent driving
solution providers, widely use the Level 2+ categorization to highlight their advanced
technologies and functions compared to basic Level 2 features. This distinction offers users and
customers a clearer understanding of the level of automation in intelligent driving solutions.
ADS solutions refer to solutions enabling Level 3 to Level 5 automation, which can
continuously perform a full range of dynamic driving tasks under certain circumstances. As
regulatory clarity increases on the performance of road trials and commercial operating
conditions of vehicles equipped with Level 3 and above solutions in designated city areas, ADS
solutions will continuously see increased commercialization in the future. The following chart
sets forth the definition and classification of different intelligent driving solutions.
INDUSTRY OVERVIEW
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Definition and classification of intelligent driving solutions
Classification Level Name
Sustained Lateral
and Longitudinal
Vehicle Motion
Control(1)
Object and Event
Detection and
Response(2)
Dynamic Driving
Task Fallback(3)
Operational
Design Domain(4)
Emergency
Assistance System Level 0 Emergency
Assistance
 Driver
 Driver and System Driver Limited
Advanced Driver
Assistance System
(ADAS)
Level 1 Partial Driver
Assistance
 Driver and System
 Driver and System Driver Limited
Level 2,
Level 2+
Combined Driver
Assistance
 System
 Driver and System Driver Limited
Automated
Driving
System (ADS)
Conditionally
Automated Driving
 System
 System
DDT fallback-ready user
(becomes the driver upon
taking over the dynamic
driving task)
Limited
Highly Automated
Driving
 System
 System System Limited
Level 3
Level 4
Level 5 Fully Automated
Driving
 System
 System System
Unlimited
(excluding
commercial and
regulatory factors)
Intelligent Driving Solutions
Autonomous Driving Solutions
Example
Functions
BSD, LDW,
FCW, PCW
LCC or ACC
Level 2: LCC and
ACC, APA
Level 2+: HNOA,
UNOA, HA VP
Traffic jam
chauffeur
Local driverless
taxi, pedals/steering
wheel may or may
not be installed
Same as Level 4,
but feature can
drive everywhere in
all conditions
Notes:
(1) Sustained lateral and longitudinal vehicle motion control refers to the sustained controlling of vehicle’s lateral
movement through steering and longitudinal movement through acceleration and deceleration.
(2) Object and event detection and response refers to the monitoring of driving environment by detecting,
recognizing, classifying and preparing responses to targets and events, and eventually executing tasks in a
targeted manner.
(3) Dynamic driving task fallback refers to the action of the driver taking over the dynamic driving tasks or the
system executing a minimal risk maneuver when conditions do not meet the operational design domain.
(4) Operational design domain refers to the external environmental conditions (including road, traffic, weather and
lighting) determined during the design phase of an intelligent driving system, which are applicable to its
functional operation.
Source: MIIT, Society of Automotive Engineers (SAE), CIC
Recent Regulatory Developments
Recently, in terms of the autonomous driving standards, the MIIT released the 2024 Key
Points of Automotive Standardization Work ( 2024ᓃ), highlighting
increased efforts in developing standards for intelligent connected vehicles. This includes
promoting mandatory national standards for vehicle information security, software upgrades
and autonomous driving data recording systems, as well as recommending national standards
for general technical requirements for autonomous driving, road test methods for autonomous
driving functions, operational design conditions for autonomous driving, general data
requirements and LTE-V2X. In addition, according to the national standards revision plan, the
standardization technical organization of the MIIT has completed the formulation of five
national automotive industry standards, including the General Technical Requirements for
Autonomous Driving Systems of Intelligent Connected V ehicles ( ౽ᅆၣᑌӛԓІਗቷትӻ
Ӌ), and has made them public.
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In terms of autonomous driving consumption, the NDRC and four other departments
issued the Measures to Create New Consumption Scenarios and Cultivate New Growth Points
in Consumption (), proposing to expand the
pilot scope of comprehensive electrification of public sector vehicles, steadily promote the
commercialization of autonomous driving, create new high-level intelligent driving scenarios
and conduct pilot applications of “vehicle-road-cloud integration ( ԓ༩ථɓ᜗ʷ)” for
intelligent vehicles.
In terms of autonomous driving access and pilot projects, according to the Notice on
Carrying Out Pilot Work on Access and Road Traffic for Intelligent Connected V ehicles ( ᗫ
), the MIIT and three other
departments have confirmed the first batch of nine consortia for pilot projects on access and
road traffic for intelligent connected vehicles. These pilots will systematically promote
technological innovation, large-scale development, and industrial ecosystem construction of
intelligent connected vehicle products, accelerate the formation of a comprehensive, pragmatic
and efficient legal, regulatory and management policy and standard system, and expedite the
construction of supporting capabilities for testing, verification and safety assessment of
intelligent connected vehicles, laying a solid foundation for their large-scale promotion and
application. In addition, the MIIT and the SAMR released the Notice on Further Strengthening
the Access, Recall and Over-The-Air Update Management of Intelligent Connected V ehicles
(Draft for Comments) (ஷ
ٝ(ᅄӋจԈᇃ)), aiming to enhance the management of access, recall and over-the-air
update processes for intelligent connected vehicles.
In terms of the local policy level, the Shenzhen Municipal Bureau of Industry and
Information Technology ( ଉέ̹ʈุձ༟ৃʷ҅) released the Operational Procedures for the
Special Support Plan for High-Quality Development of the New Energy V ehicle and Intelligent
Connected V ehicle Industry (ྌ዁Ъ
஝೻), which will provide special support for industry public service platform projects,
automotive electronic certification projects and industrialization projects, enhancing the
management level and utilization efficiency of special funds, and promoting the high-quality
development of Shenzhen’s NEV and intelligent connected vehicle industry, accelerating the
creation of a “new generation world-class automobile city. “The Regulations on Promoting the
Development of Intelligent Connected V ehicles in Wuhan (Draft) (࢝
ආૢԷ(ࣩ)) has entered the review stage by the Standing Committee of the Wuhan
Municipal People’s Congress. These regulations clearly encourage the promotion and
application of new technologies and products for intelligent connected vehicles, support road
testing, demonstration applications, commercial pilot projects and operations of autonomous
vehicles, and accelerate the process of achieving fully autonomous driving. They also support
the establishment of a deeply integrated mechanism for tackling key core technologies of
intelligent connected vehicles, focusing on breakthroughs in key core technologies such as
automotive-grade chips, automotive basic software, autonomous driving, intelligent cabin,
vehicle networking, information security and vehicle-road-cloud integration. The Beijing
Municipal Bureau of Economy and Informatization (ʷ҅) issued the
Regulations on Autonomous Driving V ehicles in Beijing (Draft for Comments) ( ̏ԯ̹Іਗ
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ቷትӛԓૢԷ(ᅄӋจԈᇃ)). These regulations provide a relatively comprehensive and
integrated regulatory framework for autonomous driving innovation activities. Furthermore,
the Standing Committee of the Guangzhou Municipal People’s Congress ( ᄿψ̹ɛɽ੬։ึ)
released the Regulations on Intelligent Connected V ehicle Innovation and Development in
Guangzhou (Draft Amendment  Draft for Comments) (ૢԷ
(ҷᇃᅄӋจԈᇃ)). These regulations aim to standardize and promote the
development of the intelligent connected vehicle industry across five areas: industry
development, integrated vehicle-road-cloud infrastructure, innovative applications, safety
assurance and legal liabilities.
Value Chain of Intelligent Driving Solutions Industry
The upstream of the value chain of intelligent driving solutions industry consists of core
components suppliers, which include chips, high-precision maps, positioning systems and
cloud services, etc. The midstream of the value chain consists of intelligent driving solutions
providers, comprising emerging technology companies, traditional tier-one suppliers and
technology giants. These providers are responsible for full-set intelligent driving solutions
applicable to various kinds of vehicles. The downstream of the value chain consists of OEMs
and mobility service providers. The following chart sets forth the value chain of the intelligent
driving solutions industry.
Value chain of intelligent driving solutions industry
Upstream Midstream Downstream
……
Core component suppliers OEMs and Mobility service providers
OEMs
Intelligent driving solution providers
Chips
High-precision maps
Cloud services
Positioning systems
Emerging technology companies(1)
Traditional tier-one suppliers(2)
Technology giants(3)
Mobility service providers
Notes:
(1) Emerging technology companies refer to companies that are dedicated to technological breakthroughs and
product innovations in the field of intelligent driving.
(2) Traditional tier-one suppliers refer to companies that supply various automotive electronic components directly
to automotive OEMs, with intelligent driving solutions constituting a part of their diversified solution
portfolio.
(3) Technology giants refer to leading large technology companies with significant influence in specific fields,
leveraging their strong financial resources and R&D capabilities to expand their layout in the field of
intelligent driving.
Source: CIC
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Market Size for Global and Chinese Intelligent Driving Solutions
Level 0 to Level 2 solutions have emerged as the mainstream intelligent driving solutions
worldwide. As OEMs expand their layout in the field of intelligent driving, the global
intelligent driving solutions market has witnessed significant growth. According to CIC, the
global market size for intelligent driving solutions in terms of revenue increased from
RMB107.1 billion in 2019 to RMB268.7 billion in 2023 with a CAGR of 25.9%. It is projected
to increase to RMB560.9 billion in 2028 with a CAGR of 13.7% from 2024 to 2028.
China and Europe have played crucial roles in propelling the global intelligent driving
solutions market. China has been leading the way in global intelligent driving solutions
development with advanced technologies and high consumer acceptance. The corresponding
market size in China has grown from RMB17.5 billion in 2019 to RMB68.1 billion in 2023
with a CAGR 40.5%, accounting for 25.4% of the global market size in 2023. Meanwhile,
Europe holds a significant market for intelligent driving solutions, with the market size
increasing from RMB35.8 billion in 2019 to RMB70.0 billion in 2023, at a CAGR of 18.3%,
accounting for 26.1% of the global market size in 2023. As technologies advance and costs
decrease, ADAS solutions, especially Level 2+ solutions, are anticipated to be applied to a
wider range of vehicle models. With supportive policy introductions and the rising consumer
receptivity, the mass production of ADS solutions is also expected to accelerate. The market
size for Chinese and European intelligent driving solutions in terms of revenue is projected to
increase to RMB164.2 billion and RMB137.3 billion, respectively, by 2028, representing a
CAGR of 14.8% and 13.0%, respectively, from 2024 to 2028. The following charts set forth
the market size for global and Chinese intelligent driving solutions in terms of revenue from
2019 to 2028.
Market Size for Global Intelligent Driving Solutions,
in terms of Revenue, by Region, 2019-2028E
China
Rest of the world
Europe
CAGR
Global Intelligent Driving Solutions
40.5%
18.3%
2019-2023 2024E-2028E
25.9% 13.7%
14.8%
13.0%
24.8% 13.3%
2019
Unit: Billion RMB
2020 2021 2022 2023 2024E 2025E 2026E 2028E2027E
82.3 105.9 157.3
239.6
53.8 59.7
130.5
259.5
184.0 212.650.7
58.4
46.3
107.1 119.3
164.2
210.5
84.2
127.6
38.0
70.0
68.1
268.7
336.2
398.6
462.0
519.4
560.9
137.3
98.4
113.894.6
152.1
164.2
116.3
135.6
0
100
200
300
400
500
600
17.5
35.8
21.6
31.2
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Market Size for Chinese Intelligent Driving Solutions,
in terms of Revenue, by Automation Level, 2019-2028E
2019
0
Unit: Billion RMB
2020 2021 2022 2023 2024E 2025E 2026E 2028E 2027E
CAGR
Chinese Intelligent Driving Solutions
2019-2023 2024E-2028E
40.5% 14.8%
40.4% 14.4%
107.4% 64.5%
L0-L2+
L3-L5
40
80
120
160
200
0.01
21.6 31.1 46.1
67.9
94.3
115.8
134.8 150.7 161.7
31.2
46.3
68.1
94.6
116.3
135.6
152.1
164.2
17.5 21.6
0.1 0.2 0.2 0.3 0.5 0.9 1.4 2.517.5
0.02
Source: OICA, CPCA, CIC
Growth Drivers of Global and Chinese Intelligent Driving Solutions Industry
 Continuous advancements in software and hardware technologies. Technology
enhancements in software, algorithms, sensors, chips, etc., have significantly propelled
the development of intelligent driving solutions. As technologies continue to advance
globally, multiple intelligent driving functions are expected to be controlled by a single
DCU, enabling deep sensor reuse and computing resource sharing. Consequently,
providers can offer more competitive and cost-effective solutions on a global scale,
driving the penetration of intelligent driving solutions.
 Accelerating automotive intelligence layout of global OEMs. The rapid development of
automotive intelligence has allowed intelligent driving solutions to emerge as a critical
competitive factor for differentiating vehicle models among OEMs across the globe. As
a result, OEMs in different countries are actively advocating for the intelligent
enhancement of vehicles and have largely increased their investment in the field of
intelligent driving.
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 Growing consumer demand for intelligent driving functions. Intelligent driving
solutions can effectively alleviate accidents. Therefore, the increasing global demand for
operational safety of vehicles has accelerated the penetration of intelligent driving
solutions. Meanwhile, intelligent driving functions have become a key consideration
among vehicle consumers worldwide as the demand for better driving experience
continues to rise. The substantial interest of global consumers in intelligent driving
functions contributes significantly to the application of intelligent driving solutions.
 Supported by industry policies, laws and regulations. Governments worldwide are
responding to the growing concern for transportation safety by implementing policies and
regulations. These measures mandate the installation of intelligent driving solutions to
improve driving safety while promoting the commercialization of these solutions. For
example, the General Safety Regulation issued by EU requires specific vehicles to be
equipped with AEB and ELK systems. Meanwhile, the C-NCAP in China has introduced
safety performance assessments for intelligent driving functions such as AEB and LKA.
In addition, the PRC government has introduced a series of policies to promote the
development and commercialization of ADS technologies. For instance, the MIIT, along
with three other departments, released the Notice on Carrying Out Pilot Work on Access
and Road Traffic of Intelligent Connected V ehicles (ɝձɪ༩
), allowing road trials of selected intelligent connected vehicles in
designated city areas. Furthermore, the Service Guidelines on Transportation Safety for
Autonomous V ehicles (for Trial Implementation) (یܸ(༊
Б)issued by the Ministry of Transport of the PRC clarifies regulations on the
commercial operating conditions for autonomous driving vehicles equipped with Level 3
to Level 5 solutions. These favorable policies have contributed to the adoption and
improvement of intelligent driving solutions.
 Continuing expansion of Chinese OEMs in the global automobile market. With
continuous advancements in technological innovation and product competitiveness,
Chinese OEMs have seen a significant growth in export sales, solidifying China’s position
as the world’s largest export market of automobiles. The export volume of automobiles
increased from 1.0 million units in 2019 to 4.9 million units in 2023 with a CAGR of
48.0%. The increasing export volume of automobiles presents significant opportunities
and momentum for the development of the Chinese intelligent driving solutions industry.
Future Trends of Global and Chinese Intelligent Driving Solutions Industry
 Widespread adoption of ADAS solutions as standard features in mass-produced vehicle
models. With growing market demands for vehicle safety and constantly decreasing costs
of ADAS solutions, Level 2 solutions are becoming standard equipment for vehicles, and
there is expected to be a wider adoption of Level 2+ solutions in mass vehicle models,
indicating a continual increase in the global penetration of ADAS solutions. The global
penetration rate of vehicles equipped with Level 2 (including Level 2+) intelligent driving
solutions was 32.1% in 2023, and is expected to reach 61.1% by 2028, with a market size
of RMB491.4 billion.
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 Increasing domestic market share of Chinese intelligent driving solutions providers.
Chinese intelligent driving solutions providers are emerging as significant participants in
the domestic intelligent driving solutions industry, leveraging advantages in rapid product
iterations and autonomous control over crucial components. While overseas tier-one
suppliers have dominated the industry with their advanced technologies and first-mover
advantage, Chinese players are now capturing a growing market share. This highlights the
trend of domestic substitution and a shifting landscape in the Chinese intelligent driving
solutions industry.
 International expansion of Chinese intelligent driving solutions providers. Continuous
advancements of technology and the rising consumer acceptance of intelligent features in
automobiles worldwide have fueled the demand for vehicles with intelligent driving
solutions. In this context, Chinese intelligent driving solutions providers are well
positioned to expand globally, benefiting from the increasing global influence of Chinese
independent OEMs and the OEMs’ preference for Chinese intelligent driving solutions
providers who offer more adaptable collaborations and prompt service delivery.
 International OEMs actively seeking intelligent driving solutions from Chinese
providers. Given the intensifying competition in the automobile industry, international
OEMs are striving to adopt advanced algorithms and enhance product competitiveness.
Meanwhile, Chinese intelligent driving solutions providers are able to iterate algorithms
rapidly and offer cost-effective products, positioning China as one of the fastest-growing
markets in the industry. Therefore, international OEMs are establishing partnerships and
investing in Chinese providers to strengthen product capabilities, creating ample growth
opportunities for Chinese providers.
 Intelligent driving solution providers are pursuing a more comprehensive spectrum of
automation levels. Intelligent driving solution providers predominantly employ two
distinct technological strategies: the incremental approach and the revolutionary
approach. Providers following an incremental approach gradually develop intelligent
driving solutions across increasing degrees of automation, from Level 0 to Level 4. Most
of these providers focus on solutions from Level 0 to Level 2+, while those with more
advanced hardware and software capabilities are leveraging their production expertise
and technological accumulation to further develop solutions for Level 3 and Level 4. On
the other hand, providers embracing a revolutionary strategy focus on solutions for Level
3 and Level 4. However, the widespread commercialization of autonomous driving
projects at Level 3 and Level 4 continues to face significant uncertainty, as the current
regulatory landscape has yet to fully address the novel challenges posed by these
advanced technologies. Consequently, some revolutionary providers have begun to
develop solutions for Level 0 to Level 2+, with a particular emphasis on Level 2+
solutions. Collectively, intelligent driving solution providers, irrespective of their chosen
incremental or revolutionary strategies, are actively working to broaden their product
offerings to cover a more comprehensive spectrum of automation levels.
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 Further commercialization of ADS solutions. Currently, ADS solutions have achieved
small-scale commercialization in road trial designated areas and low-speed enclosed sites
globally, with applications including port and mine transportation, mobility service and
last mile delivery. As supportive policies are introduced and technologies of intelligent
driving algorithms and high-precision maps continue to advance, ADS solutions are
expected to be applied to a broad spectrum of scenarios and accelerate in mass
commercialization.
Competitive Landscape of the Chinese Intelligent Driving Solutions Industry
The Chinese intelligent driving solutions industry is currently experiencing rapid growth,
attracting diverse participants, comprising OEMs with in-house R&D capabilities and
third-party providers, to get involved. OEMs with in-house R&D capabilities actively engage
in the development of intelligent driving solutions, usually applying these proprietary solutions
to their own vehicle models without external sales. The third-party providers who develop,
manufacture and sell intelligent driving solutions to OEMs, are the major participants in this
industry, including emerging technology companies, traditional tier-one suppliers and
technology giants. The overseas traditional tier-one suppliers, often international automotive
electronics giants with a long history and early market entry, possess extensive global reach.
This enables them to leverage their established networks and resources, as well as to forge deep
ties with downstream clients, thereby holding a strong market position. In terms of revenue of
Level 0 to Level 2+ solutions in 2023, the collective market share of the eight major overseas
traditional tier-one suppliers in the Chinese market reached approximately 60.0%. Meanwhile,
the four out of the top five intelligent driving solutions providers in the Chinese market were
overseas traditional tier-one suppliers. However, a significant trend in the industry is that
Chinese domestic intelligent driving solutions providers are capturing an increasing market
share by leveraging advantages in rapid product iterations and adaptable collaboration options.
In terms of revenue of Level 0 to Level 2+ solutions in 2023, we ranked seventh among all
domestic intelligent driving solutions providers with a market share of 3.2% and fifteenth
among domestic and overseas intelligent driving solutions providers with a market share of
0.6%.
Rankings of Providers in the Chinese Intelligent Driving Solutions Industry, in terms of
Revenue
(1) of Level 0 to Level 2+ Solutions, 2023
Ranking Provider Revenue Market Share (2)
(RMB million)
1 /H1118/H1118/H1118/H1118/H1118Company A (3) 10,000.0 14.7%
2 /H1118/H1118/H1118/H1118/H1118Company B (4) 8,000.0 11.8%
3 /H1118/H1118/H1118/H1118/H1118Company C (5) 7,800.0 11.5%
4 /H1118/H1118/H1118/H1118/H1118Company D (6) 7,500.0 11.0%
5 /H1118/H1118/H1118/H1118/H1118Company E (7) 4,490.0 6.6%
Sub-Total 37,790.0 55.6%
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Notes:
(1) The revenue of Level 0 to Level 2+ solutions includes revenue from integrated solutions, control units, sensors,
algorithms, software and R&D services.
(2) The market share is derived by dividing the revenue of Level 0 to Level 2+ solutions of the provider by the
market size for Chinese intelligent driving solutions in relation to Level 0 to Level 2+ solutions.
(3) Company A is an unlisted company founded in 1886 and headquartered in Germany. It is mainly engaged in
the business of autonomous driving solutions, energy construction solutions and consumer goods.
(4) Company B is a listed company founded in 1923 and headquartered in France. It is mainly engaged in the
business of autonomous driving solutions, powertrain systems, thermal systems and visibility systems.
(5) Company C is a listed company founded in 2011 and headquartered in Ireland. It is mainly engaged in the
business of autonomous driving solutions and the designing and manufacturing of automotive electrical
systems.
(6) Company D is a listed company founded in 1871 and headquartered in Germany. It is mainly engaged in the
business of autonomous driving solutions, intelligent railway engineering solutions and smart mining
solutions.
(7) Company E is a listed company founded in 1986 and headquartered in Guangdong Province, China. It is mainly
engaged in the business of intelligent cockpit, autonomous driving solutions and connected services.
Sources: Annual Reports, CIC
Rankings of Domestic Providers in the Chinese Intelligent Driving Solutions Industry, in
terms of Revenue (1) of Level 0 to Level 2+ Solutions, 2023
Ranking Provider Main solution type Revenue
Market
share (2)
(RMB million)
1 /H1118/H1118/H1118/H1118/H1118Company E Integrated driving-parking solution 4,490.0 6.6%
2 /H1118/H1118/H1118/H1118/H1118Company F (3) Driving solution and integrated
driving-parking solution
1,200.0 1.8%
3 /H1118/H1118/H1118/H1118/H1118Company G (4) Driving solution and integrated
driving-parking solution
1,193.6 1.8%
4 /H1118/H1118/H1118/H1118/H1118Company H (5) Driving solution and integrated
driving-parking solution
900.0 1.3%
5 /H1118/H1118/H1118/H1118/H1118Company I (6) Parking solution 497.9 0.7%
6 /H1118/H1118/H1118/H1118/H1118Company J (7) Integrated driving-parking solution 450.0 0.7%
7 /H1118/H1118/H1118/H1118/H1118The Group Driving solution and integrated
driving-parking solution
386.2 0.6%
8 /H1118/H1118/H1118/H1118/H1118Company K (8) Integrated driving-parking solution 300.0 0.4%
9 /H1118/H1118/H1118/H1118/H1118Company L (9) Driving solution and integrated
driving-parking solution
290.0 0.4%
10 /H1118/H1118/H1118/H1118Company M (10) Driving solution and integrated
driving-parking solution
260.0 0.4%
Sub-Total 9,967.7 14.7%
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Notes:
(1) The revenue of Level 0 to Level 2+ solutions includes revenue from integrated solutions, control units, sensors,
algorithms, software and R&D services.
(2) The market share is derived by dividing the revenue of Level 0 to Level 2+ solutions of the provider by the
market size for Chinese intelligent driving solutions in relation to Level 0 to Level 2+ solutions.
(3) Company F is a listed company founded in 2003 and headquartered in Beijing, China. It is mainly engaged in
the R&D, design, manufacturing and sales of automotive electronics and intelligent driving solutions.
(4) Company G is a listed company founded in 2016 and headquartered in Jiangsu Province, China. It is mainly
engaged in autonomous driving domain controllers and intelligent front camera products.
(5) Company H is an unlisted company founded in 2017 and headquartered in Zhejiang Province, China. It is
mainly engaged in the R&D, design, manufacturing and sales of intelligent driving solutions.
(6) Company I is an unlisted company founded in 2013 and headquartered in Shanghai, China. It is mainly
engaged in the R&D, design, manufacturing and sales of intelligent driving solutions and autonomous driving
energy service robots.
(7) Company J is a listed company founded in 2000 and headquartered in Beijing, China. It is mainly engaged in
the business of intelligent driving solutions, intelligent cabin and AI products and services.
(8) Company K is an unlisted company founded in 2019 and headquartered in Beijing, China. It is engaged in the
R&D, design, manufacturing and sales of intelligent driving solutions and autonomous driving robots.
(9) Company L is an unlisted company founded in 2015 and headquartered in Shanghai, China. It is mainly
engaged in the R&D, design, manufacturing and sales of basic software, SOA middleware and intelligent
driving solutions.
(10) Company M is an unlisted company founded in 2018 and headquartered in Zhejiang Province, China. It is
mainly engaged in the R&D, design, manufacturing and sales of intelligent driving solutions.
Source: Annual Reports, CIC
Emerging technology companies are those that are dedicated to technological
breakthroughs and product innovations within the intelligent driving sector, setting them apart
significantly from traditional tier-one suppliers and technology giants in terms of business
nature and technical capabilities. With a sharp focus in the intelligent driving field, emerging
technology companies primarily generate revenue from offering intelligent driving solutions.
In contrast, the other types market players regard intelligent driving solutions solely as a part
of their diversified product lines, contributing to a relatively minor share of their overall
revenue. For example, Company E and F are two comprehensive automotive electronics
tier-one suppliers and have a broad range of product categories encompassing intelligent
driving solutions, intelligent cabin solutions, intelligent connected services, automotive chassis
and control systems etc. Specifically, the revenue from intelligent driving solutions only
accounted for approximately 20.5% of Company E’s total revenue in 2023, while intelligent
cabin solutions contributed the largest share, accounting for approximately 72.1% of its total
revenue in the same year. Similarly, the revenue from intelligent driving solutions only
accounted for less than 30.0% of Company F’s total revenue in 2023, while other automotive
electronic products, including automotive chassis and control systems, represented the largest
share (over 40.0%) of its total revenue in the same year. Company J is a technology giant and
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its product categories include online marketing solutions, AI solutions, cloud services in
addition to intelligent driving solutions. The revenue from intelligent driving solutions only
accounted for less than 10.0% of its total revenue in 2023, while its largest revenue
contribution was from online marketing solutions, comprising approximately 55.8% of its total
revenue in the same year. Moreover, emerging technology companies emphasize on building
full-stack in-house R&D capabilities, while the other types of market players have only
separately developed R&D capabilities in software algorithm development, hardware
manufacturing or system integration. Leveraging their business focus and full-stack
capabilities in the field of intelligent driving, emerging technology companies can provide
faster service responsiveness and flexible product portfolios, and better adapt to the constantly
evolving demands of OEMs, which equips them with great growth potential in the fierce
competition of the intelligent driving solutions industry. Considering the differences described
above between emerging technology companies and other companies ( i.e. , traditional tier-one
suppliers and technology giants), CIC used the following quantitative criteria to characterize
“emerging technology companies”: (i) establishment after 2010, (ii) total revenue in 2023 was
less than RMB4 billion, and (iii) revenue from intelligent driving solutions accounted for more
than 70% of its total revenue in 2023. Currently, the emerging technology companies are
leading the innovation of intelligent driving technologies and significantly contributing to the
process of domestic substitution. In terms of revenue of Level 0 to Level 2+ solutions, the total
market share of emerging technology companies tripled from 2019 to 2023, and with the trend
towards domestic substitution, is expected to exceed 15% by 2030. In terms of revenue of
Level 0 to Level 2+ solutions in 2023, we ranked fourth among all emerging technology
companies.
The in-house R&D capabilities represent a significant competitive advantage of
intelligent driving solutions providers. These capabilities empower providers to swiftly iterate
and optimize products in accordance with market demands, thereby gaining a competitive edge
in intense market competition. The leading providers with in-house R&D capabilities are more
likely to use chips without embedded algorithms and implement their in-house developed
algorithms. In 2023, among the top five emerging technology companies that mainly focus on
offering driving solutions and integrated driving-parking solutions, we have the highest
utilization of chips without embedded algorithms, standing at a proportion of 99.98%, while
others are below 70%. The following table sets forth the ranking of the top five emerging
technology companies in terms of revenue in 2023.
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Rankings of Emerging Technology Companies (1) in the Chinese Intelligent Driving
Solutions Industry, in terms of Revenue (2) of Level 0 to Level 2+ Solutions, 2023
Ranking Provider Main solution type Revenue
Market
share (3)
(RMB million)
1 /H1118/H1118/H1118/H1118/H1118Company G Driving solution and integrated
driving-parking solution
1,193.6 1.8%
2 /H1118/H1118/H1118/H1118/H1118Company H Driving solution and integrated
driving-parking solution
900.0 1.3%
3 /H1118/H1118/H1118/H1118/H1118Company I Parking solution 497.9 0.7%
4 /H1118/H1118/H1118/H1118/H1118The Group Driving solution and integrated
driving-parking solution
386.2 0.6%
5 /H1118/H1118/H1118/H1118/H1118Company K Integrated driving-parking solution 300.0 0.4%
Sub-Total 3,277.7 4.8%
Notes:
(1) According to CIC, emerging technology companies in the Chinese intelligent driving solutions industry are
defined by (i) establishment after 2010, (ii) total revenue in 2023 was less than RMB4 billion, and (iii) revenue
from intelligent driving solutions accounted for more than 70% of its total revenue in 2023. These
characteristics indicate that such companies are still in a relatively early development stage, and are dedicated
to technological breakthroughs and product innovations in the field of intelligent driving.
(2) The revenue of Level 0 to Level 2+ solutions includes revenue from integrated solutions, control units, sensors,
algorithms, software and R&D services.
(3) The market share is derived by dividing the revenue of Level 0 to Level 2+ solutions of the provider by the
market size for Chinese intelligent driving solutions in relation to Level 0 to Level 2+ solutions.
Source: Annual Reports, CIC
Entry Barriers and Key Success Factors of Global and Chinese Intelligent Driving
Solutions Industry
 Technology strength. Developing intelligent driving solutions is a complex task,
requiring sufficient technical expertise in relevant software algorithms, domain
controllers and sensors. Additionally, providers with in-house R&D capabilities covering
software and hardware can actively respond to customers and improve production
capability. Furthermore, these capabilities provide a solid technical foundation that
enables the formation of an adaptable technical platform for faster product iterations and
shorter delivery cycles.
 Comprehensive and complete product layouts. Comprehensive hardware and software
layouts, along with complete solutions for vehicles, enable providers to effectively meet
customer requirements and offer a wide range of customized product portfolios for
downstream OEMs, thereby reaching a broader customer base.
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 Mass production and supply chain management capabilities. Providers with extensive
mass production experience and supply chain management capabilities can ensure
product reliability while offering cost-effective solutions due to lower upstream
dependence and efficient supply chain management. This allows them to maintain supply
chain stability in mass production and respond swiftly to market demands. Additionally,
their ability to manage component price fluctuations helps to reduce overall costs and
sustain profitability, which enables them to attract and retain customers to grow their
market share in the increasingly competitive industry.
 Abundant OEM supply qualifications and customer resources. Intelligent driving
solution is a key indicator of automotive intelligence and requires high reliability and
stability. Therefore, OEMs have strict onboarding requirements for the providers,
necessitating long-term and complex validation processes for their products. Providers
with abundant OEM supply qualifications can leverage a wide range of customer
resources. By serving multiple OEMs, providers can deliver advanced solutions through
cross-selling and establish a strong brand effect, thereby broadening their market share.
For new entrants in the industry, it can be difficult to rapidly obtain OEM supply
qualifications, resulting in limited customer resources.
Threats and Challenges of Global and Chinese Intelligent Driving Solutions Industry
 Increasingly intense competitive environment. The intelligent driving solutions
industry is highly competitive, with numerous players vying for market share. Providers
must allocate substantial investments in research and innovation to develop cutting-edge
technologies, while managing costs effectively to deliver competitive intelligent driving
solutions that are technologically advanced and cost- efficient relative to other market
participants.
 Potential shortages and price fluctuations of raw materials and components. Raw
material and component costs constitute one of the major costs incurred by intelligent
driving solution providers. However, uncontrollable factors such as geopolitical
challenges, natural disasters or epidemics outbreaks can disrupt the supply chain and
result in price fluctuations. Consequently, potential shortages or price fluctuations in
critical raw materials and components pose significant challenges for these providers to
navigate.
 Rising labor costs. Intelligent driving solution providers encounter notable labor
expenses. The labor cost in terms of average annual salary in China has increased from
RMB90.5 thousand in 2019 to RMB123.2 thousand in 2023, with a CAGR of 8.0%, and
is expected to rise further with the expanding economy and aging population. Moreover,
intelligent driving solution providers largely depend on the skills of their R&D personnel
to maintain a competitive edge, and thus offer these talents attractive compensation and
benefits. Consequently, the escalating labor costs pose substantial challenges for these
providers.
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Historical Price Changes of Chips in Global and Chinese Intelligent Driving Solutions
Industry
Chip costs constitute a significant portion, accounting for 30-40% of the total expense in
providing intelligent driving solutions. Due to the pandemic’s impact, there was a severe
shortage of chips from 2021 to 2022, resulting in a notable increase in the global average price
of mainstream chips. However, the chip supply has gradually stabilized in 2023, leading to a
decrease in chip prices. Moving forward, as Chinese chip manufacturers continue to improve
their technology and production capabilities, the localization of chips is expected to increase,
thereby reducing the risk of structural chip shortage and stabilizing chip prices.
ANALYSIS OF GLOBAL AND CHINESE INTELLIGENT CABIN SOLUTIONS
INDUSTRY
Overview of Global and Chinese Intelligent Cabin Solutions Industry
Intelligent cabin solutions refer to the installation of advanced software and hardware
systems, possessing perception, monitoring and human-machine interaction capabilities for
interactive communication. These solutions provide a comprehensive experience of safety,
intelligence, convenience and enjoyment for drivers and occupants in a mobile space.
Intelligent cabin solutions consist of domain controllers, in-cabin monitoring systems (IMS),
automotive displays and head up displays, etc. In particular, IMS is a crucial component in the
intelligent cabin solution. It is capable of monitoring the physiological status and behavioral
patterns of drivers and occupants in real time, thereby significantly enhancing the safety and
user experience of intelligent cabin solutions.
Driven by the accelerating deployment of automotive intelligence by OEMs, increasing
consumer demands for intelligent features in vehicles and supportive policies and regulations,
the market size for global intelligent cabin solutions, in terms of revenue, has increased rapidly
from RMB130.2 billion in 2019 to RMB321.3 billion in 2023 and is expected to reach
RMB769.4 billion in 2028, at a CAGR of 17.0% from 2024 to 2028, according to CIC. China
is playing a significant role in driving the growth of intelligent cabin solutions. According to
CIC, the market size for Chinese intelligent cabin solutions, in terms of revenue, has increased
from RMB32.9 billion in 2019 to RMB106.9 billion in 2023 and is expected to reach
RMB267.0 billion in 2028, with a CAGR of 18.2% from 2024 to 2028.
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Definition and Classification of In-cabin Monitoring System Solutions
In-cabin monitoring system (IMS) refers to an advanced technological system designed
to detect and monitor drivers, occupants and belongings inside the vehicle in real time. IMS
solutions can identify risky behavior of drivers, issue timely warnings or take measures to
ensure driving safety. Additionally, IMS solutions are capable of learning the habits of drivers
and occupants, providing personalized services. As a result, IMS solutions are anticipated to
become an essential component of automotive intelligence, enabling advanced multimodal
interaction in intelligent cabins.
IMS typically consists of driver monitoring system (DMS) and occupant monitoring
system (OMS). DMS refers to a system that relies on sensors to detect the facial expressions,
eye movements, physiological signs and other data of drivers to assess their condition. The
primary functions of DMS include monitoring fatigue, detecting distractions and observing
risky driving behaviors. OMS can perform real-time detection of occupants and belongings in
the cabin, providing safer experiences for all members. It also enables multimodal interactive
functions such as gesture recognition to enhance occupant entertainment experience.
Market Size for Global and Chinese IMS Solutions
Driven by the gradual implementation of mandatory policies and regulations, the growing
desire of consumers for driving safety and the booming development of the intelligent driving
solutions industry, the market size for global IMS solutions in terms of revenue increased from
RMB129.5 million in 2019 to RMB5,670.9 million in 2023 and is projected to reach
RMB66,580.4 million in 2028, with a CAGR of 53.0% from 2024 to 2028.
The booming development of the NEV industry in China has provided a wide market
space for the application and popularization of in-cabin monitoring technology. Additionally,
the growth of Chinese IMS solutions industry has also been attributed to strong government
policy support. According to CIC, the market size for Chinese IMS solutions in terms of
revenue increased from RMB18.2 million in 2019 to RMB1,287.8 million in 2023, and is
projected to reach RMB18,636.5 million by 2028, with a CAGR of 59.1% from 2024 to 2028.
Europe has taken the initiative in enforcing mandatory requirements and establishing rating
regulations for the installation of IMS solutions in new vehicles, thus becoming the largest
market for IMS solutions in the world. According to CIC, the market size for Europe’s IMS
solutions in terms of revenue increased from RMB70.5 million in 2019 to RMB2,165.2 million
in 2023, accounting for 38.2% of the overall market size for global IMS solutions. The
following chart sets forth the market size for global IMS solutions in terms of revenue by
region from 2019 to 2028.
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Market Size for Global IMS Solutions, in terms of Revenue, by Region, 2019-2028E
18.2 77.3 278.30
14,000
28,000
42,000
56,000
70,000
2019 2020 2021 2022 2023 2024E 2025E 2026E 2028E 2027E
40.8
70.5 196.3
620.1
567.7
1,112.4
2,165.2
2,217.8
5,670.9
1,429.0422.7129.5
1,022.4
2,702.5
530.5
5,051.7
4,179.3
2,908.9
10,069.0
16,194.2
24,655.5
31,776.0
7,052.1
9,787.9
14,224.3
16,167.9
5,794.0
9,336.8
14,309.2
18,636.5
12,139.9
22,915.1
35,318.8
53,189.0
66,580.4
CAGR
Global IMS Solutions
189.9%
135.4%
2019-2023 2024E-2028E
157.2% 53.0%
59.1%
40.2%
171.5% 58.4%
China
Rest of the world
Europe
Unit: Million RMB
14.1% 18.3% 19.5% 21.0% 22.7% 24.0% 25.3% 26.4% 26.9% 28.0%
54.4% 46.4% 43.4% 38.2% 34.4% 30.8% 27.7% 26.7% 24.3%41.2%
Market size for IMS
solutions in China
as % of global
market size for IMS
Market size for IMS
solutions in Europe
as % of global
market size for IMS
1,287.8
149.2
Source: OICA, CPCA, CIC
As the consumer demand for intelligent and safer driving experiences continues to grow,
IMS solutions are becoming an increasingly indispensable component of intelligent cabin
solutions with their ability to identify dangerous driving behaviors and prevent issues such as
unattended children left in vehicles. Consequently, the market proportion of IMS solutions in
the intelligent cabin solutions market is anticipated to witness further growth. The proportion
of global IMS solutions market as of the global intelligent cabin solutions market reached 1.8%
in 2023, and is expected to continue to reach 8.7% in 2028. In particular, the proportion of IMS
solutions market in China and Europe as of the intelligent cabin solutions market has reached
1.2% and 3.2%, respectively, in 2023 and is projected to increase to 7.0% and 10.9%,
respectively, in 2028.
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Proportion of IMS Solutions as of Intelligent Cabin Solutions Market,
by Regions, 2019-2028E
0
3
6
9
12
China
Europe
Rest of the world
0.5%
1.3%
2.2%
3.2%
4.8%
6.8%
8.1%
0.2%
10.3%
10.9%
0.6% 0.9%
1.2%
1.5%
2.1%
2.7%
3.4%
4.4%
4.6%
6.1%
7.8%
5.9%
7.0%
9.0%
0.2%
2019 2020 2021 2022 2023 2024E 2025E 2026E 2028E 2027E
0.5% 0.7%
%
0.1% 0.3% 0.7% 1.1% 1.8% 3.0% 4.5% 5.9% 7.7% 8.7%
Global market
size for IMS
solutions as % of
global market size
for intelligent
cabin solutions
0.2%0.1%
0.1%
Source: OICA, CPCA, CIC
Growth Drivers of Global and Chinese IMS Solutions Industry
 Mature and advanced technology. With the continuous advancement and maturation of
relevant technologies in the field of IMS, IMS solutions are anticipated to attain more
sophisticated and powerful features. This will provide drivers and occupants with a
superior experience of safety, convenience and enjoyment, thereby fostering the
widespread adoption of IMS solutions in vehicles.
 Strong consumer demand for in-cabin intelligence and safety monitoring. As the desire
for convenient and enjoyable in-cabin experience rises, in-cabin intelligence has become
a key consideration for consumers. Additionally, there have been frequent accidents
related to driver fatigue, dangerous driving behaviors and children being left unattended
in vehicles in recent years, leading to an emphasis on in-cabin safety monitoring
technology. The strong demand for enhanced intelligent and safety features is expected to
further drive the adoption rate of DMS solutions and OMS solutions across the
automobile industry.
 Rapid development of intelligent driving solutions. The widespread adoption of
intelligent driving solutions has not only improved consumers’ driving experiences, but
also fueled their pursuit of more comfortable and intelligent in-cabin experiences,
contributing to the growth in IMS solutions industry. In addition, intelligent driving
solutions detect the vehicle’s driving environment by leveraging advanced perception
algorithms, which can also be utilized in IMS solutions to enhance the accuracy of
monitoring and detecting functionalities. Therefore, the development of intelligent
driving technology supports the advancement of IMS solutions industry.
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 Supported by industry policies, laws and regulations. Supports by policies, laws and
regulations is one of the key driving forces for IMS solutions industry. Europe has already
taken the lead in implementing mandatory requirements and rating regulations for new
vehicles to install IMS solutions. In China, the China Automotive Technology & Research
Center officially released the 2024 edition of Chinese New Car Assessment Program
(C-NCAP), which specifies that child presence detection (CPD) and DMS have become
official rating factors in new car assessments. Meanwhile, other governments worldwide
are progressively introducing relevant policies, regulations or technical standards to
support the industry growth.
Future Trends of Global and Chinese IMS Solutions Industry
 Continuous enhancements in enriching functionalities and technologies. IMS solutions
are crucial for improving cabin comfort and automotive safety. Through continuous
technological upgrades, IMS solutions are anticipated to provide more intelligent
functions that go beyond basic gesture and characteristic perception with high stability
and accuracy, and expand from command-based features to interactive features. The
ample functionalities of IMS solutions are expected to cater to the diverse needs of both
drivers and occupants and enrich their in-cabin user experiences.
 Integration of IMS solutions and intelligent driving solutions. As intelligent driving
solutions progress toward higher automation levels, intelligent driving solutions and IMS
solutions are projected to be integrated in terms of functionalities, data, algorithms and
hardware, creating a synergistic effect to ensure vehicle safety. Through integration, IMS
solutions can effectively prompt drivers to timely detect and respond to objects and events
during driving, thereby enhancing safety when transitioning from autonomous driving to
manual control.
 Substantial demand for IMS solutions in global markets. Markets worldwide, such as
Europe, have implemented regulations that mandate the compulsory adoption of IMS
solutions, leading to robust market demand. The leading Chinese IMS solutions providers
are persistently enhancing technology and product performance to meet international
regulatory standards. Compared with providers in other countries, Chinese providers can
offer more adaptable collaboration options and respond more swiftly in service delivery,
better meeting the needs of international OEMs. Meanwhile, Chinese OEMs are
expanding rapidly into global market, with Southeast Asia becoming an important export
destination, presenting an opportunity for Chinese IMS solutions providers to seize the
global market share by equipping their products on exported vehicles.
 Growth in large-scale AI model technology usage. Large-scale AI models possess strong
capabilities in data processing, semantic understanding and perceptual recognition. By
integrating large-scale AI model technology, IMS solutions can better meet the actual
needs of drivers and occupants, enabling richer multimodal interaction capabilities. The
application of large-scale AI model technology has become an important pathway in the
industry to improve the overall intelligence level of IMS solutions and enhance
interactive experience.
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Entry Barriers and Key Success Factors for Global and Chinese IMS Solutions Industry
 Substantial technical and regulatory expertise. Developing IMS solutions requires a
collaborative design of software and hardware systems, along with expertise in
algorithms. New entrants often struggle to form a skilled R&D team quickly and acquire
the necessary regulatory knowledge, resulting in challenges in developing competitive
products with high performance and meeting compliance requirements to access market
opportunities.
 Strong OEM client base. IMS solutions play a crucial role in ensuring driving safety,
demanding high reliability and stability. Both Chinese and international OEMs have strict
qualification criteria for providers, necessitating extensive and prolonged product
validation processes. Consequently, newcomers to the industry face obstacles in swiftly
gaining approval from OEMs, leading to delays in market entry. Providers with a strong
client base and reputable brand enjoy an edge in maintaining existing clients while
expanding into new ones, ultimately increasing their market share.
 First-mover advantage in global market. In the process of entering global markets,
Chinese providers of IMS solutions possess a competitive edge in terms of response
speed, technical capabilities and cost-effectiveness products. However, they face
significant challenges in meeting mainstream product access criteria and gaining market
acceptance, requiring a considerable amount of time and effort. Therefore, providers who
entered global markets early enjoy a first-mover advantage. By obtaining relevant
certifications abroad, they can establish strong brand influence and market acceptance
ahead of others, subsequently capturing more market share.
 Comprehensive post-sales services and rapid response capabilities. It is crucial for IMS
solutions providers to have strong post-sales services and fast response capabilities to
maintain long-term customer cooperation. Comprehensive post-sales services allow
providers to quickly respond to customer needs and effectively resolve issues, thus
building deeper trust and increasing overall satisfaction. Additionally, by integrating
customer feedback, providers can accelerate the iteration of products and technologies to
align with current market needs.
Threats and Challenges of Global and Chinese IMS Solutions Industry
 Increasingly intense competitive environment. As the market potential for in-cabin
intelligence becomes increasingly apparent, more players are entering the IMS solutions
market, intensifying competition. Providers must not only develop more advanced
algorithms and precise sensors to deliver high-performing products, but also adapt to
changing policies, regulations and diverse global demands to ensure product
competitiveness and achieve sustainable development.
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 Challenges of achieving broader market acceptance. IMS solution remains an
emerging market, and consumers may not be familiar with this new type of solution,
hindering the widespread adoption of IMS solutions. Therefore, IMS solutions providers
must focus on improving the performance of their solutions and intensifying marketing
efforts to boost market acceptance and facilitate the widespread implementation of IMS
technologies.
OVERVIEW OF THE VEHICLE INFRASTRUCTURE COOPERATIVE SYSTEMS
INDUSTRY IN CHINA
In the field of intelligent driving, there are two primary technological approaches:
individual vehicle intelligence and vehicle infrastructure cooperation. Individual vehicle
intelligence empowers vehicles to independently perceive and process information from their
surroundings through onboard sensors and decision-making systems, while vehicle
infrastructure cooperation focuses on exchanging and sharing information between vehicles
and infrastructures to enhance the perceptual and decision-making capabilities of individual
vehicles. These two aspects complement each other, contributing to the development of
intelligent driving technologies and ultimately establishing a safe and efficient transportation
ecosystem.
V ehicle infrastructure cooperative system refers to an advanced technological system that
uses wireless sensing and V2X technologies to enable dynamic traffic information exchange
among vehicles, infrastructures, pedestrians and roads. Key components for vehicle
infrastructure cooperative system can be divided into intelligent onboard systems, intelligent
roadside systems, communication platforms and cloud control platforms. By continuously
collecting and integrating traffic information across all time and space, the vehicle
infrastructure cooperative system can improve road safety and enhance collaborative
management on traffic flows. It can also synchronize data from roadside units to extend
vehicles’ perception range, covering more blind spots for improved safety and automation in
intelligent driving solutions.
Considering the benefits brought by vehicle infrastructure cooperative systems,
intelligent driving solutions providers and mobility service providers, as well as operators in
the transportation infrastructure and public utility management sectors such as local
government authorities and expressway companies are actively cooperating with vehicle
infrastructure cooperative system providers. The cooperation aims to promote the application
of vehicle infrastructure cooperative systems to enhance traffic flows monitoring and digital
management, thereby creating significant market opportunities for vehicle infrastructure
cooperative system providers.
The development of roadside infrastructures and key technologies has significantly driven
the development of the vehicle infrastructure cooperative systems industry in China.
Additionally, the PRC government has introduced supportive policies and regulations, creating
a favorable operational environment for the growth of the vehicle cooperative infrastructure
systems industry in China. According to CIC, the market size for Chinese vehicle infrastructure
cooperative systems increased from RMB16.1 billion in 2019 to RMB70.9 billion in 2023 with
a CAGR of 44.9% from 2019 to 2023, and is projected to reach RMB168.5 billion in 2028 with
a CAGR of 15.3% from 2024 to 2028.
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Key Drivers and Trends of the Vehicle Infrastructure Cooperative Systems Industry in
China
 Advancements in key technologies. The integrated application of C-V2X
communication technology, AI and 5G integration technology, edge computing
technology, as well as intelligent driving technology, has not only enhanced vehicles’
intelligent driving capabilities but also provided stronger and more reliable support for
the implementation of vehicle infrastructure cooperative systems, which has significantly
propelled the rapid development of the vehicle infrastructure cooperative industry in
China.
 Continuous improvements of roadside infrastructures. Roadside infrastructure is
crucial for enabling V2X communication and information interaction between vehicles
and the surrounding environment. Specifically, 5G networks enhance communication
among various, while the installation of monitoring devices on roads and intersections
enables real-time collection of traffic and vehicle data, supporting the implementation of
vehicle infrastructure cooperative systems.
 Supported by favorable policies and regulations. To accelerate the commercialization
of vehicle infrastructure cooperative systems and stimulate the development of the
industry, the Chinese government has introduced a series of supportive policies and
regulations to plan a rational development path and ensure the enhancement of necessary
infrastructures for the vehicle infrastructure cooperative systems industry. For instance,
the MIIT released the Notice on Carrying Out Pilot Program of V ehicle-Road-Cloud
Integrated System for Intelligent Connected V ehicles (౽ঐၣᑌӛԓ“ԓ༩ථ
ɓ᜗ʷ”), which selects a group of high-standard intelligent
connected vehicles and V2X projects, including road infrastructures and cloud control
platforms, as pilot programs in designated areas. Meanwhile, unified technical
specifications and evaluation standards will be developed to ensure the safety and smooth
commercialization of vehicle infrastructure cooperative systems.
Entry Barriers for the Vehicle Infrastructure Cooperative Systems Industry in China
 Technical barrier. Developing vehicle infrastructure cooperative systems is a complex
endeavor that demands providers to possess substantial technical expertise in perception
devices such as radars and cameras, V2X communication technologies and various
algorithms. Consequently, it can be difficult for new industry entrants to rapidly build a
capable R&D team and acquire the necessary knowledge and experience within a short
timeframe.
 Customer resource barrier. V ehicle infrastructure cooperative system providers offer
products to a diverse range of customers, including local government authorities, mobility
service providers, expressway companies, etc. For new entrants, it can be challenging to
rapidly acquire a robust customer resource, which in turn extends the time required to
penetrate the market.
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 Capital investment barrier. Developing vehicle infrastructure cooperative systems is a
capital-intensive task. Providers need to allocate considerable resources towards the
research and design of these customized products in order to maintain product
diversification and competitiveness. Therefore, the need for substantial upfront
investment in equipment, research and development, as well as marketing, represents a
significant barrier that can impede the growth of new market entrants.
Threats and Challenges of the Vehicle Infrastructure Cooperative Systems Industry in
China
 Increasingly intense competitive environment. The vehicle infrastructure cooperative
systems industry presents significant growth potential with the increasing participation of
numerous companies. To thrive in this increasing competitive landscape, providers must
prioritize the development and provision of innovative, high-quality products and
services to maintain competitiveness.
 Rapid iteration of technology. The vehicle-infrastructure cooperative systems industry
is undergoing rapid development, which requires providers to accelerate technological
iteration and advancement. Consequently, providers that lack the necessary technological
competitiveness and innovation capabilities may face the risk of being eliminated from
the market.
SOURCE OF INFORMATION
In connection with the Global Offering, we engaged CIC, an independent market research
consultant, to conduct an analysis of and to prepare a report about the Chinese automotive
intelligence solutions industry. The CIC Report has been prepared by CIC independent of the
influence of our Group and other interested parties. We have agreed to pay CIC a total fee of
RMB500,000 for the preparation and use of the CIC Report, and we believe that such fees are
consistent with the market rate. CIC is a consulting firm founded in Hong Kong and provides
professional industry consulting services across multiple industries. CIC’s services include
industry consultancy services, commercial due diligence and strategic consulting.
CIC conducted both primary and secondary research using a variety of resources. Primary
research involved interviewing key industry experts and leading industry participants.
Secondary research involved analyzing data from various publicly available data sources. The
market projections in the commissioned report are based on the following key assumptions: (i)
given China’s enduringly stable political system, effective social governance and robust
economic foundation, it is anticipated that the overall social, economic and political
environments in China will remain stable during the forecast period; (ii) according to the
National Bureau of Statistics of China, key economic indicators such as gross Domestic
Product (“GDP”), industrial added value and urbanization rate have shown an upward trend in
China over the past decade. Therefore, we believe that the economic and industry development
in China is likely to maintain a steady growth trajectory during the forecast period,
accompanied by continuing urbanization; (iii) related key industry drivers such as continuous
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improvement in technologies and acceleration in automotive intelligent layout in OEMs are
likely to propel continued growth in the Chinese automotive intelligence solutions industry
throughout the forecast period; and (iv) there will be no extreme force majeure event or
unforeseen industry regulation that may significantly or fundamentally affect the relevant
market and industry.
Unless otherwise specified, all data and forecasts contained in this section are derived
from the consultancy report of CIC. The Directors, upon acting with reasonable prudence,
confirmed that there has been no occurrence of adverse change in the overall market
information that would subject the data to significant restrictions, contradiction or negative
effects since the date of the consultancy report.
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PRC LA WS AND REGULATIONS
We are subject to various PRC laws, rules and regulations that affect many aspects of our
business. This section provides an overview of the PRC laws, regulations and rules we believe
to be relating to our business and operation.
REGULATIONS ON COMPANY ESTABLISHMENT AND FOREIGN INVESTMENT
Pursuant to the PRC Company Law promulgated by the Standing Committee of the
National People’s Congress (the “ NPCSC ”) on December 29, 1993, which was amended on
December 25, 1999, August 28, 2004, October 27, 2005, December 28, 2013, October 26,
2018, and December 29, 2023 respectively and became effective on July 1, 2024, the Company
Law shall apply to all companies established in the PRC. The Company Law, which regulates
the establishment, corporate structure and management of companies, also applies to
foreign-invested companies. Where laws on foreign investment provide otherwise, such
provisions shall prevail.
Pursuant to the Foreign Investment Law of the People’s Republic of China ( ʕശɛ͏
) promulgated by the NPC on March 15, 2019 and effective on January 1,
2020, and the Regulations for the Implementation of the Foreign Investment Law of the
People’s Republic of China (ૢԷ) promulgated by the
State Council on December 26, 2019 and effective January 1, 2020, China will further expand
its opening to the outside world, actively promote foreign investment, protect the legitimate
rights and interests of foreign investment and regulate the management of foreign investment.
Foreign-invested enterprises shall equally apply the state policies on supporting the
development of enterprises in accordance with the law. The capital contributions, profits,
capital gains, proceeds from the disposal of assets, royalties from the licensing of intellectual
property, compensation or indemnification obtained in accordance with the law, and proceeds
from liquidation of a foreign investor within the territory of China may be freely remitted into
and out of the territory of China in Renminbi or foreign exchange in accordance with the law.
The State adopts the management system of pre-establishment national treatment and Negative
List for foreign investment. The State will give national treatment to foreign investments
beyond the Negative List. No foreign investors shall be allowed to invest in the industries
where foreign investment is prohibited by the Negative List; while for the industries restricted
by the Negative List, restrictive access special management measures such as equity
requirements and senior management requirements as stipulated in the Negative List shall be
met before the foreign investment can be made. As for industries not included in the Negative
List, the foreign and domestic investments shall be treated as the same in terms of
administration.
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According to the Negative List issued by the NDRC and the MOFCOM on September 6,
2024 and effective on November 1, 2024, and the Catalogue of Industries for Encouraging
Foreign Investment (2022 Edition) ( ོᎸ̮ਠҳ༟ପุͦ፽(2022و)) issued by the
MOFCOM and the NDRC on October 26, 2022 and effective on January 1, 2023, our business
does not fall within the scope of the Negative List and is not subject to special management
measures.
Pursuant to the Measures for the Reporting of Foreign Investment Information ( ̮ਠҳ
), which was jointly promulgated by the MOFCOM and the State
Administration for Market Regulation (the “ SAMR ”) on December 30, 2019 and came into
effect on January 1, 2020, if a foreign investor directly or indirectly carries out investment
activities in China, the foreign investor or foreign-invested enterprise shall report the
investment information to the competent commerce authorities.
Pursuant to the Measures for Security Review of Foreign Investments ( ̮ਠҳ༟τΌ
) promulgated by the NDRC and the MOFCOM on December 19, 2020 and
effective from January 18, 2021, the NDRC and the MOFCOM shall set up the Office of
Working Mechanisms under the NDRC, which is responsible for the security review of foreign
investments. The Measures for Security Review of Foreign Investment define foreign
investment as direct or indirect investment by a foreign investor in China, which includes (i)
investing in a new domestic project or establishing a wholly foreign-owned company or a joint
venture with a foreign investor; (ii) acquiring the equity or assets of a domestic enterprise by
way of merger or acquisition; and (iii) investing in the country by other means. Investments in
certain key areas related to national security, such as important cultural products and services,
important information technology and Internet products and services, key technologies and
other important areas related to national security, so as to obtain actual control of the invested
enterprise, must be declared to the Office of the Working Mechanism prior to the making of
the relevant investment.
REGULATIONS AND INDUSTRY STANDARDS RELATED TO THE AUTONOMOUS
DRIVING AND INTELLIGENT CONNECTED VEHICLES INDUSTRY
In 2006, China Automotive Technology and Research Center officially established the
C-NCAP based on fully considering the actual situation of road traffic accidents in China,
combined with China’s automotive standards, technology, and economic development level.
With the smooth implementation of C-NCAP and the in-depth study of C-NCAP , China
Automotive Technology and Research Center has also improved and upgraded the C-NCAP
Management Code many times, which has been amended in 2006, 2009, 2012, 2015, 2018,
2021 and 2024.
C-NCAP aims at establishing a high standard, fair and objective vehicle safety
performance evaluation method to promote the development of vehicle safety technology and
pursue higher safety concept. The significance of the project is to provide consumers with
safety information of newly released vehicles, promote production enterprises to strengthen
attention to safety standards, improve vehicles’ safety performance and technology level, and
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enable vehicles’ excellent safety performance to be reflected in the evaluation. Moreover,
C-NCAP will rate the pilot with stars based on the overall scoring rate of three aspects:
passenger protection, vulnerable road user (“ VRU”) protection and active safety. The scoring
rate for passenger protection, VRU protection and active safety shall be calculated according
to the test item respectively, and the scoring rate shall be multiplied by the weight coefficients
of the three parts and the final result shall be the comprehensive scoring rate. The standards
for star-level rating of comprehensive scoring rate are: no less than 92% shall be rated as 5+
star, no less than 83% and no more than 92% shall be rated as 5 stars, no less than 74% and
no more than 83% shall be rated as 4 stars, no less than 65% and no more than 74% shall be
rated as 3 stars, no less than 45% and no more than 65% shall be rated as 2 stars and a rating
of less than 45% is 1- star.
According to the Development Plan for a New Generation of Artificial Intelligence ( อ
஝ྌ) promulgated by the State Council on July 8, 2017 and effective on
the same day (effective from July 8, 2017), a major breakthrough in the basic theories of AI
shall be achieved by 2025, some technologies and applications shall reach the world’s leading
level, AI shall become a major driving force to drive China’s industrial upgrading and
economic transformation, and positive progress shall be made in the construction of an
intelligent society. By 2030, with AI theories, technologies and applications in general reaching
the world’s leading level, China shall become the world’s major artificial intelligence
innovation center, achieving significant results in intelligent economy and intelligent society,
and laying an important foundation for being among the forefront of innovative countries and
economic powerhouses.
According to the Automotive Driving Automation Classification ( ӛԓቷትІਗʷʱ
ॴ) promulgated by the Ministry of Industry and Information Technology of the People’s
Republic of China (the “ MIIT ”) on March 9, 2020 (which became a recommended national
standard on January 1, 2021), driving automation is classified into six grades ranging from 0
to 5. Level 0 refers to Emergency Assistance, Level 1 refers to Partial Driving Assistance,
Level 2 refers to Combined Driving Assistance, Level 3 refers to Conditional Autonomous
Driving, Level 4 refers to Highly Autonomous Driving, and Level 5 refers to Fully
Autonomous Driving.
The MIIT, the Ministry of Public Security (the “ MPS”) and the Ministry of Transport (the
“MOT”) jointly issued and implemented the Rules for the Administration of the Road Testing
and Demonstrative Application of Intelligent Connected V ehicles (for Trial Implementation)
(౽ঐၣᑌӛԓ༸༩಻༊ၾͪᇍᏐ͜၍ଣ஝ᇍ(༊Б)) on July 27, 2021, which was
implemented from September 1, 2021, any entity intending to conduct a road testing of
autonomous driving vehicles must obtain a road-testing certificate and a temporary license
plate for each tested vehicle. To qualify for above testing certificate and temporary license
plate, an applicant entity must satisfy, among others, the following requirements: (1) it must
be an independent legal person registered in PRC with the capacity to conduct intelligent
connected vehicles-related businesses such as manufacturing, technological research and
testing of vehicles and vehicle parts, which has established protocol to test and assess the
performance of autonomous driving system and is capable of conducting real-time remote
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monitor of the road tested vehicles, and with the ability of event recording, analysis and
reproduction of the vehicles under road testing and ensuring the network security of the
vehicles under road testing and the remote monitor platforms; (2) the vehicle under road testing
must be equipped with a driving system that can switch between autonomous pilot mode and
human operating mode in a safe, quick and simple manner and allows human driver to take
control of the vehicle any time immediately when necessary; (3) the tested vehicle must be
equipped with the functions of recording, storing and real-time monitoring the condition of the
vehicle and is able to transmit real-time data of the vehicle, such as the driving mode, location
and speed; (4) the applicant entity must sign an employment contract or a labor service contract
with the driver of the tested vehicle, who must be a licensed driver with more than three years’
driving experience and a track record of safe driving and is familiar with the testing protocol
for autonomous driving system and proficient in operating the system; (5) the applicant entity
must insure each tested vehicle for at least RMB5 million against car accidents or provide a
letter of guarantee covering the same. In addition, during testing, the testing entity should post
a noticeable identification logo for autonomous driving test on each tested car and should not
use autonomous driving mode unless in the permitted testing areas specified in the road-testing
certificate. If the testing entity intends to conduct road testing in the region beyond the
administrative territory of the certificate issuing authority, it must apply for a separate
road-testing certificate and a separate temporary license plate from the relevant authority
supervising the road-testing of autonomous cars in that region.
On March 24, 2021, the MPS promulgated the Road Traffic Safety Law (Revised Proposal
Draft) (ج(ᙄᇃ)), which stipulates that vehicles with autonomous
driving functions should pass road testing on closed roads and venues, obtain temporary
driving license plates, and conduct road testing at designated times, areas, and routes according
to regulations. Those who have passed the test and are allowed to be produced, imported, or
sold in accordance with relevant laws and regulations, and those who need to pass on the road
shall apply for a motor vehicle license plate. Moreover, vehicles with autonomous driving
function and manual direct operation mode should record real-time driving data when
conducting road tests or passing on the road; the driver should be in the driver’s seat of the
vehicle, monitor the operation status and surrounding environment of the vehicle, and be ready
to take over the vehicle at any time. In case of road traffic safety violations or traffic accidents,
the responsibility of the driver and the development unit of the autonomous driving system
shall be determined according to law, and the liability for damages shall be determined in
accordance with relevant laws and regulations. If a crime is constituted, criminal responsibility
shall be pursued in accordance with the law. And vehicles with autonomous driving function
but without manual direct operation mode shall be separately stipulated by relevant
departments of the State Council for road traffic. Furthermore, the autonomous driving
function should be tested and qualified by a third-party testing agency engaged in automotive
related business with corresponding qualifications. On April 29, 2021, the NPCSC promulgated
the updated Road Traffic Safety Law (), As of the Latest Practicable Date,
the aforementioned provisions of the Road Traffic Safety Law (Revised Proposal Draft) have
not been formally adopted.
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According to the Opinions of the Ministry of Industry and Information Technology on
Strengthening the Management of Intelligent Connected V ehicle Manufacturing Enterprises
and Product Entry (จ
Ԉ) issued by the MIIT on July 30, 2021, the enterprises should strengthen the data security
management capability, strengthen the network security guarantee capability, strengthen the
enterprise management capability and ensure the consistency of the product production. In
addition, the enterprises shall enhance the product management: (i) enterprises shall strictly
fulfill their duty to inform. Enterprises producing automobile products with driver-assistance
and self-driving functions shall clearly inform users of the vehicle function and performance
limitations, the driver’s duties, indication information of man-machine interaction equipment,
and the ways and conditions for activating and withdrawing the functions; (ii) Enterprises shall
strengthen the safety management of products with combined driving assistance functions; (iii)
Enterprises shall strengthen the safety management of products with Autonomous Driving
functions; and (iv) Enterprises shall ensure reliable spatial and temporal information services.
The MIIT and the Standardization Administration of China issued the Guidelines for the
Construction of National Standard System for Telematics Industry (Intelligent Connected
V ehicles) (یܸ(౽ঐၣᑌӛԓ)) on July 18, 2023, which
came into effect on the same day. The document provides a systematic planning and
deployment of the Chinese standard system for Intelligent Connected V ehicles (“ ICV”), and
defines the framework of the standard system for ICVs, which is divided into four parts: the
foundation, the general specifications, the products and technical applications, and the related
standards. On December 25, 2018, the MIIT issued the Action Plan for the Development of the
Telematics (Intelligent Connected V ehicles) Industry ( ԓᑌၣ(౽ঐၣᑌӛԓ)Бਗ
ྌ), clearly stipulating that we shall give full play to the basic, guiding and standardizing
role of the standard system in the Telematics industry ecosystem, accelerate the
implementation of the Guidelines for the Construction of the National Standard System for
Telematics Industry (), and update, supplement, and
improve the guidelines in due course according to the needs of industrial development.
On December 20, 2020, the MOT promulgated the Guidance of Ministry of Transport on
Promoting the Development and Application of Autonomous Driving Technology ( ʹஷ༶፩
ኬจԈ), which provides specific
guidance on promoting the development and application of autonomous driving technology in
terms of strengthening technological R&D promoting infrastructure intelligence, and carrying
out pilot demonstrations.
On May 15, 2023, the China Association of Automobile Manufacturers released the
Automotive Intelligent Cockpit Interaction Experience Test and Evaluation Procedures (Draft
for Comments) (ጵʹʝ᜗᜕಻༊൙ᄆ஝೻(ᅄӋจԈᇃ)), which stipulates the
terminology and definitions, the evaluation index system, the classification of grades, and the
test and evaluation methodology of the Automotive Intelligent Cockpit Interaction Experience
Test and Evaluation Procedures. The Automotive Intelligent Cockpit Interaction Experience
Test and Evaluation include the evaluation on usefulness, safety, efficiency, cognition,
intelligence, value, and aesthetics.
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On November 17, 2023, the MIIT, the MPS, the Ministry of Housing and Urban-Rural
Development (the “ MOHURD ”), and the MOT jointly issued the Notice on the Pilot Work on
the Admission and Road Access of Intelligent Connected V ehicles (౽ঐၣᑌӛԓ
) (the “ Notice of Pilot Work ”). The Notice of Pilot Work
requires the automobile manufacturers and the users to form a consortium for declaration,
which shall be approved by the people’s government of the city of operation, reviewed by the
competent provincial department of industry and information technology in conjunction with
other relevant authorities and reported to the MIIT. Ultimately, the MIIT, the MPS, the
MOHURD and the MOT will organize experts to conduct a preliminary review of the declared
proposals and decide on the consortiums that will participate in the pilot operation.
On November 21, 2023, the MOT issued the Guidelines for Transportation Safety
Services of Autonomous Driving Cars (Trial) (یܸ(༊Б))
(the “ Service Guidelines ”). The Service Guidelines specifies the applicable scenarios of
autonomous driving cars, i.e., the use of autonomous driving cars in urban roads, highways and
other types of roads used for the passage of motor vehicles, to engage in passenger transport
by bus and tram, passenger transport by taxi, road passenger transport operations, road cargo
transportation business activities. It also clarifies that autonomous driving cars refer to
conditional autonomous driving cars, highly autonomous driving cars and fully autonomous
driving cars as specified in the national standard of Automotive Driving Automation
Classification ( ӛԓቷትІਗʷʱॴ), i.e., the widely known L3, L4 and L5 level
autonomous driving cars.
According to the Interim Provisions on Radio Management of Automobile Radar ( ӛԓ
) promulgated by the MIIT on November 16, 2021 and effective
from March 1, 2022, the automobile radar equipment manufactured or imported for domestic
sale or use shall comply with the RF Technical Requirements for Automobile Radar and apply
for the radio type approval of the radio transmitting equipment from the national radio
administration agency.
REGULATIONS RELATING TO SURVEYING AND MAPPING SERVICES
On December 28, 1992, the NPCSC promulgated the Surveying and Mapping Law of the
People’s Republic of China (), or the Surveying and Mapping Law,
which was last amended on April 27, 2017 and became effective on July 1, 2017. According
to the Surveying and Mapping Law, entities that engage in surveying and mapping activities
shall meet specific requirements and obtain the necessary qualification certificates of
surveying and mapping for corresponding grades. Any entity that engages in surveying and
mapping activities without relevant qualification certificate shall be ordered to stop the illegal
behavior, and be deprived of unlawful gains as well as surveying and mapping work products.
In addition, the entity shall be subject to a fine of not less than the amount of, but not more
than twice the amount of, the illegal gains from its surveying and mapping activities. In the
event of serious violation, the surveying and mapping tools shall be confiscated. Any foreign
entity or individual engaging in surveying and mapping activities without approval or without
cooperation with relevant PRC department or entity, the foreign entity or individual shall be
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ordered to stop the illegal behavior, and be deprived of unlawful gains, surveying and mapping
work products as well as tools. In addition, the foreign entity or individual shall be subject to
a fine of RMB100,000 to RMB500,000. In the event of serious violation, the foreign entity or
individual shall be subject to a fine of RMB500,000 to RMB1,000,000 and shall be ordered to
leave the country within a specified period or expelled from the country. If constituting a
crime, the foreign entity or individual shall be investigated for criminal liability in accordance
with applicable laws.
Pursuant to the Administrative Rules of Surveying Qualification Certificate ( ಻ᖭ༟ሯ
ձ಻ᖭ༟ሯʱᗳʱॴᅺ๟), as most recently amended by the Ministry of
Natural Resources of the People’s Republic of China, or the MNR, effective from July 1, 2021,
entities conducting surveying and mapping activities in the territory of China, as well as other
territorial sea under the jurisdiction of China, shall obtain a Surveying and Mapping
Qualification Certificate, and conduct surveying and mapping activities within the specialized
categories and restricted scope permitted by their Surveying and Mapping Qualification
Certificate.
On July 26, 2024, the MNR issued the Circular on Strengthening the Management of the
Security of Surveying and Mapping Geographic Information Related to Intelligent Connected
V ehicles ()( “ Circular 139 ”),
placing renewed emphasis on the security of surveying and mapping geographic information.
This follows the issuance of the Circular on Promoting the Development of Intelligent
Connected V ehicles and Protecting the Security of Surveying and Mapping
Geographic Information ()
(“Circular No. 1 ”) in August 2022, and the MNR has once again clarified the difficulties in
the regulation of surveying and mapping compliance related to intelligent connected vehicles
in the form of a circular after a lapse of nearly two years, and clarified the focus of compliance
related to the processing of geographic information data. Circular 139 reaffirms the definition
of mapping activities related to intelligent networked vehicles as “collection, storage,
transmission, and processing of geographic information and data (including road topology
data), including spatial coordinates, real-scene images (videos, images and other
environmental perception data), point clouds and their attribute information of vehicles and
surrounding road facilities, during the operation, service, and testing of intelligent connected
vehicles” constitute surveying and mapping activity. Pursuant to Circular No. 1: (i) from the
perspective of the current market operation, most of the subjects that engage in data collection,
storage, transmission, and processing are automobile enterprises and service providers, and
some are intelligent driving software providers. Intelligent connected vehicle drivers and
passengers who only receive driving assistance and other services are not actors of the relevant
surveying and mapping activities; (ii) for any automobile enterprise, service provider, or
intelligent driving software provider that needs to engage in the collection, storage,
transmission, and processing of the relevant data, if it is a domestic enterprise, it shall obtain
the corresponding surveying and mapping qualification in accordance with the law, or it shall
entrust an entity with the corresponding surveying and mapping qualification to carry out the
corresponding surveying and mapping activities; if it is a foreign-invested enterprise, it shall
entrust an entity with the corresponding surveying and mapping qualification to carry out the
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corresponding surveying and mapping activities, and the entrusted entity shall be responsible
for the collection, storage, transmission, and processing of the relevant spatial coordinates,
images, and point clouds and their attribute information, and for the provision of geographical
information and services.
As for the Group, its vehicle infrastructure cooperative systems are “turnkey” projects
where, upon completion of the projects, the Group “hands over” the “key” to its client in
accordance with relevant contracts and thus the client will have the full ownership and control
over the V2X systems, which are ready to operate. Accordingly, although the Group’s vehicle
infrastructure cooperative systems, which integrate perception devices with V2X
communication technology, are capable of automatically gathering real-time data on vehicle
operations and road conditions (see “Business—Our Business—V ehicle Infrastructure
Cooperative System”), the Group is not involved in any of such data collection, storage,
transmission and processing during the operation, service and testing of intelligent connected
vehicles and is not aware of whether and which client(s) collected such data. Our PRC Legal
Advisor is of the view that the relevant compliance obligation related to the said data
collection, storage, transmission and processing is not on the Group.
REGULATIONS ON INTERNET INFORMATION SECURITY, PRIV ACY
PROTECTION AND AUTOMOTIVE DATA SECURITY
Internet Information Security
The Decision on Maintaining Internet Security (),
promulgated by the NPCSC on December 28, 2000, and amended in August 2009, stipulates
that the following activities carried out through the Internet will be subject to criminal
penalties if they constitute crimes under Chinese law: (i) hacking into computers or systems of
strategic importance; (ii) deliberately making and spreading destructive programs such as
computer viruses to attack computer systems and communication networks, causing damage to
computer systems and communication networks; (iii) unauthorized interruption of computer
network or communication services in violation of laws and regulations; (iv) divulging state
secrets; (v) dissemination of false commercial information; or (vi) using the Internet to infringe
intellectual property rights.
According to the Cybersecurity Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) promulgated by the NPCSC on November 7, 2016 and effective as of June
1, 2017, network owners, administrators, and network service providers are required to
undertake a variety of cybersecurity protection obligations as network operators, including but
not limited to: (i) Fulfilling the security protection responsibilities stipulated in the network
security level protection system, including formulating internal security management rules and
operational guidelines, designating the person responsible for network security and his/her
duties, adopting technical measures for preventing computer viruses, network attacks, network
intrusion and other behaviors that jeopardize network security, and adopting technical
measures for monitoring and recording the network operation status and network security
events; (ii) formulating contingency plans to respond to and address security risks in a timely
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manner, activating contingency plans in the event of a cybersecurity threat, taking appropriate
remedial measures, and reporting to the regulator; and (iii) following the principles of legality,
legitimacy and necessity, disclosing the rules of collection and use, expressing the purpose,
method and scope of collection and use of information, and obtaining the consent of the
collected person when collecting and using personal information.
According to the Measures for the Administration of Information Security Level
Protection () promulgated by the MPS, the National
Administration of State Secrets Protection, the State Cryptography Administration Office of
Security Commercial Code Administration (OSCCA), and the Informatization Work Office of
the State Council (revoked) on June 22, 2007, and effective on the same day, the units operating
and using information systems should fulfill the responsibility of protecting information
systems at multiple levels, and the information system at or above the second level that has
been operated (in operation) shall, within 30 days after the security protection level is
determined, be filed by the operator or user with the public security organ at or above the
municipal level where it is located. New information systems above the second level, shall,
within 30 days after its operation, be filed by the operator or user with the public security organ
at or above the municipal level where it is located.
The Data Security Law, promulgated by the NPCSC on June 10, 2021, and effective on
September 1, 2021, provides that organizations and individuals carrying out data activities
shall establish a system for the classification and protection of data, and formulate a catalog
of important data in order to strengthen the protection of important data. Processors of
important data shall specify the person in charge of data security and the management
organization, and implement the responsibility for data security protection. The relevant
departments will formulate measures for the cross-border flow of important data. If any
company violates the Data Security Law by providing important data outside the country, the
company may be subject to administrative penalties, including penalties, fines and/or
suspension of the relevant business or revocation of the business license. In addition, the Data
Security Law imposes national security reviews on data activities that affect or may affect
national security and imposes export controls on certain data and information.
According to the Regulations on the Security Protection of Critical Information
Infrastructure (ᚐૢԷ) promulgated by the State Council on
July 30, 2021 and effective from September 1, 2021, critical information infrastructure refers
to the information infrastructure and information systems in the public communication and
information services, energy, transportation, water conservancy, finance, public services,
e-government and other important industries and fields, as well as other critical information
infrastructure and information systems which may seriously endanger national security,
national livelihood and public interest once they are damaged, lose their functions or their data
is leaked. According to the Regulations on the Security Protection of Critical Information
Infrastructure, the relevant government departments are responsible for formulating rules for
the determination of critical information infrastructure with reference to a number of factors
stipulated in the Regulations, and for further determining the critical information infrastructure
operators in the relevant industries on the basis of such rules. The relevant authorities shall also
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notify the operator that it is recognized as a critical information infrastructure operator. In
addition, the Regulations on the Security Protection of Critical Information Infrastructure have
clear requirements on the responsibilities and obligations of operators: (i) the operator shall
establish and improve the network security protection system and responsibility system, and
guarantee the investment of human, financial and material resources; (ii) the operator shall set
up a specialized security management organization, and conduct security background checks
on the person in charge of the specialized security management organization and key position
holders; (iii) the operator shall guarantee the operating funds of the specialized security
management organization, equip it with corresponding personnel, and decisions related to
network security and informatization shall be carried out with the participation of personnel of
the specialized security management organization; (iv) the operators shall give priority to the
procurement of secure and trusted network products and services; and the procurement of
network products and services that may affect national security shall be subject to security
review in accordance with national network security regulations. The Regulation on the
Security Protection of Critical Information Infrastructure has also specified the penalties, such
as fines, for the failure of critical information infrastructure operators to fulfill their security
protection responsibilities.
According to the Measures for Cybersecurity Review () jointly
promulgated by the Cyberspace Administration of China (the “ CAC”), the NDRC, the MIIT,
the MPS, the Ministry of State Security, the MOF, the MOFCOM, the PBOC, the SAMR, the
National Radio and Television Administration, the CSRC, the National Administration of State
Secrets Protection and the State Cryptography Administration on December 28, 2021 and
effective on February 15, 2022, there are two triggering mechanisms for cybersecurity review:
(a) declaration for review initiated by enterprises: applicable to (i) procurement of network
products and services by operators of critical information infrastructures; and (ii) listing abroad
by operators of network platforms holding personal information of more than one million
users; and (b) review initiated by the regulatory authorities: For network products and services
and data-processing activities that members of the working mechanism for network security
review believe affect or may affect national security, the Network Security Review Office shall
report to the Central Cyberspace Affairs Commission for approval before initiating a network
security review.
According to the Regulations on the Network Data Security Management (Draft for
Public Comments) ( ၣഖᅰኽτΌ၍ଣૢԷ(ᅄӋจԈᇃ)) promulgated by the CAC on
November 14, 2021, data processors shall be responsible for the security of the data they
process, fulfill their obligations to protect the security of the data, accept governmental and
social supervision, and assume social responsibility. Data processors shall, in accordance with
the provisions of relevant laws and administrative regulations and the mandatory requirements
of national standards, establish and improve data security management systems and technical
protection mechanisms. The State Council issued the Regulations on the Network Data
Security Management ( ၣഖᅰኽτΌ၍ଣૢԷ) on September 24, 2024, which will take
effect on January 1, 2025.
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Pursuant to the Measures for Security Evaluation for Transfer of Data to Foreign
Countries () issued by the CAC on July 7, 2022 and coming into
effect on September 1, 2022, data processors providing data abroad shall, in any of the
following circumstances, apply for security evaluation for transfer of data to foreign countries
with the CAC through their local provincial-level Internet information department: (i) when a
data processor transfers important data to overseas recipients; (ii) when a critical information
infrastructure operator (CIIO), or a data processor who handles personal information of more
than one million individuals transfers personal information to overseas recipients; (iii) when a
data processor, who has transferred personal information of more than 100,000 individuals, or
sensitive personal information of more than 10,000 individuals to overseas recipients since
January 1 of the previous year, transfers personal information to overseas recipients; and (iv)
other circumstances under which security evaluation of cross-border data transfers is required
as prescribed by the CAC.
On December 8, 2022, the MIIT issued the Measures for the Management of Data
Security in the Field of Industry and Information Technology (for Trial Implementation) ( ʈ
ج(༊Б)), which came into effect on January 1, 2023. The
purpose of the Measures is to regulate data processing activities in the field of industry and
information technology carried out by the relevant data processors in China. It applies to
industrial enterprises, software and information technology service enterprises, and enterprises
that have obtained a license to operate telecommunications services, which decide on their own
the purpose and manner of processing in their data processing activities. Data processing
activities include, but are not limited to, activities such as data collection, storage, use,
processing, transmission, provision, and disclosure. According to the Measures, data in the
field of industry and information technology include industrial data, telecommunications data
and radio data generated and collected in the course of operating related services. It stipulates
that data in the field of industrial and information technology is classified into three levels,
namely general data, important data or core data. Besides, it has also specified the specific
requirements for the classification and hierarchical management of data and data protection
measures, including the collection, storage, processing, transmission, disclosure and
destruction of data by data processors in the field of industrial and information technology. In
particular, important data and core data processors shall file important data and core data
catalogs with the relevant authorities. The filing content includes, but is not limited to, the
basic information on the data category, level, scale, purpose and mode of processing, scope of
use, responsible parties, external sharing, cross-border transmission, and security protection
measures. If the scale of important data and core data (number of data entries or total amount
of storage, etc.) changes by more than 30%, or if the content of other filings changes, the data
processor shall update the filings with the relevant authorities within three months of the
change. In addition, it has set out the data security requirements for cross-border and data
transmission by data processors. If a data processor needs to transfer data due to merger,
reorganization, bankruptcy or other reasons, it shall specify the data transfer plan and notify
the affected users. In addition, it states that the legal representative or principal officer of the
data processor is the first person responsible for data security, and the members of the
leadership team in charge of data security are directly responsible for data processing
activities.
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According to the Guidelines for Declaration for Security Evaluation for Transfer of Data
to Foreign Countries (Second Edition) (یܸ(و)) and the
Provisions on Promoting and Regulating Cross-border Flow of Data (ݴ
) promulgated by the CAC on March 22, 2024, which came into effect on the same
day, data processors providing data abroad shall, in any of the following circumstances, apply
for security evaluation for transfer of data to foreign countries: (i) when a data processor of
critical information infrastructures transfers personal information or important data to overseas
recipients; (ii) when data processors other than operators of critical information infrastructures
provide important data outside the country, or provide more than one million people’s personal
information (excluding sensitive personal information) or more than 10,000 people’s sensitive
personal information outside the country cumulatively since January 1 of the current year. Data
processors other than operators of critical information infrastructures that have cumulatively
provided the personal information (excluding sensitive personal information) of more than
100,000 people and less than 1 million people or the sensitive personal information of less than
10,000 people outside the country since January 1 of the current year shall, in accordance with
the law, enter into a standard contract for the export of personal information with the overseas
recipients or pass the personal information protection certification.
Privacy Protection
Pursuant to the Civil Code of the PRC (Պ), which was
promulgated by the NPC on May 28, 2020 and came into effect on January 1, 2021, the
personal information of natural persons shall be protected by law. Any organization or
individual that needs to obtain personal information of others shall obtain it in accordance with
the law and ensure the security of the information, and shall not unlawfully collect, use,
process or transmit the personal information of others, or unlawfully trade in, provide or
disclose the personal information of others.
The Law of the Personal Information Protection Law of the People’s Republic of China
() (the “ Personal Information Protection Law ”), which
was promulgated by the NPCSC on August 20, 2021 and became effective on November 1,
2021, consolidates separate provisions on personal information rights and privacy protection.
The Personal Information Protection Law aims to protect the personal information rights and
interests, regulate the handling of personal information, safeguard the free flow of personal
information in an orderly manner in accordance with the law, and promote the rational use of
personal information. Personal information, as defined in the Personal Information Protection
Law, refers to all kinds of information related to an identified or identifiable natural person
recorded electronically or by other means, excluding the information that has been
anonymized. The Personal Information Protection Law stipulates the circumstances in which
a processor of personal information may process personal information, including, but not
limited to, when the consent of the individual concerned has been obtained and when it is
necessary for the conclusion or performance of a contract to which the individual is a party.
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It has also set out a number of specific rules on the obligations of processors of personal
information, such as informing individuals of the purpose and method of processing, and the
obligations of third parties who obtain personal information through co-processing or
entrustment.
According to the Decision on Strengthening the Protection of Network Information ( ᗫ
) promulgated by the NPCSC on December 28, 2012 and the
Provisions on the Protection of Personal Information of Telecommunications and Internet
Users () promulgated by the MIIT on July 16, 2013,
which came into effect on September 1, 2013, as well as the Cybersecurity Law ( ၣഖτΌ
), any collection and use of the user’s personal information shall be agreed by both parties,
shall comply with the principles of legality, legitimacy and necessity, and shall be limited to
the specified purpose, method and scope. Internet information service providers shall also keep
such information confidential, and are prohibited from divulging, altering or damaging, selling
or providing such information to others. Internet information service providers shall take
technical and other measures to prevent unauthorized disclosure, destruction or loss of
collected personal information. In the event of actual or potential leakage of the user’s personal
information, the Internet information service provider shall immediately take remedial
measures and promptly report to the relevant government departments and notify the user in
accordance with the regulations. Any Internet information service provider that violates these
laws and regulations may be subject to warnings, fines, confiscation of illegal income,
revocation of licenses, revocation of records, closure of websites, and even criminal liability.
Pursuant to the Circular of the Supreme People’s Court, the Supreme People’s
Procuratorate and the Ministry of Public Security on the Punishment of Criminal Activities
Infringing on Citizens’ Personal Information in accordance with the Law (৫e
) promulgated on
April 23, 2013, and the Interpretation by the Supreme People’s Court and the Supreme People’s
Procuratorate of Several Issues Concerning the Application of Laws to the Handling of
Criminal Cases of Infringing on Citizens’ Personal Information (৫e௰৷ɛ͏Ꮸ
༆ᙑ) promulgated on May 8,
2017 and effective on June 1, 2017, the following activities may constitute crimes of
infringement of citizens’ personal information: (i) providing citizens’ personal information to
specific persons or publishing citizens’ personal information on the Internet, etc., in violation
of the relevant regulations; (ii) providing others with lawfully collected information about
citizens without their consent (unless the information has been processed in such a way as to
make it impossible to identify a specific individual and cannot be recovered); (iii) collecting
citizens’ personal information in violation of relevant regulations or provisions in the
performance of duties or the provision of services; or (iv) collecting citizens’ personal
information in violation of relevant regulations through purchasing, receiving, or exchanging.
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Automotive Data Security
On August 16, 2021, the CAC, the NDRC, the MPS, the MIIT and the MOT jointly
promulgated the Certain Provisions on the Management of Automotive Data Security (for Trial
Implementation) (֛(༊Б)) (the “ Automotive Data Security
Provisions ”), which came into effect on October 1, 2021, and is intended to regulate the
collection, storage, use, processing, transmission, provision, and disclosure of personal
information and critical data generated by automobile designers, manufacturers, and service
providers throughout the automobile life cycle. The relevant automotive data processors,
including automobile manufacturers, parts and software providers, dealers, repair suppliers and
travel service companies, are required to process personal information and critical data in
accordance with the applicable laws during the design, manufacture, sale, operation,
maintenance and management of automobiles. Processing of personal information by
automobile data processors shall be conducted with the consent of the individual or in
accordance with other circumstances stipulated by laws and regulations. The State encourages
the reasonable and effective utilization of automotive data in accordance with the law, and
advocates that automotive data processors adhere to: (i) the principle of in-vehicle processing,
and avoid providing automotive data outside the vehicle unless necessary; (ii) the principle of
non-collection by default, and set the state of non-collection by default each time unless
otherwise set by the driver on his/her own initiative; (iii) the principle of applying the range
of accuracy, and determine the coverage and resolution of cameras, radar, etc., based on the
requirements of the provided functional service for data accuracy; (iv) the principle of
desensitized processing, and anonymize and de-identify the information whenever possible.
According to the Automotive Data Security Provisions, personal information and key data
involving automobiles are in principle stored within the country, and if they need to be made
available outside the country, the competent national Internet information department will
conduct a cross-border data security assessment in conjunction with the relevant departments
of the State Council. When processing critical data, automotive data processors shall conduct
risk assessments in accordance with the regulations and submit risk assessment reports to the
relevant provincial authorities.
The MIIT issued the Notice of the Ministry of Industry and Information Technology on
Strengthening Network Security and Data Security of Telematics (̋੶
) on September 15, 2021. Accordingly, all
manufacturers of intelligent connected vehicles and operators of Telematics service platforms
shall establish a network security and data security management system, strengthen security
protection, monitor and prevent network security risks and threats, strengthen the security
protection capability of Telematics network facilities and network systems, safeguard
Telematics communication security, carry out Telematics security monitoring and early
warning, enhance the Telematics security emergency response, and promote the Telematics
network security protection grading and filing work. The MIIT promulgated the Guidelines for
the Construction of Network Security and Data Security Standard System for Telematics ( ԓ
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) on February 25, 2022, which clearly defines
the security standards and requirements covering the terminal and facility network security,
network communication security, data security, application service security, and security
guarantee and support.
The National Information Security Standardization Technical Committee issued the
Security Guidelines for the Processing of Automotive Captured Data ( ӛԓમණᅰኽஈଣτ
) on October 8, 2021. The Guidelines establish security requirements for processing
activities such as transmission, storage and transfer to foreign countries of data collected by
vehicles.
REGULATION ON PRODUCT LIABILITY
According to the Civil Code of the PRC, if a defect of a product causes damage to another
person, the infringed person may claim compensation against the manufacturer or the seller of
the product. If the infringer knows that the product is defective and still produces or sells it,
or fails to take effective remedial measures in accordance with the provisions of the Civil Code
of the People’s Republic of China, resulting in the death of another person or serious damage
to the health of another person, the infringed person shall be entitled to claim corresponding
punitive damages. If a product is defective due to the fault of a third party, such as a transporter
or warehouseman, and causes damage to another person, the producer or seller of the product
shall have the right to recover compensation from the third party after making compensation
to the infringed person.
According to the Product Quality Law of the People’s Republic of China ( ʕശɛ͏΍
) promulgated by the NPCSC on February 22, 1993 and most recently
amended on December 29, 2018, it is prohibited to manufacture or sell products that do not
comply with the standards and requirements for safeguarding human health and the safety of
persons and property. The products must not present any unreasonable risk of endangering the
safety of persons and property. A person who is injured or whose property is damaged by the
defects in the product may claim for compensation from the manufacturer or the seller. Any
producer or seller who produces or sells substandard products shall be ordered to stop
production or sale, the products illegally produced or sold shall be confiscated, and a fine shall
be imposed; If there are any illegal gains, the illegal gains shall be confiscated concurrently;
If the circumstances are serious, the business license shall be revoked.
REGULATIONS ON THE IMPORT AND EXPORT OF GOODS
China
In accordance with the Foreign Trade Law of the People’s Republic of China ( ʕശɛ
) promulgated by the NPCSC on May 12, 1994 and amended and
effective on April 6, 2004, November 7, 2016 and December 30, 2022 respectively, and the
Notice on Matters Relating to the Filing of Consignees and Consignors of Imported and
Exported Goods (ஷ
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) issued by the General Administration of Customs of the People’s Republic of China on
January 3, 2023 and effective on the same date, the consignee or consignor of imported or
exported goods applying for filing should obtain the qualification of the market entity, but no
filing for foreign trade operators is required.
According to the Customs Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ऎ
) promulgated by the NPCSC on January 22, 1987, and amended on July 8, 2000, June
29, 2013, December 28, 2013, November 7, 2016, November 4, 2017, and April 29, 2021,
respectively, the consignee of imported goods, the consignor of exported goods, and the owner
of inbound and outbound goods are the taxpayers of customs duties. For the imported and
exported goods, unless otherwise provided for, customs declaration and tax payment
procedures may be completed by the consignee or consignor of the imported and exported
goods, or the consignee or consignor of import and export goods may entrust a customs
declaration enterprise to complete the customs declaration and tax payment procedures. The
consignees and consignors for imported or exported goods and the customs brokers engaged in
customs declaration shall be filed with the customs in accordance with the law. Customs
declaration units refer to the consignee or consignor of the imported and exported goods and
the customs declaration enterprises filed with the customs in accordance with the Regulations
of the People’s Republic of China on the Administration of the Record of Customs Declaration
Units () promulgated by the General
Administration of Customs of the People’s Republic of China on November 19, 2021 and
becoming effective as of January 1, 2022. Where the consignee or consignor of imported or
exported goods or a customs declaration enterprise applies for filing, it shall obtain the
qualification of market entities.
Pursuant to the Regulations of the People’s Republic of China on the Administration of
Import and Export of Goods (ආ̈ɹ၍ଣૢԷ)( “Regulations on the
Administration of Import and Export of Goods ”) promulgated by the State Council on
December 10, 2001 and last amended on March 10, 2024, which came into effect on May 1,
2024, enterprises engaged in the trade activities of importing goods into the territory of the
People’s Republic of China or exporting goods outside of China must comply with the
Regulations on the Administration of Import and Export of Goods. Goods whose import or
export is prohibited shall not be imported or exported; goods whose import or export is
restricted shall be subject to a licensing or quota system; and goods whose import or export is
free shall not be subject to restriction. The consignee of imported goods or the consignor of
exported goods shall submit an automatic import and export license, an import and export
license or a quota certificate to the customs for customs clearance.
The Export Control Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷̈ɹ၍Փ
) (the “ Export Control Law ”) came into force on December 1, 2020. The Export Control
Law is China’s first comprehensive and integrated export control law, which sets out provisions
for the export control of dual-use goods, military supplies, nuclear energy products, goods
related to the protection of national security and interests and other commodities, science and
technology, services and goods, as well as fulfilling the responsibilities related to the
international prohibition of nuclear proliferation.
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The United States
Export Control Law
The BIS controls exports and reexports of commercial and dual-use products, software
and technology (collectively, “ Items ”). These controls are implemented by the EAR. The EAR
applies to (i) U.S.-origin Items wherever located, (ii) exports of Items from the United States
(irrespective of their origin) to foreign countries, (iii) reexports of U.S.-origin Items from one
foreign country to another, and (iv) shipments from one foreign country to another of
foreign-made Items that are subject to the EAR either because (a) they incorporate more than
de minimis amount of controlled U.S.-origin parts, components or materials, or (b) they are the
foreign direct product of certain controlled U.S. technology or software. The export, reexport
or transfer (in-country) of Items subject to the jurisdiction of the EAR (as described in (i)-(iv)
above) must comply with licensing requirements related to the end-destination, the end-users
and the end-use of the Items when applicable.
On October 7, 2022, BIS issued the IFR (“ BIS 2022/23 IFRs ”) amending the EAR as it
relates to exports, reexports or transfers (in-country) of U.S. and foreign-made Items to
Mainland China and Hong Kong (and later adding Macau), as well as related end uses and the
activities of “U.S. persons,” (“U.S. persons” include any individual who is a U.S. Citizen or
permanent resident alien, and any entity organized under U.S. Law) in the semiconductor and
supercomputer manufacturing industries. These included:
 Adding new export control classification numbers (“ ECCN ”), 3A090 and 4A090, to
control certain high performance integrated circuits (“ICs”), computers, electronic
assemblies, and components that are subject to the EAR which are prohibited,
without a license, from being exported, reexported or transferred (in-country) to or
within Mainland China, Hong Kong SAR, and Macau SAR;
 Adding two new foreign direct product rules (“ FDP Rules ”) and the expansion of
the Entity List FDP Rule, which collectively expanded U.S. export control laws to
capture under the jurisdiction of the EAR certain foreign-made Items that are
developed from specific U.S. technology or software, or from a plant or equipment
(including test equipment) that itself was developed from specific U.S. technology
or software. Such foreign-made Items were not subject to the EAR prior to the
expansion implemented by the IFR. Foreign-made Items captured by these rules are
subject to export licensing requirements when destined for certain end-users (i.e.,
certain parties designated on BIS’ Entity List) or certain end-uses in the advanced
computing and supercomputer industries in Mainland China, Hong Kong SAR or
Macau SAR;
 Adding a specific designation (i.e., footnote 4 on the Entity List) to 28 Chinese
parties on BIS’ Entity List such that transactions with these parties are subject to the
broader EAR jurisdiction, and associated export licensing requirements, imposed by
the Entity List FDP Rule and related Entity List restrictions;
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 Adding an export license requirement for the export, reexport or transfer
(in-country) of (i) certain Items subject to EAR and classified under particular
ECCNs, or (ii) certain semiconductor manufacturing end-uses Items subject to the
EAR, where the (i) or (ii) items are destined to Mainland China, Hong Kong SAR
or Macau SAR for certain supercomputer or for semiconductor manufacturing
end-uses; and
 Adding an export license requirement for any U.S. persons (both individuals and
legal entities) whose activities support the advanced computing or semiconductor
manufacturing end-uses discussed above.
As summarized above, the IFR implemented a number of key changes, including: (i) the
addition of four new ECCNs to the Commerce Control List (“ CCL”); (ii) application of new
unilateral controls on exports to Mainland China, Hong Kong SAR or Macau SAR of certain
advanced computing chips and computers and electronic assemblies incorporating the ICs that
are now subject to the EAR; (iii) imposition of new end-use and end-user-based restrictions on
exports, reexports, and in-country transfers of Items subject to the EAR that are intended for
use in semiconductor fabrication facilities in Mainland China, Hong Kong SAR or Macau SAR
or in “supercomputers” located in or destined for Mainland China, Hong Kong SAR or Macau
SAR; and (iv) the revision of one and creation of two new FDP Rules designed to capture more
foreign-made Items within the scope of the EAR.
The updated section 744.23 of the EAR imposes license requirements where an exporter,
reexporter or transferor knows or has reason to know that certain Items subject to the EAR are
intended for a “supercomputer” end-use or are intended for semiconductor manufacturing
end-uses. No license exceptions are available to overcome these restrictions.
Furthermore, section 744.21 of the EAR prohibits the export, reexport or transfer
(in-country) of certain Items subject to the EAR if the party has “knowledge,” that the Item is
destined for a “military end use” or a “military end user” in Burma, Cambodia, China or
V enezuela. Section 744.21 of the EAR also prohibits the export, reexport, or transfer
(in-country) of any Item subject to the EAR if the party has “knowledge” that the Item is
destined for a “military end use” or “military end user” in Russia or Belarus. Section 744.22
of the EAR prohibits the export, reexport or transfer (in-country) of any Items subject to the
EAR if the party has “knowledge” that the Item is intended for a “military-intelligence end
use” or “military-intelligence end user” in Belarus, Burma, Cambodia, China, Russia or
V enezuela, or certain specified “military intelligence end users,” of such countries, wherever
located.
In addition to the restrictions introduced by the BIS 2022/23 IFRs, BIS maintains lists of
persons that are subject to enhanced export control restrictions. One such list, the Entity List,
includes a list of foreign persons on which certain trade restrictions are imposed, including
business, research institutions, government and private organizations, individuals and other
types of legal persons. The United States in recent years has placed an increasing number of
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entities, including a number of entities in China, on the Entity List and other restricted or
prohibited parties lists. Given the sudden and unpredictable nature of these determinations, it
is difficult to predict developments in this area and we have no ability to influence such
determinations.
Our Directors are of the view that the restrictions imposed by the EAR, including the BIS
2022/23 IFRs, had not negatively impacted our operations or financial performance as of the
Latest Practicable Date.
On September 23, 2024, the BIS issued a Notice of Proposed Rulemaking (“ NPRM ”) that
would prohibit the sale in or import into the United States of connected vehicles integrating
specific hardware and software, or those components or software if sold or imported separately,
with a sufficient nexus to certain foreign adversaries including China and The Russian
Federation (Russia) (the “ Proposed Rule ”). The Proposed Rule identifies significant national
security concerns associated with connected vehicles and related connect components and
software designed, developed, manufactured or supplied by companies located in or
headquartered in China or Russia, and is expected to have a major impact on the automotive
and ICTS sectors. Specifically, the Proposed Rule bans the importation and sale of hardware
and software components integrated into V ehicle Connectivity Systems (“ VCS”) (largely
technology that connects the vehicle to the internet) and software integrated into ADS (but
excluding ADAS) absent a general or specific authorization. It also prohibits connected vehicle
manufacturers that are owned by, controlled by, or subject to the jurisdiction of China or Russia
from selling connected vehicles that incorporate VCS hardware or covered software in the
United States. If adopted, prohibitions on software would go into effect for model year 2027
vehicles and prohibitions on hardware would take effect for Model Y ear 2030 vehicles, or
January 1, 2029 for units without a model year. The Proposed Rule establishes a requirement
that connected vehicle manufacturers, which would be most OEMs and all importers, submit
declarations of conformity, sets out the conditions for general and specific authorizations,
establishes a process for industry stakeholders to seek an advisory opinion from BIS with
respect to specific transactions, and establishes a process to inform VCS hardware importers
and connected vehicle manufacturers that a specific authorization may be required.
Given that (i) the Proposed Rule only covers ADS (Level 3 to Level 5) but excludes
ADAS (Level 0 to Level 2). Our commercialized products (iSafety and iPilot) are ADAS
products, and the ADS product iRobo was under development as of the Latest Practicable Date;
and (ii) as of the Latest Practicable Date, we did not sell our products to customers in the
United States or to customers who incorporated them into products for sale to the United States
to our best knowledge, and do not intend to actively develop our business in the United States
as a major market in the future, our Directors are of the view that the impact of the proposed
rules prohibiting the importation of certain vehicles into the U.S. is minimal on our operations.
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Tarriff
On May 14, 2024, the Office of the United State Trade Representative announced a plan
to raise the tariff rate applicable to U.S. imports of electric vehicles from China from 25% to
100%, and these higher tariff rates on electric vehicle imports is expected to become effective
in 2024. Separately, from August 21, 2024, the European Commission imposed higher tariffs
on imports of electric vehicles made in China. These new tariffs, which will apply across the
European Union, range from 17.0% to 36.3%, depending on the OEM that produced the
vehicle. These new tariffs are applicable to electric vehicles, not ADAS and ADS solutions that
we develop; accordingly, these new U.S. and EU tariffs are not applicable to our sales.
However, these tariffs may adversely impact the sales of some of our OEM customers in
Europe and deter our customers from pursuing sales in the United States.
As of the Latest Practicable Date, the U.S. tariff rates on passenger vehicles imported
from China (excluding electric vehicles) are the standard 2.5%, which is the general dutiable
rate applied to non-U.S. manufactured vehicles. While the U.S. tariff rates on China imported
electric vehicles is expected to raise from the current 25% to 100% in 2024. As of the Latest
Practicable Date, EU tariff rates on passenger vehicles imported from China are 10%,
regardless of the specific vehicle type. The 10% rate is the standard import tariff the EU applies
to imported automobiles. The new EU tariffs on imports of electric vehicles made in China
from July 2024 are imposed in addition to such 10% standard tariff applied to imported
vehicles.
REGULATIONS ON INTELLECTUAL PROPERTY
Copyright
On September 7, 1990, the NPCSC promulgated the Copyright Law of the PRC ( ʕശ
) (the “ Copyright Law ”), which was effective on June 1, 1991 and
amended on October 27, 2001, February 26, 2010 and November 11, 2020, and the latest
amendment took effect on June 1, 2021. The amended Copyright Law extends copyright
protection to internet activities, products disseminated over the internet and software products.
In addition, there is a voluntary registration system administered by the Copyright Protection
Centre of China. According to the Copyright Law, Chinese citizens, legal persons, or other
organizations shall, whether published or not, own copyright in their copyrightable works,
which include, among others, works of literature, art, natural science, social science,
engineering technology and computer software. Copyright owners enjoy certain legal rights,
including right of publication, right of authorship and right of reproduction. An infringer of the
copyrights shall be subject to various civil liabilities, which include ceasing infringement
activities, apologizing to the copyright owners and compensating the loss of copyright owner.
Infringers of copyright may also be subject to fines and/or administrative or criminal liabilities
in severe situations.
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In order to further implement the Regulations on Computer Software Protection (ၑ
ᚐૢԷ), promulgated by the State Council on June 4, 1991 and amended on
December 20, 2001 and January 30, 2013, respectively, the National Copyright Administration
issued the Measures for the Registration of Computer Software Copyright (ၑዚழ΁ഹЪ
) on February 20, 2002, which specifies detailed procedures and requirements
with respect to the registration of software copyrights.
Under the Issuance of the Regulations on the Protection of Layout-Designs of Integrated
Circuits (ᚐૢԷ) (the “ Regulations on Integrated Circuits ”),
promulgated by the State Council on April 2, 2001 and coming into force on October 1, 2001,
any layout-design created by a Chinese natural person, legal person or other organizations shall
be eligible for the exclusive right of layout-design in accordance with Regulations on
Integrated Circuits. Any layout-design which is to be protected shall be original in the sense
that the layout-design is the result of the creator’s own intellectual effort, and it is not
commonplace among creators of layout-designs and manufacturers of integrated circuits at the
time of its creation. The intellectual property administration department of the State Council
is responsible for the relevant administrative work concerning the exclusive right of
layout-design in accordance with these regulations.
Trademark
According to the Trademark Law of the PRC () promulgated
by the NPCSC on August 23, 1982, and amended on February 22, 1993, October 27, 2001,
August 30, 2013 and April 23, 2019, respectively, the Trademark Office of the State
Administration for Industry and Commerce Authority (the “ SAIC ”) under the State Council is
responsible for the registration and administration of trademarks in China. The SAIC under the
State Council has established a Trademark Review and Adjudication Board for resolving
trademark disputes. Registered trademarks are valid for ten years from the date the registration
is approved. A registrant may apply to renew a registration within twelve months before the
expiration date of the registration. If the registrant fails to apply in a timely manner, a grace
period of six additional months may be granted. If the registrant fails to apply before the grace
period expires, the registered trademark shall be deregistered. Renewed registrations are valid
for ten years. On April 29, 2014, the State Council issued the revised Implementing
Regulations of the Trademark Law of the PRC (ૢԷ), which
specifies the requirements of applying for trademark registration and renewal.
Patent
According to the Patent Law of the PRC () (the “ Patent
Law”), promulgated by the NPCSC on March 12, 1984 and amended on September 4, 1992,
August 25, 2000, December 27, 2008, and October 17, 2020, respectively, with the latest
amendment taking effect on June 1, 2021, and the Implementation Rules of the Patent Law of
the PRC () (the “ Implementation Rules of the Patent
Law”), promulgated by the State Council on June 15, 2001 and revised on December 28, 2002,
January 9, 2010 and December 11, 2023, respectively, the patent administrative department
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under the State Council is responsible for the administration of patent-related work nationwide
and the patent administration departments of provincial or autonomous regions or municipal
governments are responsible for administering patents within the respective administrative
areas. The Patent Law and Implementation Rules of the Patent Law provide three types of
patents, namely “inventions,” “utility models” and “designs.” Invention patents are valid for
twenty years, utility model patents are valid for ten years, and since June 1, 2021, the
validation period for design patents whose application date is after June 1, 2021 has been
extended to fifteen years in each case from the date of application. The Chinese patent system
adopts a “first come, first file” principle, which means that where more than one person files
a patent application for the same invention, utility model or design, a patent will be granted to
the person who files the application first. An invention or a utility model must possess novelty,
inventiveness and practical applicability to be patentable. Third Parties must obtain consent or
a proper license from the patent owner to use the patent. Otherwise, the unauthorized use
constitutes an infringement on the patent rights.
Domain Names
On August 24, 2017, the MIIT promulgated the Administrative Measures for Internet
Domain Names () (the “ Domain Name Measures ”), which became
effective on November 1, 2017. The Domain Name Measures regulate the registration of
domain names, such as China’s national top-level domain name “.CN.” The China Internet
Network Information Center (the “ CNNIC ”), issued the Administrative Regulations for
Country Code Top-Level Domain Name Registration and Country Code Top-Level Dispute
Resolutions Rules (݄<ۆ>ʮѓ)o n
June 18, 2019, pursuant to which the CNNIC can authorize a domain name dispute resolution
institution to decide domain name related disputes.
REGULATIONS ON ENVIRONMENTAL PROTECTION AND FIRE PREVENTION
Environment Impact Assessment
Pursuant to the Environmental Protection Law of the People’s Republic of China ( ʕ
) promulgated by the NPCSC on December 26, 1989 and amended
on April 24, 2014, the Administrative Regulations on the Environmental Protection of
Construction Project (ᚐ၍ଣૢԷ) (the “ Construction Environmental
Protection Rules ”), promulgated by the State Council on November 29, 1998 and amended on
July 16, 2017, and other relevant environmental laws and regulations, enterprises which plan
to construct projects shall submit or fill in assessment report, assessment form, or registration
form on the environmental impact of such projects to relevant environmental protection
administrative authority for approval or recording. Construction entities may entrust a
technical institution to conduct an environmental impact assessment of its construction projects
and prepare the assessment reports and assessment forms on the environmental impact of
construction projects. If the construction entities have the technical capability of environmental
impact assessment, it may carry out the above activities by itself.
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Pursuant to the Environmental Impact Assessment Law of the People’s Republic of China
() promulgated by the NPCSC on October 28, 2002 and
amended on July 2, 2016 and December 29, 2018 respectively, for any construction projects
have an impact on the environment, the construction entity is required to produce either a
report, or a form, or a registration form on such environmental impact depending on the
seriousness of the impact that may be exerted on the environment.
The Construction Environmental Protection Rules also provides that after the completion
of a construction project for which the environmental impact report or the environmental
impact form has been prepared, the construction entity shall, in accordance with the standards
and procedures established by the competent department of environmental protection
administration under the State Council, conduct acceptance checks of the environmental
protection facilities and prepare an acceptance report, and announce the acceptance inspection
report according to law except for circumstances where there is a need to keep confidentiality
pursuant to the provisions of the State. Where the environmental protection facilities have not
undergone acceptance inspection or do not pass acceptance inspection, the construction project
shall not be put into production or use.
Completion and Acceptance
The Interim Measures for Environmental Protection Acceptance upon Completion of
Construction Projects () was promulgated and
implemented by the former Ministry of Environmental Protection (now the Ministry of
Ecology and Environment) on November 20, 2017. The Measures stipulates the procedures and
standards for the construction entity to make independent environmental protection acceptance
upon the completion of construction projects.
Pollutant Discharge
According to the Catalog of Classified Management of Pollutant Discharge Permits for
Stationary Pollution Sources (2019 Edition) (๕રϮ஢̙ʱᗳ၍ଣΤ፽(2019 ϋ
و)) promulgated by the Ministry of Ecology and Environment on December 20, 2019, China
implements key management, simplified management and registration management of
pollutant discharge permits based on factors such as the amount of pollutants generated, the
amount of pollutants discharged and the degree of impact on the environment, and only
pollutant discharge entities that are subject to registration management do not need to apply for
a pollutant discharge permit.
Fire Protection Design Approval and Filing
The Fire Prevention Law of the People’s Republic of China ()
(the “ Fire Prevention Law ”) was adopted on April 29, 1998 and latest amended on April 29,
2021. According to the Fire Prevention Law and other relevant laws and regulations of the
PRC, the Ministry of Emergency Management under the State Council and its local
counterparts at or above county level shall monitor and administer the fire prevention affairs.
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The Fire and Rescue Department of the People’s Government are responsible for
implementation. The Fire Prevention Law provides that the fire protection design or
construction of construction projects shall comply with the national technical standards for fire
protection. Pursuant to the Interim Provisions on the Administration of Fire Protection Design
Review and Final Inspection of Construction Projects (᜕ϗ၍ଣᅲБ
) issued by the Ministry of Housing and Urban-Rural Development on April 1, 2020 and
amended on August 21, 2023, special construction projects as defined under such Interim
Provisions shall be subject to fire protection design review and fire protection final inspection,
construction projects other than such special construction projects shall be submitted to the
competent authorities for record-filing of project fire protection design and acceptance.
REGULATIONS ON PRODUCTION SAFETY
Pursuant to the Production Safety Law of the People’s Republic of China ( ʕശɛ͏΍
) promulgated on June 29, 2002 and amended on August 27, 2009, August
31, 2014 and June 10, 2021, a business entity shall establish, improve and implement a
production safety responsibility system and production safety rules and systems for all
employees, increase efforts to guarantee the input of funds, materials, technology, and
personnel in production safety, and improve production safety conditions. Business entities
shall provide their employees with production safety education and training to ensure that their
employees have necessary production safety knowledge, are familiar with the relevant
production safety policies and rules and safe operating procedures, possess the safe operating
skills for their respective posts, know the emergency response measures for accidents, and are
informed of their rights and obligations in production safety. Employees failing the production
safety education and training shall not take their posts.
REGULATIONS ON REAL ESTATE
Pursuant to the Land Administration Law of the People’s Republic of China ( ʕശɛ͏
) promulgated by the NPCSC on June 25, 1986, latest amended on August
26, 2019 and taking effect on January 1, 2020, China applies a system of control over the
purposes of use of land, including land for agriculture, land for construction and unused land.
All entities and individuals shall use land only for the purposes determined in the overall plans
for land utilization. Registration of the ownership and the right to the use of land shall be
governed by the laws and administrative regulations relating to real estate registration. The
legally registered ownership and right to the use of land shall be protected by law and may not
be infringed upon by any entities or individuals.
Pursuant to the Interim Regulations Concerning the Assignment and Transfer of the Right
to the Use of the State-owned Land in the Urban Areas (2020 Edition) (ᕄ਷ϞɺήԴ͜
ᛆ̈ᜫձᔷᜫᅲБૢԷ(2020ࠈࡌ)) promulgated by the State Council on November 29,
2020, China implements a system of assignment and transfer of the right to use state-owned
land. A land user shall pay land assignment fee to the State as consideration for the assignment
of the land use right within a certain term. A land user who has obtained the land use right may
transfer, lease out, mortgage, or otherwise commercially exploit the land within the term of
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use. Under the Interim Regulations Concerning the Assignment and Transfer of the Right to the
Use of the State-owned Land in the Urban Areas, the local land administration authority may
enter into an assignment contract with the land user for the assignment of land use rights. Land
users shall pay the land assignment fee in accordance with the land assignment contracts. After
paying the total amount of the assignment fee, the land user shall go through the registration
thereof, obtain the certificate for land use to evidence the acquisition of the land use right.
The Interim Regulations on Real Estate Registration ( ʔਗପ೮াᅲБૢԷ)
promulgated by the State Council on November 24, 2014, taking effect on March 1, 2015 and
amended on March 24, 2019 and March 10, 2024, and the Implementing Rules of the Interim
Regulations on Real Estate Registration () promulgated by
the Ministry of Land and Resources on January 1, 2016 and amended on July 24, 2019 and
May 9, 2024 respectively, provide that, among other things, the State implements a uniform
real estate registration system and real estate registration shall follow the principles of strict
administration, stability, continuity, and convenience for the masses.
Pursuant to the Administrative Measures for Commodity House Leasing (ॡ
) promulgated by the Ministry of Housing and Urban-Rural Development on
December 1, 2010 and taking effect on February 1, 2011, the parties to a commodity house
lease shall complete the lease registration with the competent construction (real-estate)
departments of the municipalities directly under the Central Government, cities and counties
where the leased property is located within 30 days after the lease is executed. The competent
construction (real estate) departments of the municipalities directly under the Central
Government, cities and counties shall order to make corrections within a prescribed time limit,
and shall impose a fine below RMB1,000 on individuals who fail to rectify within the specified
time limit, and a fine between RMB1,000 and RMB10,000 on entities which fail to rectify
within the specified time limit.
REGULATIONS ON OVERSEAS DIRECT INVESTMENT
The Measures for the Administration of Overseas Investment ()
was promulgated by the Ministry of Commerce on September 6, 2014 and took effect on
October 6, 2014. As defined in the Measures for the Administration of Overseas Investment,
overseas investment refers to the act of an enterprise legally established in China to own a
non-financial enterprise or acquire ownership, control, management and other interests in an
established non-financial enterprise outside China through new establishment, mergers and
acquisitions, etc. Where an enterprise’s overseas investment involves sensitive countries and
regions or sensitive industries, it shall be subject to examination and approval. Overseas
investment of enterprises under other circumstances shall be subject to record. Local
enterprises shall be reported to the provincial administrative department of commerce for
record. Qualified enterprises will be recorded and awarded the “Certificate of Overseas
Investment of Enterprises” by the provincial commerce authorities.
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On August 4, 2017, the NDRC, the MOFCOM, the PBOC and the Ministry of Foreign
Affairs issued the Opinions on Further Guiding and Regulating Direction of Overseas
Investment (ኬจԈ) (the “ Opinions ”) for the
purposes of providing further guidance and regulation on overseas investments. The Opinions
sets out, among others, certain categories of overseas investments that should be “encouraged,”
“restricted” or “prohibited.”
The NDRC promulgated the Measures for the Administration of Overseas Investment by
Enterprises () (the “ Measures ”) on December 26, 2017, which
took effect on March 1, 2018. Under the Measures, Sensitive overseas investment projects
conducted directly by Chinese enterprises or through overseas enterprises controlled by them
shall be approved by the NDRC while non-sensitive overseas investment projects conducted
directly by Chinese enterprises shall be reported to the NDRC or its local branches at the
provincial level for filing. For large-scale non-sensitive overseas investment projects with an
investment amount of USD300 million or more conducted by Chinese enterprises through
overseas enterprises controlled by them, a report on the details of the large-scale non-sensitive
projects shall be submitted to the NDRC before project implementation. Overseas investments
conducted by Chinese residents through overseas enterprises controlled by them shall be
analogically governed by the Measures. On January 31, 2018, the NDRC issued the Catalogue
of Sensitive Industries for Overseas Investment (2018 Edition) ( ྤ̮ҳ༟ઽชБุͦ፽
(2018و)), which came into effect on March 1, 2018. According to this catalogue,
enterprises are prohibited from making overseas investments in several industries, including
but not limited to real estate and hotels.
REGULATIONS ON FOREIGN EXCHANGE
On January 29, 1996, the State Council promulgated the Regulations of the People’s
Republic of China on Foreign Exchange ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ), which took
effect on April 1, 1996, amended on January 14, 1997 and August 5, 2008. The foreign
exchange expenditure under the current items shall be paid by an institution with its self-owned
foreign exchange upon valid documents or with the foreign exchange purchased from any
financial institution operating the foreign exchange sale or settlement business in accordance
with the administrative provisions of the foreign exchange administrative department of the
State Council on the payment and purchase of foreign exchange. An institution or individual
within the territory of China shall apply for registration in accordance with the provisions of
the foreign exchange administrative department of the State Council before making overseas
direct investment or engaging in overseas issuance and trading of securities and derivatives.
On November 19, 2012, the SAFE issued the Circular on Further Improvement and
Adjustment of the Foreign Exchange Control Policy over Direct Investment (̮ි၍ଣ
)( “SAFE Circular 59 ”), which took
effect on December 17, 2012, amended on May 4, 2015 and October 10, 2018 and abolished
in part on December 30, 2019. SAFE Circular 59 aims to simplify the current foreign exchange
procedure, and facilitate investment and trade. Under Circular 59, the opening of various
special purpose foreign exchange accounts (e.g. pre-establishment expenses account, foreign
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exchange capital account, guarantee account), reinvestment of Renminbi proceeds by foreign
investors in the PRC, and remittance of foreign exchange profits and dividends by a
foreign-invested enterprise to its foreign shareholders no longer require the approval or
verification of SAFE, and multiple capital accounts for the same entity may be opened in
different provinces. In February 2015, the SAFE issued the Circular on Further Simplifying
and Improving Policies for the Foreign Exchange Administration of Direct Investment ( ᗫ
) (which was part abolished in in
December 2019), prescribed that banks instead of SAFE can directly handle the foreign
exchange registration and approval under foreign direct investment while SAFE and its
branches indirectly supervise the foreign exchange registration and approval under foreign
direct investment through banks.
On May 10, 2013, the SAFE issued the Administrative Provisions on Foreign Exchange
in Domestic Direct Investment by Foreign Investors (ટҳ༟̮ි၍ଣ஝
) (the “ SAFE Document 21 ”), which took effect on May 13, 2013, amended on October
10, 2018 and partially abolished on December 30, 2019. The SAFE Document 21 specifies that
the administration by SAFE or its local branches over direct investment by foreign investors
in the PRC must be conducted by way of registration and banks must process foreign exchange
business relating to the direct investment in the PRC based on the registration information
provided by SAFE and its branches.
Pursuant to the Notice on Issues Related to Foreign Exchange Administration for
Overseas Listing () issued by the SAFE on
December 26, 2014, a domestic company shall, within 15 business days upon the completion
of overseas listing and issuance, register the overseas listing with the foreign exchange
administration authority in the place of establishment registration. The proceeds raised from
the overseas listing of a domestic company may be transferred back to its territory or deposited
overseas, and the use of the proceeds shall be consistent with the relevant contents listed in the
document and other public disclosure documents.
A foreign-funded enterprise may, based on its operating, voluntarily settle the foreign
exchange capital, pursuant to the Circular of the State Administration of Foreign Exchange
Concerning Reform of the Administrative Approaches to Settlement of Foreign Exchange
Capital of Foreign-invested Enterprises (ږ
), which was promulgated on March 30, 2015, validated on June 1, 2015
and abolished in part on December 30, 2019. Foreign-invested enterprises’ capital and RMB
funds from their settlement shall not be used for the following purposes: (i) payments beyond
their business scope or prohibited under the laws and regulations of the State; (ii) direct or
indirect securities investments; (iii) release of entrusted loans (unless permitted by the business
scope), repayments of inter-enterprise borrowings (including third-party advances), and
repayments of RMB bank loans already refinanced to any third party; and (iv) payment of
expenses related to the purchase of real estate not for self-use, except for investing in real
estate enterprises.
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On October 23, 2019, SAFE promulgated the Circular on Further Facilitating Cross-
Board Trade and Investment (ஷ
), which took effect on the same date (except for Article 8.2, which took effect on January
1, 2020) and amended on December 4, 2023. The circular canceled restrictions on domestic
equity investments made with capital funds by non-foreign-funded enterprises. In addition,
restrictions on the use of funds for foreign exchange settlement of domestic accounts for the
realization of assets have been removed and restrictions on the use and foreign exchange
settlement of foreign investors’ security deposits have been relaxed. Eligible enterprises in
pilot areas are also allowed to use revenues under capital accounts, such as capital funds,
foreign debts and overseas listing revenues for domestic payments without providing materials
to banks in advance for authenticity verification on an item-by-item basis, while the use of
funds should be true, in compliance with applicable rules and conforming to the current capital
revenue management regulations.
REGULATIONS ON SHARE INCENTIVE PLANS
In February 2012, SAFE promulgated the Circular on Foreign Exchange Administration
for PRC Residents Participating in Share Incentive Plans of Offshore Listed Companies (Huifa
[2012] No. 7) (
(ි೯[2012]7 ໮)) (the “ SAFE Circular 7 ”). According to the SAFE Circular 7 and other
relevant rules and regulations, a domestic director, supervisor or senior management or
employees who has employment or labor relationship with a company listed overseas, and
participates in a share incentive plan of the company shall be subject to the foreign exchange
registration procedure as required in the SAFE Circular 7. However, H-share direct listings by
domestic companies do not fall under the category of ‘overseas listed companies’ as defined
in SAFE Circular 7. Therefore, the provisions of the Notice of the State Administration of
Foreign Exchange on Issues Concerning Foreign Exchange Administration for Overseas
Listings (Huifa [2014] No. 54) (
(ි೯[2014]54 ໮)) (the “ SAFE Circular 54 ”) shall apply. Under the SAFE Circular 54, after
a domestic company gets listed overseas, if any of its domestic shareholders intends to increase
or decrease overseas shares, the domestic shareholder shall handle overseas shareholding
registration formalities with the local foreign exchange authority upon the strength of the
related materials within twenty working days prior to the intended share increase or decrease.
After verifying the above-mentioned materials, the local foreign exchange authority shall
conduct registration for the domestic company in the system, print a business registration
certificate through the system, affix business seal thereto and deliver it to the domestic
shareholder. The domestic shareholder shall handle the account opening and relevant affairs for
increase or decrease of shares of the company listed overseas upon the strength of the
registration certificate.
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REGULATIONS ON LABOR FORCE AND SOCIAL SECURITY
Labor Force
Pursuant to the Labor Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷௶ਗ
) promulgated by the NPCSC on July 5, 1994, taking effect on January 1, 1995, and
amended on August 27, 2009 and December 29, 2018, respectively, the Labor Contract Law of
the People’s Republic of China () promulgated by the NPCSC
on June 29, 2007, taking effect on January 1, 2008, and amended on December 28, 2012 and
taking effect on July 1, 2013, and the Regulations for the Implementation of the Labor Contract
Law of the People’s Republic of China (ૢԷ)
promulgated by the State Council on September 18, 2008, when establishing an employment
relationship, the employer and the laborer shall sign a written labor contract. In addition, wages
shall not be lower than the local standards on minimum wages. The employer shall establish
a labor safety and health system, strictly implement national labor safety and health regulations
and standards, educate laborers on labor safety and health, provide labor safety and sanitation
conditions meeting State stipulations and necessary articles of labor protection, and carry out
regular health examination for laborers engaged in work with occupational hazards.
Social Security
Pursuant to the Social Insurance Law of the People’s Republic of China ( ʕശɛ͏΍
) (the “ Social Insurance Law ”) promulgated by the NPCSC on October 28,
2010, taking effect on July 1, 2011, and amended on December 29, 2018, the Interim
Regulations on the Collection and Payment of Social Insurance Premiums (ᎈ൬ᅄᖮ
ᅲБૢԷ) promulgated by the State Council on January 22, 1999, and amended on March
24, 2019, and the Housing Provident Fund Management Regulations (၍ଣૢ
Է) (the “ Housing Provident Fund Management Regulations ”) promulgated by the State
Council on April 3, 1999, and amended on March 24, 2002, and March 24, 2019, the employer
shall, within 30 days from the date of employment, open social insurance accounts and housing
provident fund accounts, and shall also pay for its employees basic pension insurance,
unemployment insurance, basic medical insurance, work-related injury insurance, maternity
insurance and contributions to other social insurance programs, as well as housing provident
fund. If the employer fails to pay the aforementioned contributions, it will be subject to a fine
and ordered to make up the shortfall within a specified period.
REGULATIONS ON TAXATION
Enterprise Income Tax (the “EIT”)
Pursuant to the EIT Law promulgated by the NPCSC on March 16, 2007, taking effect on
January 1, 2008, and amended on February 24, 2017 and December 29, 2018, respectively, and
the Regulations for the Implementation of the Enterprise Income Tax Law of the People’s
Republic of China (ૢԷ) promulgated by the State
Council on December 6, 2007, taking effect on January 1, 2008 and amended on April 23,
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2019, an enterprise established in accordance with law in China or established in accordance
with the laws of foreign countries (regions) but is actually under the management of
organization located in China shall be considered a resident enterprise. A resident enterprise
shall be subject to EIT at a tax rate of 25% based on its income derived from PRC and foreign
sources. China applies preferential EIT policies to industries or projects that are greatly
supported or encouraged for development. State-supported high-tech enterprises can enjoy a
reduced EIT rate of 15%. Pursuant to Announcement of the State Taxation Administration on
Matters Concerning the Implementation of Preferential Income Tax Policies Supporting the
Development of Small Low-Profit Enterprises and Individual Industrial and Commercial
Households (ഄϞᗫԫධ
ʮѓ) promulgated by State Taxation Administration on April 7, 2021, taking effect on
January 1, 2021, the annual taxable income of a small low-profit enterprise that is not more
than RMB one million shall be included in its taxable income at the reduced rate of 12.5%, with
the applicable enterprise income tax rate of 20%.
VAT
Pursuant to the Interim Regulations of the People’s Republic of China on V alue-Added
Tax (೼ᅲБૢԷ) promulgated by the State Council on December 13,
1993, and latest amended on November 19, 2017, and the Detailed Rules for the
Implementation of the Interim Regulations of the People’s Republic of China on V alue-Added
Tax () promulgated by the Ministry of Finance
and the SA T on December 25, 1993, latest amended on October 28, 2011, and taking effect on
November 1, 2011, (collectively, the “ V AT Law”), any enterprise or individual engaged in the
sale of goods, provision of processing, repair and replacement services, and import of goods
within the territory of PRC shall pay V A T. On November 19, 2017, the State Council issued the
Decision to Abolish the Interim Regulation of the People’s Republic of China on Business Tax
and Amend the Interim Regulation of the People’s Republic of China on V alue Added Tax
(ᄻ˟ <ʕശɛ͏΍ձ਷ᐄุ೼ᅲБૢԷ >ҷ<೼ᅲБૢԷ >ٙ
) (the “ Decree No. 691 ”). Any enterprise or individual engaged in the sale of goods,
provision of processing, repair and replacement services, sales of services, intangible assets
and real and the import of goods within the territory of PRC shall be V A T taxpayers and shall
pay the V A T pursuant to the V A T Law and Decree No. 691. Generally, the applicable V A T rates
are simplified to 17%, 11%, 6% and 0%, and it is 3% for small-sized taxpayers. The Circular
of the Ministry of Finance and the State Administration of Taxation on Adjusting the V A T Rate
() was promulgated on April 4, 2018 and
took effect on May 1, 2018. The former V A T rates of 17% and 11% have been adjusted to 16%
and 10% respectively. On March 20, 2019, the MOF, the SA T and the General Administration
of Customs jointly issued the Announcement on Policies Concerning Deepening V alue Added
Tax Reform (ʮѓ) (the “ Announcement 39 ”), which
came into force on April 1, 2019. Pursuant to the Announcement 39, the V A T rate applicable
to taxable sales or imports of goods has been adjusted from 16% to 13%, and the applicable
V A T rate of 10% has been adjusted to 9%.
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Dividend Withholding Tax
Pursuant to the EIT Law and related implementation regulations, dividends declared to
non-PRC resident investors who do not have an establishment or place of business in China,
or who have such an establishment or place of business but whose relevant income has no
actual connection with that establishment or place of business, are generally subject to a 10%
income tax rate, as long as the dividends are derived from sources within China.
Pursuant to the Arrangement between the Mainland of China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income (ᅄ೼
τર) (the “ Double Taxation Avoidance Arrangement ”) and other
applicable laws of the People’s Republic of China, if a Hong Kong resident enterprise is
recognized by the competent tax authorities of the People’s Republic of China as meeting the
relevant conditions and requirements of the aforementioned Double Taxation Avoidance
Arrangement and other applicable laws, the 10% withholding tax on dividends received by the
Hong Kong resident enterprise from a resident enterprise of the People’s Republic of China can
be reduced to 5%. However, pursuant to the Notice of the State Administration of Taxation on
Issues Concerning the Implementation of the Dividend Clause of Tax Treaties (೼ਕᐼ
) issued by the SA T on February 20, 2009, if
the relevant Chinese tax authorities determine, at their discretion, that the company enjoys the
reduced income tax rate mainly due to its tax-driven structure or arrangement, the Chinese tax
authorities may adjust the preferential tax treatment. According to the Announcement of the
State Administration of Taxation on Issues Concerning “Beneficial Owners” in Tax Treaties
(ʕ“Ϟɛ”ʮѓ) issued by the SA T on
February 3, 2018, and implemented on April 1, 2018, when determining the “beneficial owner”
identification of an applicant for tax treaty benefits related to dividends, interest, or royalties,
several factors, including but not limited to (i) whether the applicant is obliged to pay to
residents of a third country (region) 50% of the income or more within 12 months after receipt
of the income; (ii) whether the business activities conducted by the applicant do not constitute
substantive business activities; and (iii) the other contracting country (region) does not impose
any tax on or exempts tax from the relevant income, or imposes tax on the relevant income but
the actual tax rate is extremely low, will be considered, and a comprehensive analysis will be
conducted in light of the actual circumstances of the specific cases. This announcement
stipulates further that pursuant to the Announcement of State Administration of Taxation on
Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the
Treatment under Tax Agreements (೯б<༾၍ଣ
ج>ʮѓ) issued by the SA T on October 14, 2019 and taking effect on January 1, 2020,
where non-resident taxpayers enjoy the benefits under the articles on dividends, interest and
royalties of the treaties, the relevant materials proving the identity as “beneficial owners” shall
be retained.
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Regulations on H Share Full Circulation
“Full circulation” means listing and circulation of domestic unlisted shares of H-share
companies (including unlisted domestic shares held by domestic shareholders before overseas
listing, unlisted domestic shares additionally issued after overseas listing, and unlisted shares
held by foreign shareholders) on the stock exchanges. On August 10, 2023, the CSRC issued
Guidelines for the Application for the “Full Circulation” of the Domestic Unlisted Shares of
H-Share Companies ( H΅͡ሗ“ஷ”ˏ(2023͍)) (the
“Guidelines for the Full Circulation ”).
Pursuant to the Guidelines for the Full Circulation, shareholders of domestic unlisted shares
may, under the premise of complying with the relevant laws and regulations and the requirements
of the policies on management of state-owned assets, foreign investment, and industry
supervision and administration, among others, determine the amount and proportion of shares
whose circulation is applied for on their own through consultation, and entrust H-share
companies to file with the CSRC. A domestic unlisted company limited by shares may file with
the CSRC for “full circulation” while applying for the overseas initial public offering and listing.
On December 31, 2019, the CSDC and the Shenzhen Stock Exchange (the “ SZSE”) jointly
issued the Detailed Rules for Implementation of H-share Full Circulation Business ( Hٰ“ݴ
ஷ”) (the “ Detailed Rules for Implementation ”). H-share full circulation
business (e.g. cross-border transfer registration, maintenance of deposit and holding details,
transaction entrustment and instruction transmission, settlement, management of settlement
participants, services of nominal holders) is subject to the Detailed Rules for Implementation.
To fully promote the H-share “full circulation” reform and clarify the business
arrangements and procedures for share registration, deposit, and clearing and settlement, the
CSDC issued the H-Share Full Circulation Business Guide ( Hٰ“ஷ”)o n
February 7, 2020, which provides for participation in H-share full circulation business
preparation, account arrangements, cross-border transfer registration, overseas centralized
depository, and other related matters. CSDC (Hong Kong) also issued the H-Share Full
Circulation Business Guide of China Securities Depository and Clearing (Hong Kong)
Company Limited ( ʕ਷ᗇՎ೮াഐၑ(ಥ)ʮ̡Hٰ“ஷ”) in February
2020, which stipulates the corresponding custody, depository, agent services, settlement
arrangements, risk management measures, and other related matters.
Pursuant to the Detailed Rules for Implementation and Business Guide, shareholders who
apply to participate in the H-share “full circulation” (the “ Participating Shareholders ”) must
complete cross-border transfer registration to convert relevant non-listed domestic shares into H
shares before trading the shares. Specifically, the CSDC, as the nominee holder, deposits the
relevant securities held by Participating Shareholders with CSDC (Hong Kong), which will then
deposit the relevant securities with the HKSCC in its own name. HKSCC will exercise the rights
of the issuer of the securities through HKSCC, and the HKSCC agent as the ultimate nominee
shareholder will be included in the register of shareholders of the H-share listed company.
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The H-Share Full Circulation Business Guide stipulates that H-share listed companies
will be authorized by Participating Shareholders to appoint only domestic securities companies
(“Domestic Securities Companies ”) to participate in the conversion of H-share transactions.
The specific procedures are as follows:
Participating Shareholders submit transaction instructions for converting H shares
through Domestic Securities Companies, which then transfer the instructions to the Hong Kong
securities companies designated by the Domestic Securities Companies through Shenzhen
Securities Communication Co., Ltd.; Hong Kong securities companies conduct corresponding
securities transactions in the Hong Kong market based on the above transaction instructions
and the rules of the Hong Kong Stock Exchange.
The H-Share Full Circulation Business Guide stipulates that after the transaction is
completed, settlement will be conducted between the Hong Kong securities company and
CSDC (Hong Kong), CSDC (Hong Kong) and CSDC, CSDC and the Domestic Securities
Company, and the Domestic Securities Company and Participating Shareholders, respectively.
REGULATIONS ON OVERSEAS SECURITIES OFFERING AND LISTING
The CSRC issued the Interim Measures for the Administration of Overseas Securities
Offering and Listing by Domestic Enterprises ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍ଣ༊Б፬
) (the “ Interim Measures for Overseas Offering ”) and five related guidelines on
February 17, 2023, which took effect on March 31, 2023. The Interim Measures for Overseas
Offering has significantly reformed the regulatory system for the direct or indirect offering and
listing of securities by companies within China’s territory in overseas markets, transitioning to
a filing-based system.
Under the Interim Measures for Overseas Offering, domestic companies seeking to offer
and list securities directly or indirectly in overseas markets must complete filing procedures
with the CSRC and report relevant information. The Interim Measures for Overseas Offering
stipulates that under any of the following circumstances, companies cannot list or issue
securities overseas: (i) financing through listing is explicitly prohibited by laws, administrative
regulations or relevant provisions of China; (ii) the proposed overseas offering and listing may
endanger national security as determined by the relevant competent department under the State
Council after examination according to the law; (iii) a domestic enterprise or its controlling
shareholder or actual controller intending to list or issue securities in overseas markets has
committed a criminal crime of corruption, bribery, embezzlement, misappropriation of
property or disrupting the economic order of the socialist market in the last three years; (iv)
a domestic company intending to list or issue securities in overseas markets is currently under
investigation for suspected criminal offenses or major violation of laws and regulations, and
the case has not yet been closed; or (v) there is a major dispute over ownership of the equity
held by the controlling shareholder or a shareholder controlled by the controlling shareholder
and/or the actual controller of a domestic company.
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The issuer’s initial public offering overseas shall be filed with the CSRC within three
working days after the issuer submits the listing application documents to the overseas
regulatory authorities. Where the issuer issues securities in the same overseas market following
the previous overseas issuance and listing of securities, it shall be filed with the CSRC within
three working days upon the completion of the issuance. Subsequent offerings and listings of
securities by the issuer in other foreign markets shall be filed as initial public offerings.
In addition, the issuer shall report the following major events to the CSRC within three
working days from the date of the occurrence and announcement of the relevant events: (i)
change of control; (ii) being investigated or punished by overseas securities regulatory
authorities or the relevant competent authorities; (iii) change of listing status or sector; (iv)
voluntary or forced termination of the listing. Where the issuer witnesses significant changes
in the main business operations after the overseas issuance and listing and they no longer fall
within the scope of the filing, the issuer shall, within three working days from the date of the
changes, submit a special report plus legal opinions issued by a domestic law firm to the CSRC,
explaining the relevant circumstances.
On February 24, 2023, the CSRC and other relevant governmental authorities
promulgated the Regulations on Strengthening the Confidentiality and Archives Management
Related to the Overseas Issuance and Listing of Securities by Domestic Enterprises (̋
) (the “ Confidentiality
Regulations ”), which became effective on March 31, 2023. Under the Confidentiality
Regulations, if a domestic enterprise provides or publicly discloses, or provides or publicly
discloses through its overseas listed entities, documents and information involving state secrets
or the working secrets of state organs to the relevant securities companies, securities service
organizations, overseas regulatory bodies and other entities and individuals, it shall submit the
documents and information to the approving authorities for approval in accordance with the
laws and report them to the confidentiality administrative department at the same level for
record. Where a domestic enterprise provides accounting archives or copies of accounting
archives to the securities companies, securities service organizations, overseas regulatory
bodies and other entities and individuals, the enterprise in question shall perform
corresponding procedures in accordance with the provisions of the relevant laws and
regulations issued by the State.
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OVERVIEW
Our history can be traced back to December 2014, when our co-founders, Dr. Liu
Guoqing, Mr. Y ang Guang, Mr. Zhou Xiang and Mr. Wang Qicheng established our Company.
Each of our co-founders gained knowledge and experience in the technology industry from
their respective academic background and past work experience prior to founding our
Company, which laid the foundation and drove the success and development of our Company.
For detailed biographies of our co-founders, see “Directors, Supervisors and Senior
Management.” Having considered the growth potential in the intelligent driving industry and
utilizing their relevant knowledge and experience in the technology field, our co-founders
established our Company with a vision to develop an automotive intelligence ecosystem
through technological innovations so as to improve road safety and enhance driving
experiences.
Since its establishment in 2014, our Company is dedicated to R&D and innovation and
has developed a platform-based and software-hardware-integrated R&D capabilities and
in-house developed algorithm structures which drove our rapid technological development. See
“Business” for further details. Accredited to the accumulation of technology capabilities, our
Company launched our first iSafety solution in 2016. Over the years, our Company has evolved
into an intelligent driving and cabin solutions provider in China, offering solutions for critical
aspects of the driving experience, including piloting, parking and in-cabin features.
OUR KEY MILESTONES
The table below shows the key milestones in the history of our Group:
Y ear Milestone
2014 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company was established.
2016 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We developed the prototype of our iSafety solutions, being our
first-generation intelligent driving solutions.
2017 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We commenced bulk delivery of our iSafety solutions.
2018 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We launched our new-generation iSafety solutions, and obtained design
win from passenger vehicle OEM for the first time.
2019 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We established our intelligent cabin solutions business, and achieved
commercialization for our DMS solutions.
2020 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We established our V2X business.
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We launched iPilot intelligent driving solutions at Level 2+ automation.
We launched intelligent cabin solutions with interactive functions.
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Y ear Milestone
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Our first V2X project was delivered.
We were the first batch of intelligent cabin solutions suppliers in the
PRC which supported OEMs in obtaining DDAW certifications for their
vehicle models under EU GSR.
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We delivered our iPilot solutions with HNOA function.
OEMs’ vehicle models equipped with our DMS solutions received
E-NCAP five-star rating.
We have been rated as a national-level specialized, special and new
enterprise (ॴਖ਼ၚतอʃ̶ɛΆุ) by the MIIT.
Our Company was converted from a limited liability company into a
joint stock company with limited liability.
OUR SUBSIDIARIES
Major Subsidiary
As of the Latest Practicable Date, the following entities were our major subsidiaries
which made a material contribution to our results of operation and financial position during the
Track Record Period, each of which individually contributed over 10% of the revenue and/or
assets of our Group for each financial year or stub period during the Track Record Period and
was material to our Group’s operations. The Company, Hubei Y oujia and Shanghai Y ouqu
collectively contributed over 70% of the revenue and/or assets of our Group during the Track
Record Period. Hubei Y oujia has been a direct wholly-owned subsidiary of our Company since
its establishment. Shanghai Y ouqu has been a direct non-wholly-owned subsidiary of our
Company held as to 60% by our Company since its establishment.
Name of subsidiary
Place of
establishment
Date of
establishment Shareholding
Principal
business activities
Hubei Y oujia /H1118/H1118/H1118/H1118PRC December 22,
2017
100% Sales of products
Shanghai Y ouqu /H1118/H1118PRC June 30, 2020 60% Sales of products
Other Subsidiaries
As of the Latest Practicable Date, our other subsidiaries were principally involved in,
among others, R&D and sales of solutions. A summary of the business activities of our other
subsidiaries are set out in Note 14 to the Accountant’s Report as set out in Appendix I to this
prospectus.
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MAJOR SHAREHOLDING CHANGES OF OUR COMPANY
Establishment of our Company
Our Company was established in the PRC as a limited liability company on December 10,
2014. The initial registered capital of the Company was RMB1,323,529, and the shareholding
structure of our Company upon establishment was as follows:
Shareholders
Registered
capital held
Percentage of
shareholding
(RMB)
Liu Guoqing ( ᄎ਷૶) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118686,051 51.84%
Y ang Guang ( เᄿ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201,176 15.20%
Zhou Xiang ( մജ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201,176 15.20%
Wang Qicheng ( ˮ઼೻)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180,623 13.65%
Wu Jianxin (㒥)(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,503 4.12%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,323,529 100%
Note:
(1) Mr. Wu Jianxin was a former Director of our Company. Mr. Wu assisted in founding of our Company
and was involved in and provided advice and guidance to our Group’s technological development when
he was a Director of our Company. He resigned from his directorship in 2023 to focus on his academic
endeavours, and has not held any position in the members of our Group since then.
Series Angel Financing in 2015
On March 18, 2015, our Pre-IPO Investor, Mr. Wu Y ongming subscribed for an increased
registered capital of RMB147,059 in our Company at a consideration of RMB2.5 million. On
March 23, 2015, Mr. Wu further subscribed for an increased registered capital of RMB86,495
in our Company at a consideration of RMB2 million. Upon completion of the foregoing
subscriptions, the registered capital of our Company was increased from RMB1,323,529 to
RMB1,557,083.
Series Pre-A1 Financing and Series Pre-A2 Financing in 2016
On April 25, 2016, we completed our series pre-A1 financing through subscription by our
Pre-IPO Investor, Hefei Zeyi Semiconductor Investment Partnership (Limited Partnership) ( Υ
̒ኬ᜗ҳ༟ΥྫΆุ(Υྫ)) (“ Hefei Zeyi ”), formerly known as Hefei
Zhongxing Hechuang Semiconductor V enture Capital Fund (Limited Partnership) (̹ʕጳ
ږ(Υྫ)), of an increased registered capital of RMB173,009 in our
Company at a consideration of RMB12 million.
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On August 18, 2016, we completed our series pre-A2 financing through subscription by
our Pre-IPO Investor, Beijing Hanbang Hi-Tech Digital Technology Co., Ltd. (߅
ʮ̡)( “ Hanbang Gaoke ”), of an increased registered capital of
RMB96,117 in our Company at a consideration of RMB10 million.
Upon completion of the series pre-A1 financing and series pre-A2 financing, the
registered capital of our Company was increased from RMB1,557,083 to RMB1,826,209.
Capital Transfer in 2016
On November 9, 2016, Dr. Liu Guoqing transferred registered capital of RMB77,855 of
our Company to Mr. Y an Shengye ( ₢௷ุ), who is a former Director of our Company, at a
consideration of RMB77,855. Mr. Y an assisted in founding of our Company and was involved
in and provided advice and guidance to our Group’s administration, including recruitment and
internal appraisal system, when he was a Director of our Company. Mr. Y an resigned from his
directorship of the Board in 2023 as he was less involved in the Group’s operations and the
Board affairs to focus on his other personal commitments, and other than serving as a director
of Jiangsu Y uanshi in which he has not held any management role nor involved in the daily
operation of Jiangsu Y uanshi, he has not held any position in the members of our Group since
then. The capital transfer was conducted based on arm’s length negotiation between the
Shareholders, and did not involve increase of registered capital by our Company.
Series Pre-A3 Financing in 2017
On February 8, 2017, Hefei Zeyi further subscribed for an increased registered capital of
RMB96,116 at a consideration of RMB8 million. Upon completion of the series pre-A3
financing, the registered capital of our Company was increased from RMB1,826,209 to
RMB1,922,325.
Capital Transfer, Series A1 Financing and Series A2 Financing in 2018
On January 19, 2018, certain of our then Shareholders, namely Dr. Liu Guoqing, Mr. Y ang
Guang, Mr. Zhou Xiang, Mr. Wang Qicheng, Mr. Wu Jianxin and Mr. Y an Shengye, transferred
a total of registered capital of RMB38,456 of our Company to our Pre-IPO Investor, Shenzhen
Hechuang Intelligent and Health V enture Capital Fund (Limited Partnership) ( ଉέ̹Υ௴౽ঐ
ږ(Υྫ)) (“ Hechuang Intelligent ”) at a consideration of
RMB4,199,999. The capital transfer was conducted based on arm’s length negotiation between
the Shareholders, and did not involve increase of registered capital by our Company.
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On January 19, 2018 and December 5, 2018, we completed our series A1 financing and
series A2 financing, respectively, through increase of the registered capital of our Company as
detailed below. The respective subscription amount and consideration paid by the subscribers
of the series A1 financing and series A2 financing are as follows:
Subscribers
Registered capital
subscribed for Consideration
(RMB) (RMB)
Series A1 financing
Jinhua Puhua Tianqin Equity Investment
Fund Partnership (Limited Partnership)
(ΥྫΆุ(Ϟ
Υྫ)) (“ Puhua Tianqin ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,302 10,000,000
Hangzhou Binjiang Puhua Tianqing Equity
Investment Partnership (Limited
Partnership) (ᛆҳ
༟ΥྫΆุ(Υྫ)) (“ Binjiang
Puhua ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,302 10,000,000
Hechuang Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,302 10,000,000
Qingdao Xinda Pu Chuang Investment
Center (Limited Partnership)
(༺౷௴ҳ༟ʕː(Υྫ))
(“Qingdao Xinda ”) (formerly known as
Shenzhen Hechuang Xinda Investment
Management Enterprise (Limited
Partnership) (༺ҳ༟၍ଣ
Άุ(Υྫ))) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,656 284,000
Shenzhen Jiaxin Y uande Equity Investment
Fund Partnership (Limited Partnership)
(ΥྫΆุ
(Υྫ)) (“ Jiaxin Yuande ”) /H1118/H1118/H1118/H1118/H1118/H1118/H111869,963 12,000,000
Chongqing Dehan New Applied Materials
V enture Capital Fund Partnership
(Limited Partnership) (ᅅᅃᖍอᏐ͜
ΥྫΆุ(Υྫ))
(“Dehan Capital ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,321 4,000,000
Harbin Xinrong Qihang V enture Capital
Enterprise (Limited Partnership) (ဧᏵ
㒥࿰઼ঘ௴ุҳ༟Άุ(Υྫ))
(“Xinrong Capital ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,321 4,000,000
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Subscribers
Registered capital
subscribed for Consideration
(RMB) (RMB)
Series A2 financing
Jiaxin Y uande /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,774 2,000,000
Dehan Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,151 7,500,000
Xinrong Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,151 7,500,000
Zhejiang Huihong Industrial Investment
Co., Ltd. (ʮ̡)
(“Zhejiang Huihong ”) (formerly known
as Zhejiang Dajia Xiangchi Asset
Management Co., Ltd. (ୂཱུ༟
ʮ̡)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,868 10,000,000
Hangzhou Fulin V enture Capital
Partnership (Limited Partnership) (ψ
௴ุҳ༟ΥྫΆุ(Υྫ))
(“Fulin Investment ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,434 5,000,000
Upon completion of the series A1 financing and series A2 financing, the registered capital
of our Company was increased from RMB1,922,325 to RMB2,339,870.
Capitalization of Capital Reserve, Capital Transfers and Series B Financing in 2019
On January 8, 2019, our then Shareholders passed a resolution and approved the
capitalization of the capital reserve of RMB17,660,130 of our Company. The capitalization of
capital reserve was completed on January 31, 2019. Upon the completion of such
capitalization, the registered capital of our Company was increased from RMB2,339,870 to
RMB20,000,000.
From January to April 2019, the following Shareholders completed a number of transfers
of equity interests in our Company, the details of which are set out below:
Date of completion
of transfer Transferor Transferee
Registered capital
transferred Consideration
(RMB) (RMB)
January 31, 2019 /H1118/H1118/H1118Mr. Wu Y ongming Xinrong Capital 35,098 7,500,000
February 1, 2019 /H1118/H1118/H1118Mr. Wu Y ongming Shanghai Hongjin
Enterprise
Management
Partnership (Limited
Partnership) (ݵح
Άุ၍ଣΥྫΆุ(Ϟ
Υྫ)) (“ Shanghai
Hongjin ”)
300,000
(1) 7,500,000
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Date of completion
of transfer Transferor Transferee
Registered capital
transferred Consideration
(RMB) (RMB)
April 15, 2019 /H1118/H1118/H1118/H1118/H1118Mr. Wu Y ongming Beijing Siwei Internet
Fund Management
Center (Limited
Partnership) ( ̏ԯ̬ၪ
၍ଣʕː(Ϟ
Υྫ)) (“ Beijing
Siwei ”)
503,226 15,600,000
April 15, 2019 /H1118/H1118/H1118/H1118/H1118Hanbang Gaoke Beijing Siwei 303,226 9,400,000
Note:
(1) The capital transfer agreement between Mr. Wu Y ongming and Shanghai Hongjin was entered into
before completion of the capitalization of the capital reserve of our Company in January 2019. The
registered capital transferred represented RMB35,098 of the then registered capital of the Company at
the time of execution of the capital transfer agreement, and RMB300,000 of the then registered capital
upon completion of the capitalization of capital reserve.
These capital transfers were conducted based on arm’s length negotiations between the
Shareholders, and did not involve increase of registered capital by our Company.
On April 15, 2019 and June 26, 2019, we completed our series B1 financing and series
B2 financing, respectively, through capital increase as detailed below. The respective
subscription amount and consideration paid by the subscribers of the series B1 financing and
series B2 financing are as follows:
Subscribers
Registered capital
subscribed for Consideration
(RMB) (RMB)
Series B1 financing
Beijing Siwei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,650,000 66,000,000
Shenzhen Taolue New Energy Equity Investment
Fund Partnership (Limited Partnership) ( ଉέᗱ
ΥྫΆุ(Υྫ))
(“Taolue Fund ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500,000 20,000,000
Series B2 financing
Shenzhen Futian District Shanchuang Small,
Medium and Micro Equity Investment Fund
Partnership (Limited Partnership) ( ଉέ̹၅͞ਜ
ΥྫΆุ(Υྫ))
(“Shenzhen Shanchuang ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118681,818 30,000,000
Upon completion of the series B1 financing and B2 financing, the registered capital of our
Company was increased from RMB20,000,000 to RMB22,831,818.
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Series Pre-C financing, Series C1 financing and Series C2 financing, and Capital
Transfers in 2020
We completed series pre-C financing, series C1 financing and series C2 financing through
increase of the registered capital of our Company on July 15, 2020, September 8, 2020 and
October 26, 2020, respectively, as detailed below. The respective subscription amount and
consideration paid by the subscribers of series pre-C financing, series C1 financing and series
C2 financing are as follows:
Subscribers
Registered capital
subscribed for Consideration
(RMB) (RMB)
Series pre-C financing
Beijing Siwei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,045,467 46,000,000
Shanghai Moqin Intelligent Technology
Co., Ltd. (ʮ̡)
(“Moqin Intelligent ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118454,551 20,000,000
Series C1 financing
Jiaxin Y uande /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118442,397 20,000,000
Shenzhen Kangchengheng Ruixiang
Investment Partnership (Limited
Partnership) ( ଉέ̹ੰϓЖြԮҳ༟Υ
ྫΆุ(Υྫ)) (“ Kangchengheng
Ruixiang ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118442,397 20,000,000
SME Development Fund (Shenzhen
Nanshan Limited Partnership) ( ʕʃΆุ
ږ(Υྫ)) (“ SME
Development ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118663,596 30,000,000
Series C2 financing
Zhuhai Jiashi Shengqi V enture Capital
Fund Partnership (Limited Partnership)
(ΥྫΆุ(Ϟ
Υྫ)) (“ Jiashi Shengqi ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118313,205 15,732,708
Zhuhai Jiashi Shengde V enture Capital
Fund Partnership (Limited Partnership)
(ΥྫΆุ(Ϟ
Υྫ)) (“ Jiashi Shengde ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118397,457 19,964,830
Zhuhai Jiashi Shengxuan V enture Capital
Fund Partnership (Limited Partnership)
(ΥྫΆุ(Ϟ
Υྫ)) (“ Jiashi Shengxuan ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118284,731 14,302,462
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Subscribers
Registered capital
subscribed for Consideration
(RMB) (RMB)
Hangzhou Y uanjing Chuangheng Equity
Investment Fund Partnership (Limited
Partnership) (ᛆҳ༟ਿ
ΥྫΆุ(Υྫ)) (“ Hangzhou
Yuanjing ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118278,710 14,000,000
Suzhou Y uanjing Equity Investment
Partnership (Limited Partnership) ( ᘽψ
ᛆҳ༟ΥྫΆุ(Υྫ))
(“Suzhou Yuanjing ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118278,710 14,000,000
Mr. Li Fan ( ҽɭ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118437,973 22,000,000
Upon completion of the series pre-C financing, series C1 financing and C2 financing, the
registered capital of our Company was increased from RMB22,831,818 to RMB27,871,012.
On October 26, 2020, Hanbang Gaoke transferred (i) registered capital of RMB163,096
to Jiashi Shengqi at a consideration of RMB6,267,292, (ii) registered capital of RMB206,969
to Jiashi Shengde at a consideration of RMB7,953,203, and (iii) registered capital of
RMB148,269 to Jiashi Shengxuan at a consideration of RMB5,697,538. These capital transfers
were conducted based on arm’s length negotiations between the Shareholders, and did not
involve increase of registered capital by our Company.
Establishment of the ESOP Holding Entities
The ESOP Holding Entities, namely Y oujia Qingcheng, Y oujia Zhongcheng and Y oujia
Licheng, were established as limited partnerships under the laws of the PRC between 2020 and
2021, where Dr. Liu Guoqing acts as the general partner in each of the ESOP Holding Entities.
The ESOP Holding Entities were established to hold equity interests in our Company as our
employee ownership platforms.
On December 25, 2020, Dr. Liu Guoqing transferred registered capital of RMB1,000,000
held by him in our Company to Y oujia Qingcheng at a consideration of RMB1.
For further details of the ESOP Holding Entities, see “— Employee Ownership
Platforms.”
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Series D1 Financing, Series D2 Financing, and Capital Transfers in 2021
We completed our series D1 financing and series D2 financing through increase of the
registered capital of our Company on April 28, 2021 and December 30, 2021, respectively, as
detailed below. The respective subscription amount and consideration paid by the subscribers
of series D1 financing and series D2 financing are as follows:
Subscribers
Registered capital
subscribed for Consideration
(RMB) (RMB)
Series D1 financing
Jiashi Shengqi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,659 7,857,143
Jiashi Shengxuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,599 7,142,857
Hangzhou Y uanjing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118154,839 10,000,000
Suzhou Y uanjing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118154,839 10,000,000
Shenzhen Wanhe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118325,162 21,000,000
Qingdao CICC Alpha Intelligent Internet
Industry Equity Investment Fund
(Limited Partnership) (͠ɿ౽
ږ(Υྫ))
(“CICC Alpha ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118774,195 50,000,000
Dongfeng Asset Management Co., Ltd.
(ʮ̡)( “ Dongfeng
Asset Management ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118774,195 50,000,000
Series D2 financing
Zhongjin (Changde) Emerging Industry
V enture Capital Partnership (Limited
Partnership) (ږ(੬ᅃ)อጳପุ௴ุҳ
༟ΥྫΆุ(Υྫ)) (“ CICC
Changde ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118496,482 45,000,000
Liantong Zhongjin Innovation Industry
Equity Investment Fund (Shenzhen)
Partnership (Limited Partnership) ( ᑌஷ
ږ(ଉέ)ΥྫΆ
ุ(Υྫ)) (“ Liantong CICC ”) /H1118/H1118/H1118/H1118 661,976 60,000,000
Shenzhen Nanshan Dongfang Fuhai Small,
Medium and Micro V enture Capital
Fund Partnership (˙బऎʕ
ΥྫΆุ)
(“Dongfang Fuhai ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118165,494 15,000,000
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Subscribers
Registered capital
subscribed for Consideration
(RMB) (RMB)
Shenzhen Fuhai Y ouxuan No. 2 High-tech
V enture Capital Partnership (Limited
Partnership) (߅
Ҧ௴ุҳ༟ΥྫΆุ(Υྫ))
(“Fuhai Y ouxuan ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118165,494 15,000,000
Chongqing Kexing Kechuang Equity
Investment Fund Partnership (Limited
Partnership) (ᛆҳ༟ਿ
ΥྫΆุ(Υྫ)) (“ Chongqing
Kexing ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118165,494 15,000,000
Chongqing Shenghehui Enterprise
Management Partnership (Limited
Partnership) (ᅅସͫිΆุ၍ଣΥྫ
Άุ(Υྫ)) (“ Chongqing
Shenghehui ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118220,658 20,000,000
Upon completion of the series D1 financing and D2 financing, the registered capital of
our Company was increased from RMB27,871,012 to RMB32,162,098.
From April to December 2021, the following Shareholders completed a number of
transfers of equity interests in our Company, the details of which are set out below:
Date of completion
of transfer Transferor Transferee
Registered capital
transferred Consideration
(RMB) (RMB)
April 28, 2021 /H1118/H1118/H1118/H1118Dr. Liu Guoqing Jiashi Shengqi 31,284 1,571,430
Jiashi Shengxuan 28,440 1,428,570
Mr. Y ang Guang Shenzhen Qianhe
Wanhe V enture
Capital Partnership
(Limited Partnership)
(ଉέɷ൭ຬͫ௴ุҳ
༟ΥྫΆุ(Υ
ྫ)) (“ Shenzhen
Wanhe”)
59,724 3,000,000
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Date of completion
of transfer Transferor Transferee
Registered capital
transferred Consideration
(RMB) (RMB)
Mr. Zhou Xiang Hangzhou Y uanjing 29,862 1,500,000
Suzhou Y uanjing 29,862 1,500,000
Mr. Wang
Qicheng
Jiashi Shengqi 10,428 523,810
Jiashi Shengxuan 9,480 476,190
Hangzhou Y uanjing 9,954 500,000
Suzhou Y uanjing 9,954 500,000
Shenzhen Wanhe 19,908 1,000,000
September 13,
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Dehan Capital Shanghai Ganche
Intelligent
Technology
Partnership (Limited
Partnership) ( ɪऎ଑
ҦΥྫΆุ
(Υྫ))
(“Shanghai
Ganche ”)
448,500 14,000,000
December 16, 2021 /H1118Hefei Zeyi Shenzhen Zeyi
Semiconductor
Investment
Partnership (Limited
Partnership) ( ଉέዣ
̒ኬ᜗ҳ༟ΥྫΆ
ุ(Υྫ))
(“Shenzhen Zeyi ”)
2,300,340 85,730,000
These capital transfers were conducted based on arm’s length negotiations between the
Shareholders, and did not involve increase of registered capital by our Company.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Series D2+ Financing, Series D3 Financing, Subscription by or Capital Transfer of the
ESOP Holding Entities and Capital Transfers in 2022
We completed our series D2+ financing and series D3 financing through capital increase
on January 26, 2022 and May 24, 2022, respectively, as detailed below. The respective
subscription amount and consideration paid by the subscribers of series D2+ financing and
series D3 financing are as follows:
Subscribers
Registered capital
subscribed for Consideration
(RMB) (RMB)
Series D2+ financing
Guokai Zhizao Transformation and
Upgrading Fund (Limited Partnership)
(ږ(Υྫ))
(“Guokai Zhizao ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,206,586 200,000,000
Series D3 financing
Hubei Cathay Car Tech Equity Investment
Fund Partnership L.P . (Ϫӛ
ΥྫΆุ(Υ
ྫ)) (“ Hubei Cathay Cartech ”) /H1118/H1118/H1118/H1118/H1118/H1118397,310 50,000,000
Jinning Economic Development Industry
Strong Chain Equity Investment (Hubei)
Partnership (Limited Partnership) (ྐྵ
ᛆҳ༟(ಳ̏)ΥྫΆุ
(Υྫ)) (“ Jinning Qianglian ”) /H1118/H1118/H1118/H1118 381,418 48,000,000
Sichuan Shenwan Hongyuan Changhong
Equity Investment Fund Partnership
(Limited Partnership) (ڗ
ΥྫΆุ(Υྫ))
(“Shenwan Changhong ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,601 3,473,523
Shenhong Huichuang Development
(Foshan) Equity Investment Partnership
(Limited Partnership) (࢝(Н
ʆ)ᛆҳ༟ΥྫΆุ(Υྫ))
(“Shenhong Huichuang ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,601 3,473,523
On May 17, 2022, each of Y oujia Zhongcheng and Y oujia Licheng, two of the ESOP
Holding Entities, subscribed for an increased registered capital of RMB624,464 and
RMB312,232 of our Company at a consideration of RMB624,464 and RMB312,232,
respectively. On September 29, 2022, Dr. Liu Guoqing further transferred registered capital of
RMB330,072 held by him in our Company to Y oujia Qingcheng at a nominal consideration of
RMB1.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Upon completion of the series D2+ financing and D3 financing and the subscription by
or transfer of registered capital by the ESOP Holding Entities, the registered capital of our
Company was increased from RMB32,162,098 to RMB36,139,310.
From May to September 2022, the following Shareholders completed a number of
transfers of equity interests in our Company, the details of which are set out below:
Date of completion of
transfer Transferor Transferee
Registered capital
transferred Consideration
(RMB) (RMB)
May 17, 2022 /H1118/H1118/H1118/H1118Taolue Fund Hubei Cathay Cartech 325,166 28,000,000
Shanghai Jipei Xinsheng
Management
Consulting
Partnership (Limited
Partnership) ( ɪऎΛ
Խอସ၍ଣፔ༔Υྫ
Άุ(Υྫ))
(“Jipei Xinsheng ”)
23,226 2,000,000
Shenwan Changhong 75,804 6,527,482
Shenhong Huichuang 75,804 6,527,482
September 29,
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Dongfeng Asset
Management
Xinzhifeng (Wuhan)
Equity Investment
Fund Partnership
(Limited Partnership)
(ࠬ(ဏ)ᛆҳ
ΥྫΆุ(ࠢ
Υྫ)) (“ Xinzhifeng ”)
774,195 50,000,000
These capital transfers were conducted based on arm’s length negotiations between the
Shareholders, and did not involve increase of registered capital by our Company.
Conversion into a Joint Stock Company in 2023
On June 7, 2023, our Company was converted from a limited liability company into a
joint stock company with limited liability. Upon completion of such conversion, the registered
capital of our Company was RMB36,139,310 divided into 36,139,310 Shares with a nominal
value of RMB1.00 each, which were subscribed by all the then Shareholders in proportion to
their respective equity interest in our Company before the conversion.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Series Pre-IPO Financing, Series Pre-IPO+ Financing, and Capitalization of Capital
Reserve in 2023
We completed our series Pre-IPO financing and series Pre-IPO+ financing through capital
increase on October 18, 2023 and December 1, 2023, respectively, as detailed below. The
respective subscription amount and consideration paid by the subscribers of the series Pre-IPO
financing and series Pre-IPO+ financing are as follows:
Subscribers
Number of Shares
subscribed for Consideration
(RMB)
Series Pre-IPO financing
Guangzhou Science and Technology
Industry Investment Fund Partnership
(Limited Partnership) (௴ପุҳ
ΥྫΆุ(Υྫ)) (“ Chantou
Fund ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118289,114 40,000,000
Guangzhou Kechuangzhihui No. 2
V enture Capital Partnership
(Limited Partnership) (௴౽ිɚ
໮௴ุҳ༟ΥྫΆุ(Υྫ))
(“Kechuangzhihui No. 2 ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,139 5,000,000
Guangzhou Suikai Intelligent
Manufacturing Equity Investment
Partnership (Limited Partnership) ( ᄿψ
ᛆҳ༟ΥྫΆุ(Υྫ))
(“Suikai Intelligent ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118202,380 28,000,000
Guangzhou Suikai Intelligent
Manufacturing No. 2 Equity Investment
Partnership (Limited Partnership) ( ᄿψ
ᛆҳ༟ΥྫΆุ(Υ
ྫ)) (“ Suikai Intelligent No. 2 ”) /H1118/H1118/H1118/H1118/H1118/H1118159,013 22,000,000
Guangzhou Hehe Suikai Investment
Partnership (Limited Partnership) ( ᄿψ
ձΥᐦකҳ༟ΥྫΆุ(Υྫ))
(“Hehe Suikai ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,697 1,480,000
Chaogaoqing Video Industry Investment
Fund (Guangzhou) Partnership (Limited
Partnership) (ږ
(ᄿψ)ΥྫΆุ(Υྫ))
(“Chaogaoqing Fund ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118144,557 20,000,000
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Subscribers
Number of Shares
subscribed for Consideration
(RMB)
Suzhou Industrial Park Huazhi Xingrui
V enture Capital Partnership (Limited
Partnership) ( ᘽψʈุ෤ਜശ౽ጳ๿௴
ุҳ༟ΥྫΆุ(Υྫ)) (“ Huazhi
Xingrui ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216,836 30,000,000
Shanghai Boyuan Hongcheng V enture
Capital Partnership (Limited
Partnership) (ᒿϓ௴ุҳ༟Υ
ྫΆุ(Υྫ)) (“ Boyuan
Hongcheng ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216,836 30,000,000
Suzhou Xinjing Fuying V enture Capital
Partnership (Limited Partnership) ( ᘽψ
௴ุҳ༟ΥྫΆุ(Υྫ))
(“Xinjing Fuying ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118144,557 20,000,000
Tongxiang Wuzhen Puhua Fengqi V enture
Capital Partnership (Limited
Partnership) (ඊढᕄ౷ശჾಐ௴ุҳ
༟ΥྫΆุ(Υྫ)) (“ Puhua
Fengqi ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118722,786 100,000,000
Jiangmen Kexi Zhongke Selected No. 4
V enture Capital Partnership (Limited
Partnership) (त፯̬໮௴
ุҳ༟ΥྫΆุ(Υྫ)) (“ Kexi
Zhongke ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,734 12,000,000
Series Pre-IPO+ financing
Liantong CICC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216,836 30,000,000
Hangzhou Y uanjing Lechi Equity
Investment Fund Partnership (Limited
Partnership) (ᛆҳ༟ਿ
ΥྫΆุ(Υྫ)) (“ Hangzhou
Yuanjing Lechi ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,279 10,000,000
Upon completion of the series pre-IPO financing and pre-IPO+ financing, the registered
capital of our Company was increased from RMB36,139,310 to RMB38,658,074.
On November 17, 2023, our then Shareholders passed a resolution and approved the
capitalization of the capital reserve of RMB321,341,926 of our Company. The capitalization of
capital reserve was completed on December 1, 2023. Upon completion of such capitalization,
the registered capital of our Company was increased from RMB38,658,074 to
RMB360,000,000.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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PRC Legal Advisor’s Confirmation
As advised by our PRC Legal Advisor, our Company has made all necessary registrations
or filings with the relevant local branch of SAMR in respect of the transfers, capital increases
and issuances of Shares set out above in all material respects, and such transfers, capital
increases and issuances of Shares were conducted in compliance with the applicable PRC laws
and regulations in all material respects.
ACQUISITION DURING THE TRACK RECORD PERIOD
We have not conducted any acquisitions, disposals or mergers since our inception that we
consider to be material to us during the Track Record Period.
PRE-IPO INVESTMENTS
Overview
Between 2015 and 2023, we completed series of Pre-IPO Investments in our Company.
Details of the Pre-IPO Investments are summarized below.
Pre-IPO
Investment
Timing of
investment
agreement(s) or
shareholders’
approval
Payment timing of
consideration (2)
Amount of
registered
capital/ Number
of Shares
subscribed for
Amount of
consideration
Post-money
valuation (3)
(approximate)
Cost per
Share (4)
(approximate)
Adjusted cost per
Share (7)
(approximate)
Discount to
the Offer
Price (8)
(approximate)
Series Angel /H1118/H1118March 2015 February 2015 RMB147,059 RMB2.5 million RMB25 million RMB17.00 RMB0.21 98.79%
March 2015 March 2015 RMB86,495 RMB2.0 million RMB36 million RMB23.12 RMB0.29 98.33%
Series Pre-A1 /H1118March 2016 April 2016 RMB173,009 RMB12 million RMB120 million RMB69.36 RMB0.87 94.98%
Series Pre-A2 /H1118July 2016 July 2016 RMB96,117 RMB10 million RMB190 million RMB104.04 (5) RMB1.31 92.45%
Series Pre-A3 /H1118September 2016 October 2016 RMB96,116 RMB8 million RMB160 million RMB83.23 RMB1.05 93.95%
Series A1 /H1118/H1118/H1118October 2017 December 2017 RMB293,167 RMB50.284 million RMB380 million RMB171.52 RMB2.15 87.60%
Series A2 /H1118/H1118/H1118October 2018 November 2018 RMB124,378 RMB32 million RMB602 million RMB257.28 (6) RMB3.23 81.38%
Series B1 /H1118/H1118/H1118February 2019 April 2019 RMB2,150,000 RMB86 million RMB886 million RMB40.00 RMB4.30 75.21%
Series B2 /H1118/H1118/H1118May 2019 June 2019 RMB681,818 RMB30 million RMB1,005 million RMB44.00 RMB4.72 72.79%
Series Pre-C /H1118/H1118April 2020 June 2020 RMB1,500,018 RMB66 million RMB1,071 million RMB44.00 RMB4.72 72.79%
Series C1 /H1118/H1118/H1118July 2020 August 2020 RMB1,548,390 RMB70 million RMB1,170 million RMB45.21 RMB4.85 72.04%
Series C2 /H1118/H1118/H1118September 2020 October 2020 RMB1,990,786 RMB100 million RMB1,400 million RMB50.23 RMB5.39 68.92%
Series D1 /H1118/H1118/H1118March 2021 May 2021 RMB2,415,488 RMB156 million RMB1,956 million RMB64.58 RMB6.94 59.99%
Series D2 /H1118/H1118/H1118December 2021 December 2021 RMB1,875,598 RMB170 million RMB2,915 million RMB90.64 RMB9.73 43.90%
Series D2+ /H1118/H1118December 2021 December 2021 RMB2,206,586 RMB200 million RMB3,115 million RMB90.64 RMB9.73 43.90%
Series D3 /H1118/H1118/H1118May 2022 May 2022 RMB833,930 RMB104,947,046 RMB4,548 million RMB125.85 RMB13.51 22.11%
Series Pre-IPO /H1118August 2023 October 2023 2,229,649 Shares RMB308.48 million RMB5,309 million RMB138.35 RMB14.86 14.33%
Series Pre-IPO+ /H1118November 2023 December 2023 289,115 Shares RMB40 million RMB5,348 million RMB138.35 RMB14.86 14.33%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Notes:
(1) The Pre-IPO Investments consist of both (i) subscription of additional registered capital of the Company or
new Shares by the Pre-IPO Investors, for which the Company was a party to such Pre-IPO Investments and
received proceeds from such Pre-IPO Investors, the details of which are set out in this table; and (ii) transfer
of existing registered capital or Shares to the Pre-IPO Investors, for which the Company was not a party to such
Pre-IPO Investments and received no proceeds from such Pre-IPO Investors, and for further details of such
transfers, please refer to the paragraph headed “— Major Shareholding Changes of our Company” above.
(2) This refers to the timing of last payment made by the relevant Pre-IPO Investors in the relevant series of
Pre-IPO Investment.
(3) The post-money valuation refers to cost per additional registered capital or newly issued Share paid to the
Company for the corresponding series of Pre-IPO Investment, multiplied by the amount of registered capital
or number of issued share capital of the Company immediately after the corresponding series of Pre-IPO
Investment.
(4) The cost per Share of each series of Pre-IPO Investment is calculated by dividing the total amount of
consideration by the amount of registered capital or number of Shares subscribed by the Pre-IPO Investors in
that series of Pre-IPO Investment.
(5) The higher cost per Share for the series Pre-A2 IPO Investment as compared to the series Pre-A1 IPO
Investment was determined based on arm’s length negotiations between our Company and the Pre-IPO Investor
of the series Pre-A2 IPO Investment, taking into account the overall increase in valuation of the then
automotive intelligence solutions industry and the individual investor’s confidence in the business potential of
our Company (especially with the launch of our first iSafety solutions, being our first-generation intelligent
driving solutions in 2016).
(6) The difference in cost per Share between series A2 Pre-IPO Investment and the subsequent series of Pre-IPO
Investments was due to the capitalization of capital reserve completed in January 2019 before series B1
Pre-IPO Investment.
(7) The adjusted cost per Share is adjusted with reference to the capitalization of capital reserve of our Company
in January 2019 and December 2023 as set out in the section headed “Major Shareholding Changes of Our
Company” above.
(8) The discount to the Offer Price is calculated based on the Offer Price of HK$18.60 per Offer Share (being the
mid-point of the indicative Offer Price range of HK$17.00 and HK$20.20 per Offer Share) as compared with
the adjusted cost per Share.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 191 ---
Principal terms of the Pre-IPO Investments
Use of proceeds from the
Pre-IPO Investments: /H1118/H1118/H1118/H1118/H1118
The gross proceeds from the Pre-IPO Investments involving
increase of registered capital and/or issuance of new Shares
by our Company amounted to approximately RMB1,448
million, which has been utilized in part for the research and
development and the operation of our Group’s business.
As of the Latest Practicable Date, an amount of
approximately RMB134 million remained unutilized and will
be used for the operation and further development of our
Group’s business, including research and development,
market expansion and business operation as a supplement to
the use of the proceeds from the Global Offering.
No proceeds were received by our Company from the
Pre-IPO Investments that involved transfers of existing
registered capital or Shares by our Company to the Pre-IPO
Investors.
Strategic benefits the Pre-IPO
Investors brought to our
Company: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
We are of the view that our Group can benefit from the
additional capital provided by the Pre-IPO Investors’
investments in our Company. Some of the Pre-IPO Investors
are investors in the relevant industries, and can provide us
with their knowledge and experience, which we believe
would be helpful to our Group’s future development. The
Pre-IPO Investors’ investments also demonstrated their
confidence in our Group’s operations and served as a
validation of our Group’s performance, strengths and
prospects.
Basis of determining the
consideration paid: /H1118/H1118/H1118/H1118/H1118/H1118/H1118
The consideration for each of the Pre-IPO Investments which
involved increase of registered capital and/or issuance of new
Shares in which the Company was a party was determined
based on arm’s length negotiations between our Group and
each of the Pre-IPO Investors, after taking into consideration
the timing of investment, and the then status of our business
and operating entities.
To the best knowledge of our Company, for the Pre-IPO
Investments which involved the transfer of existing
registered capital or Shares to the Pre-IPO Investors, the
considerations were determined among the relevant then
Shareholders of our Company and the relevant Pre-IPO
Investors upon their respective arm’s length negotiations.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 192 ---
Lock-up period: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Pursuant to the applicable PRC laws, within the 12 months
following the Listing Date, all existing Shareholders
(including the Pre-IPO Investors) cannot dispose of any of
the Shares held by them.
Special rights of the Pre-IPO
Investors: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Pursuant to the shareholders’ agreement executed in
November 2023, entered into among our Company and the
Pre-IPO Investors, as amended and supplemented in May
2024 (collectively, the “ Shareholders’ Agreement ”), the
Pre-IPO Investors were granted with certain special rights,
including, among others, divestment rights, drag-along
rights, co-sale rights, redemption rights, rights of first
refusal, pre-emptive rights, information and inspection rights,
director nomination rights and anti-dilution rights (whereby
the Pre-IPO Investors have the right to subscribe for
additional Shares to be issued by our Company pursuant to
the Global Offering so as to maintain their respective
percentage of shareholding at the Offer Price).
Pursuant to the Shareholders’ Agreement, the Company’s
obligations in relation to certain special rights granted to the
Pre-IPO Investors (including certain indemnity, redemption,
winding-up and other collateral obligations by or of the
Company) have been irrevocably terminated and shall be void
ab initio .
Pursuant to the Shareholders’ Agreement, (a) all divestment
rights, drag-along rights, and co-sale rights granted to the
Pre-IPO Investors and the redemption rights that entitle the
Pre-IPO Investors to require, among others, the Concert Party
Group to repurchase their respective Shares have been
automatically terminated immediately before the first filing
of listing application by the Company with the Stock
Exchange, provided that such divestment rights and
redemption rights shall be automatically restored on the
following day upon the occurrence of the earliest of (i) the
CSRC not granting a notice of filing for the Global Offering,
(ii) the rejection of the listing application to the Stock
Exchange, (iii) the withdrawal of the listing application to the
Stock Exchange, (iv) the Stock Exchange not granting
approval for the Listing, or (v) six months after the lapse of
the listing application to the Stock Exchange without re-
submission of the listing application; and (b) all other special
rights will be automatically terminated upon Listing on (and
inclusive of) the Listing Date.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Non-Competition Undertakings provided by the Non-competition Covenantors
Each of Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou Xiang, Mr. Wang Qicheng, Mr. Y an
Shengye and Mr. Wu Jianxin (collectively, the “ Non-competition Covenantors ”) provided an
undertaking in favor of the Pre-IPO Investors, pursuant to which, they have undertaken that
during the period the Pre-IPO Investors remain as a Shareholder, without the prior consent of
the Pre-IPO Investors, the Non-competition Covenantors shall not, and shall cause their
respective affiliates, senior management member and core personnel not to: (i) make any form
of investment in any business that directly or indirectly compete with the business of the Group
(the “ Competing Business ”), be engaged in such Competing Business or provide consultation,
assistance or other services to such Competing Business; (ii) directly or indirectly hold any
equity interest, shares, option or other form of interest in the Competing Business; (iii) recruit,
solicit, or attempt to recruit or solicit any current management personnel, manager, consultant,
employee, customer, supplier or other business partners of the Group, or affect or attempt to
affect the Group’s relationship with the foregoing; (iv) other than for the benefit of the Group,
use any trademark or other intellectual property right used by the Group, or dispute or register
any such intellectual property in jurisdictions where such intellectual property right is used by
the Group; (v) be employed by the Competing Business; or (vi) enter into any other form of
cooperation with the Competing Business (including but not limited joint venture, provision of
consultation services, provision of funds, etc.), unless such cooperation is for the benefit of the
Group or has obtained the prior consent of the Group and the Pre-IPO Investors.
The undertaking was provided as part of the terms of the Pre-IPO Investment as agreed
between the Non-competition Covenantors and the Pre-IPO Investors. The Company believes
that the undertaking made by the Non-competition Covenantors is in the interest of the
Company and the Shareholders as it serves as a protective mechanism to protect the Group
from the Competing Business and the potential loss of talents, business interests or
opportunities which may be resulted from such competition and to safeguard trade secrets and
confidential information of the Group.
Information about our Major Pre-IPO Investors
Set out below is a description of our major Pre-IPO Investors (which are the Pre-IPO
Investors (together with their respective close associates) which held 1% or more of our total
issued Shares as of the Latest Practicable Date) and their respective beneficial owner(s) and
background and their relationship with the Group and/or any connected person of the Company.
To the best of the Company’s knowledge, information and belief, all the Pre-IPO Investors are
Independent Third Parties.
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1. Beijing Siwei
Beijing Siwei is a limited partnership established under the laws of the PRC. Its general
partner is Beijing Siwei Tiansheng Private Equity Fund Management Co., Ltd. ( ̏ԯ̬ၪ˂ସ
ʮ̡)( “ Beijing Siwei Management ”). Beijing Siwei is held by Beijing
Siwei Management as to 1% and its limited partner, NavInfo Co., Ltd. (ٰ
ʮ̡)( “ NavInfo ”) as to 99%. NavInfo is a company listed on the Shenzhen Stock
Exchange (stock code: 002405), and principally operates in the smart mobility solutions
industry in the PRC.
2. Shenzhen Zeyi
Shenzhen Zeyi is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is Shenzhen Zeyi Private Equity
V enture Capital Fund Management Co., Ltd. (ʮ̡)
(“Shenzhen Zeyi Management ”), which is in turn held by Chi Ke ( ϫ̙) as to 75.23%.
Shenzhen Zeyi is held as to 1.03% by Shenzhen Zeyi Management, and its limited partners,
among which (i) 33.33% is held by Gongqingcheng Xinxing Entrepreneurship Investment
Partnership (Limited Partnership) (ጳ௴ุҳ༟ΥྫΆุ(Υྫ))
(“Gongqingcheng ”), (ii) 33.33% is held by Shenzhen Times Trust Creation No. 1 Investment
Partnership (Limited Partnership) (௴ఠ໮ҳ༟ΥྫΆุ(Υྫ)( “ Shenzhen
Times ”), and (iii) 32.31% is held by nine other limited partners, none of which holds one-third
or more of the interest therein. Gongqingcheng is held by Chen Y aoqing ( ௓ာ૶) as to over
90%, and Shenzhen Times is held by a total of 18 partners and none of which holds one-third
or more of the interest therein.
3. Guokai Zhizao
Guokai Zhizao is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is Guokai Investment Fund
Management Co., Ltd. (ப΂ʮ̡)( “ Guokai Management ”), which is
in turn wholly owned by China Development Bank Capital Co., Ltd (ப΂ʮ̡)
(“CDB”). Guokai Zhizao is held by Guokai Management as to 0.2% and its limited partner,
National Manufacturing Transformation and Upgrade Fund Co., Ltd. (ʺॴਿ
ʮ̡)( “ Manufacturing Transformation Fund ”) as to 99.8%. Manufacturing
Transformation Fund is in turn held by CDB as to 13.59% and 19 other shareholders as to
86.41%, none of which holds one-third or more of the interest therein.
4. CICC Capital
Liantong CICC
Liantong CICC is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is Liantong CICC Private Equity
Investment Management (Shenzhen) Co., Ltd. (ᛆҳ༟၍ଣ(ଉέ)ʮ̡)
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(“Liantong CICC PE Management ”), which is in turn held by (i) CICC Capital Operations
Co., Ltd. (ʮ̡)( “ CICC Capital ”) (which is in turn ultimately wholly
owned by China International Capital Corporation Ltd. (ʮ̡), a
company listed on the Stock Exchange (stock code: 3908)) and the Shanghai Stock Exchange
(stock code: 601995) as to 51%, and (ii) China Unicom Capital Investment Holdings Limited
(ʮ̡) (which is in turn ultimately wholly owned by SASAC) as to
49%. Liantong CICC is held by Liantong CICC PE Management as to 0.54%, and 15 limited
partners as to 99.46% in aggregate, none of which holds one-third or more of interest therein.
CICC Alpha
CICC Alpha is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is CICC ALPHA (Beijing) Private
Equity Investment Fund Management Co., Ltd. (͠ɿ(̏ԯ)ʮ̡)
(“CICC Alpha PE Management ”), which is in turn held by (i) CICC Capital as to 51%, and
(ii) Jiazi Wan Hui (Beijing) Consulting Co., Ltd. ( ͠ɿຬි(̏ԯ)ʮ̡) as to 49%.
CICC Alpha is held by CICC Alpha PE Management as to 1%, and 20 limited partners as to
99%, none of which holds one-third or more of interest therein.
CICC Changde
CICC Changde is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is CICC Capital. CICC Changde
is held by CICC Capital as to 2%, and seven limited partners as to 98%, among which, Hunan
Caixin Investment Holding Co., Ltd. (ʮ̡)( “ Hunan Caixin ”), holds
47.7% interest therein, and none of the other limited partners holds one-third or more of the
interest therein. Hunan Caixin is in turn ultimately owned by Changde Municipal Finance
Bureau (҅) as to 66.79%.
5. Mr. Wu Y ongming and his controlled entity
Mr . Wu Yongming
Mr. Wu Y ongming is an individual investor and a shareholder of a Chinese multinational
technology company listed on the Stock Exchange and the New Y ork Stock Exchange.
Hangzhou Yuanjing Lechi
Hangzhou Y uanjing Lechi is a limited partnership established under the laws of the PRC.
It is principally engaged in equity investment. Its general partner is Hangzhou Y uanjing
Ruiheng Investment Management Co., Ltd. (ʮ̡)( “ Yuanjing
Ruiheng ”), which is in turn held as to 83% by Wu Y ongming. Hangzhou Y uanjing Lechi is held
by Y uanjing Ruiheng as to 0.1% and four limited partners, among which Hangzhou Y uanjing
Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ))
(“Hangzhou Yuanjing Partnership ”) holds 35.4% therein, and Hangzhou Y uanjing Letong
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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V enture Capital Partnership (Limited Partnership) (ψ෥ዽᆀҕ௴ุҳ༟ΥྫΆุ(Υ
ྫ)) (“ Hangzhou Yuanjing Letong Partnership ”) holds 38.8% therein. Hangzhou Y uanjing
Partnership is held by Hangzhou Ali V enture Capital Co., Ltd. (ʮ̡)a s
to approximately 40.9%, a company wholly owned by Hangzhou Zhenxi Investment
Management Co., Ltd. (ʮ̡), which is in turn ultimately held by
Hangzhou Zhenqiang Investment Management Partnership (Limited Partnership) (ψጲ੶ҳ
༟၍ଣΥྫΆุ (Υྫ)) (“ Hangzhou Zhenqiang ”) and Hangzhou Zhensheng Investment
Management Partnership (Limited Partnership) (ψጲ᳅ҳ༟၍ଣΥྫΆุ(Υྫ))
(“Hangzhou Zhensheng ”) as to 50% each. Each of Hangzhou Zhenqiang and Hangzhou
Zhensheng is held as to 0.0001% by their respective general partner, Hangzhou Zhenyue
Enterprise Management Co., Ltd. (ʮ̡) and five individual limited
partners (“ Individual Limited Partners ”), each of whom is an Independent Third Party
holding less than 30% of interest therein. Hangzhou Zhenyue Enterprise Management Co., Ltd.
is held by Individual Limited Partners, none of whom holds 30% or more of interest therein.
Hangzhou Y uanjing Letong Partnership is ultimately held by Wu Y ongming as to over 60%.
6. Hangzhou Yuanjing Erjiu
Hangzhou Yuanjing Chuangheng
Hangzhou Y uanjing Chuangcheng is a limited partnership established under the laws of
the PRC. It is principally engaged in equity investment. Its general partner is Hangzhou
Y uanjing Erjiu Equity Investment Fund Management Partnership (Limited Partnership) (ψ
၍ଣΥྫΆุ(Υྫ)) (“ Hangzhou Yuanjing Erjiu ”). Hangzhou
Y uanjing Erjiu is in turn controlled by Hangzhou Hongshan Investment Management Co., Ltd.
(ʮ̡) (which is ultimately owned by Wu Hanyuan ( юဏ๕), its
supervisor, as to 60%) as to over 40% and Chen Hongliang (ڥݳwho is a partner of a
venture capital, Vision Plus Capital ( ʩዽ༟͉)) as to over 30%. Hangzhou Y uanjing
Chuangheng is held by Hangzhou Y uanjing Erjiu as to 1.9% and 14 limited partners, none of
which holds one-third or more of interest therein.
Suzhou Yuanjing
Suzhou Y uanjing is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is Hangzhou Y uanjing Erjiu.
Suzhou Y uanjing is held by Hangzhou Y uanjing Erjiu as to 1.12%, and seven limited partners,
none of which holds one-third or more of interest therein.
7. Zhiying Huirong
Jiashi Shengqi
Jiashi Shengqi is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is Zhiying Huirong Private Fund
Management (Beijing) Co., Ltd. (၍ଣ(̏ԯ)ʮ̡)( “ Zhiying
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Huirong ”), which is in turn held by Zhang Ru ( ੵন), Liang Shan ( ૑ʆ) and Li Dong ( ҽಊ)
as to 40%, 40% and 20%, respectively. Jiashi Shengqi is held as to 0.87% by Zhiying Huirong
and as to 99.13% by three limited partners, among which, Herun Jiashi Investment
51 Xinyongka Development Fund No. 1 ( ձᆗྗྼҳ༟51ږ1໮)( “ 51 Fund ”)
held 75.54% therein. 51 Fund is a venture capital fund managed by Herun Pilot Investment
Management (Beijing) Co., Ltd. ( ձᆗჯঘҳ༟၍ଣ (̏ԯ)ʮ̡), which is held as to 50%
and 50% by Jiang Tao (ᏹ) and Zhang Ru ( ੵন), respectively. None of partner of 51 Fund
holds 30% or more of interest therein.
Jiashi Shengde
Jiashi Shengde is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is Zhiying Huirong. Jiashi
Shengde is held as to 1.05% by Zhiying Huirong and two limited partners, among which, Lhasa
Deyu New Energy Industrial Co., Ltd. (ʮ̡)( “ Lhasa Deyu ”) holds
79.89% interest therein. Lhasa Deyu is wholly owned by Zhengzhou Y utong Group
Corporation Ltd. (ʮ̡), which is in turn controlled by Zhengzhou Tongtai
Zhihe Enterprise Management Center (Limited Partnership) ( ቍψஷइқΥΆุ၍ଣʕː(ࠢ
Υྫ)) (“ Zhengzhou Tongtai Zhihe ”) as to over 80%. Zhengzhou Tongtai Zhihe is held as to
0.01% by its general partner, Zhengzhou Tongtai Hezhi Management Consulting Co., Ltd. ( ቍ
ʮ̡), and 36 limited partners, being Independent Third Parties none
of which holds 30% or more of interest therein. Zhengzhou Tongtai Hezhi Management
Consulting Co., Ltd. is held by Tang Y uxiang ( ಷ͗ୂ) as to 52% and other six Independent
Third Parties, none of which holds 30% or more of interest therein.
Jiashi Shengxuan
Jiashi Shengxuan is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is Zhiying Huirong. Jiashi
Shengxuan is held by Zhiying Huirong as to 0.27% and five limited partners as to 99.73%, none
of which holds one-third or more of interest therein.
8. Puhua
Puhua Fengqi
Puhua Fengqi is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. It is held by its general partner, Zhejiang Puhua
Tianqin Equity Investment Management Co., Ltd. (ʮ̡)
(“Puhua ”) as to 1% and its limited partners, Tongxiang Puhua Fengqi V enture Capital
Partnership (Limited Partnership) (ඊ౷ശჾಐ௴ุҳ༟ΥྫΆุ(Υྫ)) (“ Tongxiang
Puhua ”) and Y unxiang Wuzhen (Tongxiang) Equity Investment Co., Ltd. ( ථԮढᕄ(ඊ)ᛆ
ʮ̡)( “ Yunxiang Wuzhen ”), each as to 49.5%. Puhua is ultimately controlled by
Shen Qinhua ( ӏೞശ) as to 72%, and each of Tongxiang Puhua and Y unxiang Wuzhen is
state-owned entities controlled by the Tongxiang Finance Bureau (҅).
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Binjiang Puhua
Binjiang Puhua is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. It is held by its general partner, Hangzhou Binjiang
Puhua Equity Investment Management Co., Ltd. (ʮ̡)
(which is in turn held by Puhua as to 70%) as to 0.05% and its limited partners, Hangzhou
Binjiang Real Estate Group Co., Ltd. (ʮ̡)( “ Binjiang Real
Estate Group ”) as to 99.45% and Wu Xiaofeng ( юወᔮ) as to 0.5%. Binjiang Real Estate
Group is a company listed on the Shenzhen Stock Exchange (stock code: 002244) and is
principally engaged in real estate development in the PRC.
Puhua Tianqin
Puhua Tianqin is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. It is held by its general partner, Puhua as to 1% and
its limited partners Ningbo Meishan Bonded Port Area Puhua Tianji V enture Capital
Partnership (Limited Partnership) (೼ಥਜ౷ശ˂ᚕ௴ุҳ༟ΥྫΆุ(Υྫ)),
Jinhua Puhua Junji Investment Partnership (Limited Partnership) (ശ౷ശёᚕҳ༟ΥྫΆุ
(Υྫ)), Zhejiang Jinhua Transformation and Upgrading Industry Fund Co., Ltd. (ږ
ʮ̡) as to 42%, 37% and 20%, respectively. Ningbo Meishan
Bonded Port Area Puhua Tianji V enture Capital Partnership (Limited Partnership) is held as to
1.5% by its general partner, Puhua, as to 35.7% by its limited partner Zhejiang Pandao
Investment Management Co., Ltd. (ʮ̡) and other nine limited
partners who are Independent Third Parties, none of which holds 30% or more of interest
therein. Zhejiang Pandao Investment Management Co., Ltd. is held by Zhejiang Huacheng
Holding Group Limited Company (ʮ̡) and Zhejiang Huacheng Real
Estate Development Co., Ltd. (ʮ̡) as to 60% and 40%. Zhejiang
Huacheng Holding Group Limited Company is held by three Independent Third Parties, namely
Shen Fengfei (࠭Shen Bo (تand another individual as to 51.0%, 36.5% and 12.5%.
Zhejiang Huacheng Real Estate Development Co., Ltd. is held by Shen Bo and Zhejiang
Huacheng Holding Group Limited Company as to 72.5% and 27.5%. Jinhua Puhua Junji
Investment Partnership (Limited Partnership) is held as to 8.18% by its general partner, Puhua
and other ten Independent Third Parties, none of which holds 30% of the interests therein.
Zhejiang Jinhua Transformation and Upgrading Industry Fund Co., Ltd. is wholly owned by
Jinhua Industrial Fund Co., Ltd. (ʮ̡)), which is ultimately controlled by
State-owned Assets Supervision Administration Commission of Jinhua Municipal Government
(ึ).
9. Kangchengheng
Jiaxin Yuande
Jiaxin Y uande is a limited partnership established in the PRC. It is principally engaged in
equity investment. Its general partner is Shenzhen Jialin Xinye Equity Investment Management
Co., Ltd. (ʮ̡)( “ Jialin Management ”), which is in turn
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held by (i) Shenzhen Kangchengheng Capital Management Group Limited ( ଉέ̹ੰϓЖ༟͉
ʮ̡)( “ Kangchengheng ”), an asset management platform engaged in equity
investment and securities investment which is held as to 87% by Mr. Y uan Y akang ( ঺ԭੰ),
as to approximately 51.5%, and (ii) Shenzhen Y upengnian Property Management Co., Ltd. ( ଉ
ʮ̡) as to 48.5%, which is in turn controlled by Y upengnian
Management (Shenzhen) Co., Ltd. ( Яుϋ၍ଣ(ଉέ)ʮ̡), a conglomerate established
by philanthropist, Y u Pang-lin ( Яుϋ), as to 70%. Jiaxin Y uande is held by Jialin Management
as to 2.33%, Kangchengheng as to 0.95%, and 15 other limited partners as to 96.72%, none of
which holds one-third of the interests therein.
Kangchengheng Ruixiang
Kangchengheng Ruixiang is a limited partnership established in the PRC. It is principally
engaged in equity investment. Its general partner is Kangchengheng. Kangchengheng Ruixiang
is held as to 4.26% by Kangchengheng, and as to 95.74% by 14 limited partners, none of which
holds one-third of the interests therein.
10. Controlled entities of Mr. Zhang Tieshuang (
ੵ᚛ᕐ)
Xinrong Capital
Xinrong Capital is a limited partnership established in the PRC. It is principally engaged
in equity investment. It is held by its general partner, Zhoushan Guangchuan V enture Capital
Partnership (Limited Partnership) ( Ћʆᄿʇ௴ุҳ༟ΥྫΆุ(Υྫ)) (“ Zhoushan
Guangchuan ”) as to 99% and its limited partner, Harbin Huina Juxin Investment Management
Enterprise (Limited Partnership) (ဧᏵිॶၳ㒥ҳ༟၍ଣΆุ(Υྫ)) as to 1%.
Zhoushan Guangchuan is in turn held by Zhang Tieshuang ( ੵ᚛ᕐ) as to 95%.
Shenzhen Wanhe
Shenzhen Wanhe is a limited partnership established in the PRC. It is principally engaged
in equity investment. It is held by its general partner, Tianjin Y uerong Qihe Enterprise
Management Partnership (Limited Partnership) (൳࿰઼ႺΆุ၍ଣΥྫΆุ(Υྫ))
(“Tianjin Yuerong ”) as to 95% and its limited partner, Dong Jun (ࠏas to 5%. Tianjin
Y uerong is in turn held by its general partner, Zhang Tieshuang ( ੵ᚛ᕐ) as to 10% and its
limited partner, Zhao Ming (׼as to 90%.
11. Controlled entities of Mr. Ding Mingfeng (
ࢤ׼)
Hechuang Intelligent
Hechuang Intelligent is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. Its general partner is Shenzhen Hechuang Capital
Management Co., Ltd. (ʮ̡)( “ Hechuang Management ”), which is
in turn held by Ding Mingfeng (ࢤ׼as to over 70%. Hechuang Management focuses on the
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investment in information, communication and technology as well as and healthcare sectors.
Hechuang Intelligent is held by Hechuang Management as to 1.78% and 16 limited partners,
none of which holds one-third of the interest therein. Ding Mingfeng (ࢤ׼is the chairman
of Hechuang Management.
Qingdao Xinda
Qingdao Xinda is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. It is held by its general partner, Ding Mingfeng ( ɕ
ࢤ׼as to 1%, and three limited partners, namely Qian Qiang ( ፺੶), Tang Zujia (ख़Գ) and
Y u Juan (ऐ) who are managing partners of Hechuang Management, each as to 33%.
12. OFC
SME Development
SME Development is a limited partnership established in the PRC. It is principally
engaged in equity investment. Its general partner is Shenzhen OFC SME Development Fund
Equity Investment Management Co., Ltd. (ʮ
̡)( “ OFC SME Management ”), which is controlled by Shenzhen Oriental Fortune Capital
Co., Ltd. (ʮ̡)( “ OFC”). OFC is held by a total of 17
shareholders, including (i) Mr. Chen Wei ( ௓⒜), the chairman of OFC, and his controlled
entities, namely Wuhu Fuhai Jiutai Investment Consulting Partnership (Limited Partnership)
(ጾಳ̹బऎɮइҳ༟ፔ༔ΥྫΆุ(Υྫ)) and Wuhu Fuhai Juli Investment Consulting
Partnership Enterprise (Limited Partnership) ( ጾಳ̹బऎၳлҳ༟ፔ༔ΥྫΆุ(Υྫ))
as to over 50%, (ii) Guangdong Baolihua New Energy Co., Ltd. (ࠢ
ʮ̡), an independent investor and the second largest shareholder of OFC as to 29.59%, and
(iii) 13 other independent investors or shareholders of OFC, each holding no more than 10%
of the interests in OFC. OFC focuses on the investment in technology, media and telecom,
green technology, new material and advanced manufacturing technology and healthcare
sectors. SME Development is held as to 1% by OFC SME Management and 11 limited partners,
none of which holds one-third or more of the interest therein.
Dongfang Fuhai
Dongfang Fuhai is a limited partnership established in the PRC. It is principally engaged
in equity investment. Its general partner is Shenzhen Dongfang Fuhai V enture Capital
Management Co., Ltd. (ʮ̡)( “ Dongfang Fuhai Venture
Capital ”), which is in turn wholly owned by OFC. Dongfang Fuhai is held as to (i) 1% by
Dongfang Fuhai V enture Capital, (ii) 5% by OFC, (iii) 35% by Shenzhen Yindao Fund
Investment Co., Ltd. (ʮ̡)( “ Shenzhen Yindao Fund ”) and (iv)
59% by 8 other limited partners, none of which holds one-third of the interests therein.
Shenzhen Yindao Fund is in turn wholly owned by Shenzhen Municipal Finance Bureau ( ଉέ
҅).
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Fuhai Youxuan
Fuhai Y ouxuan is a limited partnership established in the PRC. It is principally engaged
in equity investment. Its general partner is Dongfang Fuhai V enture Capital. Fuhai Y ouxuan is
held as to (i) 2.51% by Dongfang Fuhai V enture Capital, (ii) 5.01% by OFC and (iii) 92.48%
by 43 other limited partners, none of which holds one-third or more of the interest therein.
13. Xinzhifeng
Xinzhifeng is a limited partnership established under the laws of the PRC. It is principally
engaged in equity investment. Its general partner is Y uanjing (Wuhan) Investment Management
Co., Ltd. ( ᒐᅓ(ဏ)ʮ̡)( “Yuanjing Wuhan ”), which is in turn wholly owned
by Dongfeng Asset Management, which is in turn wholly owned by the SASAC. Xinzhifeng
is held as to 0.03% by Y uanjing Wuhan and as to 99.97% by its limited partner, Dongfeng
Asset.
14. Hubei Cathay Cartech
Hubei Cathay Cartech is a limited partnership established under the laws of the PRC,
which is managed by its general partner, Cathay (Quanzhou) Private Equity Fund Management
Co., Ltd. ( ௱ሾ(ψ)ʮ̡), formerly known as Hubei Cathay Equity
Investment Management Co., Ltd. (ʮ̡), an investment platform
of Cathay Capital (ږHubei Cathay Cartech is principally engaged in equity
investment and focuses on innovative companies in the automotive and automotive related
smart mobility sector with a strong potential growth upside and critical technology control
points in China.
15. Shenzhen Shanchuang
Shenzhen Shanchuang is a limited partnership established under the laws of the PRC. It
is principally engaged in equity investment. Its general partner is Shenzhen Shanchuang Equity
Investment Management Co., Ltd. (ʮ̡)( “ Shenzhen
Shanchuang Management ”), which is in turn held by Shanghai Shanshan Chuanghui V enture
Capital Management Co., Ltd. (ʮ̡)( “ Shanghai
Shanshan ”) as to 70%. Shanghai Shanshan is held by (i) Ningbo Shanshan V enture Capital
Co., Ltd. (ʮ̡), a limited liability company ultimately wholly owned
by Ningbo Shanshan Co., Ltd. (ʮ̡), a company listed on the Shanghai
Stock Exchange (Stock Code: 600884), as to 40%; (ii) Shanghai Wenbo Asset Management
Co., Ltd. (ʮ̡), a limited liability company held as to 52.27% by Mr.
Li Baosheng ( ҽᘒ͛), as to 40%; and (iii) Ningbo Meishan Bonded Port Area Ruixing Trading
Co., Ltd. (ʮ̡), a limited liability company held as to 99% by
Mr. Huang Xiangle ( රജᆀ), as to 20%. Shenzhen Shanchuang is held as to 1% by Shenzhen
Shanchuang Management, and 99% by four limited partners, among which Shenzhen Yindao
Fund holds 35% of the interest therein.
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16. Moqin Intelligent
Moqin Intelligent is a company established under the laws of the PRC with limited
liability. It is principally engaged in equity investment. It is wholly owned by Huaqin
Technology Co., Ltd. (ʮ̡), a company listed on the Shanghai Stock
Exchange (stock code: 603296) which specializes in smart hardware products.
17. Shanghai Ganche
Shanghai Ganche is a limited partnership established under the laws of the PRC. It is
principally engaged in equity investment. It is held by its general partner, Shanghai Huimin
Business Consulting Center (ਠਕፔ༔ʕː)( “ Shanghai Huimin ”) (which is in turn
wholly owned by Deng Jinyu ( ቎ᆩຄ)) as to 1%, and its limited partner, Shanghai Y ujiang
Information Technology Center (Ҧʕː)( “ Shanghai Yujiang ”) (which is in
turn wholly owned by Mr. Zheng Xianneng ( ቍ΋ঐ)) as to 99%.
Joint Sponsors’ Confirmation
On the basis that (i) the Pre-IPO Investments were irrevocably settled more than 28 clear
days before the date of first filing of the listing application, and (ii) the redemption rights and
divestment rights granted to the Pre-IPO Investors have been terminated upon the first filing
of listing application by the Company submitted with the Stock Exchange and all other special
rights granted to the Pre-IPO Investors will be terminated upon Listing on (and inclusive of)
the Listing Date, the Joint Sponsors have confirmed that the Pre-IPO Investments are in
compliance with Chapter 4.2 of the Guide for New Listing Applicants.
PRC Legal Advisor’s Confirmation
As advised by our PRC Legal Advisor, our Company has made all necessary registrations
or filings with the relevant local branch of SAMR in respect of the Pre-IPO Investments in all
material respects, and the Pre-IPO Investments were conducted in compliance with the
applicable PRC laws and regulations in all material respects.
EMPLOYEE OWNERSHIP PLATFORMS
In recognition of the contribution of our senior management and key personnel and to
incentivize them to promote the development of our business, the ESOP Holding Entities,
namely Y oujia Qingcheng, Y oujia Zhongcheng and Y oujia Licheng, were established as limited
partnerships under the laws of the PRC as our employee ownership platforms. As of the Latest
Practicable Date, each of the ESOP Holding Entities had one general partner, namely Dr. Liu
Guoqing, who shall have decision-making power and management control over each of the
ESOP Holding Entities.
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As of the Latest Practicable Date, the ESOP Holding Entities collectively held
approximately 5.86% of the total issued share capital of our Company. Immediately following
the completion of the Global Offering (assuming the Over-allotment Option is not exercised),
the ESOP Holding Entities will be interested in approximately 5.29% of the total issued share
capital of our Company. The ESOP Holding Entities form part of the Single Largest Group of
Shareholders. See “Relationship with the Single Largest Group of Shareholders” for further
details.
The Employee Incentive Scheme is not subject to the provisions of Chapter 17 of the
Listing Rules as it does not involve any grant of share options or awards or any issuance of new
Shares by our Company after Listing. For further details of our employees’ ownership
platforms and the Employee Incentive Scheme see “Appendix VI—Statutory and General
Information—D. Employee Incentive Scheme.”
CONCERT PARTY GROUP
To formalize the cooperation among the members of the Concert Party Group in achieving
the shared goals and objectives of our Company, Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou
Xiang, Mr. Wang Qicheng, Mr. Y an Shengye and Mr. Wu Jianxin entered into the Concert Party
Agreement in June 2019, as amended and replaced by the Amended Concert Party Agreement
entered into among them in May 2024. The Amended Concert Party Agreement served to
reaffirm their concert party arrangement, to confirm and formalize the effective date and
termination date of the concert party arrangement, and to clarify that only the Shares
beneficially owned by the members of the Concert Party Group are subject to the concert party
arrangement, and it does not affect the ownership continuity of our Company as required under
Rule 8.05(3)(c) of the Listing Rules. Pursuant to the Amended Concert Party Agreement, each
of Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou Xiang, Mr. Wang Qicheng, Mr. Y an Shengye
and Mr. Wu Jianxin agreed to be parties acting in concert in (i) aligning their votes in the board
meetings of our Company, and (ii) aligning their votes in the Shareholders’ meeting of our
Company in respect of the Shares in our Company beneficially owned by each of them from
time to time, since they became and remained as Directors or Shareholders of our Company,
and that members of the Concert Party Group will follow Dr. Liu Guoqing’s vote to arrive at
a unanimous consent in case of any disagreement. Such concert party arrangement (i) in respect
of Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou Xiang and Mr. Wang Qicheng, shall be
effective until 36 months after the Listing, and (ii) in respect of Mr. Y an Shengye and Mr. Wu
Jianxin, shall be effective until 12 months after the Listing.
As of the Latest Practicable Date, the Concert Party Group is collectively interested in
approximately 24.35% of the total issued share capital of our Company. Immediately following
the completion of the Global Offering (assuming the Over-allotment Option is not exercised),
the Concert Party Group will be interested in approximately 21.96% of the total issued share
capital of our Company. The Concert Party Group forms part of our Single Largest Group of
Shareholders. See “Relationship with the Single Largest Group of Shareholders” for further
details.
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PREVIOUS PLAN FOR A-SHARE LISTING
On August 3, 2023 we entered into a pre-listing tutoring engagement agreement with a
tutoring agency in relation to our previous preliminary plan to list on the A-share market (the
“A-Share Listing Plan ”). As part of the preparation for the A-Share Listing Plan, we filed a
notice of pre-listing tutoring for A-share listing application with the CSRC on August 9, 2023.
We terminated the pre-listing tutoring engagement agreement with the tutoring agency on
May 23, 2024. The tutoring acceptance inspection procedure in relation to the A-Share Listing
Plan has not been initiated and no formal listing application in relation to the A-Share Listing
Plan has been filed, and therefore, no major comments and issues were received from or raised
by the relevant regulatory authorities in the PRC in relation to the A-Share Listing Plan.
Due to the overall market environment and having regard to our future strategies to grasp
opportunities in the international market, we subsequently considered that a listing on the
Stock Exchange would be more favorable to our development. Therefore, we decided to
suspend the A-Share Listing Plan and proceed with the Listing.
To the best of our Directors’ knowledge, information and belief, our Directors are not
aware of any material matter in relation to the A-Share Listing Plan which may materially and
adversely affect the Company’s suitability for Listing and needs to be brought to the attention
of the Stock Exchange or the Shareholders.
Based on the due diligence work conducted by the Joint Sponsors, nothing has come to
the Joint Sponsors’ attention that would reasonably cause the Joint Sponsors to disagree with
the Directors’ view on whether any material matter in relation to the A-Share Listing Plan
needs to be brought to the attention of the Stock Exchange or the Shareholders.
PUBLIC FLOAT
54,393,441 H Shares converted from Unlisted Shares and controlled by the Concert Party
Group and the ESOP Holding Entities, all being our core connected persons or otherwise fall
under the situations as contemplated under Rule 8.24 of the Listing Rules (representing
approximately 15.11% of our total issued Shares as of the Latest Practicable Date,
approximately 13.63% of our total issued Shares upon Listing (assuming the Over-allotment
Option is not exercised), or approximately 13.43% of our total issued Shares (upon exercise of
the Over-allotment Option in full)), will not be considered as part of the public float of our
Company in accordance with Rule 8.08 of the Listing Rules.
In addition, 14,427,295 H Shares converted from Unlisted Shares and controlled by
Kangchengheng, which will be our core connected person upon Listing (representing
approximately 4.01% of our total issued Shares as of the Latest Practicable Date,
approximately 3.61% of our total issued Shares upon Listing (assuming the Over-allotment
Option is not exercised), or approximately 3.56% of our total issued Shares (upon exercise of
the Over-allotment Option in full)) will not be considered as part of the public float of our
Company in accordance with Rule 8.08 of the Listing Rules.
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In addition, 89,576,892 Unlisted Shares that will not be converted into H Shares
(representing approximately 24.88% of our total issued Shares as of the Latest Practicable
Date, approximately 22.44% of our total issued Shares upon Listing (assuming the Over-
allotment Option is not exercised), or approximately 22.11% of our total issued Shares (upon
exercise of the Over-allotment Option in full)) will not be considered as part of the public float
of our Company, as the Unlisted Shares will not be converted into H Shares and will not be
listed following the completion of the Global Offering.
To the best knowledge and information of our Directors, taking into account the
Conversion of Unlisted Shares into H Shares upon Listing and the Global Offering,
209,699,572 H Shares (representing approximately 52.53% of our total issued Shares upon
Listing (assuming the Over-allotment Option is not exercised)), or 215,577,972 H Shares
(representing approximately 53.22% of our total issued Shares (upon exercise of the
Over-allotment Option in full) both calculated based on the low-end of the indicative Offer
Price range) will be counted towards the public float of our Company in accordance with Rule
8.08 of the Listing Rules. For further details of the Conversion of Unlisted Shares into H
Shares, see “Share Capital” in this prospectus.
CAPITALIZATION OF OUR COMPANY
The following table sets out our shareholding structure (a) as at the date of this prospectus
and (b) immediately upon the completion of the Global Offering and the Conversion of
Unlisted Shares, assuming the Over-allotment Option is not exercised.
Number of Shares
upon completion of the
Global Offering (1)
Shareholders
Number of Shares
held by the
Shareholder as at
the date of this
prospectus H Shares (7) Unlisted Shares
Aggregate
ownership
percentage as at
the date of this
prospectus
Aggregate
ownership
percentage upon
completion of
the Global
Offering (1)
Concert Party Group
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,283,503 17,141,752 17,141,751 9.52% 8.59%
Mr. Y ang Guang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,928,508 7,464,254 7,464,254 4.15% 3.74%
Mr. Zhou Xiang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,928,508 7,464,254 7,464,254 4.15% 3.74%
Mr. Wang Qicheng /H1118/H1118/H1118/H1118/H1118/H111813,348,191 6,674,096 6,674,095 3.71% 3.34%
Mr. Y an Shengye /H1118/H1118/H1118/H1118/H1118/H1118/H11185,993,470 2,996,735 2,996,735 1.66% 1.50%
Mr. Wu Jianxin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,195,615 2,097,808 2,097,807 1.17% 1.05%
ESOP Holding Entities
Y oujia Qingcheng (2) /H1118/H1118/H1118/H1118/H1118/H111812,386,181 6,193,091 6,193,090 3.44% 3.10%
Y oujia Zhongcheng (2) /H1118/H1118/H1118/H1118/H11185,815,267 2,907,634 2,907,633 1.62% 1.46%
Y oujia Licheng (2) /H1118/H1118/H1118/H1118/H1118/H1118/H11182,907,634 1,453,817 1,453,817 0.81% 0.73%
Major Pre-IPO Investors (3)
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Number of Shares
upon completion of the
Global Offering (1)
Shareholders
Number of Shares
held by the
Shareholder as at
the date of this
prospectus H Shares (7) Unlisted Shares
Aggregate
ownership
percentage as at
the date of this
prospectus
Aggregate
ownership
percentage upon
completion of
the Global
Offering (1)
Beijing Siwei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,611,320 32,611,320 N/A 9.06% 8.17%
Shenzhen Zeyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,421,719 21,421,719 N/A 5.95% 5.37%
Guokai Zhizao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,548,643 N/A 20,548,643 5.71% 5.15%
CICC Capital
Liantong CICC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,183,861 8,183,861 N/A 2.27% 2.05%
CICC Alpha /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,209,625 7,209,625 N/A 2.00% 1.81%
CICC Changde /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,623,446 4,623,446 N/A 1.28% 1.16%
Mr. Wu Y ongming and his
controlled entity
Mr. Wu Y ongming /H1118/H1118/H1118/H1118/H1118/H1118/H11188,316,675 8,316,675 N/A 2.31% 2.08%
Hangzhou Y uanjing Lechi /H1118/H1118 673,092 673,092 N/A 0.19% 0.17%
Hangzhou Y uanjing Erjiu
Suzhou Y uanjing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,408,171 4,408,171 N/A 1.22% 1.10%
Hangzhou Y uanjing
Chuangheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,408,171 4,408,171 N/A 1.22% 1.10%
Zhiying Huirong
Jiashi Shengqi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,956,891 5,956,891 N/A 1.65% 1.49%
Jiashi Shengde /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,628,665 5,628,665 N/A 1.56% 1.41%
Jiashi Shengxuan /H1118/H1118/H1118/H1118/H1118/H1118/H11185,415,346 5,415,346 N/A 1.50% 1.36%
Puhua
Puhua Fengqi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,730,883 6,730,883 N/A 1.87% 1.69%
Binjiang Puhua /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,640,749 4,640,749 N/A 1.29% 1.16%
Puhua Tianqin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,640,749 4,640,749 N/A 1.29% 1.16%
Kangchengheng
Jiaxin Y uande /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,307,511 10,307,511 N/A 2.86% 2.58%
Kangchengheng Ruixiang /H1118/H1118/H1118 4,119,784 4,119,784 N/A 1.14% 1.03%
Controlled entities of
Mr. Zhang Tieshuang
Xinrong Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,970,342 5,181,496 1,788,846 1.94% 1.75%
Shenzhen Wanhe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,769,609 188,480 3,581,129 1.05% 0.94%
Controlled entities of
Mr. Ding Mingfeng
Hechuang Intelligent /H1118/H1118/H1118/H1118/H11187,701,739 7,701,739 N/A 2.14% 1.93%
Qingdao Xinda /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131,864 131,864 N/A 0.04% 0.03%
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Number of Shares
upon completion of the
Global Offering (1)
Shareholders
Number of Shares
held by the
Shareholder as at
the date of this
prospectus H Shares (7) Unlisted Shares
Aggregate
ownership
percentage as at
the date of this
prospectus
Aggregate
ownership
percentage upon
completion of
the Global
Offering (1)
OFC
SME Development /H1118/H1118/H1118/H1118/H1118/H11186,179,681 6,179,681 N/A 1.72% 1.55%
Dongfang Fuhai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,541,149 1,541,149 N/A 0.43% 0.39%
Fuhai Y ouxuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,541,149 1,541,149 N/A 0.43% 0.39%
Xinzhifeng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,209,625 7,209,625 N/A 2.00% 1.81%
Hubei Cathay Cartech /H1118/H1118/H1118/H1118/H1118/H11186,727,996 6,727,996 N/A 1.87% 1.69%
Shenzhen Shanchuang /H1118/H1118/H1118/H1118/H1118/H11186,349,372 6,349,372 N/A 1.76% 1.59%
Moqin Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,232,967 4,232,967 N/A 1.18% 1.06%
Shanghai Ganche /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,176,618 N/A 4,176,618 1.16% 1.05%
Other Pre-IPO Investors (4)
Jinning Qianglian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,551,922 3,551,922 N/A 0.99% 0.89%
Zhejiang Huihong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,093,770 3,093,770 N/A 0.86% 0.78%
Shanghai Hongjin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,793,724 2,793,724 N/A 0.78% 0.70%
Chantou Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,692,349 2,692,349 N/A 0.75% 0.67%
Chongqing Shenghehui /H1118/H1118/H1118/H1118/H11182,054,859 2,054,859 N/A 0.57% 0.51%
Huazhi Xingrui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,019,267 1,009,633 1,009,634 0.56% 0.51%
Boyuan Hongcheng /H1118/H1118/H1118/H1118/H1118/H1118/H11182,019,267 2,019,267 N/A 0.56% 0.51%
Suikai Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,884,646 1,884,646 N/A 0.52% 0.47%
Fulin Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,546,978 1,546,978 N/A 0.43% 0.39%
Chongqing Kexing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,541,149 1,541,149 N/A 0.43% 0.39%
Suikai Intelligent No. 2 /H1118/H1118/H1118/H1118/H11181,480,795 1,480,795 N/A 0.41% 0.37%
Chaogaoqing Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,346,175 1,346,175 N/A 0.37% 0.34%
Xinjing Fuying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,346,175 1,346,175 N/A 0.37% 0.34%
Shenhong Huichuang /H1118/H1118/H1118/H1118/H1118/H1118962,950 962,950 N/A 0.27% 0.24%
Shenwan Changhong /H1118/H1118/H1118/H1118/H1118/H1118/H1118962,950 962,950 N/A 0.27% 0.24%
Kexi Zhongke /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118807,703 807,703 N/A 0.22% 0.20%
Kechuangzhihui No. 2 /H1118/H1118/H1118/H1118/H1118/H1118336,541 336,541 N/A 0.09% 0.08%
Jipei Xinsheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216,290 216,290 N/A 0.06% 0.05%
Hehe Suikai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,615 99,615 N/A 0.03% 0.02%
Other Shareholder
Nanchang Municipal Public
Group Co., Ltd. (“ Nanchang
Municipal ”) (ʮ͜
ʮ̡)
(5) /H1118/H1118/H1118/H1118/H1118/H1118/H11184,078,586 N/A 4,078,586 1.13% 1.02%
Offer Shares
Offer Shares Shareholders
(6) /H1118/H1118 – 39,190,000 N/A – 9.82%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,000,000 309,613,108 89,576,892 100% 100.00%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Notes:
(1) Assuming the Over-allotment Option is not exercised.
(2) Y oujia Qingcheng, Y oujia Zhongcheng and Y oujia Licheng are ESOP Holding Entities, holding Shares in our
Company as our employee ownership platforms. Each of the ESOP Holding Entities is held by Dr. Liu Guoqing
as the general partner. Each of Y oujia Qingcheng, Y oujia Zhongcheng and Y oujia Licheng is held by 41, 34
and 39 limited partners, respectively, being the employees of our Group as of the Latest Practicable Date. For
details, see “Appendix VI—Statutory and General Information—D. Employee Incentive Scheme.”
(3) See “—Pre-IPO Investments—Information about our Major Pre-IPO Investors.” for the detailed background
information of each of the major Pre-IPO Investors.
(4) To the best of the Company’s knowledge, information and belief, such Shareholders are Independent Third
Parties.
(5) The Company has received an enforcement notice dated November 4, 2024 (the “ Enforcement Notice ”) issued
by the People’s Court of Donghu District, Nanchang, Jiangxi Province (the “ People’s Court of Donghu ”).
According to the Enforcement Notice, an enforcement order was issued by the People’s Court of Donghu on
September 6, 2024 (the “ Court Order ”), pursuant to which the ownership of 4,078,586 Shares in the Company
(the “Relevant Shares”) held by Mr. Li Fan (“Mr. Li”) was ordered to be transferred to Nanchang Municipal
(the “ Transfer ”) to fulfill Mr. Li’s repayment obligations to Nanchang Municipal as confirmed by a civil
mediation document issued by the People’s Court of Donghu (“ Repayment Obligations ”). The Repayment
Obligations were personal matters of Mr. Li, and were negotiated between Mr. Li and Nanchang Municipal
without any involvement of the Company. As advised by the PRC Legal Advisor, (i) the Transfer is necessitated
as a result of the Court Order and the related legal proceeding involving Mr. Li; (ii) each of the Enforcement
Notice and the Court Order is made pursuant to applicable laws and regulations of the PRC; and (iii) the
Company is legally obliged to cooperate to complete the Transfer in compliance with the Enforcement Notice
and the Court Order. It should be noted that the consideration for Mr. Li’s subscription of 437,973 Shares
(adjusted as 4,078,586 Shares upon the completion of the capitalization of the capital reserve of the Company
on December 1, 2023), being RMB22,000,000 (the “ Li Fan Investment Amount ”), was irrevocably settled
back in October 2020, and Mr. Li has been a shareholder of the Company since then. As advised by the PRC
Legal Advisor, the Li Fan Investment Amount could be freely utilised by the Company for its principal
business without being impacted by the Enforcement Notice, the Court Order or the Transfer or being subject
to any other condition. Therefore, the Enforcement Notice, the Court Order and the Transfer do not affect the
irrevocable settlement and completion of Mr. Li’s subscription of the Relevant Shares.
(6) “Offer Shares Shareholders” refer to the Shareholders who subscribe for the Offer Shares pursuant to the
Global Offering, among which 31,092,800 H Shares to be subscribed by KCH International Investment
Limited (calculated based on the low-end of the indicative Offer Price range) will not be counted towards the
public float of the Company as KCH International Investment Limited is controlled by Kangchengheng, which
will be one of our substantial shareholder holding 45,520,095 H Shares upon Listing (calculated based on the
low-end of the indicative Offer Price range), representing 11.40% of total issued Shares upon Listing
(assuming the Over-allotment Option is not exercised). See “Cornerstone Investors” in this prospectus for
details of the subscription by KCH International Investment Limited and see “History, Development and
Corporate Structure — Pre-IPO Investments — Information about our Major Pre-IPO Investors — 9.
Kangchengheng” in this prospectus for details of Kangchengheng.
(7) The number of H Shares upon Listing represent (i) in respect of the existing Shareholders, the number of
H Shares as converted from Unlisted Shares under the Conversion from Unlisted Shares into H Shares, and
(ii) in respect of the public Shareholders, the number of H Shares to be issued pursuant to the Global Offering.
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CORPORATE STRUCTURE
The following charts illustrate our shareholding and corporate structure (1) immediately prior to completion of the Global Offering and (2)
immediately after the completion of the Global Offering (assuming that the Over-allotment Option has not been exercised).
Immediately prior to the completion of the Global Offering (9)
Concert Party
Group
ESOP Holding
Entities Beijing Siwei Shenzhen Zeyi Guokai Zhizao CICC Capital Zhiying Huirong Puhua Kangchengheng Other major
Pre-IPO Investors
24.35% 5.86% 9.06% 5.95% 5.71% 5.56% 4.72% 4.45% 4.01% 20.65%
Other Pre-IPO
Investors and
Other Shareholder
9.68%
Our Company
100% 100% 100% 51.61% 100%
Guangzhou
Youjia
Wuhan
Youjia
Nanjing
Kaiyun
Jiangsu
Yuanshi(2)
Hunan
Youxiang
100% 60% 55% 75% 100% 100% 51% 100% 100% 51%
Nanjing
Youjia
Shanghai
Youqu(3)
Shanghai
Youxing(4)
Ruijian
Zhixing(5)
Hubei
Youjia
Youjia
Zhixing
Zhongyan
Youjia(6)
Tongxiang
Wuzhen
Youjia
Youjia
Beijing
Chongqing
Youjia(7)
60%
Shaanxi
Youjia(8)
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(1) The Concert Party Group and ESOP Holding Entities form the Single Largest Group of Shareholders of our Company. See “Relationship with Our Single L argest Group of
Shareholders” for details. Also see “—Pre-IPO Investments—Information about our Major Pre-IPO Investors” above for the detailed background infor mation of each of the major
Pre-IPO Investors and “—Capitalization of our Company” for the background information of the other Pre-IPO Investors.
(2) The remaining 48.39% equity interest of Jiangsu Y uanshi is held by China Design Group Co., Ltd. (ʮ̡), which is a company listed on the Shanghai
Stock Exchange (stock code: 603018) and an Independent Third Party other than being the substantial shareholder of Jiangsu Y uanshi, which is an insig nificant subsidiary (as
defined under Rule 14A.09 of the Listing Rules) of our Company.
(3) The remaining 40% equity interest of Shanghai Y ouqu is held by Shanghai Tianqu Technology Co., Ltd. (ʮ̡), which is in turn held by Lin Haiya (ऎԭ)
as to 60%, and an Independent Third Party other than being the substantial shareholder of Shanghai Y ouqu, which is an insignificant subsidiary (as def ined under Rule 14A.09
of the Listing Rules) of our Company.
(4) The remaining 45% equity interest of Shanghai Y ouxing is held by Wu Jiwei ( юᘱਃ), who is an Independent Third Party other than being the substantial shareholder of Shanghai
Y ouxing, which is an insignificant subsidiary (as defined under Rule 14A.09 of the Listing Rules) of our Company.
(5) The remaining 25% equity interest of Ruijian Zhixing is held by Hangzhou Xianghui Y ouxin Equity Investment Partnership (Limited Partnership) (ᛆҳ༟Υ
ྫΆุ(Υྫ)), which is in turn held by Hangzhou Qiantang New Area Construction Investment Group Co., Ltd. (ʮ̡), a state-owned
enterprise, as to over 40%, and an Independent Third Party other than being the substantial shareholder of Ruijian Zhixing, which is an insignificant subsidiary (as defined under
Rule 14A.09 of the Listing Rules) of our Company.
(6) The remaining 49% equity interest of Zhongyan Y oujia is held by Zhongyan Zhike Data Technology (Shanghai) Co., Ltd. (Ҧ(ɪऎ)ʮ̡)( “ Zhongyan
Zhike ”) (which is ultimately controlled by Wu Jinshan (ʆ)) as to 23%, Keruisichuang Intelligent Technology (Shanghai) Co., Ltd. (Ҧ(ɪऎ)ʮ̡)
(which is a subsidiary of Zhongyan Zhike) as to 16%, and Shanghai Y utian Enterprise Management Partnership (Limited Partnership) ( ɪऎය˂Άุ၍ଣΥྫΆุ(Υྫ))
(which is ultimately controlled by Wu Jinshan (ʆ)) as to 10%, who are Independent Third Parties other than being the shareholders of Zhongyan Y oujia, which is an
insignificant subsidiary (as defined under Rule 14A.09 of the Listing Rules) of our Company.
(7) The remaining 49% equity interest of Chongqing Y oujia is held by Chongqing Hetai Runda Technology Co., Ltd. (ʮ̡), which is in turn held by each
ofᛢ (Ling Ji) and රᑡᏄ (Huang Xuepin) as to 50% and an Independent Third Party other than being the substantial shareholder of Chongqing Y oujia, which is an
insignificant subsidiary (as defined under Rule 14A.09 of the Listing Rules) of our Company.
(8) The remaining 40% of Shaanxi Y oujia is held by Xi’an Desheng Xinghan Intelligent Technology Co., Ltd. (ʮ̡) (which is in turn wholly owned
by Han Xiao ( ᒵᄟ)) as to 30% and Dechuang Future Automotive Technology Co., Ltd. (ʮ̡) (which is ultimately controlled by Shaanxi Automobile
Group Co., Ltd. (ʮ̡), a state-owned enterprise) as to 10%, which are Independent Third Parties other than being the substantial shareholder of Shaanxi
Y oujia, which is an insignificant subsidiary (as defined under Rule 14A.09 of the Listing Rules) of our Company.
(9) The chart shows the subsidiaries directly held by our Company.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Immediately after the completion of the Global Offering (assuming that the Over-allotment Option is not exercised) (9)
Concert Party
Group Beijing Siwei Shenzhen ZeyiESOP Holding
Entities Guokai Zhizao CICC Capital Zhiying Huirong Puhua Kangchengheng
Other Pre-IPO
Investors and
Other Shareholder
21.96% 8.17% 5.37% 5.29% 5.15% 5.01% 4.26% 4.01% 3.61% 8.73%
Other major
Pre-IPO
Investors
18.62%
Offer Shares
Shareholders
9.82%
Our Company
100% 100% 100% 51.61% 100% 60%
Guangzhou
Youjia
Wuhan
Youjia
Nanjing
Kaiyun
Jiangsu
Yuanshi(2)
Hunan
Youxiang
Shaanxi
Youjia(8)
100% 60% 55% 75% 100% 100% 51% 100% 100% 51%
Nanjing
Youjia
Shanghai
Youqu(3)
Shanghai
Youxing(4)
Ruijian
Zhixing(5)
Hubei
Youjia
Youjia
Zhixing
Zhongyan
Youjia(6)
Tongxiang
Wuzhen
Youjia
Youjia
Beijing
Chongqing
Youjia(7)
Note:
Notes (1) to (9): See the corresponding notes for the chart under “Immediately prior to the completion of the Global Offering” above.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OVERVIEW
Who We Are
We are an intelligent driving and cabin solutions provider in China, offering solutions for
critical aspects of the driving experience, including piloting, parking and in-cabin functions.
With our advanced R&D and commercialization capabilities, we empower intelligent vehicles,
enhancing safety and driving experiences while promoting vehicle automation. We are devoted
to becoming a leader in the automotive intelligence solutions industry adhering to an
incremental approach of intelligent driving development, which means that we gradually
develop our intelligent driving solutions of increasing degrees of automation. We provide
Level 0 to Level 2+ intelligent driving solutions that are in-house developed and proven by
mass production, and we have also been proactively developing more advanced autonomous
driving technologies. As of the Latest Practicable Date, we had accumulatively undertaken
mass production for 35 automotive original equipment manufacturers (OEMs). We have
deployed in the sectors of individual vehicle intelligence and vehicle infrastructure cooperative
system, and we aim to create a more comprehensive solutions portfolio that meets diverse
customer needs, contributing to the establishment of an automotive intelligence ecosystem.
Our in-house platform-based technologies, software-hardware-integrated R&D capabilities and
advanced mass production capabilities provide our solutions with significant technical
advantages and cost-effective features.
Our solutions comprise intelligent driving solutions, intelligent cabin solutions and
vehicle infrastructure cooperative systems. We have achieved remarkable accomplishments in
each of our business lines:
 Intelligent driving solutions . Our intelligent driving solutions primarily include the
iSafety and iPilot series. In 2021, 2022 and 2023 and the six months ended June 30,
2024, we had design wins under development for our intelligent driving solutions
for 18, 19, 20 and 25 vehicle models with 12, 13, 14 and 16 OEMs, respectively, and
had undertaken mass production for 22, 50, 56 and 67 vehicle models with 10, 17,
20 and 22 OEMs, respectively. According to CIC, in 2023, we ranked seventh
among all domestic intelligent driving solutions providers and ranked fourth among
all emerging technology companies in China, with a market share of 0.6%, in terms
of revenue of Level 0 to Level 2+ solutions. As a testament to our capabilities, we
were the only supplier of intelligent driving solutions from Mainland China to be
awarded the “Supplier Innovation Award 2023” by ZF Group, a Germany-
headquartered global technology company supplying advanced mobility products.
Furthermore, we are developing and testing autonomous driving functions at more
advanced levels of automation, and expect to deliver our iRobo solutions in the first
quarter of 2025.
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 Intelligent cabin solutions . In 2021, 2022 and 2023 and the six months ended June
30, 2024, we had design wins under development for our intelligent cabin solutions
for 4, 17, 31 and 16 vehicle models with 3, 9, 9 and 8 OEMs, respectively, and had
undertaken mass production for nil, 3, 10 and 30 vehicle models with nil, 2, 7 and
9 OEMs, respectively. According to CIC, we are among the first batch of suppliers
of driver monitoring system (DMS) solutions in China that successfully supported
OEMs in obtaining driver drowsiness and attention warning (DDAW) certifications
for their vehicle models under the EU General Safety Regulation (GSR).
 V ehicle infrastructure cooperative systems . We have been proactively developing
vehicle infrastructure cooperative systems, expecting to advance intelligent
transportation infrastructure and smart cities. With the intelligent collaborations
among the on-board devices of individual vehicle intelligence and the roadside
devices of vehicle infrastructure cooperative system, we have been promoting
vehicle-to-infrastructure connectivity, and we are committed to achieving further
commercialization in this sector. During the Track Record Period and up to the
Latest Practicable Date, we had participated in 21 typical vehicle infrastructure
cooperative system projects in China.
Highway
& Intersection
Management
Industry Parks
& Parking Space
Management
iSafety
iPilot
iRobo
DMS
OMS
We have strategically laid out and advanced our three principal business lines based on
our three core strengths in algorithm development, software engineering and hardware design.
This strategy aligns with the market demand and technology development in the automotive
intelligence solutions industry.
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Intelligent driving solutions are the core and foundation of our business. The market’s
recognition and application of intelligent driving technologies is a step-by-step process, and we
have accordingly adopted an incremental strategy. Starting from basic advanced driver
assistance system (ADAS) functions, we have been continually refining and enhancing our
solutions. Our intelligent driving solutions portfolio is tailored to meet the requirements of
various driving scenarios and diverse vehicle models of OEMs. The technological capabilities,
accumulated experience, expansive customer base and esteemed reputation we have cultivated
since our inception provide a robust foundation for our future growth.
Intelligent cabin solutions significantly elevate the safety and comfort of journeys for
both drivers and passengers, creating synergies with intelligent driving solutions. As
automotive intelligence advances to higher levels, the importance of the interaction among
various driving and cabin solutions becomes more prominent. Intelligent cabin solutions not
only bolster safety by monitoring driver behavior and status and timely intervening during
intelligent driving, but also provide interactive and intelligent in-cabin functions, offering
differentiated driver and passenger experiences. With our strengths in both sectors, we are well
positioned to deliver advanced solutions in line with the trend of “crossover and integration”
as advocated by mainstream OEMs.
The vehicle infrastructure cooperative systems stand as pivotal elements in realizing
overall automotive intelligence. In response to the development of intelligent transportation
infrastructure and smart cities, in addition to focusing on individual vehicle intelligence, we
have also entered broader application scenarios and new markets by offering solutions in
relation to vehicle infrastructure cooperative systems. By fostering vehicle-to-infrastructure
connectivity and information interaction, our solutions empower vehicles with extended
perception capabilities, acting as a driving force for the widespread adoption of intelligent
driving technologies.
During the Track Record Period, our solutions were deployed in a growing number of
vehicle models. As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had design
wins under development for 20, 36, 51 and 41 vehicle models with 14, 20, 21 and 22 OEMs,
respectively, and had undertaken mass production for 22, 53, 64 and 94 vehicle models with
9, 19, 26 and 29 OEMs, respectively. Our revenue increased from RMB175.2 million in 2021
to RMB279.4 million in 2022 and further increased to RMB476.2 million in 2023, representing
a CAGR of 64.9% from 2021 to 2023. Our revenue increased by 44.5% from RMB163.8
million for the six months ended June 30, 2023 to RMB236.7 million for the same period in
2024.
Our experienced and visionary management has built a comprehensive team covering
R&D, procurement, production and marketing and sales, consistently creating value for our
shareholders and customers. As a pioneer of incremental intelligent driving development in
China, we are committed to shaping an automotive intelligence ecosystem through
technological innovations to improve road safety and enhance driving experiences.
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Our Solutions
The following diagram illustrates how our capabilities and solutions interact in shaping
our automotive intelligence ecosystem:
Proven technologies
in-house developed
Deep neural
network
Fusion
perception
Customer base
7 of Top 10
Domestic OEMs
Planning and
control
Software-hardware-integrated
Platform-based
Cutting-edge technologies
Comprehensive
business patterns
Diverse customer bases
Diversified solutions
Intelligent driving Intelligent cabin Vehicle infrastructure cooperative system
iSafety
Level 0 to Level 2 driving assistance
and intelligent driving solutions
iPilot
Level 2 to Level 2+
intelligent driving solutions
iRobo
Level 4 autonomous driving
solutions
Driver Monitoring System and
Occupant Monitoring System
Highway and Intersection Management
Industry Parks & Parking Space
Management
Advanced
R&D and
innovation
capabilities
Leading
commercialization
capabilities
Solution matrix
Intelligent production
Scale advantages
Global business
Based on our incremental approach of intelligent driving development, we focus on
providing software-hardware-integrated Level 0 to Level 2+ intelligent driving solutions. Our
iSafety solutions enable safe and comfortable driving experiences in complex traffic scenarios
such as sharp bends, S-shaped curves and intersections while performing autonomous
emergency braking (AEB), traffic jam assist (TJA), integrated cruise assist (ICA), adaptive
cruise control (ACC), lane keeping assist (LKA), forward collision warning (FCW), lane
departure warning (LDW) and other ADAS functions, thereby reducing the risk of traffic
accidents. Our iSafety solutions are designed to be highly adaptable to mainstream system-
on-chip (SoC) platforms and are able to realize intelligent driving functions based on electronic
control units (ECUs) with low computing power consumption, which make our solutions more
cost-effective and competitive. As such, our iSafety solutions are able to meet diverse customer
needs for intelligent vehicles. We have been developing our iPilot solutions featuring advanced
functions since 2021. Our iPilot solutions are able to deliver advanced intelligent driving
functions including navigate on autopilot (NOA), home automated valet parking (HA VP) and
automatic parking assist (APA), spanning various scenarios including driving on highways and
urban routes, as well as parking. Our iPilot solutions integrate sophisticated intelligent driving
and parking solutions to enhance safety and driving experiences. Furthermore, we are
developing and testing more advanced autonomous driving solutions, and expect to deliver our
iRobo solutions in the first quarter of 2025.
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Our intelligent cabin solutions are designed to enhance the in-cabin experience for both
drivers and passengers and have been tailored to meet the diverse needs of OEMs and tier-one
suppliers. We have developed advanced intelligent cabin perception and interaction solutions,
which are centered around in-cabin monitoring systems such as the DMS and the occupant
monitoring system (OMS), featuring advanced functions. Our intelligent cabin solutions offer
users enhanced automotive experiences and encompass driving safety monitoring, interactive
and intelligent functions and entertainment functions. Successfully applied to various vehicle
models, our intelligent cabin solutions have achieved mass production domestically and
entered the international market through cooperations with leading OEMs.
In China, we are at the forefront of deploying vehicle infrastructure cooperative systems,
working closely with customers in the transportation infrastructure sector. Our vehicle
infrastructure cooperative systems are designed to exchange traffic information among
vehicles, the transportation infrastructure and the public management platform. Our vehicle
infrastructure cooperative systems integrate perception devices, such as radars and
cameras, our in-house developed algorithm structures and “vehicle-to-everything (V2X)”
communication technologies, thereby enhancing the traffic safety and efficiency. We also assist
customers to manage traffic flows in industry parks and operate parking lots and roadside
parking space, enabling precise management of these premises. By developing vehicle
infrastructure cooperative systems, we expect to generate synergy with automotive intelligence
and contribute to the development of intelligent transportation infrastructure and smart cities.
OUR STRENGTHS
Pioneer of Incremental Intelligent Driving Development in China Well-Positioned for
Extensive Growth Opportunities
We pioneer in adopting an incremental development approach to deliver a diverse range
of in-house developed intelligent driving solutions validated through mass production and
market acceptance. We adopted this incremental development approach at our inception, when
many competitors focused on development strategies starting with high-level automation. We
were among the first batch of intelligent driving companies to develop Level 0 to Level 2+
solutions and to adopt an incremental development approach to gradually develop our
intelligent driving solutions, positioning us as a pioneer of incremental intelligent driving
development to enjoy the benefits of comprehensive solution portfolio, deeply accumulated
expertise and lasting customer relationships.
The continuous technological progress and increasing customer demand for safer and
more enjoyable driving experiences are driving automotive intelligence as key differentiators
for OEMs to improve their vehicle models. As such, the industry is developing following an
incremental pattern.
 According to CIC, the sales volume of automobiles in China reached 30.5 million
units in 2023, accounting for 32.9% of the global total, and is anticipated to reach
35.0 million units in 2028. The stable growth of automobile sales and the rising
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penetration of intelligent solutions are expected to drive continuous developments in
the Chinese automotive intelligence solutions industry. The market size of this
industry in terms of revenue, encompassing intelligent driving solutions and
intelligent cabin solutions, reached RMB175.0 billion in 2023, and is expected to
reach RMB431.2 billion in 2028 with a CAGR of 16.8% from 2024 to 2028.
 Currently, Level 0 to Level 2 intelligent solutions are the mainstream intelligent
driving solutions worldwide. As OEMs expand their layout in the field of intelligent
driving, the global intelligent driving solutions market has witnessed significant
growth. China is experiencing high-speed growth in the adoption of intelligent
driving solutions, establishing itself as an essential market. The intelligent driving
solutions market size in China increased from RMB17.5 billion in 2019 to RMB68.1
billion in 2023 at a CAGR of 40.5% from 2019 to 2023, accounting for 25.4% of the
global market size in 2023. The market size for Chinese intelligent driving solutions
in terms of revenue is projected to increase to RMB164.2 billion by 2028,
representing a CAGR of 14.8% from 2024 to 2028. According to CIC, the global
penetration rate of vehicles equipped with Level 2 (including Level 2+ automation)
intelligent driving solutions was 32.1% in 2023, and is expected to reach 61.1% by
2028, with a market size of RMB491.4 billion.
 As technology and the level of intelligent driving advance, intelligent cabin
solutions incorporate innovative technologies to enhance safety and cater to
personalized needs. In addition, driven by the accelerating deployment of
automotive intelligence by OEMs and supportive policies and regulations, consumer
demand for intelligent in-cabin functions has increased. According to CIC, the
market size for Chinese intelligent cabin solutions, in terms of revenue, has
increased from RMB32.9 billion in 2019 to RMB106.9 billion in 2023 and is
expected to reach RMB267.0 billion in 2028, with a CAGR of 18.2% from 2024 to
2028.
 According to CIC, the global market size for automotive intelligence solutions in
terms of revenue, encompassing intelligent driving solutions and intelligent cabin
solutions, reached RMB589.9 billion in 2023, and is projected to increase to
RMB1,330.3 billion in 2028 with a CAGR of 15.5% from 2024 to 2028; the global
market size for intelligent driving solutions in terms of revenue increased from
RMB107.1 billion in 2019 to RMB268.7 billion in 2023 with a CAGR of 25.9%
from 2019 to 2023, and is projected to increase to RMB560.9 billion in 2028 with
a CAGR of 13.7% from 2024 to 2028; and the market size for global intelligent
cabin solutions, in terms of revenue, has increased rapidly from RMB130.2 billion
in 2019 to RMB321.3 billion in 2023 and is expected to reach RMB769.4 billion in
2028, at a CAGR of 17.0% from 2024 to 2028.
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 V ehicle infrastructure cooperative systems elevate automotive intelligence and
contribute to the development of intelligent transportation infrastructure and smart
cities, aiming to augment road safety and traffic efficiency. According to CIC, the
market size for Chinese vehicle infrastructure cooperative systems reached
RMB70.9 billion in 2023 and is expected to reach RMB168.5 billion in 2028 at a
CAGR of 15.3% from 2024 to 2028.
Our incremental development approach allows us to offer a comprehensive solution
portfolio spanning from Level 0 to Level 2+ automation, with Level 4 solutions in
development. This range enables us to meet the diverse needs of OEMs, who typically offer
multiple configurations at different price points within a single vehicle model as well as across
various vehicle models at different price ranges. We believe that our strategic positioning is
well-aligned with prevailing market trends and lays a solid foundation for us to capture
extensive market opportunities.
Leveraging our industry understanding and adherence to the incremental development
strategy, we have been leading the industry based on our advanced technologies. Our solutions
equipped with Level 0 to Level 2+ intelligent functions have achieved solid sales volumes. We
also remain competitive with our Level 2+ intelligent solutions. Through the continuous
innovation of our perception technologies, we have achieved precise environment perception
and analysis. Our iPilot solutions have adopted the BEV technology and have gradually
adopted end-to-end technology. As neural network technology evolves, we are exploring
advanced visual intelligent driving solutions and fostering adaptability and innovation with
minimum reliance on high-definition maps. By capitalizing on our in-house platform-based
technologies and software-hardware-integrated R&D capabilities, we can strengthen our
competitive position and establish a robust foundation for future solutions. Our technology is
characterized by its efficiency and practicality, which have been proven through large-scale
commercial deployment.
Our incremental development strategy enhances our efficiency in product iteration and
new functionality development. For example, automotive intelligence relies on the precision of
the underlying neural network models. Producing such neural network models demands
massive data input, which further involves significant human resources and computational
resources. For details of our self-developed neural network tools HardNet and ThiNet, see
“—Our Technologies—In-house Developed Core Algorithms—Neural Network Acceleration
and Deployment Tools.” Attributable to our incremental development strategy, we have built
the neural network models in a highly adaptable way. They can be applied to next-generation
intelligent driving solutions and deployed in various vehicle models. Throughout our product
development process, we have developed various hardware and software toolchains, which are
sets of development tools used simultaneously to complete complex development tasks,
thereby markedly improving our development efficiency.
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Our incremental development approach provides us with a differentiated competitive
advantage, enabling us to swiftly meet customer demands and efficiently achieve solutions
scalability and mass production. By demonstrating our capabilities across various automation
levels, we have been able to forge long-term relationships with our customers. As of June 30,
2024, we had maintained business relationships with our five largest customers in each year or
period of the Track Record Period for one to four years. OEMs sometimes use higher-level
projects to validate a supplier’s technical capabilities, and our proven track record across the
automation spectrum increases our chances of securing both lower and higher-level projects
from the same customer. Our achievement in securing design wins across automation levels
with individual OEMs demonstrates the effectiveness of our approach. For instance, in 2021,
we secured a design win for a Level 2+ solution for an OEM’s premium coupes, which entered
production in 2023. Subsequently, in 2023, we received additional design wins from the same
OEM for both Level 2 and Level 2+ solutions for their mid-size SUV model, with the Level
2 solutions entering production in 2024. In another case, we secured design wins for four
vehicle models across an OEM’s product lines, beginning with a Level 2+ solution for their
compact crossover in 2022, followed by both Level 2 and Level 2+ solutions for their mid-size
SUV and compact SUV models in 2023, and most recently, Level 2 and Level 2+ solutions for
their new SUV model in 2024. These examples illustrate how our incremental development
approach enables us to expand our relationships with OEMs across their product lines and
automation levels, reinforcing our competitive position in the market.
Our incremental development approach is reflected in our commercialized solutions
portfolio and expected solutions ranging from Level 0 to Level 4 automation as illustrated in
the diagram below:
L0-L1
L2
L2+
• iSafety 1
• iSafety 3
• iSafety 2
• iPilot 4
• iPilot 3
• iPilot 2
• iPilot 1
L4
• iRobo
• Vehicle infrastructure
cooperative system
We have been continuously empowering automotive intelligence and proactively
strategizing in advanced technologies for ADS, intelligent cabins and vehicle infrastructure
cooperative systems. With our expertise and strengths in algorithm development, software
engineering and hardware design, we are able to provide customized solutions to meet diverse
customer demands and we expect to maintain our competitive advantages and leading positions
in ADS technologies and solutions. Our iRobo solutions, which have undergone extensive
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real-vehicle road testing, enable fully autonomous driving in specific areas and operating
scenarios, capable of navigating complex traffic conditions, such as narrow roads and
congested intersections, and performing emergency maneuvers to avoid obstacles or vehicles.
We expect to deliver our iRobo solutions in the first quarter of 2025.
Comprehensive Solutions Portfolio Addressing Customer Needs with Proven
Commercialization Capabilities
Our comprehensive intelligent driving and cabin solutions enhance vehicle intelligence,
safety and in-vehicle experiences across various driving scenarios. These solutions cater to the
diverse needs and expectations of both drivers and passengers for ADAS and ADS functions
and in-cabin functions. In addition, we offer vehicle infrastructure cooperative systems to
customers in the transportation infrastructure sector, aiming to augment road safety and traffic
efficiency. Upholding the mission of improving automotive intelligence and road safety, we
adhere to the incremental development strategy and form various business lines with
synergistic effects.
The diagram below illustrates our current solutions portfolio:
iSafety (Level 0 to Level 2 assisted intelligent driving solutions)
ʵProviding cost-effective solutions to meet customer demands for intelligent driving assistance system with flexible compatibility with many mainstream SoC platforms
iSafety 1 iSafety 2 iSafety 3
Intelligent
driving
Intelligent cabin perception and interaction solutions
ʵDesigned to enhance the in-vehicle experience for both drivers and passengers, and utilize a variety of human-machine interaction methods to improve the intelligence of interactions while providing
safety and entertainment functions
iPilot (Level 2+ intelligent driving solutions)
ʵFocusing on integrated domain controller for driving and parking and supporting functions like NOA and HAVP to meet the diverse requirements of OEM’s target markets for each vehicle model
iPilot 1 iPilot 2 iPilot 3 iPilot 4
iRobo (Level 4 autonomous driving solutions)
ʵFully autonomous driving in specific areas and operating scenarios to meet customer demands for autonomous driving while ensuring safety
iRobo
Intelligent cabin
Driver Monitoring System
Vehicle infrastructure cooperative system
ʵCollaboration with customers in the transportation infrastructure sector, aiming to augment road safety and traffic efficiency, improve their control over traffic flows and enhance operational efficiency
and operational security
Vehicle
infrastructure
cooperative system Highway and Intersection Management
Occupant Monitoring System
Industry Parks & Parking Space Management
The breadth of our automotive intelligence solution lines sets us apart as an emerging
intelligent driving company from many industry peers who often specialize in fewer domains.
According to CIC, many of our industry peers only focus on intelligent driving solutions.
We have developed the capability to concurrently provide multiple solutions to OEM
customers, including our iSafety, iPilot and intelligent cabin solutions. This approach allows
us to efficiently address a wide range of customer needs, potentially streamlining OEMs’
implementation of automotive intelligence features across multiple domains.
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The synergies between our different business lines enhance our commercialization
capabilities. Our cross-domain expertise is evidenced by our relationships with several leading
OEMs across various market segments. For instance, we offer intelligent driving solutions
(including iSafety and iPilot solutions) and intelligent cabin solutions across multiple vehicle
models for a leading Chinese electric vehicle manufacturer. For one specific model, we
simultaneously supply iSafety, iPilot and intelligent cabin solutions, showcasing the breadth of
our solutions and the customer’s trust in our capabilities. Our ability to meet diverse needs
extends to other major OEMs as well. We supply both intelligent driving and cabin solutions
for multiple vehicle models to several prominent Chinese automobile manufacturers. See
“—Our Business—Intelligent Driving Solutions” and “—Our Business—Intelligent Cabin
Solutions.” As one of our new business line, our intelligent cabin solutions also enable us to
penetrate large OEMs. Once integrated into the supply chain, these solutions may drive the
sales of our intelligent driving solutions.
Our commercialization achievement is driven by our customer-centric approach, efficient
R&D approach, mass production capabilities, after-sales capability and industry recognition.
Our intelligent driving solutions, ranging from Level 0 to Level 4 automation, include
iSafety (Level 0 to Level 2 automation), iPilot (Level 2+ automation) and iRobo (Level 4
automation). These solutions integrate multi-sensor perception systems and in-house
algorithms to enable cost-effective and highly compatible functions across various driving or
parking scenarios. Our intelligent cabin solutions enhance in-vehicle experiences for drivers
and passengers, tailored to the needs of OEMs and tier-one suppliers. Additionally, our vehicle
infrastructure cooperative systems integrate perception devices with V2X communication
technology and our in-house developed algorithm structures to improve road safety and traffic
efficiency. By developing these synergistic solutions, we aim to comprehensively contribute to
the establishment of an automotive intelligence ecosystem. Our strong mass production and
after-sales capabilities enable us to form stable cooperative relationships with our customers
and deliver pure software solutions in respond to customers’ requirements. As of the Latest
Practicable Date, our iPilot solutions integrating intelligent driving and parking functions,
other than iPilot 4, which is expected to launch in 2025, have achieved commercialization. We
maintain strict quality control throughout the entire solution lifecycle, ensuring solutions
consistency and minimizing defects.
We have garnered significant industry and customer recognition, as evidenced by the
numerous accolades we have received. These include being awarded the “Supplier Innovation
Award 2023” by ZF Group, recognized as one of the 100 Technology Pioneers of 2021 by
World Economic Forum, and awarded as the National-level Specialized, Special and New
Enterprise (ॴਖ਼ၚतอʃ̶ɛΆุ) by MIIT in 2023. Additionally, we have been
acknowledged as a High-quality DMS and OMS Supplier by Gasgoo Automotive. Our
“MINIEYE In-Cabin Sensing Solution” also won the Edge AI and Vision Alliance Best
Automotive Solution Award in 2021.
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Full-Stack In-House R&D Capabilities Driving Swift and Efficient Commercialization of
our R&D Achievements
Our full-stack in-house development capabilities serve as the foundation for
comprehensive technological advancements and iterations, enhancing the autonomy of our
solutions and enabling us to extend into different business lines. Our full-stack R&D
capabilities encompass the four main intelligent driving modules, namely, perception, fusion,
mapping and localization and planning and control. See “—Our Technologies—In-house
Developed Core Algorithms” for details. A key aspect of our full-stack in-house R&D
capabilities is our in-house developed perception algorithms, which allow us greater control
and flexibility in our solution development process. According to CIC, providers with
full-stack in-house R&D capabilities tend to utilize chips without pre-embedded algorithms,
allowing for the implementation of their proprietary algorithms. This approach potentially
offers greater flexibility in algorithm development and optimization. In 2023, among the top
five emerging technology companies that mainly focus on offering driving solutions and
integrated driving-parking solutions in our industry, we have a high utilization of chips without
embedded algorithms, standing at a proportion of 99.98%, while others are below 70%,
according to CIC. This approach provides us with control over our solutions and allows us to
adapt to a range of chip models, enhancing our flexibility in solution development and supply
chain management. Moreover, our in-house developed visual perception technology plays a
crucial role in the research and iteration of higher-level autonomous driving solutions,
potentially positioning us favorably for future advancements in the field. For example, our
perception technology can recognize dozens of vehicle models and nearly 300 types of traffic
signs, as well as various uncommon targets such as barriers, garbage bins or construction
barriers. Our bird-eye view (BEV) technology is not only able to detect obstacles around the
vehicle with a 360-degree view, but is also capable of recognizing the structure of the roads,
enabling us to achieve HD-mapless perception-driven NOA. Our perception technology can
also detect targets located more than 200 meters away and perform precise ranging with a
relative error of less than 5%. Our gaze tracking technology can determine the driver’s
observation direction with an error of less than three degrees. Our capabilities extend to more
advanced end-to-end algorithms that integrate perception and planning. This advancement has
already been implemented in some of our solutions, as evidenced by our recent design wins
with a leading domestic OEM. Our in-house R&D capabilities enable us to swiftly
commercialize our R&D achievements and form a more flexible solutions delivery model.
Specifically, we are able to rapidly respond to customer needs and collaborate with upstream
and downstream partners to provide customized solutions. In contrast, companies without
full-stack in-house R&D capabilities often need to incorporate algorithms from external
suppliers, particularly for perception, planning and control algorithms related to parking and
driving. The reliance on external sources may increase the complexity of development
management and potentially impact project timelines. Furthermore, the use of externally
sourced algorithms typically involves licensing fees and may incur additional development
costs to integrate these algorithms into the overall system. Such factors could potentially affect
the overall cost-effectiveness of the solutions. We believe our full-stack in-house R&D
capabilities are the key factor that sets us apart in the automotive intelligence solutions
industry and the cornerstone for the commercialization of our future R&D achievements.
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We have achieved comprehensive coverage of the intelligent driving algorithm stack. We
independently develop and refine driving algorithm modules, including perception, fusion,
mapping and localization, planning and control. For example, in terms of perception, we have
implemented full-stack technologies from object detection and segmentation to temporal
tracking. In terms of fusion, our in-house developed fusion algorithm can support cross-
platform and multi-sensor configurations and has supported a number of vehicle models to
obtain five-star ratings from the China New Car Assessment Program (C-NCAP). Our planning
and control algorithms demonstrate high compatibility and adaptability. We actively iterate and
innovate through cooperations across the industry, enhancing the adaptability and stability of
algorithms in complex environments through data input. We also consistently monitor the
production to identify and solve any quality issues in a timely manner, thereby improving
overall algorithm performance.
Based on our full-stack in-house R&D capabilities, we can quickly adapt and transfer
across different hardware platforms, enabling flexible supplier selection and therefore
supporting a stable supply chain. As our sales volume increases, we expect our strong supply
chain management to further enhance our bargaining power. In addition, our full-stack in-house
R&D capabilities enable us to quickly respond to market changes, strengthen customer
cooperation, establish competitive advantages, and enhance our industry reputation. Through
continual iterations, we offer short development cycles, high efficiency and rapid
responsiveness to downstream needs with cost-effectiveness and competitiveness, obtaining
recognition from customers.
Platform-Based and Software-Hardware-Integrated R&D Capabilities Enabling
Algorithmic Optimization Advantages and Solutions Cost-Effectiveness
Our platform-based and software-hardware-integrated R&D capabilities provide our
solutions with significant technical advantages and cost-effectiveness. Our in-house developed
algorithm structures allow quick platform transition and improve adaptation efficiency. This
allows us to offer integrated “algorithm + software + hardware” solutions to our customers. The
diagram below illustrates the structure and components of our solutions:
Integration of
multiple sensors Planning and control Mapping and localization Fault diagnosisVisual perception
Middleware
Communications Clock synchronization Diagnosis management Status management Persistent storage
Health management Logging management Execution management Update and
configuration Others
Runtime environment
Peripheral trigger
Real-time operating system kernels
Distributed clock
synchronization Hardware abstraction
Application
software
SoC MCU
Infrastructure
software
Computing
platforms
Real-time operating system
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The adaptation to distinct SoC platforms with cost-effectiveness requires coordination
across hardware design, software development and algorithm synergy. Our platform-based
R&D capabilities are particularly advantageous, as we achieve platform compatibility by using
our in-house developed middleware to decouple upper-level application software from
lower-level computing platforms.
Our in-house developed middleware is a set of software frameworks that reside between
upper-level application software and lower-level computing platforms. It serves as a platform
for managing, allocating and scheduling software and hardware resources. As such, our
platform-based R&D approach allows for compatibility with mainstream SoC platforms and
enhances the adaptability of intelligent driving solutions to different vehicle models based on
our integrated “algorithm + software + hardware” solutions. Depending on varying customer
and project demands, our platform-based approach can reduce R&D resources, tailoring our
solutions to new vehicle models rather than starting from scratch. Our R&D efficiency is
demonstrated by our ability to support a wide range of vehicle models with a relatively lean
team. As of June 30, 2024, our R&D team of 304 members had supported the development of
94 vehicle models that achieved mass production. According to CIC, this development
efficiency significantly exceeds that of comparable competitors in the industry.
Our software-hardware-integrated R&D capabilities allow us to develop software based
on pre-evaluated hardware. Our embedded in-house developed algorithms are linked with
sensors, controllers and other hardware, which can effectively improve the compatibility of
each component and maximize the performance of the hardware, improving the stability and
overall performance of our solutions.
Our software-hardware-integrated R&D capabilities and in-house developed algorithms
feature cost-effectiveness, enabling us to optimize the allocation of computing power across
the entire technology chain. Through in-house development, we have achieved efficient
computing power allocation, enabling the implementation of optimal algorithms in real-life
scenarios and effectively utilizing the capabilities of high performance chips. Notably, we are
able to provide driving-parking-integrated DCLC and APA with only eight TOPS, featuring
industry-leading technologies. In contrast, driving and parking functions in most comparable
products by industry peers are controlled by two chips with an aggregate computing power of
over ten TOPS.
Solid Mass Production Capabilities Underpinning Solutions Competitiveness
We have strong intelligent mass production capabilities and have established long-term
and strategic partnerships with numerous well-known OEMs and tier-one suppliers. Our
Bao’an Production Base has a gross floor area of approximately 2,500 square meters and
covered the production processes of three-proof coating, assembly and packaging, and its
design annual production capacity is approximately 377,400 units. In order to meet the
increasing production needs based on the additional starts of production (SOPs) we have
obtained, and to further enhance our control over the entire production process, we have
established our Guangzhou Production Base. We commenced production at our Guangzhou
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Production Base in the third quarter of 2024. Our Guangzhou Production Base has a total gross
floor area of approximately 3,400 square meters, which allows us to expand our in-house
production to the production processes of surface mount technology (SMT), dual in-line
package (DIP) insertion and depaneling.
Our in-house production capabilities allow us to effectively streamline production
processes, enhance quality and productivity and decrease logistics costs. For example, the
manufacturing cost of the SMT procedure decreases by approximately 20% per each processing
unit when completed in-house compared with outsourcing to contract manufacturers. Also, by
completing the packaging procedure in-house, we can save logistics and inspection costs, and
expedite the whole procedure compared with delivering the products through contract
manufacturers.
Our mass production capabilities have earned us market recognition. Top OEMs and
tier-one suppliers highly value suppliers’ capacity in response to their demands. Our strong
mass production capabilities enable us to promptly respond to urgent and customized needs,
gaining customer recognition and helping us establish partnerships with OEMs and tier-one
suppliers.
Our commitment to building a highly interconnected smart production base is driven by
our focus on production line automation, manufacturing intelligence and operational
digitalization.
 Our production lines feature a high degree of automation. We have introduced
automated assembly lines and intelligent packaging lines. We significantly reduce
labor and improve efficiency through technologies such as intelligent material racks
and automated transportation.
 We have implemented advanced manufacturing intelligence systems to ensure
optimal production performance. Our smart production base monitors production in
real time through the manufacturing execution system (MES), managing orders to
ensure control and traceability over our manufacturing processes. We also use MES
to monitor equipment and identify abnormalities, comprehensively improving
production intelligence.
 The digitalization of our operations has been a key focus in enhancing our
manufacturing capabilities. We have utilized visual dashboards to monitor key
production data including material inflow and outflow, consumption, yield,
equipment status and efficiency in real time, facilitating production control and
resource allocation and enhancing intelligent production.
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The combination of cost-effectiveness and quality control is a hallmark of our intelligent
mass production capabilities. We firmly believe that our intelligent production and mass
production capabilities bring us competitive advantages. Our extensive mass production
experience provides support for our R&D efforts. Our accumulated experience brings us deeper
understanding from R&D to commercialization, helping us to continuously explore advanced
technologies or solutions, analyze commercialization feasibility and effectively promote R&D
transformation.
Optimized supply chain management is another key advantage stemming from our
advanced intelligent and mass production capabilities. Our effective supply chain management
helps us better manage the entire planning, procurement, production and sales process,
achieving lower costs, higher efficiency, more stable delivery and higher satisfaction. Our mass
production capabilities also brings us significant after-sales advantages and facilitates the
timely supplies and replacements of solutions and spare parts, ensuring that our customers are
able to receive high-quality after-sales services in a timely manner.
Top-Tier Customer Base and Proven Track Record with a Solid Foundation for Overseas
Expansion
Through our incremental development strategy, we have accumulated a rich global
customer base and solid track record. We have gradually developed from an upstream supplier
to a supplier directly providing software-hardware-integrated solutions to OEMs as we have
been collaborating with leading OEMs to develop high-quality solutions that meet their needs.
Domestically, our in-house developed algorithms have formed the basis for our mass
production for 35 OEMs as of the Latest Practicable Date. A notable example is our successful
design win obtained from a software company of a well-known global OEM, which has
established a strong foundation for our entry into leading international OEM ecosystems. We
have also formed partnership with a leading global supplier of advanced vehicle products and
systems, collaborating to serve the markets in Europe. In 2023, we were the only supplier of
intelligent driving solutions from Mainland China to be awarded the “Supplier Innovation
Award 2023” by ZF Group.
Over time, we have gradually amassed a diverse customer base, from intelligent driving
sector to intelligent cabin sector, which strengthens our comprehensive mass production
capabilities and successfully secures our place on the supplier lists of leading OEM. According
to CIC, in 2023, we ranked seventh among all domestic intelligent driving solutions providers
and ranked fourth among all emerging technology companies in China, with a market share of
0.6%, in terms of revenue of Level 0 to Level 2+ solutions. Our solutions have been adopted
by well-known domestic OEMs and deployed on various vehicle models, including the NEVs
with the highest export sales, which are exported to Europe, South America and Southeast Asia
at scale. We offer one-stop software-hardware-integrated solutions for vehicles, driving our
business growth.
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We have gradually developed from supplying domestic companies and sino-foreign joint
ventures to working with global OEMs, fostering long-term competitiveness with our extensive
experience in the industry. Our one-stop software-hardware-integrated solutions allow us to
satisfy the stringent requirements of leading domestic and overseas OEMs. We are well
positioned in domestic vehicles supply chain systems and have also penetrated into the supply
chain systems of prominent sino-foreign joint ventures. For example, our 360 around-view
solutions supply for a global OEM’s heavy trucks. As of the Latest Practicable Date, we had
entered into cooperations with various sino-foreign joint ventures and a well-known global
OEM, through which we expect to significantly increase our business influence. As of June 30,
2024, our solutions had been selected for 15 exported vehicle models from 6 OEMs that are
under development, and had achieved SOP for 21 exported vehicle models from 4 OEMs.
Among the 15 models that were under development, most were expected to be exported to
various regions. Specifically, 13 were expected to be exported to the European Union, 8 to
Australia, 7 to the UK, 9 to Southeast Asia and 3 to the Middle East; among the 21 models that
had achieved SOP , 21 were exported to the European Union, 11 to Australia, 11 to the UK, 5
to Southeast Asia, 1 to the Middle East and 1 to Hong Kong. None of our customers exported
vehicles equipped with our solutions to the United States or Canada during the Track Record
Period and we do not plan to expand into the U.S. or Canadian market. Among the 15 models
that were under development, 9 models had different energy types, including 10 ICE models,
5 EV models and 10 models of other new-energy types; and among the 21 models that had
achieved SOP , 8 models had different energy types, including 7 ICE models, 14 EV models and
8 models of other new-energy types. These exported models span a wide range of vehicle types,
from compact cars to luxury models. This demonstrates our strong capability in meeting
international market requirements and our OEM customers’ trust in our solutions for their
global expansion strategies. In addition to supporting Chinese automakers in their overseas
expansion, we have also made progress in supplying our solutions to international OEMs. Our
solutions for these exported models are designed to meet the regulatory requirements and
industry standards of various international markets, including the European Union, the UK,
Australia, Southeast Asia, the Middle East and Hong Kong. This adaptability has been
recognized by key customers, as evidenced by our solutions being deployed in the overseas
versions of all vehicle models for a leading Chinese electric vehicle manufacturer. We plan to
continue our overseas expansion and gradually start to cooperate with leading overseas OEMs.
Since our inception in 2014, we have been at the forefront of paying attention to overseas
laws and regulations, enabling us to swiftly adapt to the evolving environment and seize new
opportunities. We proactively conducted R&D activities prior to the official implementation of
the EU GSR. We anticipate that mandatory high-level assisted driving configuration
regulations, such as EU GSR, will be further formulated worldwide and our first-mover
advantages will present opportunities for rapid business growth. According to CIC, we are
among the first batch of suppliers of DMS solutions in China that successfully supported OEMs
in obtaining DDAW certifications for their vehicle models under the EU GSR and we are the
first Chinese intelligent cabin solutions provider supporting Chinese OEMs to obtain the
five-star rating from the European New Car Assessment Program (E-NCAP) since its
introduction in 2023. Our DMS and OMS solutions have been deployed on vehicle models of
various leading OEMs, supporting our overseas expansion plan.
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Visionary Management Team with Strong Shareholder Support and Experienced
Workforce Committed to Our Mission and Values
We advocate the “Bamboo Spirit ( ˣ϶ၚग़),” deeply rooting ourselves in the automotive
intelligence solutions industry. Since our inception, we have been committing to continuous
R&D activities, creating a strong competitive edge. We persist in launching practical solutions
that meet the market and customer demands, aiming at long-term business achievements.
Our experienced management includes professionals in the automotive intelligence
solutions industry with rich industry experience and knowledge. Our management works
closely with our visionary founder, Dr. Liu, to drive our achievements and rapid growth. As the
Chairman and general manager, Dr. Liu has over 10 years of experience in the automotive
intelligence solutions industry and is primarily responsible for overseeing the overall business
development, strategies and operations of our Group. Under Dr. Liu’s and the management’s
guidance, we are well positioned to adapt to the dynamic industry landscape and capitalize on
market opportunities. Our pace of commercialization and the coverage of our solutions
portfolio have positioned us at the forefront of the industry, allowing us to make a significant
contribution to the development of the automotive intelligence solutions industry.
Our shareholders include prominent investors such as Beijing Siwei, Shenzhen Zeyi and
Guokai Zhizao. Our investors have provided us with financial support as well as market
insight.
We have a professional team with rich experiences in R&D, sales and marketing and
supply and production enabling us to maintain strong positions in both R&D and
commercialization capabilities.
 Our senior management team has an average of more than 10 years of experience in
R&D and production. Some members of the senior management have extensive
industry experience in major internet companies. Leveraging our management
team’s experiences, we are committed to advancing innovation in our solutions.
 As of June 30, 2024, our R&D team comprised 304 employees, representing 61.3%
of our total employees. We also have a highly trained sales and marketing team in
China. We have implemented an innovative “R&D-sales integration” model, which
involves R&D specialists in customer discussions to ensure that our R&D efforts are
closely aligned with market needs. This collaborative strategy not only sharpens our
R&D focus based on direct customer insights but also nurtures versatile technical
expertise within our team, enhancing our ability to respond to evolving customer
requirements and market dynamics.
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OUR STRATEGIES
Continuously Focusing on Technological Innovation and Optimizing Our Solutions
With the continuous advancement of automotive intelligence, vehicles will better cope
with complex traffic scenarios. We will continue focusing on technological innovations and
optimizing our solutions to promote the development of automotive intelligence solutions
industry.
We plan to enhance our R&D capabilities to (i) research artificial intelligence
technologies, (ii) refine our product R&D abilities and reinforce our capabilities to
commercialize innovations, and (iii) boost the scalability as well as efficiency and
effectiveness of our R&D process. We will continue increasing R&D investment and expanding
our overseas market based on our in-house developed technologies, software-hardware-
integrated R&D capabilities and advanced mass production capabilities, including:
 Intelligent driving . We will continue focusing on cutting-edge areas, such as BEV
technology, end-to-end technology and Level 4 autonomous driving technology, to
further improve our technical capabilities and expand our solutions portfolio. Our
BEV technology is not only able to detect obstacles around the vehicle with a
360-degree view, but also capable of recognizing the structure of the roads,
expecting to achieve HD-mapless perception-driven NOA. Our end-to-end
technology is an important direction in the development of intelligent driving
technologies. In addition, we believe that the end-to-end technology will offer a
more simplified, efficient intelligent driving architecture where the different
modules are jointly optimized with a data-driven approach, thereby achieving the
overarching goal of delivering a more accurate and intelligent driving experience. It
is expected to simplify system structures, improve data processing efficiency, reduce
computational workload and play a significant role of intelligent driving in the
future. Our Level 4 autonomous driving technology has been able to achieve
autonomous driving in specific areas and operating scenarios and to handle complex
traffic situations such as narrow road encounters, busy intersections and emergency
maneuvers around obstacles or vehicles.
 Driving-cabin integration . We will persist in refining the interaction among driving
and in-cabin functions so as to improve the driving experience and pursue a
sustained development in the automotive intelligence solutions industry. We plan to
continuously develop DMS solutions, OMS solutions and other solutions based on
the large-scale AI model. In addition, we will further develop our own intelligent
cabin technologies and continue to integrate DMS and OMS solutions to provide a
highly interactive intelligent driving experience. For example, our iPilot 4 is
designed to integrate DMS and OMS solutions with intelligent driving solutions,
achieving the integration of driving, parking and in-cabin functions.
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 External cooperation . We will intensify our collaborative efforts with external
partners to advance the development of intelligent driving technology together. By
forming alliances with enterprises along the supply chain, academic institutions and
governmental bodies, we can collaboratively address challenges, shape policies and
undertake R&D activities that contribute to the automotive intelligence solutions
industry.
The continual R&D activities for solutions iteration and the launch of new industry-
leading solutions are vital for our business development. Since our inception in 2014, we have
been continuously refining our solutions portfolio, accumulating industry experience and
actively reviewing customer needs and feedback to carry out R&D activities and iteration. We
plan to continue to allocate resources to R&D initiatives aimed at fostering innovation and
developing cutting-edge technologies in order to quickly respond to market demands and
launch new solutions.
We plan to use approximately 12% of the net proceeds from the Global Offering, or
approximately HK$79.8 million, for researching artificial intelligence technologies to maintain
our leading edge in technology innovation in the automotive intelligence solutions industry. We
intend to develop our end-to-end technology to build a comprehensive intelligent driving
architecture and improve our capabilities in designing, training and deploying the large-scale AI
model for our intelligent cabin solutions. See “Future Plans and Use of Proceeds.”
Developing Individual Vehicle Intelligence and Vehicle Infrastructure Cooperative
System to Empower the Automotive Intelligence Ecosystem
We will continue adhering to the concept of “empowering intelligent vehicles” (౽ঐ
ӛԓረঐ) and focusing on intelligent driving and cabin solutions businesses. We are
committed to providing a more comprehensive solutions portfolio.
Our intelligent driving solutions have adopted the BEV technology and have gradually
adopted end-to-end technology and other cutting-edge technologies. We plan to refine our
solutions and enhance the competitiveness of our solutions portfolio. In terms of our intelligent
driving solutions, our iPilot 1, iPilot 2 and iPilot 3 have achieved commercialization. Building
off the success of our intelligent driving solutions, we intend to further refine our solutions to
enhance our competitiveness in terms of performance, cost effectiveness and reliability. In
terms of our intelligent cabin solutions, we are dedicated to elevating the in-vehicle user
experience by crafting more sophisticated HMI solutions applicable to a wider array of
scenarios, thereby improving driving safety and comfort. We are in the early stage of
commercialization for our intelligent cabin solutions to capture growing market opportunities.
We intend to further expand our intelligent cabin solutions business by delivering more
innovative and personalized functions for in-vehicle users, marking our efforts to capture the
evolving trend. In terms of our vehicle infrastructure cooperative systems, we are guided by the
vision of “building an efficient zero-accident transportation system” and are committed to
being at the forefront of development of intelligent transportation infrastructure and smart
cities, aiming to augment road safety and traffic efficiency.
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We aim to further drive the convergence of intelligent driving and cabin technologies to
deliver more holistic automotive intelligence solutions and remain our market leadership in the
trend of driving–cabin integration. For example, we expect to launch our iPilot 4 in 2025,
which is expected to be equipped with the most comprehensive set of hardware in our iPilot
series and offer advanced driving and in-cabin functions.
Ongoing technology advancements and growing customer desire for safer and better
intelligent driving experiences are fueling the progress of the automotive intelligence. Our
commitment to technological advancement extends beyond the development of individual
vehicle intelligence itself. We are at the forefront of innovation in the development of vehicle
infrastructure cooperative system, and in response to the development of intelligent
transportation infrastructure and smart cities, we plan to further promote vehicle-to-
infrastructure connectivity by enhancing intelligent collaborations among the on-board devices
of individual vehicle intelligence and the roadside devices of vehicle infrastructure cooperative
system.
We will continuously value customer feedback and refine our service quality guided by
a “user-first” ( ͜˒Їɪ) ethos. By actively engaging in collaborations with partners along the
industry chain and forging strategic partnerships with OEMs and software and hardware
suppliers, we aspire to co-create a synergistic ecosystem. Additionally, we plan to take an
active role in the formulation of industry standards to facilitate policy enhancement and
innovation.
We plan to use approximately 18% of the net proceeds from the Global Offering, or
HK$119.9 million, for improving our R&D infrastructure, equipment and tools and expanding
our R&D team to strengthen the scalability as well as efficiency and effectiveness of our R&D
process. We intend to expand the space for more hardware and calibration laboratories and
testing facilities, and upgrade our hardware and software toolchains for our R&D activities.
See “Future Plans and Use of Proceeds.”
Consistently Promoting Globalization to Become a Leader in the Automotive Intelligence
Solutions Industry
We aim to continuously empower the upstream and downstream industry chain and
promote global automotive intelligence development. We plan to enhance our presents in the
domestic market and further expand to the overseas markets.
We have long been aware of the importance of global expansion and have leveraged our
domestic experience and advantages to expand into the overseas market. From the global
market perspective, according to CIC, the global market size for automotive intelligence
solutions in terms of revenue, encompassing intelligent driving solutions and intelligent cabin
solutions, reached RMB589.9 billion in 2023, and is projected to increase to RMB1,330.3
billion in 2028 with a CAGR of 15.5% from 2024 to 2028; the global market size for intelligent
driving solutions in terms of revenue increased from RMB107.1 billion in 2019 to RMB268.7
billion in 2023 with a CAGR of 25.9% from 2019 to 2023, and is projected to increase to
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RMB560.9 billion in 2028 with a CAGR of 13.7% from 2024 to 2028; the market size for
global intelligent cabin solutions in terms of revenue has increased rapidly from RMB130.2
billion in 2019 to RMB321.3 billion in 2023 and is expected to reach RMB769.4 billion in
2028, at a CAGR of 17.0% from 2024 to 2028. Our extensive R&D experience, mass
production expertise and brand recognition will help us further attract global OEM customers.
We believe that we will be benefited from our expansion at overseas markets, enabling us to
maintain high-speed growth in the long run.
Grasping local regulations and market dynamics in the overseas markets is crucial for
achieving our global expansion plan. We intend to carry out comprehensive analyses of each
overseas market, tailoring our strategies to align with the nuances of local market dimensions,
consumer behaviors and legal stipulations.
We plan to enhance our global presence by establishing more international strategic
alliances. Moreover, to enhance the effectiveness of our overall sales and marketing activities
in the overseas markets, we plan to recruit experienced sales and marketing personnel to
facilitate our business collaborations with automotive OEMs and tier-one suppliers in overseas
markets.
Our extensive expertise in automotive intelligence solutions and our integrated R&D
capabilities, which encompass both software and hardware on a platform basis, will underpin
our strategy for global expansion. We have been gradually expanding our customer base from
domestic companies and sino-foreign joint ventures to global OEMs so as to foster long-term
competitiveness by providing extensive and high-quality automotive intelligence solutions.
Our collaboration with a global leading automotive company supplying advanced products and
systems for vehicles stands as a testament to our overseas endeavors, and we are poised to
further our overseas business growth and amplify our global presence.
Continuously Enhancing Intelligent Production Capability to Accelerate
Commercialization
We will continue enhancing our intelligent production capabilities so as to accelerate our
commercialization from the following aspects:
 Advanced and automated production lines . The introduction of fully SMT lines, DIP
lines, automated assembly lines and intelligent packaging lines at the Guangzhou
Production Base is expected to further curtail manual operations, diminish costs and
augment efficiency. In addition, we plan to introduce advanced automated
production equipment and systems to further enhance the intelligence of our
production lines, thereby improving our operational and production efficiency.
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 Intelligent production systems . The adoption of the MES and ERP system has
facilitated real-time monitoring and management of production processes. We also
plan to implement intelligent quality control measures at various stages of the
production process to ensure the high quality of the solutions delivered to our
customers.
 High-precision equipment . By procuring advanced mechanical equipment, we aim to
guarantee precise processing and assembly, thereby elevating the quality of
solutions provided.
 Production expansion plan . We attach great importance to improving the efficiency
of our existing production lines and plan to further expand our production scale
based on customer demand and market forecasts by way of building new production
bases or expanding existing production bases.
 Supply chain management . We will continuously optimize supply chain management
to ensure a stable and reliable raw materials and components supply to guarantee our
production quality and achieve cost control. We plan to vertically integrate certain
parts of our supply chain which we believe are more beneficial to manufacture
in-house than through procurement from external parties. For example, we plan to
develop in-house advanced sensors leveraging our strong perception technology, and
establish an automated sensor production line.
In addition, we plan to switch certain production processes that are currently done by
external parties to in-house production, thereby providing us with more control over the overall
product workstream and the quality of production outcomes. Such integration is also expected
to increase flexibility and adaptiveness of our production, allow us to further streamline
production workflows to reduce lead time and down time and reduce our production costs in
the long run.
Through the above measures, we can effectively improve our production capability to
meet market demands for high-quality solutions. We plan to use approximately 30% of the net
proceeds from the Global Offering, or approximately HK$199.8 million, for increasing our
production efficiency and solution competitiveness. We intend to switch certain production
processes that are currently performed by external parties to in-house production and establish
advanced automated production systems such as SMT lines, DIP lines, automated assembly
lines and intelligent packaging lines. We also aim to vertically integrate the sensor production
part of our supply chain by develop in-house advanced sensors and establish an automated
sensor production line. To achieve both, we plan to allocate funds to purchase relevant
production equipment and recruit manufacturing personnel. See “Future Plans and Use of
Proceeds.”
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Continuously Attracting Talent for Technological Innovation
Technological innovation is deemed essential for our success, with talent acquisition and
development playing a crucial role. We have instituted a thorough internal talent development
mechanism. As of the Latest Practicable Date, we had five R&D centers strategically located
in Shenzhen, Beijing, Shanghai, Wuhan and Nanjing. We will continue attracting R&D talent
and plan to attract more experts in perception algorithms, decision planning and control and
positioning algorithms. To incentivize our employees and retain our talent, we had in place two
share award schemes, and incurred share-based payments of RMB8.8 million, RMB15.0
million, RMB22.4 million, RMB11.2 million and RMB15.3 million, respectively, in 2021,
2022 and 2023 and the six months ended June 30, 2023 and 2024.
We plan to recruit and retain relevant R&D talent to achieve breakthroughs in advanced
intelligent driving technologies, boost the scalability as well as efficiency and effectiveness of
our R&D activities, and optimize and enrich our solutions portfolio. Specifically, we plan to
focus on R&D activities on emerging technologies and applications, including the end-to-end
technology and large-scale AI model. In connection with this objective, we intend to retain
talent with algorithms and engineering expertise to conduct the R&D projects. As we will need
to manage a significant amount of data in our R&D process, we intend to hire more R&D
personnel specialized in data labeling and management. We plan to use approximately 10% of
the net proceeds from the Global Offering, or HK$66.6 million, for refining our product R&D
abilities and reinforcing our capabilities to commercialize innovations. We plan to allocate
funds to research domain controller products to enhance the competitiveness of our iPilot
solutions. See “Future Plans and Use of Proceeds.”
Further Developing Customer Base and Exploring New Business Pathways
With the positive industry momentum, we believe we are well positioned to capture greater
market share and continue to drive revenue growth in the intelligent driving and intelligent cabin
markets. Building on our in-house development capabilities and advanced intelligent mass
production capabilities, we have established first-mover advantages in the solutions that we offer.
We have established cooperative relationships with various industry-leading OEMs and
tier-one suppliers, attributable to our solution performance, reliable solutions quality and
comprehensive services, all of which have contributed to our strong industry reputation. We
expect to further enhance our relationships with existing customers. As of the Latest
Practicable Date, we had accumulatively undertaken mass production for 35 OEMs. We have
also established long-term relationships with many of our customers. We intend to capitalize
on the relationships established with our existing customers to further discover and meet their
needs and stay at the technological forefront of the market. We believe that our market
leadership, along with our cost-effective solutions as well as mass production capabilities, will
continually help us attract new customers. We expect to access new customers and business
opportunities, such as showcasing our solutions performance and capabilities to prospective
OEMs and tier-one suppliers through collaborative development projects, thereby
demonstrating the value proposition of our solutions.
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We also aim to continually upgrade and expand our intelligent driving and cabin
solutions. We expect that our customers will find increasing value in our solutions and apply
them in more of their mass-produced vehicle models, driving our revenue growth concurrently.
We anticipate broadening the scope of our design wins to encompass the entirety of OEMs’
vehicle platforms, which are commonly used to create a range of vehicle models sharing
similar components, systems and functions, thereby requiring intelligent driving solutions with
similar specifications. By adopting this strategy, we expect to be able to secure a substantial
volume of orders covering the entire solutions line of the OEMs. This approach will also allow
us to mitigate the costs associated with developing and tailoring our solutions for each
individual vehicle model. As a result, we can enhance our operational efficiency by
streamlining our development process and delivering our solutions more quickly and
effectively to achieve SOP for a larger number of vehicle models.
Capitalizing on the expertise in intelligent driving and intelligent cabin technologies, we
are poised to extend our reach to logistics firms and urban transport operators, offering them
integrated solutions, aiming to cultivate new customer relationships and innovate business
patterns. We also plan to introduce our core technologies into specific fields, such as mining
and aircraft industry. By engaging in cross-border collaborations, we intend to spearhead the
application and innovation of intelligent solutions in these new strategic pathways, thereby
diversifying our solutions portfolio and pioneering new avenues for technological application.
We plan to use approximately 20% of the net proceeds from the Global Offering, or
approximately HK$133.2 million, for reinforcing our sales and marketing capabilities. We
intend to establish offices in Shanghai, Singapore and Munich to explore market opportunities
in the PRC, Southeast Asia and Europe, respectively. As part of this plan, we intend to allocate
funds to recruit sales and marketing personnel, lease office space and enhance our presence in
these markets through a variety of public relations and marketing activities. See “Future Plans
and Use of Proceeds.”
OUR BUSINESS
We are an intelligent driving and cabin solutions provider in China. We offer
comprehensive intelligent driving and cabin solutions that enhance vehicle intelligence,
automotive safety and in-vehicle experiences in various operational scenarios for both drivers
and passengers to cater to diverse customer needs and expectations for ADAS and ADS
functionalities. In addition, we offer vehicle infrastructure cooperative systems to customers in
the transportation infrastructure sector to enhance road safety, improve traffic management
efficiency and lower operating costs. We also continue to address new features driven by our
commitment to the continual development of intelligent driving techniques.
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Our portfolio encompasses solutions integrating algorithms, software and hardware
across our business lines of intelligent driving solutions, intelligent cabin solutions and vehicle
infrastructure cooperative systems. The following diagram illustrates the broad spectrum of our
solutions and how our business lines interact with our core technologies:
SOLUTIONS
Intelligent Cabin
Solutions
Intelligent Driving
Solutions
Vehicle Infrastructure
Cooperative Systems
TECHNOLOGY
In-house
Developed Core Algorithms
Compatible and
Portable Technologies
Software-Hardware-
Integrated Design Capabilities
In particular, our solutions comprise:
 Intelligent Driving Solutions. Our intelligent driving solutions primarily include
the iSafety and iPilot series. Our iSafety solutions, developed based on ADAS
technologies, feature: (i) a rich array of cost-effective functions enhancing
automotive intelligence and safety; and (ii) high compatibility with various vehicle
models, SoC platforms and other components. Leveraging our technological
capabilities at higher levels of intelligent driving techniques, we provide iPilot
solutions to accommodate the various customization needs of OEMs for more
innovative automation functions of their vehicles in a wide range of application
scenarios. Furthermore, we are developing ADS functions and expect to deliver our
iRobo solutions in the first quarter of 2025, which are currently in the testing phase.
Our iRobo solutions can support fully autonomous driving in specific areas and
operating scenarios.
 Intelligent Cabin Solutions. Our intelligent cabin solutions are centered around
in-cabin sensing and in-cabin interaction, with primary offerings comprising DMS
solutions, OMS solutions and other solutions. Supported by our in-house proprietary
algorithms, our intelligent cabin solutions are able to achieve high stability and
accuracy while performing a broad spectrum of functions that enrich the in-vehicle
user experience and automotive safety.
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 Vehicle Infrastructure Cooperative Systems. Leveraging our core technologies
and our extensive experiences from the sectors of intelligent driving and cabin
solutions that have been validated on a large scale, we offer vehicle infrastructure
cooperative systems that integrate in-house designed sensor devices, such as radars
and cameras, our in-house developed algorithm structures and advanced V2X
technologies. We generally work with customers in the transportation infrastructure
sector aiming to augment road safety and traffic efficiency, and also help customers
manage traffic flows in industry parks, parking lots and roadside parking space. By
promoting vehicle-to-infrastructure connectivity, our vehicle infrastructure
cooperative systems have facilitated the intelligent collaborations among the
on-board devices of individual vehicle intelligence and the roadside devices of
vehicle infrastructure cooperative system, so as to contribute to the establishment of
an automotive intelligence ecosystem.
As of the Latest Practicable Date, we had accumulatively undertaken mass production for
35 OEMs. As of the Latest Practicable Date, in terms of sales volume, seven of the top 10
domestic OEMs had chosen our solutions for their mass-produced vehicle models. As of
December 31, 2021, 2022 and 2023 and June 30, 2024, we had design wins under development
for 20, 36, 51 and 41 vehicle models with 14, 20, 21 and 22 OEMs, respectively, and had
undertaken mass production for 22, 53, 64 and 94 vehicle models with 9, 19, 26 and 29 OEMs,
respectively.
During the Track Record Period, we generated a large majority of our revenue from
intelligent driving solutions. Meanwhile, we have also been focusing on the development of
our intelligent cabin solutions and vehicle infrastructure cooperative systems. The revenue
from these two business lines continued to grow both in absolute number and as a percentage
of the total revenue during the Track Record Period. The following table sets forth a breakdown
of our revenue by business line for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount % Amount % Amount % Amount
%o f
revenue Amount
%o f
revenue
(RMB in thousands, except for percentages)
(unaudited)
Intelligent driving
solutions /H1118/H1118/H1118/H1118/H1118173,019 98.8 267,312 95.7 386,150 81.1 142,617 87.0 182,279 77.0
iSafety solutions /H1118/H1118173,007 98.8 231,501 82.9 334,780 70.3 125,307 76.5 152,867 64.6
iPilot solutions /H1118/H1118 12 0.0 35,811 12.8 51,370 10.8 17,310 10.5 29,412 12.4
Intelligent cabin
solutions /H1118/H1118/H1118/H1118/H1118696 0.4 1,565 0.6 18,346 3.8 4,089 2.5 30,540 12.9
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Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount % Amount % Amount % Amount
%o f
revenue Amount
%o f
revenue
(RMB in thousands, except for percentages)
(unaudited)
V ehicle infrastructure
cooperative
systems /H1118/H1118/H1118/H1118/H1118/H1118– – 722 0.3 71,454 15.0 16,965 10.4 23,626 10.0
Others
(1) /H1118/H1118/H1118/H1118/H1118/H11181,459 0.8 9,759 3.4 256 0.1 163 0.1 230 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118175,174 100.0 279,358 100.0 476,206 100.0 163,834 100.0 236,675 100.0
(1) Others mainly refer to revenue generated from sales of spare parts and rendering maintenance services.
The following diagram illustrates the respective roles of all the stakeholders along the
value chain:
• Sensors
• Chips
• High precision maps
Positioning systems
• Other raw materials
and components
Algorithm and
software development
•
•
Hardware design
and validation
• Test  and validation
• System integration
• Production
• Quality control and
after-sales services
Our Company
(Solution provider)
Raw material and
component suppliers
OEMs
• System integration
• Production
• Quality control and
after-sales services
Tier-one suppliers
•
We operate as a solution provider in the industry value chain. Upstream, we source critical
raw materials and components, including sensors, chips, high precision maps positioning systems
and other necessary materials for our solutions. Our core activities encompass algorithm and
software development, hardware design, testing and validation, system integration, production,
quality control and after-sales services. These activities enable us to create comprehensive
intelligent driving and cabin solutions that enhance vehicle intelligence, safety and in-vehicle
experiences. For details of our competitive strengths compared to our peers, see “Business—Our
Strengths.” Downstream, our solutions reach the market through two primary channels. We
supply solutions directly to OEMs, collaborating closely with them to customize and integrate
our technologies into their vehicle models. We also provide solutions to tier-one suppliers, who
then integrate our technologies into their products before supplying them to OEMs.
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Intelligent Driving Solutions
Our intelligent driving solutions represent a suite of software and hardware integrated
into vehicles, which are designed to reduce human intervention and enhance road safety. Such
solutions utilize a combination of sensors to understand the vehicle’s surroundings and driving
environments and process the data in real time with advanced algorithms. The intelligent
driving system then provides warnings and makes decisions on the vehicle actions, such as
determining when to accelerate, brake or steer, supporting the effective control of the vehicle’s
actions.
ADAS solutions refer to solutions enabling Level 1 to Level 2+ automation, allowing
continuous control over various aspects of lateral and longitudinal vehicle dynamics. Currently,
global intelligent driving solutions industry is progressing towards Level 2+ vehicle autonomy.
According to CIC, the distinction between Level 2 and Level 2+ intelligent driving
solutions lies in their technologies and functions. Compared to Level 2 solutions, Level 2+
offers a broader detection range and higher precision through enhanced hardware
configurations and more sophisticated cooperation between key components, leading to more
comprehensive driving functions and superior driving experiences. A typical Level 2 function
combines adaptive cruise control (ACC) and lane keeping assist (LKA), helping vehicles
maintain a safe following distance and stay within their lanes. This typically requires one
camera and one to five millimeter-wave radars. In contrast, an example of Level 2+ solution
is highway navigate on autopilot (HNOA), which enables vehicles to follow navigation paths
on highways autonomously, handling complex driving tasks to the destination as specified by
the driver. Implementing such features usually involves configuring at least five to twelve
cameras and millimeter-wave radars, with some systems also incorporating one or two
LiDARs.
ADS solutions refer to solutions enabling Level 3 to Level 5 automation, which can
continuously perform a full range of dynamic driving tasks. The difference between Level 2+
and Level 3 solutions lies in the degree of driver responsibility. Both Level 2+ and Level 3
intelligent driving solutions can perform more advanced and complex driving tasks under
specific conditions compared to Level 2 intelligent driving solution. However, with Level 2+
solutions, the driver must continuously monitor the vehicle and be ready to take control at all
times. In contrast, Level 3 solutions can fully control the driving process and handle driving
tasks without the need for continuous driver supervision under certain conditions. This allows
the driver to legally divert his/her attention from driving tasks and only take over control when
requested by the system. In summary, Level 2+ provides advanced driver assistance with the
driver always remaining in control, whereas Level 3 allows for conditional vehicle autonomy,
where the vehicle takes full control under specific conditions, with the driver ready to intervene
upon request.
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Benefiting from our years of expertise in the R&D of intelligent driving technologies
accumulated since 2014 and rich commercialization experience gained since 2017, we are
capable of designing, developing, optimizing and commercializing intelligent driving solutions
of different automation levels in response to diversified application scenarios to make vehicles
safer and smarter. Our intelligent driving solutions have the following characteristics:
 Comprehensiveness. We have developed a comprehensive solutions portfolio with
various intelligent driving functions, covering Level 0 to Level 2+ intelligent
driving solutions that are in-house developed and proven by mass production.
Specifically, our intelligent driving solutions at Level 0 to Level 2 automation
primarily focus on enhancing safety, our intelligent driving solutions at Level 2+
automation primarily focus on providing more advanced intelligent driving
functions, such as NOA and HA VP , and our efforts in developing Level 4
autonomous driving solutions represents our commitment to the continual
development of autonomous driving techniques.
 Compatibility. Our intelligent driving solutions can be compatible with various
vehicle models, SoC platforms and other components, which enables us to deliver
our solutions with modularized customization based on the hardwares determined by
OEMs, thereby allowing us to efficiently meet OEMs’ needs at reasonable costs.
 Cost-effectiveness. Leveraging years of efforts in technology advancement, we offer
cost-effective intelligent driving solutions featuring minimal requirements for
computing power consumption and hardware configurations.
Capitalizing on our robust intelligent driving solutions, we have accumulated a large and
loyal customer base composed primarily of leading OEMs and tier-one suppliers in China. In
2021, 2022 and 2023 and the six months ended June 30, 2024, we had design wins under
development for our intelligent driving solutions for 18, 19, 20 and 25 vehicle models with 12,
13, 14 and 16 OEMs, respectively, and had undertaken mass production for 22, 50, 56 and 67
vehicle models with 10, 17, 20 and 22 OEMs, respectively. In 2023, the average unit price for
our intelligent driving solutions was approximately RMB491.6. We set the pricing of our
intelligent driving solutions by mainly considering: (i) the complexity of the solutions and
relevant services required by customers; (ii) expected sales volume of the solutions; and (iii)
the expected profitability of the solutions.
We offer iSafety and iPilot solutions and other intelligent driving solutions related
services in our intelligent driving solutions business. These solutions are typically offered in
forms of hardware (such as a domain controller with associated sensors) embedded with our
in-house developed algorithm solutions. Meanwhile, we are also developing our iRobo
solutions, which are currently in the testing phase.
According to our PRC Legal Advisor, our intelligent driving solutions business had been
carried out in compliance with applicable PRC laws and regulations in all material respects
during the Track Record Period and up to the Latest Practicable Date.
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iSafety Solutions
Our iSafety solutions integrate multi-sensor perception systems with our proprietary
perception algorithms to detect and locate vehicles, pedestrians, lanes, traffic signals and road
signs. They feature the use of our algorithms to process multi-sensor signals to realize the
perception of the real world and to implement intelligent driving functions through planning
and control. We have also deployed our in-house developed HardNet neural network inference
framework on hardware. See “—Our Technologies.” In particular, our iSafety solutions enable
a safe and intelligent driving experience in complex traffic scenarios such as sharp bends,
S-shaped curves and intersections while performing AEB, TJA, ICA, ACC, LKA, FCW, LDW
and other ADAS functions, thereby reducing the risk of traffic accidents.
Our iSafety solutions are generally able to achieve the following major functions:
Autonomous Emergency Braking (AEB). Our
iSafety solutions activate an alarm or initiate
braking automatically when the driver brakes
too late, applies insufficient braking force, or
fails to brake at all. Our AEB has met the
requirements of C-NCAP .
Traffic Jam Assist (TJA). In situations of
traffic congestion, TJA provides drivers with
both lateral and longitudinal assistance
functions. While TJA can control the vehicle
to travel in the middle position of the lane
lines at a certain speed, it can control the
vehicle to follow the trajectory of the vehicle
ahead and actively manage the acceleration
and deceleration of the vehicle, maintaining a
certain distance from the vehicle in front.
Integrated Cruise Assist (ICA). In smooth
traffic conditions, by controlling the vehicle’s
lateral and longitudinal movements, ICA
assists the vehicle to stay centered in its
current lane, moving at a set speed.
Meanwhile, if there is a vehicle ahead, ICA
ensures the vehicle maintains a consistent
following distance from it.
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Adaptive Cruise Control (ACC). Our iSafety
solutions automatically control the
longitudinal movement of the vehicle to
ensure driving safety and provide convenient
assistance to the driver. ACC provides a
smooth vehicle-following experience,
supporting the recognition and tracking of
dozens of vehicle types, including
unconventional ones. Our ACC also achieves
long-distance responsiveness and anticipatory
judgment and supports braking for stationary
targets at speeds of up to 100 km/h.
Lane Keeping Assist (LKA). Our iSafety
solutions continuously monitor the vehicle’s
position relative to the lane markings and
control the lateral movement of the vehicle
either continuously or when necessary to
ensure the vehicle stays within its lane.
Forward Collision Warning (FCW). Our
iSafety solutions monitor the driving
environment in front of the vehicle in real
time and issue warning alerts in the event of a
forward collision risk.
Lane Departure Warning (LDW). When
LDW is activated, our iSafety solutions
continuously monitor the vehicle’s relative
position to the lane markings and alert the
driver when the vehicle unintentionally drifts
out of the lane or is about to leave the lane.
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Our iSafety solutions are designed to be flexibly compatible with various vehicle models,
SoC platforms and other components in response to the diverse requirements of OEMs and
tier-one suppliers. Such compatibility and flexibility can effectively shorten our re-
development cycle and reduce our re-development costs without compromising our ability to
further evolve our advanced solutions in the pipeline. In addition, our iSafety solutions are able
to realize intelligent driving functions with low computing power consumption on simple
ECUs. For example, the computing power of iSafety 1 to meet the ISO intelligent transport
system or C-NCAP related test can be as low as 0.55 TOPS. This enables us to offer
competitive solutions with high computing efficiency to meet the specific needs of OEMs. The
computing power of our iSafety solutions generally ranges from 0.55 to five TOPS, allowing
us to reach a large customer base that demands flexible and cost-effective solutions for their
vehicle models.
We developed a prototype of our iSafety solution in 2016. Since 2019, we have developed
and commercialized iSafety 1, iSafety 2 and iSafety 3, newer-generation products in the iSafety
series. Our iSafety solutions possess high computing efficiency and various intelligent driving
functions and other functions that are specifically designed to meet the requirements of OEMs.
The following table sets out some details of our major iSafety solutions:
iSafety 1 iSafety 2 iSafety 3
Computing power 0.55 TOPS Four TOPS Five TOPS
Sensors  One camera
 One millimeter-wave
radar (optional)
 One camera
 One millimeter-wave
radar (optional)
 One camera
 One to five millimeter-
wave radar (optional)
Primary functions  Driving (forward-
warning) functions:
FCW, LDW, PCW, TSR
 Driving (control)
functions:
AEB, ACC, LCC,
LKA, TJA, ICA
 Driving (forward-
warning) functions:
FCW, LDW, PCW,
TSR, IHBC, S&G
 Driving (control)
functions:
AEB, ACC, LCC,
LKA, TJA, ICA, DCLC
 Driving (forward- and
backward-warning)
functions:
FCW, LDW, PCW,
TSR, IHBC, S&G,
DOW, RCW, BSD,
FCTA, RCTA
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In particular, our iSafety 2 and iSafety 3 are equipped with excellent ACC braking
performance for static targets, supporting full stops at speeds up to 100 km/h. They are also
equipped with cornering capabilities, supporting tight bends with radii of less than 50 meters,
handling S-curves and following vehicles through intersections. Our more recent iSafety
solutions have met the requirements of C-NCAP and E-NCAP . All our iSafety solutions listed
above have achieved commercialization and mass production.
iPilot Solutions
We have been developing our iPilot solutions featuring advanced driving functions since
2021. With the perception-driven approach with minimum reliance on HD maps, our iPilot
solutions are able to deliver advanced intelligent driving functions, spanning highway and
urban routes driving and parking, which are expected to achieve HD mapless perception-driven
NOA in the near future. Building upon the basic intelligent driving functions of our iSafety
solutions, our iPilot solutions integrate more sophisticated intelligent driving and parking
functions to provide an increasingly intelligent driving and parking experience.
Our iPilot solutions are able to accomplish, in addition to those functions of iSafety
solutions, the following major functions:
Highway Navigate on Autopilot (HNOA). Our
iPilot solutions allow the vehicle to
automatically follow the navigation path on
highways based on navigation maps,
including automatic lane changes according to
navigation, automatic entry and exit from
ramps and automatic overtaking.
Urban Navigate on Autopilot (UNOA). Our
iPilot solutions allow the vehicle to
automatically follow the navigational route on
structured urban roads. This includes
automatic lane changes according to
navigation, passing through intersections,
making left and right turns and U-turns and
automatically navigating around obstacles for
point-to-point travel.
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Home Automated V alet Parking (HAVP). Our
iPilot solutions allow the vehicle to
autonomously find a parking space and park
itself in fixed parking scenarios such as
residential or commercial parking lots. After
the vehicle has learned the route, the vehicle
is able to autonomously park itself and there
is no need for the driver to perform any
operations for parking.
Automatic Parking Assist (AP A). Our iPilot
solutions use the vehicle’s own sensors to
monitor the relative distance, speed and angle
between the vehicle and surrounding
obstacles. APA controls the vehicle’s
acceleration, deceleration and steering to
automatically park into or out of designated
parking space.
iPilot is a Level 2+ solution. Compared to Level 2 intelligent driving solutions, Level 2+
solutions offer a broader detection range and higher precision through richer hardware
configurations and more intelligent cooperation between key components, resulting in more
comprehensive driving functions and superior driving experiences. Typical functions of Level
2+ solutions include HNOA, UNOA and HA VP , which are all included in iPilot solutions.
The driver can easily interrupt the functions above by lightly pressing the brake pedal.
Control of the vehicle will immediately be handed back to the driver. In addition, iPilot’s
algorithms constantly monitor driving conditions and will alert the driver to take over when a
danger is detected. For example, the driver is required to always keep his/her hand on the
steering wheel. If the driver’s hands are not on the steering wheel for an extended period, the
system will remind the driver to retake control. Further, even when the HNOA, UNOA, HA VP
and APA functions are active, the AEB function continuously monitors collision risks. If an
obvious collision danger is detected during driving, the vehicle will perform active braking
through AEB and transfer control to the driver.
Our iPilot solutions are designed to offer cost-effective deliveries to OEMs and tier-one
suppliers with high computing efficiency and minimum requirements for hardware
configurations to meet the various requirements of OEMs and tier-one suppliers. The
perception-driven approach with minimum reliance on HD maps, as applied in our iPilot
solutions, is supported by our in-house developed algorithms with deep neural network
technology at the perception stage, which can facilitate the cost management for our customers.
For example, our iPilot solutions have adopted the BEV technology, early-fusion algorithms
that synergize visual and radar data and tracking and prediction algorithms to provide stable
and continuous in-depth perception of surrounding obstacles, while integrating intelligent
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driving and parking functions into a single intelligent driving module. Our BEV technology is
also capable of sensing and analyzing temporal and spatial data, enabling our iPilot solutions
to efficiently anticipate and react to potential obstacles or changes in various driving
environment. Benefitted from the BEV technology adopted in our iPilot solutions, OEM
customers are able to select simple hardware configurations, which can optimize their overall
cost structure.
Moreover, our efficient utilization of computing power can help us effectively control
hardware costs for ourselves and OEM customers. For example, our iPilot solutions are
generally able to support intelligent driving and parking functions with a single chip. In
addition, our iPilot 3 is able to use only 32 TOPS to achieve HNOA and HA VP simultaneously.
Same as our iSafety solutions, our iPilot solutions are also designed to be flexibly compatible
with mainstream SoC platforms, and they can also flexibly work with various sensor
combinations under similar algorithm frameworks.
Furthermore, leveraging our in-house developed algorithms, we are able to co-develop
highly customized intelligent driving functions with OEMs and tier-one suppliers, catering to
the various needs of target markets. For example, we have collaborated with OEMs and
developed customized intelligent driving functions under off-road scenarios, such as
automatically optimizing ACC by taking considerations of various driving conditions,
including paved road, dirt roads, snow roads, gravel roads and waded dirt roads through
providing additional driving modes.
The following table sets out some details of our major iPilot solutions:
iPilot 1 iPilot 2 iPilot 3 iPilot 4
Computing power /H1118/H1118/H1118/H1118Eight TOPS Five TOPS 32 TOPS 80 TOPS
Sensors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Five millimeter-
wave radar
 Six cameras
 12 ultrasonic
radar
 Five millimeter-
wave radar
 Five cameras
 12 ultrasonic
radar
 One to five
millimeter-wave
radar
 Six to 10
cameras
 12 ultrasonic
radar
 One LiDAR
 Five millimeter-
wave radar
 Seven to
11 cameras
 12 ultrasonic
radar
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Primary functions
(in addition to the
functions of iSafety
solutions) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
 Driving
functions:
lite HNOA
 Parking
functions:
HA VP , APA,
A VM, RPA,
PDC
 Driving
functions:
lite HNOA
 Parking
functions:
APA, A VM,
RPA, PDC
 Driving
functions:
HNOA
 Parking
functions:
HA VP , APA,
A VM, RPA,
PDC
 Driving
functions:
HNOA/UNOA
 Parking
functions:
HA VP , APA,
A VM, RPA,
PDC
 In-cabin
functions:
DMS/OMS
In particular, iPilot 1 distinguishes itself by its high computing power efficiency, lite
NOA (with minimum reliance on HD maps) and HA VP . It does not rely on water-cooled
cooling systems and allows its application in both NEVs and traditional petrol-powered cars,
thereby imposing fewer requirements on the vehicle’s power supply capabilities. In addition,
iPilot 1 has met the requirements of C-NCAP . iPilot 2 is equipped with eight megapixel
cameras and is able to achieve advanced intelligent driving and parking solutions on a single
chip in a cost-effective manner. iPilot 2 is underpinned by our proprietary algorithms for
diverse parking space geometries, capable of achieving dynamic route planning to
accommodate parking spaces of various complex shapes. iPilot 3 is able to achieve HNOA in
a cost-effective manner, leveraging the BEV technology and the perception-driven technology
with minimum reliance on HD maps. iPilot 1, 2 and 3 have been commercialized. iPilot 4 is
expected to achieve UNOA and HA VP leveraging the BEV technology and end-to-end
technology. iPilot 4 is designed to integrate intelligent cabin solutions, achieving the
integration of driving, parking and in-cabin functions. As of the Latest Practicable Date, we
had finalized the functionality design of iPilot 4 and commenced the hardware design
verification test. We had also tested the perception algorithm model of iPilot 4, which
demonstrated good stability in identifying vehicles, pedestrians and other objects on regular
roads. We expect iPilot 4 to commence commercialization in 2025.
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The following table sets forth details of the main vehicle brands, vehicle types, vehicle
energy types, market positioning and major retail locations for which we have achieved mass
production or procured design wins of our intelligent driving solutions during the Track Record
Period and up to the Latest Practicable Date:
No.
Main
vehicle
brands Vehicle types
Vehicle energy
types Market positioning
Major retail
locations
iSafety Solutions
1. /H1118/H1118Brand A 1 Buses ICE vehicles, EVs and
other NEVs
Brand A focuses on high-
end business, passenger
transport, tourism,
public transport, school
buses, special-purpose
vehicles and group
vehicles.
Mainland China
2. /H1118/H1118Brand B
2 SUVs and sedans EVs and other NEVs Brand B’s vehicles spans
from entry-level to
high-end luxury. Brand
B’s vehicles models
include sedans, SUVs,
MPVs and NEVs.
Mainland China
3. /H1118/H1118Brand C
3 Heavy-duty trucks ICE vehicles and EVs Brand C covers mid-range
and high-end
automotive market
segments. It offers
various models
including tractor
trucks, dump trucks,
special-purpose
vehicles, mixer trucks
and cargo trucks.
Mainland China
4. /H1118/H1118Brand D
4 Heavy-duty trucks ICE vehicles and EVs Brand D specializes in the
mid-range and high-end
heavy truck market. It
offers various models
including natural gas
heavy trucks, diesel
heavy trucks and new
energy heavy trucks.
Mainland China
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No.
Main
vehicle
brands Vehicle types
Vehicle energy
types Market positioning
Major retail
locations
5. /H1118/H1118Brand E 5 Heavy-duty trucks ICE vehicles and EVs Brand E covers mid-range
and high-end market
segments, it offers
various models
including tractor
trucks, cargo trucks,
heavy engineering
trucks and special-
purpose vehicles.
Mainland China
6. /H1118/H1118Brand F
6 Tanker trucks, tow
trucks and
sanitation
trucks
ICE vehicles Brand F covers mid-range
and high-end market
segments, it offers
various models
including tractor
trucks, cargo trucks,
heavy engineering
trucks and special-
purpose vehicles.
Mainland China
7. /H1118/H1118Brand G
7 Sedans and SUVs ICE vehicles Brand G primarily focuses
on the entry-level and
mid-range market
segment, it mainly
offers sedans and
SUVs.
Mainland China
8. /H1118/H1118Brand H
8 SUVs ICE vehicles, EVs and
other NEVs
Brand H primarily covers
various segments from
entry-level to mid-
range, it mainly offers
SUV models.
Mainland China and EU
9. /H1118/H1118Brand I
9 SUVs EVs and other NEVs Brand I covers various
segments from entry-
level to mid-range, it
offers models including
sedans, SUVs and
sports cars.
Mainland China
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No.
Main
vehicle
brands Vehicle types
Vehicle energy
types Market positioning
Major retail
locations
10. /H1118Brand J 10 Sedans ICE vehicles and other
NEVs
Brand J covers various
segments from entry-
level to high-end, it
offers models including
sedans, SUVs and
sports cars.
Mainland China, EU, UK
and Australia
iPilot Solutions
1. /H1118/H1118Brand I Sedans and SUVs EVs and other NEVs See No. 9 above. Mainland China
2. /H1118/H1118Brand K
11 MPVs EVs Brand K covers various
segments from entry-
level to mid-range, it
offers a variety of
models including
sedans, SUVs and
MPVs.
Mainland China
3. /H1118/H1118Brand A Buses ICE vehicles, EVs and
other NEVs
See No. 1 above. Mainland China
4. /H1118/H1118Brand H SUVs ICE vehicles, EVs and
other NEVs
See No. 8 above. Mainland China
5. /H1118/H1118Brand L
12 Sedans ICE vehicles and EVs Brand L covers various
segments from mid-
range to luxury, it
offers a variety of
models including
sedans, SUVs and
MPVs.
Mainland China and EU
Notes:
(1) Brand A, founded in 1998, is a well-known brand in the Chinese bus industry.
(2) Brand B, founded in 1995, a leading new energy vehicle manufacturer in China.
(3) Brand C, founded in 1930, is a well-known vehicle manufacturer in China, specializing in the R&D,
production and sales of heavy-duty trucks, special-purpose vehicles, buses and other specialized
vehicles.
(4) Brand D, founded in 2022, is a well-known vehicle manufacturer in China, specializing in the R&D,
production and sales of heavy-duty military off-road vehicles, heavy-duty trucks and heavy-duty axles.
(5) Brand E, founded in 1969, focuses on the systematic deployment of new energy solutions in niche
markets such as short-distance resource transportation, sanitation and construction waste/mixing.
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(6) Brand F, founded in 2002, focuses on the production of liquid tankers, recovery vehicles, engineering
dump trucks and various other specialized vehicle types.
(7) Brand G, became an independent brand since 2019 and focuses on producing safe, reliable,
cost-efficient and energy-saving vehicles.
(8) Brand H, founded in 2018, focuses on the SUV market and is dedicated to creating a “Travel+” mobility
ecosystem.
(9) Brand I, founded in 2018, focuses on creating high-quality intelligent electric vehicles.
(10) Brand J, founded in 1924, is an international brand with nearly a century of history and focuses on
creating high-performance sports sedans.
(11) Brand K, founded in 1993, is a well-known automobile manufacturing enterprise in China, specializing
in the R&D and manufacturing of vehicles and automotive powertrains.
(12) Brand L, founded in 1958, focuses on creating high-quality automotive vehicles.
It is our business strategy to foster a diversified customer base—given that many vehicle
brands in China are aggressively developing their autonomous driving vehicles and there is no
prediction which brands will ultimately succeed, we strategically sell to a wide range of vehicle
brands to maximize our own chance of future success. As illustrated by the table above for
intelligent driving solutions and the table below in subsection “—Intelligent Cabin Solutions”
for intelligent cabin solutions, during the Track Record Period, we mainly supplied intelligent
driving solutions to 12 vehicle brands and intelligent cabin solutions to 10 vehicle brands, most
of which produced vehicles of different energy types. In addition, we had accumulatively
undertaken mass production for 35 OEMs as of the Latest Practicable Date, and the revenue
from our five largest customers for 2023 and the six months ended June 30, 2024 only
represented 37.0% and 39.8% of our total revenue. Based on the foregoing, the Directors are
of the view, and the Joint Sponsors concur, that there is not any undue concentration of revenue
generated from sales to any particular vehicle brand or vehicle energy type.
iRobo Solutions
Our iRobo solutions support fully autonomous driving in specific areas and operating
scenarios, such as industry parks, ports and airports. They are able to handle complex traffic
situations such as narrow road encounters, busy intersections and emergency maneuvers
around obstacles or vehicles. In addition, our iRobo solutions are capable of environmental
perception, trajectory prediction, planning and control, fusion positioning and system
calibration.
As of the Latest Practicable Date, our iRobo solutions have undergone extensive
real-vehicle road testing. The testing comprises two parts: general testing (conducted by us)
and local testing (to be jointly conducted by us and our local customers). Currently, we have
completed the general testing stage of iRobo, which mainly included module testing,
simulation testing and real-vehicle testing. The general testing stage has validated the technical
stability and reliability of iRobo. As iRobo will be deployed in real-world environments ( e.g. ,
an industrial park), we expect that our customers ( e.g. , the transportation operator of an
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industrial park) and us will jointly conduct the local testing. As of the Latest Practicable Date,
we had extensive discussions with several potential customers, and we had been engaged for
our first localized project and expect to deliver this project in the first quarter of 2025. Under
relevant PRC laws and regulations, L4 autonomous driving transportation operators should
obtain relevant regulatory permits, such as the road transportation permit, which may vary
across different provinces or cities. For our first localized project, the responsibility for
obtaining such permits rests with our local customer instead of us, because our role is limited
to supplying hardware and software to our local customer and therefore is not an autonomous
driving transportation operator, as advised by our PRC Legal Advisor. We will provide
necessary support to our local customer during the permit application process. We expect, and
our PRC Legal Advisor concurs, that there are no material legal impediment in obtaining the
relevant permits. In addition, we do not anticipate the permit application process to affect the
schedule project delivery timeline. The following picture presents our robo-bus under testing
that utilizes our iRobo solutions:
Intelligent Cabin Solutions
We have commercialized our intelligent cabin solutions since 2019. Our intelligent cabin
solutions are designed to enhance the in-cabin experience for both drivers and passengers by
providing a safer and more comfortable driving environment, as well as interactive and
intelligent functions. Our intelligent cabin solutions center around our DMS solutions, which
focus on monitoring driver behaviors with real-time tracking functions, and our OMS
solutions, which focus on providing smart and entertainment functions and enhancing in-cabin
user experience for both drivers and passengers. Our intelligent cabin solutions are generally
delivered in the form of algorithm solutions or software-hardware-integrated solutions. The
software-hardware-integrated solutions integrate sensors and hardware components such as
SoCs with embedded algorithms.
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According to CIC, we are among the first batch of suppliers of DMS solutions in China
that successfully supported OEMs in obtaining DDAW certifications for their vehicle models
under the EU GSR and we are the first Chinese intelligent cabin solutions provider supporting
Chinese OEMs to obtain the E-NCAP five-star rating since its introduction in 2023.
Driver Drowsiness
Detection
Passenger Care
Vital Signs Indicator
Safety Takeover
Driver Registration
Interactive Entertainment
Experience
Our intelligent cabin solutions are generally applied in the following in-cabin scenarios:
 Driver Drowsiness Detection. Our intelligent cabin solutions are capable of
real-time monitoring of multi-dimensional indicators such as the driver’s head
posture, eyelid opening and closing percentage, gaze direction and blinking
frequency to provide timely warnings or prevent dangerous driving behaviors. They
have been widely utilized by various vehicle models.
 Safety Takeover . Our intelligent cabin solutions can track the driver’s gaze and
analyze the driver’s attention, ensuring the driver can take over the vehicle from the
autonomous driving mode in a timely manner.
 Vital Signs Indicator . Our intelligent cabin solutions trace and analyze a number of
vital indicators to conduct monitoring on the driver’s conditions, such as heart rate
and breath rate, all of which are achieved through a non-contact approach.
 Driver Registration. Our intelligent cabin solutions are able to achieve identity
recognition with live detection technologies. The user can register either on a mobile
device or on in-cabin camera. As the user approaches the sensor, the in-cabin system
can quickly make a real-time judgement and carry out identity recognition, and then
automatically activate relevant driving and in-cabin memory functions for the
driver, such as seat position setting.
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 Passenger Care. Our intelligent cabin solutions are designed to provide various care
functions for both adults and children passengers by comprehensively analyzing
their features. For example, our intelligent cabin solutions consistently monitor the
passenger’s seat belt and other dangerous behaviors during a journey, providing
real-time feedback to the driver. In addition, when a child is detected, the in-cabin
system actively triggers the childcare function, continuously monitoring the child’s
behaviors and alerting the driver if a child is left in the vehicle alone.
 Interactive Entertainment Experience. Our intelligent cabin solutions include a
number of interactive entertainment functions catering to users across different age
groups, such as video games, beauty camera and in-cabin KTV .
Leveraging our proprietary perception algorithms and our extensive experience from
intelligent driving solutions that have been validated on a large scale, our in-cabin perception
algorithms can adjust our solutions in response to various lighting conditions and head postures
and have been optimized for features such as bright and dark pupils and uneven eye sizes. In
addition, our in-cabin perception algorithms are able to accurately tell if a driver’s gaze falls
within over 20 detectable regions inside the cabin, with a high level of precision that allows
for a gaze area being as small as 5cm x 5cm and average gaze tracking accuracy within three
degrees. Our intelligent cabin solutions have been awarded the “2021 Edge AI and Vision
Product of the Y ear Award” in the intelligent solutions category.
Moreover, our intelligent cabin solutions are highly portable among various CPU and
NPU architectures selected by mainstream SoC platforms. Therefore, our solutions can be
flexibly compatible with mainstream SoC platforms and applied on the in-cabin systems or the
cockpit domain controllers designed by the OEMs’ vehicle infotainment, leading to high
inference efficiency and low porting costs for both of our OEM customers and ourselves.
Meanwhile, benefitting from our software-hardware-integrated design capabilities, our DMS
solutions can be tailored to optimize the utilization of computing power to control hardware
costs.
Furthermore, our intelligent cabin solutions utilize a variety of human-machine
interaction methods to improve the intelligence of interactions, representing strong technical
capabilities. From perception perspective, our intelligent cabin solutions go beyond basic eye
tracking, gestures and head posture interactions, and have expanded to multimodal fusion
approaches, integrating visual and voice interaction to enrich the in-cabin user experience for
both drivers and passengers. Our intelligent cabin solutions employ deep learning algorithms
to analyze users’ personal physical characteristics, such as eye shape and head contour, and
progressively refine the solutions’ interpretation of user behaviors to enhance user experience.
We plan to further improve the capabilities of our intelligent cabin solutions leveraging
large-scale AI model technologies.
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We initiated our intelligent cabin solution business in 2021. In 2021, 2022 and 2023 and
the six months ended June 30, 2023 and 2024, the revenue from our intelligent cabin solutions
amounted to RMB0.7 million, RMB1.6 million, RMB18.3 million, RMB4.1 million and
RMB30.5 million, respectively, representing 0.4%, 0.6%, 3.8%, 2.5% and 12.9% of our total
revenue, respectively. In 2023, the average unit price for our intelligent cabin solutions was
approximately RMB565.1. We set pricing of our intelligent cabin solutions by mainly
considering: (i) functions included in the delivered solutions and relevant services required by
customers; (ii) expected sales volumes of the solutions; and (iii) the expected profitability of
the solutions.
In 2023 and the six months ended June 30, 2024, the revenue from our three largest
customers of intelligent cabin solution business in the respective year/period in aggregate was
RMB16.6 million and RMB24.8 million, respectively, representing 90.6% and 81.3% of our
total revenue from intelligent cabin solutions. In the same periods, our largest customer of
intelligent cabin solutions business in the respective year/period contributed RMB11.9 million
and RMB11.7 million, respectively, representing 64.8% and 38.4% of our total revenue from
intelligent cabin solutions.
In 2021, 2022 and 2023 and the six months ended June 30, 2024, we had design wins
under development for our intelligent cabin solutions for 4, 17, 31 and 16 vehicle models with
3, 9, 9 and 8 OEMs, respectively, and had undertaken mass production for nil, 3, 10 and 30
vehicle models with nil, 2, 7 and 9 OEMs, respectively.
The following table sets forth details of the main vehicle brands, vehicle types, vehicle
energy types, market positioning and major retail locations for which we have achieved mass
production or procured design wins of our intelligent cabin solutions during the Track Record
Period and up to the Latest Practicable Date:
No.
Main
vehicle
brands Vehicle types
Vehicle energy
types Market positioning
Major retail
locations
1. /H1118/H1118Brand M 1 Sedans and SUVs ICE vehicles, EVs and
other NEVs
Brand M covers the mid-
range market, it offers
models including
sedans and SUVs.
EU, Middle East,
Southeast Asia and
Hong Kong
2. /H1118/H1118Brand N
2 Heavy-duty trucks Other NEVs Brand N covers various
segments from entry-
level to luxury, it
offers a range of
models including heavy
trucks, light trucks,
micro trucks, vans and
buses.
Mainland China
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No.
Main
vehicle
brands Vehicle types
Vehicle energy
types Market positioning
Major retail
locations
3. /H1118/H1118Brand J 3 Sedans ICE vehicles and other
NEVs
Brand J covers various
segments from entry-
level to high-end, it
offers models including
sedans, SUVs and
sports cars.
Mainland China, EU, UK
and Australia
4. /H1118/H1118Brand O
4 SUVs ICE vehicles Brand O covers various
segments from entry-
level to high-end, it
offers models including
sedans, SUVs and
MPVs.
Mainland China
5. /H1118/H1118Brand P
5 SUVs ICE vehicles Brand P covers various
segments from entry-
level to mid-range, it
offers models including
saloons, SUVs and
MPVs.
Mainland China
6. /H1118/H1118Brand L
6 Sedans ICE vehicles and EVs Brand L covers various
segments from mid-
range to luxury, it
offers a variety of
models including
sedans and SUVs.
Mainland China, UK,
Australia, EU,
Southeast Asia,
Middle East and
Middle Asia
7. /H1118/H1118Brand I
7 Sedans and SUVs EVs and other NEVs Brand I covers various
segments from entry-
level to mid-range, it
offers models including
sedans, SUVs and
sports cars.
Mainland China
8. /H1118/H1118Brand Q
8 Minibuses, MPVs
and trucks
ICE vehicles, EVs and
other NEVs
Brand Q covers various
segments from entry-
level to luxury, it
offers models including
MPVs, SUVs,
motorhomes, wide-
body light commercial
vehicles and pickup
trucks.
EU, Australia, UK
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No.
Main
vehicle
brands Vehicle types
Vehicle energy
types Market positioning
Major retail
locations
9. /H1118/H1118Brand R 9 Sedans and SUVs EVs Brand R covers various
segments from mid-
range to luxury, it
offers models including
SUVs and saloons.
EU
10. /H1118Brand S
10 SUVs EVs and other NEVs Brand S covers various
segments from entry-
level to mid-range, it
offers models including
saloons and SUVs.
Mainland China and
Thailand
Notes:
(1) Brand M, founded in 2019, focuses on creating more luxurious, trendier and smarter vehicles.
(2) Brand N, founded in 2014, focuses on the R&D and manufacturing of new energy and intelligent
vehicles.
(3) Brand J, founded in 1924, is an international brand with nearly a century of history and focuses on
creating high-performance sports sedans.
(4) Brand O, founded in 2006, focuses on creating mid-to-high-end vehicles with international
competitiveness.
(5) Brand P , founded in 2006, is dedicated to providing consumers with high-quality and diverse automotive
products.
(6) Brand L, founded in 1958, focuses on creating high-quality automotive vehicles.
(7) Brand I, founded in 2018, focuses on creating high-quality intelligent electric vehicles.
(8) Brand Q, founded in 2011, is dedicated to providing a diverse range of automotive products to meet
consumers’ personalised needs.
(9) Brand R, founded in 2014, is a leading new energy EV brand in China and is dedicated to providing
users with high-quality intelligent EV and innovative solutions.
(10) Brand S, founded in 2023, is dedicated to providing users with innovative digital and intelligent
mobility solutions.
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The following table sets forth our major projects in the intelligent cabin business segment
in 2023 and the six months ended June 30, 2024. Our revenue from this business segment was
minimal in 2021 and 2022, as we were ramping up our business and did not undertake major
projects during these two years.
Project No.
Customer
Background Solutions provided
Time of
Commencement
Time of
Completion (1)
For the year ended December 31, 2023
Project 1 /H1118/H1118A limited liability
company located
in Ningbo,
Zhejiang. It
specializes in the
sales of NEVs.
DMS software-hardware integrated
solutions.
November 2021 Ongoing
Project 2 /H1118/H1118A state-owned
limited liability
company located
in Shanghai. It
specializes in
R&D, production
and sales of
automobiles,
tractors and
motorcycles.
DMS software-hardware integrated
solutions.
November 2021 Ongoing
Project 3 /H1118/H1118A state-owned
limited liability
company located
in Changchun,
Jilin. It
specializes in
R&D, production
and sales of
automobiles and
related
components.
DMS software-hardware integrated
solutions.
November 2021 Ongoing
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Project No.
Customer
Background Solutions provided
Time of
Commencement
Time of
Completion (1)
For the six months ended June 30, 2024
Project 2 /H1118/H1118A state-owned
limited liability
company located
in Shanghai. It
specializes in
R&D, production
and sales of
automobiles,
tractors and
motorcycles.
DMS software-hardware integrated
solutions.
November 2021 Ongoing
Project 4 /H1118/H1118A limited liability
company located
in Shenzhen. It
specializes in the
development and
manufacturing of
electronic
components and
systems.
Intelligent algorithm hardware
platform.
January 2024 Ongoing
Project 5 /H1118/H1118A limited liability
company located
in Hangzhou,
China. It focuses
on the
development and
manufacturing of
automobiles.
DMS software-hardware integrated
solutions.
December 2021 Ongoing
Note:
(1) The design-win agreements with OEM customers typically stipulate that such OEM customers will purchase
from us over a span of three to five years, which is in line with industry practice, according to CIC. OEM
customers do not place all orders at once; instead, they place orders periodically according to the mass
production schedule of the relevant vehicles.
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Vehicle Infrastructure Cooperative System
Ongoing technology advancements and growing customer desire for safer and better
intelligent driving experiences are fueling the progress of the automotive intelligence. We are
at the forefront of the development of individual vehicle intelligence, with a keen focus on
enhancing the driving experience and passenger comfort through intelligent driving and cabin
solutions. Meanwhile, the development of vehicle infrastructure cooperative systems is integral
to the automotive intelligence. As such, our commitment to technological advancement extends
beyond the development of individual vehicle intelligence itself. In response to the
development of intelligent transportation infrastructure and smart cities, we have entered into
broadened application scenarios and new markets by offering solutions in relation to vehicle
infrastructure cooperative systems. With the intelligent collaborations among the on-board
devices of individual vehicle intelligence and the roadside devices of vehicle infrastructure
cooperative system, we have been promoting vehicle-to-infrastructure connectivity, and we are
committed to achieving further commercialization in this sector.
We established our vehicle infrastructure cooperative system business in 2020. Our
vehicle infrastructure cooperative systems integrate perception devices, such as radars and
cameras, with V2X communication technology and our in-house developed algorithm
structures, thereby enhancing road safety and traffic efficiency. Our collaboration typically
involves customers in the transportation infrastructure sector. We also assist customers to
manage traffic flow in industry parks and operate parking lots and roadside parking space,
enabling precise management of these premises. Specifically:
 The on-board systems employ devices including radars, cameras and human-
machine interfaces and our in-house developed algorithm structures, designed to
exchange traffic information with other vehicles, the transportation infrastructure
and the public management platform (for example, the traffic flow monitoring
platform operated by the transportation authority of local governments).
 Roadside systems are designed to automatically gather real-time data on vehicle
operations and road conditions with perception devices and algorithms, providing
real-time driving guidances and traffic directives via traffic lights or display screens,
so as to promote vehicle-to-infrastructure connectivity.
 The vehicle infrastructure cooperative management platform receives and processes
information from on-board and roadside systems to analyze real-time traffic
information and optimize traffic management.
Among the three components above, we provide one or more components according to
local customers’ needs and also provide customization and integration services as requested.
Leveraging advanced perception devices, V2X communication technology and our in-house
developed algorithm structures, our vehicle infrastructure cooperative systems currently have
been applied in the following scenarios.
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Highway and Intersection Management
We collaborate with customers in the transportation infrastructure sector to provide
perception devices and real-time data exchange technologies, thereby enhancing road safety
and traffic efficiency. Our vehicle infrastructure cooperative systems support the automatic
monitoring and analysis of traffic conditions at highway and intersection and are able to
generate traffic management plans based on real-time data feedback.
The key applications of our highway and intersection management include:
 Traffic flow optimization . Automatically identifying traffic congestion supported by
the roadside systems, performing real-time diagnosis of anomalies and providing
assistance for efficient traffic flow management by operating traffic signals.
 Traffic condition information analysis . Automatically extracting and digitalizing
traffic information such as traffic flows, queue length, vehicle distance and overflow
time at intersections, and producing traffic condition evaluation through our
in-house developed perception algorithms.
Industry Parks & Parking Space Management
Our vehicle infrastructure cooperative systems are capable of providing assistances to the
management over traffic flows in industry parks and operations of parking lots and roadside
parking space.
 For industrial park scenarios, our vehicle infrastructure cooperative systems adopt
3D model technology to form a digitalized map of the traffic facilities in an
industrial park to monitor and analyze traffic flows in real time in order to improve
the traffic management.
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 For parking lots or roadside parking scenarios, with our vehicle infrastructure
cooperative systems, our customers are able to: (i) record the vehicles that enter,
occupy or exit the parking space in real time supported by the roadside systems, (ii)
present real-time vehicle park occupancy status, and (iii) provide online payment
functions to improve operational efficiency.
The following table sets forth the backlog movement in the vehicle infrastructure
cooperative system business segment during the Track Record Period and up to the Latest
Practicable Date:
Number of Projects
At the
Beginning
of the
Y ear/Period
Newly
Engaged
Projects (1)
Completed
Projects
At the End
of the
Y ear/Period
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180202
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 2 11 3
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 28 32 9
Since January 1, 2024
and up to the Latest
Practicable Date /H1118/H1118/H1118/H1118/H111892 51 51 9
Note:
(1) The contract sum for newly engaged projects in 2021, 2022, 2023 and since January 1, 2024 and up to
the Latest Practicable Date was RMB19.8 million, RMB55.6 million, RMB38.8 million and RMB30.0
million, respectively.
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During the Track Record Period and up to the Latest Practicable Date, we had participated
in 21 typical vehicle infrastructure cooperative system projects in China. During the Track
Record Period and up to the Latest Practicable Date, we had been approached by potential
customers from time to time to discuss the possibility of undertaking vehicle infrastructure
cooperative system projects or sometimes been invited to participate in bidding processes for
such projects. These potential customers include both state-owned companies, listed companies
and private companies.
We have established a comprehensive workflow process for our vehicle infrastructure
cooperative system business:
 Analysis: We gather detailed information to gain a thorough understanding and
evaluation of the customer’s specific needs, based on which we provide technical
consultations and prepare proposed solutions.
 Procurement and R&D: Once designated to provide the proposed solutions, we
initiate development work in accordance with our strategic plan. We continuously
test and refine the solutions to ensure they meet customer requirements and
expectations.
 Delivery: We deploy the solutions as requested by our customer. We conduct
comprehensive training for the customer’s operational personnel, equipping them
with the knowledge to effectively utilize and maintain the solution.
 After-sales service: We continue to offer technical support and perform solution
inspections and maintenance within the warranty period to ensure optimal
performance. We also engage in ongoing communication with the client through
regular visits, addressing concerns and gathering feedback for future enhancements.
The typical salient terms of our agreements with customers for vehicle infrastructure
cooperative system are set forth below:
 Specifications: The specification, quantity, price, delivery timeline and other
detailed items are specified.
 Payments: Our contracts generally provide for payment in several installments, each
paid subject to contract and delivery progress.
 Delivery: We are required to deliver solutions within a specified period. Customers
usually conduct acceptance inspections after delivery. Depending on the specific
nature of the project, the duration of our vehicle infrastructure cooperative system
project generally spans from three months to 18 months.
 Intellectual property: The ownership of intellectual property arising from the
projects will generally be defined in the agreements.
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 Warranty period: We typically grant a warranty period of one to three years from the
date of formal acceptance of our solutions. We also provide technical support during
this period.
 Confidentiality: Generally, all confidential information provided by either party
shall be used solely for cooperation purposes pursuant to the agreements and shall
not be disclosed to any third party without prior consent.
 Liability for breach of contract: We are responsible for delays in delivery or quality
problems with our solutions, while customers are responsible for delays in
payments.
We established our vehicle infrastructure cooperative systems business in 2020. We
initiated to participate in vehicle infrastructure cooperative system projects in 2022, and since
then our vehicle infrastructure cooperative system business experienced significant
development. We obtained seven, six and eight new typical vehicle infrastructure cooperative
system projects in 2022 and 2023 and during the period since January 1, 2024 and up to the
Latest Practicable Date, respectively. In 2022 and 2023 and the six months ended June 30,
2024, revenue from this segment amounted to RMB0.7 million, RMB71.5 million and
RMB23.6 million, respectively, representing 0.3%, 15.0% and 10.0% of our total revenue,
respectively. We set pricing for our vehicle infrastructure cooperative system by mainly
considering the project complexity, estimated costs and resource invested.
In 2023, the revenue from our major customers (the four largest customers for the year)
of vehicle infrastructure cooperative system business in aggregate was RMB60.2 million,
representing 84.2% of our total revenue from this business segment. In the six months ended
June 30, 2024, the revenue from our major customers (the three largest customers for the
period) of vehicle infrastructure cooperative system business in aggregate was RMB23.4
million, representing 99.2% of our total revenue from this business segment of the same period.
In the same periods, our largest customer of vehicle infrastructure cooperative system business
contributed RMB19.6 million and RMB15.7 million, representing 27.4% and 66.5% of our
total revenue from this business segment, respectively. Our vehicle infrastructure cooperative
systems offer intelligent functions for our customers. For example, in 2023, we developed a
solution based on intelligent transportation and smart highways and provided traffic flow
control and volume analysis for a smart industrial park.
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The following table sets forth our major projects in the vehicle infrastructure cooperative
system business segment in 2023 and the six months ended June 30, 2024. Our revenue from
this business segment was nil or minimal in 2021 and 2022, as we were ramping up our
business and did not undertake major projects during these two years.
Project No. Customer Background Solutions provided Project Locations
Time of
Commencement
Time of
Completion
For the year ended December 31, 2023
Project 1 /H1118/H1118/H1118A state-owned limited liability
company located in Jinan,
Shandong. It specializes in
the technical service, R&D,
consultation.
(i) a comprehensive visual
solution for parking space
management and smart
parking solutions for static
traffic, and (ii) a solution
based on intelligent
transportation and smart
highways
(i) Wuhan, Hubei Province; (ii)
Xining, Qinghai Province;
(iii) Ulanqab City, Inner
Mongolia Autonomous
Region
July 2022 December 2023
Project 2 /H1118/H1118/H1118A joint-stock limited company
located in Nanjing, Jiangsu.
It specializes in construction
engineering design and
building intelligence system
design.
V arious projects implemented in
several cities, including
intelligent inland port smart
control system, intelligent
berthing system for shipping
port, smart parking platform
development or upgrades,
intelligent transportation
information management
integration system for
highway and toll station
V arious cities in Jiangsu
Province, Chongqing and
Inner Mongolia Autonomous
Region
September 2021 December 2023
Project 3 /H1118/H1118/H1118A limited liability company
located in Changsha, Hunan.
It specializes in software
technology services,
information technology
consulting services and
information technology
integration system services.
The traffic flow control
mechanism design for a
smart industrial park; and
the corresponding traffic
volume analysis
Changsha, Hunan Province June 2022 June 2023
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Project No. Customer Background Solutions provided Project Locations
Time of
Commencement
Time of
Completion
Project 4 /H1118/H1118/H1118A limited liability company
located in Zhuzhou, Hunan.
It specializes in internet
information services and
information system
integration services. In
particular, it engages in the
design, operation and
maintenance of car park
management systems, and
provides consulting services
for the design of car parks.
A comprehensive visual solution
for parking space
management and smart
parking solutions for static
traffic
Zhuzhou, Hunan Province March 2022 October 2023
For the six months ended June 30, 2024
Project 5 /H1118/H1118/H1118A limited liability located in
Guangzhou, Guangdong. It
specialized in computer
wholesale, software
wholesale and computer
parts retail.
A comprehensive visual solution
for parking space
management and smart
parking solutions for static
traffic
Zhuzhou, Hunan Province October 2021 May 2024
Project 6 /H1118/H1118/H1118A limited liability company
located in Nanjing, Jiangsu.
It specialize in software
R&D and consultations.
Intelligent IoT Information
Management System
Nanjing, Jiangsu Province September 2023 June 2024
OUR TECHNOLOGIES
Core Advantages
Our technologies possess the following core advantages that allow us to achieve
commercialization efficiently. These advantages are realized through our in-house R&D
capabilities, which span across our core algorithms, hardware design and validation,
middleware and comprehensive toolchains.
 In-house Developed Algorithms. Our in-house developed core algorithms
encompass the four main intelligent driving modules, i.e. perception, fusion,
mapping and localization and planning and control. Our in-house R&D capabilities
enable us to quickly respond to market changes, strengthen customer cooperation
and enhance our industry leadership. Through multiple iterations, we can offer short
development cycles, high R&D efficiency and rapid responsiveness to downstream
needs with cost-effectiveness and competitiveness, obtaining recognition from
customers.
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 Compatible and Portable Technologies. Our algorithms and middleware can be
flexibly embedded on mainstream SoC platforms, ensuring a high level of
reusability across various vehicle models. Such compatible and portable design
capabilities reduce the need to develop separate algorithms and middleware from
scratch for each project, leading to streamlined process and cost savings during
development. We have successfully deployed our iSafety solutions, iPilot solutions
and intelligent cabin solutions on various mainstream SoC platforms for multiple
series of vehicle models with high R&D efficiency and cost-effectiveness. By
optimizing the neural network architecture, we also improve the performance of our
algorithms for our intelligent cabin solutions and achieve high compatibility with
various SoC platforms.
 Software-Hardware-Integrated Design Capabilities. Our software-hardware-
integrated design capabilities enable us to concurrently develop software and
hardware with a full-picture understanding throughout the whole R&D project. By
aligning hardware with ECUs or domain controllers of the appropriate computing
power and bandwidth, we can make the best use of selected hardware and avoid
retrofitting algorithms to pre-designed software and hardware. By enhancing the
synergy among algorithms, embedded software, sensors, ECUs and domain
controllers, we also improve the compatibility, stability and overall performance of
our solutions. By tailoring software in accordance with the pre-selected hardware
combinations, we have established a seamless hardware-to-software development
system. We have been able to secure OEM customers by providing one-stop
solutions to them, while reducing their dependency on other external parties along
the industry value chain.
In-house Developed Core Algorithms
Perception Technology
Our in-house developed perception technology is able to run with low computing power
consumption and making the best use of the hardware, enabling us to achieve diverse
functionalities with cost-effectiveness. For example, our iSafety solutions with warning
functionalities requires only 0.55 TOPS of computing power and our iPilot 2 with integrated
driving and parking functions requires only 5 TOPS of computing power. Our iPilot 3 is able
to achieve advanced functions including HNOA and HA VP with only 32 TOPS of computing
power, representing our leading position in algorithm development.
Our in-house developed perception technology also uses emerging technologies to
perceive the surrounding environment and driver status, such as monocular 3D neural
networks, BEV neural networks, occupancy networks and recognition technology for our
intelligent cabin solutions. For example, our perception technology can recognize dozens of
vehicle models and nearly 300 types of traffic signs, as well as various uncommon targets such
as barriers, garbage bins or construction barriers. Our BEV technology is not only able to
detect obstacles around the vehicle with a 360-degree view, but is also capable of recognizing
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the structure of the roads, enabling us to achieve HD-mapless perception-driven NOA. Our
perception technology can detect targets located more than 200 meters away and perform
precise ranging with a relative error of less than 5%. Our gaze tracking technology can
determine the driver’s observation direction with an error of less than three degrees. Our
fatigue detection technology has supported OEMs in obtaining DDAW certifications for their
vehicle models under EU GSR.
Multi-sensor Fusion Technology
Our multi-sensor fusion technology features low computing power consumption. This
cost-effectiveness enables high compatibility of our fusion technology with different platforms
ranging from MCUs with low computing power and SoCs with high computing power.
Our multi-sensor fusion technology adopts a highly adaptable platform-based design. For
example, the same set of fusion algorithm can be applied on both the 1V1R system (a single
vision solution with a radar) of our iSafety 1 and the 7V5R system (seven vision solutions with
five radars) of our iPilot 4. The high reusability of our algorithms saves the time required for
developers to develop algorithms for different projects and reduces the costs for solutions
iteration and maintenance.
Mapping and Localization Technology
Our mapping and localization technology incorporates advanced algorithms analysing
information from multiple sources, enabling precise localization even in challenging weather
and GPS signal conditions and enhancing the navigation experience for drivers. Our mapping
and localization technology has undergone rigorous testing and has been validated through
mass production. Specifically, our positioning algorithms demonstrate consistent navigation
accuracy in tunnels exceeding a length of two kilometers, without experiencing any issues such
as location deviation or reduced functionality.
Our mapping and localization technology supports advanced features like memory
driving assistant and HA VP in large parking lots that involve an intelligent driving distance
over two kilometers. Through integrating sophisticated deep learning algorithms, our
technology is capable of mapping intricate elements within the traffic environment, such as
lane lines, zebra crossings, parking space lines, traffic signs, traffic lights, parking lot barriers,
pillars and speed bumps.
Planning and Control Technology
Our in-house developed planning and control technology has been rigorously tested and
has demonstrated reliability and safety on various vehicle models. Our planning and control
technology has facilitated a number of vehicle models obtaining C-NCAP five-star ratings. In
addition, we have not received any complaints regarding our AEB due to false braking
incidents during the extensive testing projects by our OEMs.
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Our in-house developed planning and control technology adopts a platform-based design,
with the algorithm architecture divided into three layers: (i) the objective estimation layer
focusing on reconstructing the environment by analyzing data generated by sensors; (ii) the
subjective interaction layer focusing on making decisions based on information collected from
the driving environment; and (iii) the stable execution layer ensuring precise control and
tracking. Each layer of the algorithms can be tailored according to different hardware
computing power. This flexible and portable feature therefore allows the same planning and
control algorithm to be applied across our iSafety solutions and iPilot solutions, reducing the
costs for re-development and algorithm maintenance.
We also keep our in-house developed planning and control technology in pace with
emerging technologies in the automotive intelligence solutions industry. For example, in the
development of our iRobo solutions, we have incorporated trajectory prediction neural
networks, machine learning-based motion planning and planning neural network. These
data-driven technologies enable us to continually upgrade our solutions to cover broader
scenarios and handle more complex driving environments.
Hardware Design and Validation Capabilities
Leveraging our capabilities in electronic design, structural design, optical calibration and
production automation, our hardware technology team can customize our hardware design to
accommodate development requirements of our customers. Through signal simulation, thermal
and mechanical simulation, optical deviation analysis and image IQ tuning, we can perform
comprehensive analysis and optimization when developing our solutions.
Capable of validating our designs at our own laboratories for electronic, structural,
optical and reliability testing, we have obtained development process certifications from
leading OEMs in relation to design verification experiments, enabling us to support our OEMs
in developing more advanced and customized solutions that meet stringent safety requirements.
Capitalizing on our compatible hardware design and validation capabilities, our hardware
has successfully achieved compatibility with mainstream SoC platforms and over 100 camera
models, and our hardware solutions have covered applications in areas such as ADAS, DMS,
BSD and A VM.
Middleware In-house Development Capabilities
Our in-house developed middleware is a set of software frameworks that reside between
upper-level software applications and lower-level operating systems. It serves as a platform for
managing, allocating and scheduling software and hardware resources. The decoupling of
software and hardware allows for compatibility with mainstream SoC platforms, enhancing the
adaptability of our solutions to different vehicle models.
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Our in-house developed middleware also optimizes the utilization of hardware computing
power and manages the bandwidth usage within the intelligent driving system. By efficiently
allocating and managing these resources, the middleware significantly reduces the overall
consumption of computing power. This ensures that the system operates efficiently and reduces
the strain on hardware resources, allowing for improved performance and responsiveness.
Developers can leverage our middleware without extensive re-engineering, thereby achieving
cost-effectiveness in solutions development and iteration.
Based on our middleware, we have developed integrated domain controllers for
intelligent driving and parking functions with relatively low computing power consumption.
These in-house developed domain controllers offer cost-effective solutions to our customers,
and have entered into mass production.
Comprehensive In-house Developed Toolchains
Our comprehensive in-house developed toolchains span across neural network design,
algorithm integration and algorithm performance testing. Our toolchains not only enhance the
quality of solutions development and iteration, but also allow us to save time and costs in
commercializing our solutions.
Neural Network Acceleration and Deployment Tools
We have developed proprietary R&D tools for optimizing neural networks, covering
application in both software and hardware.
For hardware, we develop HardNet, an inference framework, to overcome the efficiency
constraints of CPU-based neural network processing through parallel computing. For example,
for ADAS functions which often require significant computing power for neural network
computations, HardNet can load the neural network computations to a dedicated hardware
module and facilitate efficient neural network processing. This optimization allows low-
computing-power hardware to handle complex neural network tasks effectively, improving the
overall performance.
For software, we use ThiNet, a neural network compression architecture, to streamline the
neural network structure and improve the overall efficiency. ThiNet is designed to address the
challenge of model size and computational efficiency. It achieves model compression, making
the models approximately 16 times smaller compared to their original size, while ensuring that
performance is unaffected. We employ miniDNN on embedded devices to accelerate neural
network inference speed. Our miniDNN optimizes dense computations in neural networks and
enables multiple instructions to be responded to in parallel and improving cache utilization
efficiency. In terms of neural network acceleration, our miniDNN representing industry-
leading position enables us to achieve better functionality and performance even on platforms
with limited computing power.
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R&D Testing Tools
Our in-house developed playback tools support our software-hardware-integrated design
process and allow us to test our solutions without interrupting the operation of the device.
Testing data can be replayed into our domain controllers to replicate experimental results and
simulate real-world driving scenarios, leading to cost savings and enhanced development
efficiency.
In addition, we have in-house developed simulation testing tools for various driving
conditions and scenarios. Our simulation testing tools are extensively applied in the testing of
our domain controller projects, especially in the early stages of the projects, allowing us to
simulate challenging scenarios such as AEB testing and parking scenarios. By developing our
in-house simulation testing tools, we not only save development costs, but also ensure high
accuracy of simulation for the sensor arrays in our solutions, thus improving the quality and
efficiency of our R&D activities.
RESEARCH AND DEVELOPMENT
Our passion for innovation coupled with our strong R&D capabilities have allowed us to
remain competitive in the industry. Our team of engineers forms the foundation for our R&D
competitiveness. Our R&D team collaborates with our production and supply chain teams in
order to continually optimize and improve manufacturing processes and supply chain
management. In 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, we
recorded R&D expenses of RMB82.2 million, RMB139.3 million, RMB149.8 million,
RMB81.4 million and RMB63.3 million, respectively.
R&D Team
As of June 30, 2024, our R&D team comprised 304 employees, representing 61.3% of our
total employees, including professionals graduating from top-tier domestic and overseas
universities, specializing in various disciplines. As of June 30, 2024, among our R&D
specialists, 53.9% held a bachelor’s degree and 28.9% held a master’s degree or above. In
addition, we have instituted a thorough internal talent development mechanism, including
regular training and an R&D knowledge-sharing mechanism for employees at all levels.
As of the Latest Practicable Date, we had five R&D centers strategically located in
Shenzhen, Beijing, Shanghai, Wuhan and Nanjing. While our Shenzhen headquarters serve as
the core of our R&D efforts, by coordinating the work of other centers and housing a diverse
team of professionals, other centers are dedicated to certain aspects of our R&D activities: (i)
our Beijing R&D center focuses on the R&D of algorithms, building and optimizing the models
we use in our production processes; (ii) our Shanghai R&D center focuses on collaborations
with various OEMs in Eastern China and the R&D of planning and control technologies; (iii)
our Wuhan R&D center specializes in the R&D of our vehicle parking and fusion positioning
technologies; and (iv) our Nanjing R&D center is responsible for data analysis.
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We engage in strategic R&D collaborations with certain customers, suppliers and
academic institutions, empowering us to gain deep insights into industry trends and keep up
with latest technologies. For example, we have established partnerships with leading
universities in China and a number of academic institutions to conduct algorithm development.
R&D Process
We have established a comprehensive R&D process consisting of various stages as
follows:
 Market Analysis Stage . We aim to keep up with the market trends and explore
potential market opportunities, which provides a long-term business perspective and
ensures that our R&D efforts are aligned with our broader goals. At the first stage,
we primarily focus on solutions research, such as developing proof-of-concept
prototypes and exploring the feasibility of new concept intelligent driving solutions
beyond our existing solutions. Once we identify a potential market opportunity, we
set a clear R&D direction to effectively allocate our R&D resources.
 Internal Pre-research Stage . Once an R&D direction is confirmed, our R&D team
conducts internal pre-research and engages in preliminary research and feasibility
studies for potential solutions. At this stage, we also evaluate such concept from
various perspectives, including technical capabilities, estimated costs and
profitability and availability of raw materials and components.
 Development Stage . Our R&D team works with our sales and marketing team to
understand customers’ needs and prepare R&D plans pursuant to their
specifications, ensuring that our solutions are able to meet our customers’
requirements.
 Project Execution Stage . Following customer confirmation and validation, we
formally establish the development project. This stage is characterized by
customized R&D activities, tailored based on the requirements and feedback of our
customers. In addition, we conduct verification and validation work to test our work.
We do not charge our customers for our development activities.
 Mass Production Stage . We conduct quality control measures on our solutions under
mass production. In addition, our R&D team regularly collects feedback from our
customers and the market to upgrade our solutions in a timely manner.
 After-Sales Stage . We continue to track the performance of our solutions and closely
work with our customers to resolve any issues that arise during the use of our
solutions.
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To ensure that our solutions integrate and adapt with other components and/or systems of
the vehicles, we have implemented the following measures during the R&D process:
 We develop customized algorithms and functional modules based on the specific
vehicle model requirements, technical specifications, installation requirements and
deployment conditions of specific vehicle models.
 We customize our product’s network architecture, communication protocols and
signal quantities based on the vehicle model’s network architecture, network
topology and communication matrix.
 We tailor the various protocol modules of our solutions in line with the vehicle
model’s offline calibration scheme, after-sales calibration plan and OTA upgrade
schemes or standards.
 We customize our hardware to meet the requirements for signal communication and
interaction based on the specific cameras, sensors, radars and other various
components and/or systems on the vehicle models.
 We ensure that all indicators of the product meet the customer’s standard
requirements in accordance with the customer’s standards or referenced
national/international standards.
 We tailor our solutions to meet the regulatory requirements of specific sales regions
based on the target customers or target markets.
OUR PRODUCTION
Our production process is designed to promote high standards of quality while
simultaneously providing the agility to expedite production to meet customers’ demands in a
timely manner. Our mass production capabilities and strict quality control measures enable us
to ensure the high performance and reliability of our solutions.
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We are committed to the continual development of production process techniques to
enhance our production capabilities and to accelerate the automation and digitalization of our
production lines. The diagram below illustrates key steps of our production process:
In the Process of Deployment
IQC SMT DIP Insertion
Mounting electronic components
(e.g. SoC and electronic resistors) on
the PCB
Placing and soldering DIP on the
PCB
Removing the
individual PCB from a
large panel
OQC Packaging Assembly
Packaging the finished solutions Assembling the components of the
solutions
Applying a protective layer
against moisture, mold and salt fog
Depaneling
Three-Proof
Coating
 SMT: With SMT line, we mount a variety of electronic components, such as SoCs
and resistors, onto the PCB. This process ensures precise component placement and
secure soldering, creating a reliable foundation for the intelligent driving solutions.
 DIP Insertion: We insert electronic components with wire leads, such as connectors
and larger-sized capacitors, into pre-drilled holes on the PCB. The components are
then soldered on the opposite side of the board, establishing robust electrical
connections.
 Depaneling: After the PCB is completed, we use specialized equipment to remove
the edges of the entire PCB board to ensure that each PCB is intact and fully
functional.
 Three-proof Coating: We coat our solutions with a protective layer as a barrier
against moisture, mold and salt fog, improving their durability and reliability.
 Assembly: We integrate various components, including the PCB assembly, camera
modules, connectors and other mechanical parts, to form the core body of the
intelligent driving solutions.
 Packaging: The finished intelligent driving solutions are packaged together and
transported to the warehouses for storage.
During the Track Record Period, to enhance the quality and cost-effectiveness of our
production, we commenced production at our Bao’an Production Base in July 2022, which has
a gross floor area of approximately 2,500 square meters and covers the production processes
of three-proof coating, assembly and packaging. Its design annual production capacity is
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approximately 377,400 units. In July 2022, we gradually put our semi-automatic production
lines into operation at Bao’an production lines. During this initial ramp-up period, the
production volume reached approximately 55,000 units, resulting in a utilization rate of 34.2%
for 2022. In 2023 and the six months ended June 30, 2024, the production volume of our
Bao’an Production Base was approximately 212,200 units and 93,300 units, respectively, and
the utilization rate was 56.2% and 53.5%, respectively. The production utilization rate at our
Bao’an Production Base was relatively low, mainly because most of our solutions delivered in
the form of hardware were mainly manufactured by our contract manufacturers during the
Track Record Period and we were generally not allowed to change the production sites without
relevant customers’ consents. Many of our customers maintain stringent standards for
production consistency and are cautious about permitting changes to established production
processes. Currently, our Bao’an Production Base primarily focuses on the final three
production stages: three-proof coating, assembly and packaging. Before reducing our reliance
on contract manufacturing, we intend to invite our customers to conduct comprehensive testing
and verification of our enhanced production processes. This approach aims to ensure that our
expanded in-house production meets our customers’ exacting quality and consistency
requirements. Our solutions would further shift from production by contract manufacturers
towards our in-house production after we gradually obtaining consents from relevant customers
and the utilization rate of our production base is expected to increase in line with our business
expansion.
Constructed in compliance with stringent standards, our production workshops, incoming
raw material inspection room and electronic component warehouse in our production facilities
are designed to ensure the optimal performance and longevity of our sensitive electronic
components. Our Bao’an Production Base offers a dust-free and stable environment with
temperature and humidity control systems to safeguard against the potential adverse effects of
dust, moisture and temperature fluctuations on both the materials and the sophisticated
equipment used during assembly. In addition, we have also utilized visual dashboards to
monitor key production data including material inflow and outflow, consumption, yield,
equipment status and efficiency in real time, facilitating production control and resource
allocation and enhancing intelligent production.
We are committed to improving our production technologies and production management
capabilities, and enhancing the automation and digitalization of our production lines. In order
to meet the increasing production needs based on the additional SOPs that we have obtained,
and to further enhance our control over the entire production process, we have established our
Guangzhou Production Base. We commenced production at our Guangzhou Production Base in
the third quarter of 2024. Our Guangzhou Production Base has a total gross floor area of
approximately 3,400 square meters, which allows us to expand our in-house production to the
production processes of SMT, DIP insertion and depaneling. The expected annual production
capacity of our Guangzhou Production Base is approximately 878,400 units.
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The proportion of our products manufactured in-house was nil, 13.5%, 24.4% and 21.0%
in 2021, 2022, 2023 and the six months ended June 30, 2024, respectively. The remainder of
the products were manufactured by our contract manufacturers. With the recent commencement
of production of our Guangzhou Production Base, along with our established Bao’an
Production Base, we are able to further enhance our control over the entire production process
and increase operating efficiency. We expect to achieve full in-house production by 2026.
Quality Control
We are committed to providing our customers with high-performance solutions with
consistent quality and reliability. We use the MES system to identify production abnormalities
and monitor the operating status of our equipment. As we highly value the quality of our
solutions, the safety of our employees and environmental protection in the course of our
manufacturing process, we have obtained a series of certifications, including ISO 9001 for
quality control, ISO 45001 for occupational health and safety management and ISO 14001 for
environmental management. We also have obtained ISO 26262, ISO 21434, ASPICE Level 2
and IA TF16949 certification for our quality management system.
As of June 30, 2024, we had a dedicated quality control team of 20 employees with
expertise in quality control who are responsible for the overall quality management of our
production process. In addition, we also engage external professional institutions to conduct
quality tests to ensure our quality standards. With our strict quality control measures, we
believe that we are able to produce high-quality solutions that cater to evolving market and
customer demands.
Solution Audit Process Audit Layered Audit:
Dynamic
Early Production
Containment
Solution Manufacturing Process
IQC Incoming Inspection IPQC
In-process Quality Control
OQC
Outgoing Inspection
Supplier 100% Compliance
(Supplier Management System)
100% Production
Self-inspection
(Automatic/Manual) —
MES
100% MES Station
ConfirmationPotential Supplier
Survey and Evaluation
Supplier Audit (Annual)
Supplier Performance Review
Supplier Continuous Improvement
CP/Incoming Inspection Plan, Work Instructions CP/SOP CP/SOP
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During the production process, we have conducted continuous audits and management: (i)
the solution audit ensures ongoing consistency and compliance of our solutions with the design
scheme during mass production; (ii) process audit provides on-site evaluation for the
consistency and compliance of the specific implementation of the production process during
mass production; (iii) we also organize personnel at various levels to conduct on-site
evaluations of the standardization in the production process according to a plan and at a certain
frequency, thereby achieving dynamic layered audit; and (iv) we perform the inspection of the
solutions from the customer’s perspective after the production.
We rigorously implement IQC, IPQC and OQC. We have implemented a comprehensive
supplier management system that defines the admission of suppliers, management of qualified
suppliers and termination of unqualified suppliers to ensure the efficiency of our supplier
management. See “—Our Suppliers—Supply of Raw Materials and Components—Selection
and Engagement of Suppliers.” We conduct automatic or manual tests for solutions’ appearance
and functionality based on their characteristics after the production. The entire production
process utilizes an automated information traceability system to achieve tracking records of
raw material information, production processes, test parameters and results and product
delivery. Leveraging our MES system, the process from raw material input to product output
is marked according to different stages of the production process. The sequence of each
production stage is recorded to ensure the compliance of the product manufacturing process.
Contract Manufacturing
During the Track Record Period, certain production processes were performed by our
contract manufacturers. In 2021, 2022 and 2023 and the six months ended June 30, 2024, we
engaged two, five, four and four contract manufacturers, respectively. Before our Bao’an
Production Base was put into operation in July 2022, our contract manufacturers were
responsible for the production of our solutions delivered in the form of hardware. After our
Bao’an Production Base was put into operation in July 2022, we have been able to handle the
production processes of three-proof coating, assembly and packaging for some of our solutions.
In 2021, 2022 and 2023 and the six months ended June 30, 2024, nil, 13.5%, 24.4% and 21.0%
of our solutions delivered in the form of hardware were produced by our own production base,
respectively, and the rest were manufactured by our contract manufacturers. During the Track
Record Period, we have steadily increased our in-house production capacity. This growth was
supported by the gradual implementation of our semi-automated production lines at our Bao’an
Production Base, which began operations in July 2022. As of the Latest Practicable Date, none
of our contract manufacturers had any past or present relationships with our Company or its
subsidiaries, their respective directors, shareholders or senior management members, or any of
their respective associates. Our contract manufacturers or other suppliers had not been
involved in building the algorithms of our products as of the Latest Practicable Date.
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To uphold the standards of quality and to ensure adherence to our stringent requirements,
we have implemented rigorous oversight mechanisms for our contract manufacturing. Our
dedicated personnel are stationed at the production sites, generally conducting inspections
every four hours and ensuring all production processes and staff are in compliance with our
standards. Our execution engineers are responsible for conducting daily reviews of the
production process to ensure that the production techniques meet our standards.
We usually enter into framework agreements with our contract manufacturers, which set
out the general terms and conditions of cooperation. We then issue separate purchase orders.
The salient terms of our agreements with our contract manufacturers are set forth below:
 Production order and forecast. We provide a one-month order and a three-month
rolling forecast to contract manufacturers each month for their preparation of
production schedules.
 Payment and delivery. We are generally required to settle payments within 60 days
after receipt of invoice. The contract manufacturers are responsible for delivery of
products as required by us.
 Solutions inspection. We generally have 15 business days upon receipt of solutions
to inspect the delivered solutions and confirm whether there are any deviations from
our specifications, quantity or other manufacturing requirements.
 Warranty . The contract manufacturers warrant that all solutions will adhere to our
specifications in all material respects. Such warranty shall remain in effect for three
to five years from acceptance, and the contract manufacturers are required to replace
any defective solution in breach of such warranty.
 Confidentiality. All confidential information provided by either party shall be used
solely for the purposes of cooperation pursuant to the agreements and shall not be
disclosed to any third party without prior consent.
 Duration . The duration of the agreements are generally three years.
LOGISTICS AND INVENTORY MANAGEMENT
Generally, we engage qualified third-party logistics service providers for the delivery of
our finished solutions to locations specified by our customers. Our contracts with the
third-party logistic service providers contain detailed standards for the transportation of our
solutions. We evaluate the third-party logistics service providers periodically on their
compliance and performance to ensure smooth delivery of solutions to customers. To the best
of our knowledge, all of these logistics service providers are Independent Third Parties.
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Our inventory primarily includes raw materials, work in progress and finished products.
Our inventory management is closely linked with our production plans and benefits from our
strong relationships with customers and suppliers, which enable us to effectively manage the
level of inventories, mitigate inventory-related risks and enhance our overall operational
efficiency. To monitor our inventory levels and minimize obsolete inventory, we have
established a strict inventory management system and manage our inventory through our ERP
and MES systems. Our supply management team takes necessary measures to lower
obsolescence risks. We also actively assess market changes and reserve strategic raw materials
in anticipation of possible supply shortages. The roles and responsibilities of inventory
management personnel include, among others, consistently monitoring inventory storage
environments, regularly conducting inventory checks to implement dynamic and static
supervision of our inventories.
OUR CUSTOMERS
Our customers primarily consist of OEMs and tier-one suppliers, the majority of which
are located in the PRC. Our strong industry reputation and recognition enables us to maintain
long-term business relationships with our customers.
Major Customers
For the years ended December 31, 2021, 2022 and 2023 and the six months ended June
30, 2024, the revenue from our five largest customers for the respective years/period in
aggregate accounted for 78.0%, 42.7%, 37.0% and 39.8% of our total revenue, respectively,
and our largest customer for the respective years/period contributed 31.7%, 16.6%, 11.4% and
10.5% of our total revenue, respectively. As of June 30, 2024, we had maintained business
relationships with our five largest customers for one to four years.
The tables below set forth information about our five largest customers in each
year/period of the Track Record Period:
Y ear ended December 31, 2021
Customers Background Products provided Revenue
%o f
total
revenue
Y ear of
commencement
of business
relationship
RMB’000
Customer A /H1118/H1118/H1118A wholly state-owned limited
liability company located in
Hubei, China. It is an OEM
that primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions —
iSafety and
iPilot
55,595 31.7% 2019
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Customers Background Products provided Revenue
%o f
total
revenue
Y ear of
commencement
of business
relationship
RMB’000
Customer B /H1118/H1118/H1118A joint-stock limited company
listed on the Hong Kong Stock
Exchange and the Shenzhen
Stock Exchange, with
operations in Beijing,
Shanghai and Chongqing,
China. It is an OEM that
primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions —
iSafety
36,672 20.9% 2020
Customer C /H1118/H1118/H1118A wholly state-owned limited
liability company located in
Fujian, China. It is an OEM
that primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions —
iSafety
24,006 13.7% 2020
Customer D /H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It is a tier-1 supplier that
primarily focuses on
automotive component
manufacturing.
Intelligent driving
solutions —
iSafety
13,518 7.7% 2020
Customer E
(1) /H1118/H1118A limited liability company
located in Guangdong, China.
It primarily engages in
insurance loss assessment
services.
Intelligent driving
solutions —
iSafety
7,052 4.0% 2021
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 136,843 78.0%
Note:
(1) On April 2, 2021, the Department of Transportation of Guangdong Province issued a notice regarding the
promotion of the installation and use of intelligent video surveillance and alarm devices in heavy trucks ( ᗫ
). This notice required that semi-trailer
trucks engaged in highway transportation and general freight vehicles weighing 12 tons or more be equipped
with intelligent video surveillance and alarm devices by June 30, 2021. Our in-house developed safety defense
systems are capable of effectively analyzing dangerous driving behaviors in real time and providing immediate
reminders for safe driving. As such, Customer E placed a bulk order for our safety defense system in 2021.
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Y ear ended December 31, 2022
Customers Background Products provided Revenue
%o f
total
revenue
Y ear of
commencement
of business
relationship
RMB’000
Customer C /H1118/H1118/H1118A wholly state-owned limited
liability company located in
Fujian, China. It is an OEM
that primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions —
iSafety
46,297 16.6% 2020
NavInfo /H1118/H1118/H1118/H1118/H1118/H1118A public company located in
Beijing, China and listed on
the Shenzhen Stock Exchange.
It is a tier-1 supplier that
primarily engages in vehicle
information system integration
services.
Intelligent driving
solutions —
iSafety
21,080 7.5% 2020
Customer A /H1118/H1118/H1118A wholly state-owned limited
liability company located in
Hubei, China. It is an OEM
that primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions —
iSafety
19,696 7.1% 2019
Customer G /H1118/H1118/H1118A limited liability company
located in Hubei, China. It is
an OEM that primarily focuses
on automobile and automobile
component production.
Intelligent driving
solutions —
iSafety
16,172 5.8% 2022
Customer B /H1118/H1118/H1118A joint-stock limited company
listed on the Hong Kong Stock
Exchange and the Shenzhen
Stock Exchange, with
operations in Beijing,
Shanghai and Chongqing,
China. It is an OEM that
primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions —
iSafety
15,846 5.7% 2020
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 119,091 42.7%
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Y ear ended December 31, 2023
Customers Background Products provided Revenue
%o f
total
revenue
Y ear of
commencement
of business
relationship
RMB’000
Customer C /H1118/H1118/H1118A wholly state-owned limited
liability company located in
Fujian, China. It is an OEM
that primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions —
iSafety
54,099 11.4% 2020
NavInfo /H1118/H1118/H1118/H1118/H1118/H1118A public company located in
Beijing, China and listed on
the Shenzhen Stock Exchange.
It is a tier-1 supplier that
primarily engages in vehicle
information system integration
services.
Intelligent driving
solutions —
iSafety
37,607 7.9% 2020
Customer B /H1118/H1118/H1118A joint-stock limited company
listed on the Hong Kong Stock
Exchange and the Shenzhen
Stock Exchange, with
operations in Beijing,
Shanghai and Chongqing,
China. It is an OEM that
primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions —
iSafety
28,349 6.0% 2020
Customer A /H1118/H1118/H1118A wholly state-owned limited
liability company located in
Hubei, China. It is an OEM
that primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions —
iSafety
28,026 5.9% 2019
Customer H /H1118/H1118/H1118A limited liability company
located in Zhejiang, China. It
is an OEM that primarily
engages in automobile
production.
Intelligent driving
solutions —
iSafety and
iPilot, and
intelligent cabin
solutions
27,495 5.8% 2021
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 175,576 37.0%
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Six months ended June 30, 2024
Customers Background Products provided Revenue
%o f
total
revenue
Y ear of
commencement
of business
relationship
RMB’000
Customer B /H1118/H1118/H1118A joint-stock limited company
listed on the Hong Kong Stock
Exchange and the Shenzhen
Stock Exchange, with
operations in Beijing,
Shanghai and Chongqing,
China. It is an OEM that
primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions –
iSafety
24,773 10.5% 2020
Customer I /H1118/H1118/H1118/H1118A majority state-owned company
located in Suzhou, China. It is
an OEM that mainly focuses
on NEV technology
development and consultation.
Intelligent driving
solutions –
iSafety
22,935 9.7% 2022
Customer C /H1118/H1118/H1118A wholly state-owned limited
liability company located in
Fujian, China. It is an OEM
that primarily focuses on
automobile and automobile
component production.
Intelligent driving
solutions –
iSafety and
iPilot
17,063 7.2% 2020
Customer J /H1118/H1118/H1118/H1118A limited liability company
located in Guangzhou, China.
It is a high-tech company
focuses on IT solutions and
system integration.
V ehicle
infrastructure
cooperative
systems
15,741 6.7% 2021
Customer K /H1118/H1118/H1118A wholly state-owned limited
liability company located in
Shanghai, China. It is an OEM
that primarily focuses on
automobile production.
Intelligent driving
solutions –
iSafety and
iPilot, and
intelligent cabin
solutions
13,531 5.7% 2021
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 94,043 39.8%
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To the best of our knowledge, except for NavInfo, none of our Directors, their respective
close associates or any Shareholder who owned more than 5% of our issued share capital as of
the Latest Practicable Date, had any interest in any of our five largest customers in each
year/period of the Track Record Period. Details of NavInfo are disclosed in “History,
Development and Corporate Structure — Pre-IPO Investments.”
Design Win Conversion
After obtaining a design win, we initiate the corresponding design-win project with our
customers, the process of which involves the following steps. According to CIC, the steps in
our design wins conform with automotive industry norms.
Understanding the Specification Requirements : Through close communication with our
customers, we gain a detailed understanding of the specifications and milestones of a project.
Developing the Prototypes and Optimizing : Based on the specifications, we initiate the
relevant R&D activities. Through iterative cycles of prototype modeling and optimization, we
ensure that the final deliverables meet our customer’s requirements.
Testing and V alidation : Upon the achievement of certain milestones, we conduct testing
and validation, including sample testing, vehicle model testing and third-party verification, to
ensure that the deliverables are compliant with industry standards and our customer’s
requirements.
Project Completion and Delivery : Once our customer accepts the deliverables, our design
wins are considered as completed and we will generally undertake mass production for the
customers. In response to the customer’s needs, we may provide training to their designated
personnel and offer ongoing maintenance services.
Salient Terms of Agreements with Customers
The common salient terms of our major customer agreements during the Track Record
Period are set out below:
 Solutions specifications . Our customers typically set forth specific solution
specifications for solutions ordered in the agreements or specific purchase orders,
such as solution name, model, configurations and features.
 Term. The agreement typically has an indefinite term, while certain agreements may
have a one-year term which can be renewed automatically.
 Sales volume and pricing . The framework agreement with our customers do not
specify the sales volume, because our customers do not place orders all at once —
instead, they place purchase orders periodically, and the sales volume of each
purchase order is determined according to the sales volume of the relevant vehicle
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model and the OEM’s mass production plan in the upcoming months. The general
pricing of our products is specified in the design-win agreement, which may be
subject to minor adjustments for each purchase order, depending on market price
fluctuations at that time.
 Delivery . For solutions, we are generally responsible for delivering the solutions to
locations designated by the customers in accordance with the delivery schedule
specified in the agreement. For orders involving software, we provide the software
to customers within a specified time.
 Payment and credit term . Our customers are typically required to settle the payment
within three months after receipt of invoice.
 Transfer of risks . The risks transfer to customers after they confirm receipt of our
solutions.
 Warranty . We typically offer a standard solution warranty to customers of our
solutions. See “—After-Sales and Warranty.”
 Confidentiality . All confidential information provided by either party shall not be
disclosed to any third party, unless it is otherwise required by applicable laws and
regulations or prior written consent has been obtained.
Solution Returns and Replacement
We have developed a standard solution return procedure. When a customer requests the
return of non-conforming solutions, the customer needs to provide us with a non-conforming
sample and our quality control team shall accept the return request upon determination of any
non-conformity. During the Track Record Period and up to the Latest Practicable Date, we had
not experienced any material solution return or recall due to defects in our solutions.
After-Sales and Warranty
In our ongoing efforts to maintain customer satisfaction and improve our solutions and
services, our after-sales team is responsible for providing comprehensive after-sales services.
They can diagnose issues and identify solutions for customers’ problems. Upon receiving
customer complaints, we conduct a preliminary analysis within 24 hours during business days.
Following the acknowledgment of customer complaints, a dedicated team is assembled by our
quality engineers and other experts from production, R&D, project management and supply
chain departments. For significant customer complaints that involve production halts, claims
or recalls, quality engineers are required to compile relevant information in writing and report
to the quality manager and the responsible vice president to expedite resolution. If the analysis
reveals that the issue stems from purchased raw materials or components, we will notify the
procurement team and the supplier, halting further procurement immediately. In cases where
solutions materials, structural design, software or hardware design or processing schemes are
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found to be non-compliant, we conduct thorough assessments. We provide after-sales services
such as repair, replacement and returns for our customers based on the specific circumstances
of the product in accordance with the applicable laws and regulations. We have established
after-sales service and warranty management procedures. When a warranty issue can be
resolved through a software update or upgrade, we typically offer after-sales services to our
clients via online guidance or remote operations. When on-site warranty service is required,
our after-sales personnel will bring the necessary repair equipment to provide service on-site.
All after-sales personnel providing on-site after-sales service have undergone rigorous
trainings and are only permitted to attend to customer sites after they have passed assessments.
For our solutions sold to passenger vehicle customers, we generally provide varied
warranty periods as agreed in the contracts. For our solutions sold to commercial vehicle
customers, we generally provide a three-year warranty period or 100,000 kilometer-based
warranty coverage, subject to the specific warranty agreements. During the warranty period,
for any quality issue with either our software or hardware which is caused by our fault, we will
make repair free of charge under certain conditions. For solution damage caused by the
customer’s own improper operation, we will provide repair services at a charge. We may be
obligated to assume the product liability in the event of any quality defects in our solutions that
result in personal or property damage. If such claims arise from solution defects in the raw
materials or components we procure from our suppliers, we may have the right to request them
to assume the corresponding product liability. In 2021, 2022 and 2023 and the six months
ended June 30, 2024, the warranty expenses incurred were RMB2.6 million, RMB3.4 million,
RMB5.2 million and RMB1.6 million, respectively. In 2021, 2022 and 2023 and the six months
ended June 30, 2024, we made provisions for warranties of RMB3.5 million, RMB5.6 million,
RMB9.3 million and RMB10.8 million, respectively. During the Track Record Period and up
to the Latest Practicable Date, we did not experience any material complaints, litigation or
other incidents regarding the quality and safety of our solutions.
As advised by our PRC Legal Advisor, according to the PRC Civil Code ( ʕശɛ͏΍ձ
Պ), if a product has defects that cause damage to others, the manufacturer shall bear
the liability for infringement, and the infringed party may request compensation from the
manufacturer or seller of the product. Where a defect is caused by the manufacturer, the seller
who has paid compensation has the right to indemnification against the manufacturer. And
according to the PRC Product Quality Law (), if a product has
defects that cause personal injury or property damage (other than the damage to the defective
product itself), the manufacturer shall be liable for compensation. Therefore, if it is proved that
a traffic accident occurred due to a defect of our solutions, causing personal and other property
damage, we need to bear compensation responsibilities. Moreover, according to the
Implementing Measures for the Administrative Regulations on the Recall of Defective Auto
Products (Revised in 2020) (ج2020ࠈࡌ)), the
manufacturers of automobiles and automobile trailers shall be responsible for recalling defective
automobiles, and we, as the auto part manufacturer, shall report information concerning defective
automobiles to the State Administration for Market Regulation, and notify the Automobile
Manufacturers. The State Administration for Market Regulation and entrusted market regulatory
departments shall have the power to conduct on-the-spot investigations on the premises of auto
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part manufacturers, and auto part manufacturers shall render assistance during a defective
automobile investigation and furnish relevant information as required in the investigation.
Furthermore, according to the related contract between our Company and relevant customers, our
Company shall be liable for any losses caused to customers due to the quality of the products
provided by our Company. Meanwhile, if a customer finds any quality problems in the products
provided by our Company in such links as the receipt, inspection, use and after-sales, the
customer may require our Company to replace or return the goods, repair the product, refuse to
pay the purchase price or claim compensation or other similar treatment according to actual
situations. See “Regulatory Overview—Regulation on Product Liability.”
SALES AND MARKETING
We have an experienced sales and marketing team in China, consisting of 65 personnel
as of June 30, 2024, who proactively identify market opportunities. Many of our salespersons
are familiar with professional knowledge in relation to our solutions to support their sales
activities. We believe that sales of our solutions will be enhanced by salespersons who are
equipped with the relevant knowledge and experience and who can convey the value of our
technologies and the high performance of our solutions.
Our solutions are primarily sold to OEMs and tier-one suppliers, and are generally
deployed on new vehicles by OEMs and tier-one suppliers. We secure orders leveraging our
well-established brand reputation and extensive solutions portfolio as well as our dynamic
marketing and promotional efforts, such as communication with automotive OEMs, attending
industry forums, technology conferences and industry expositions to showcase our solutions
and collaboration with industry media to regularly disseminate information about our latest
technological innovations, solutions and developments. We believe that the combination of our
high-quality solutions and the optimization of our marketing channels enables us to achieve
continued brand exposure and attract high-quality potential OEM customers efficiently. We
generally sell our intelligent driving solutions and intelligent cabin solutions through direct
sales. During the Track Record Period and up to the Latest Practicable Date, we did not sell
our solutions to any distributor.
Collaboration with Our Customers
Generally, our customers determine whether our solutions are suitable and necessary for
their vehicle models based on the market positioning, targeted end-customers and competitive
vehicle models. However, according to CIC, ADAS solutions are increasingly required to be
deployed across a wider range of vehicle models. Additionally, in cases where ADS or ADAS
functions are mandated by relevant laws or regulations, such as the DDAW in the EU, the
relevant solutions must be integrated as a standard feature in each vehicle sold within the EU.
We maintain collaborative relationships with our customers throughout the product lifecycle,
from R&D to after-sales service, while we in-house develop solutions for our customers. The
process described below represents a typical comprehensive workflow, which may be adjusted
based on specific customer requirements, internal procedures, and the nature of our solutions
and services offered. Depending on these factors, additional steps may be included, or certain
steps may be combined or omitted.
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Design Win
Upon receiving a tender request from a potential customer, we provide technical solutions
tailored to their specific needs. Our technical sales team engages in requirement discussions
with the customer, addressing feedback and refining our proposals. Customers conduct
technical reviews to evaluate our solutions. While we are required not to infringe intellectual
property rights of others in the course of R&D and production, we are allowed to use the data,
drawings and samples provided by the customer. Upon successful design win, we typically sign
nomination letters, technical development agreements or R&D fee agreements. These
agreements outline the rights and obligations of both parties. We are typically obligated to
develop solutions according to customer specifications and provide detailed technical
proposals. Customers have the right to oversee the development process, provide modification
suggestions and sign nomination letters upon approval. See “Risk Factors—Our existing OEM
customers may not purchase our solutions in any certain quantity or at any certain price.” For
more details on our customer relationships and sales process, please see “—Our Customers”
and “—Sales and Marketing” sections.
Solution Development
Following a design win, we undertake design and development for our solutions
according to customer requirements. We are responsible for completing solution development
within the agreed timeframe and conducting regular technical reviews. Our customers may
provide feedback during our solution development stage. We are obligated to maintain close
communication with customers to ensure the project progresses as planned.
Solution V erification
We conduct solution testing in accordance with regulatory, industry and customer
standards, which may include vehicle-level testing with our customers and third-party
evaluations such as E-NCAP and/or C-NCAP five-star ratings. Our obligations include
conducting comprehensive solution testing and cooperating with third-party and vehicle-level
testing to ensure the solution meets customer requirements. Customers have the right to
participate in testing and acceptance, propose improvements and sign Preliminary Engineering
Sign Off documents or acceptance certificates upon approval.
Sales Orders and Mass Production
Upon customer approval, we proceed with mass production. Our customers are typically
involved in production process supervision and conduct regular quality audits. At this stage, we
generally enter into annual framework agreements with our customers, who place specific
orders under such framework agreements through our system for our solutions. Our obligations
include ensuring production line optimization, completing production tasks on time. Customers
have the right to supervise the production process and conduct quality audits to ensure product
quality meets their requirements.
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Delivery
We manage logistics and delivery for our solutions, ensuring our solutions reach our
customers safely and on time. Our responsibilities include arranging transportation,
coordinating with logistics partners and ensuring proper handling of our solutions throughout
the delivery process. We are obligated to arrange logistics and delivery, ensuring solutions are
delivered safely and on time. See “—Logistics and Inventory Management.” Customers have
the right to inspect delivered solutions and provide feedback on the delivery. Our solutions are
deployed on ICE vehicles, EVs and other NEVs, covering a range of vehicle models, including
trucks, passenger vehicles, saloon vehicle, SUVs and other vehicle models, with prices ranging
from approximately RMB100,000 to RMB1.0 million. Our customers are generally responsible
for the integration of our solutions into their vehicles via their production lines.
After-sales Service
Following solution delivery and integration into vehicles, we provide comprehensive
after-sales service to address any feedback or issues that may arise. Our dedicated after-sales
service team is responsible for promptly responding to customer inquiries, providing
troubleshooting assistance, offering software updates when applicable and conducting on-site
support when necessary. See “—Our Customers—After-sales and Warranty.” To formalize our
after-sales commitments, we often enter into quality agreements or technical service
agreements with our customers. We are obligated to provide timely and effective after-sales
service based on customer demand. Customers have the right to evaluate after-sales service
quality and propose improvements.
The extensive customization and integration process, combined with our close
collaboration with OEMs and our in-house R&D capabilities, contribute to the distinct nature
of our solutions. Our solutions are designed to be integral components of the vehicles they are
developed for, which enhances their value to our customers. Our Directors are of the view that
our solutions are not easily replaceable by other solutions available in the market, given that:
 The R&D and production process of intelligent driving and cabin solutions require
close interaction with OEMs regarding network topology and signal quantities,
consuming a substantial amount of OEM’s resources for integration, debugging and
validation. This deep integration makes it challenging for OEMs to replace our
solutions without significant time and resource investment;
 Intelligent driving and cabin solutions evolve rapidly, with more cost-effective
solutions emerging annually. Our continuous innovation often results in the
introduction of superior and more cost-efficient solutions before competitors can
complete their R&D cycles; and
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 The R&D of intelligent driving and cabin solutions requires comprehensive
capabilities in perception, fusion, planning and control algorithms, software
development and hardware design and production. Our in-house platform-based
technologies, software-hardware-integrated R&D capabilities and solid mass
production capabilities provide us with a competitive edge in solution reliability and
development efficiency, further differentiating our solutions in the market.
Pricing Policy
Depending on the market conditions, we adopt different pricing strategies. We set our
baseline prices to safeguard the financial integrity of our operations based on our assessment
of our cost structure and commitment to upholding quality standards. Our cost structure is
generally determined by, among other things, costs of raw materials and components, cost of
production and R&D expenses. The complexity of our solutions or level of customization
directly influences our cost structure. Additionally, the costs associated with R&D activities
are carefully evaluated to maintain our competitive edge in innovation while ensuring a fair
return on investment.
Subject to our baseline prices, our sales and marketing team generally aligns our pricing
with the competitive landscape and ensures that our pricing remains dynamic and responsive
to market trends by conducting regular market assessments and staying abreast of competitive
solutions. We also adjust our selling prices dynamically based on the market position of the
solutions, the customer profile and expected order volume. Generally, we engage in discussions
with customers concerning fluctuations in the prices of raw materials, logistics costs and
exchange rates, as these factors directly impact the cost of providing solutions and services. By
maintaining open communication, both parties can negotiate adjustments to the pricing of
solutions to reflect these changes.
OUR SUPPLIERS
Our suppliers primarily consist of raw materials and components suppliers, including
suppliers for, among others, electronic components, structural components and camera
modules, the majority of which are located in the PRC. Semiconductor chips are a key category
of products that we procure from our suppliers. We maintain stable relationships with our
suppliers to ensure the stability of material supply and delivery.
Major Suppliers
For the years ended December 31, 2021, 2022 and 2023 and the six months ended June
30, 2024, our five largest suppliers for the respective years/period in aggregate accounted for
41.9%, 36.3%, 41.7% and 38.9% of our total purchase amount, respectively, and our largest
supplier for the respective years/period contributed 15.3%, 8.0%, 11.7% and 13.2% of our total
purchase amount, respectively. As of June 30, 2024, we had maintained business relationships
with our five largest suppliers for one to six years.
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The following table sets forth details of our five largest suppliers in each year/period of
the Track Record Period:
Y ear ended December 31, 2021
Suppliers Background
Products
purchased
Purchase
amount
%o f
total
purchases
Y ear of
commencement
of business
relationship
RMB’000
Supplier A /H1118/H1118/H1118/H1118A limited liability company
located in Hong Kong, China.
It specializes in chip
application technology services
and chip distribution.
Chips 33,934 15.3% 2017
Supplier B /H1118/H1118/H1118/H1118A limited liability company
located in Tianjin, China. It
specializes in professional
vehicle camera solutions.
Camera modules 26,395 11.9% 2017
Supplier C /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in technology
development, design and sales
of electronic products and
electronic components.
Communication
modules
11,398 5.1% 2019
Supplier D /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in the
manufacturing of vehicle
equipment.
BSD modules 11,137 5.0% 2021
Supplier E /H1118/H1118/H1118/H1118A limited liability company
located in Taiwan, China. It
specializes in the processing,
manufacturing, R&D, trading
and import and export of
various electronic components
and finished products.
Chips 10,198 4.6% 2018
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 93,062 41.9%
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Y ear ended December 31, 2022
Suppliers Background
Products
purchased
Purchase
amount
%o f
total
purchases
Y ear of
commencement
of business
relationship
RMB’000
Supplier D /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in the
manufacturing of vehicle
equipment.
BSD modules 20,497 8.0% 2021
Supplier F /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in the production
of automotive electronics.
PCB assembly 19,916 7.8% 2022
Supplier G /H1118/H1118/H1118/H1118A limited liability company
located in Hunan, China. It
specializes in software
development.
Signal control
modules
19,080 7.4% 2021
Supplier H /H1118/H1118/H1118/H1118A limited liability company
located in Zhejiang, China. It
specializes in the production
of optoelectronic components.
Camera modules 18,092 7.0% 2021
Supplier I /H1118/H1118/H1118/H1118A limited liability company
located in Shanghai, China. It
specializes in the R&D and
production of electronic
components of automobiles
and motorcycles.
Millimeter wave
radars
15,724 6.1% 2021
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 93,309 36.3%
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Y ear ended December 31, 2023
Suppliers Background
Products
purchased
Purchase
amount
%o f
total
purchases
Y ear of
commencement
of business
relationship
RMB’000
Supplier F /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in the production
of automotive electronics.
PCB assembly 39,336 11.7% 2022
Supplier D /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in the
manufacturing of vehicle
equipment.
BSD modules 28,976 8.6% 2021
Supplier J /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in the R&D of
automobile components.
PCB assembly 27,804 8.3% 2022
Supplier H /H1118/H1118/H1118/H1118A limited liability company
located in Zhejiang, China. It
specializes in the production
of optoelectronic components.
Camera modules 27,234 8.1% 2021
Supplier B /H1118/H1118/H1118/H1118A limited liability company
located in Tianjin, China. It
specializes in professional
vehicle camera solutions.
Camera modules 16,963 5.0% 2021
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 140,313 41.7%
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Six months ended June 30, 2024
Suppliers Background
Products
purchased
Purchase
amount
%o f
total
purchases
Y ear of
commencement
of business
relationship
RMB’000
Supplier D /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in the
manufacturing of vehicle
equipment.
BSD modules 27,387 13.2% 2021
Supplier K /H1118/H1118/H1118/H1118A limited liability company
located in Zhejiang, China. It
specializes in the R&D of
automobile components.
Sensors and shells 18,842 9.1% 2023
Supplier J /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in the R&D of
electronic components.
PCB assembly 13,488 6.5% 2022
Supplier F /H1118/H1118/H1118/H1118A limited liability company
located in Guangdong, China.
It specializes in the production
of automotive electronics.
PCB assembly 11,594 5.6% 2022
Supplier L /H1118/H1118/H1118/H1118A limited liability company
located in Jiangsu, China. It
specializes in the R&D of
electronic components.
Digital video
recorder (DVR)
modules
9,288 4.5% 2022
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 80,599 38.9%
To the best of our knowledge, none of our Directors, their respective close associates or
any Shareholder who owned more than 5% of our issued share capital as of the Latest
Practicable Date, had any interest in any of our five largest suppliers in each year/period of the
Track Record Period.
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Supply of Raw Materials and Components
Our procurement is generally based on our customized production plan and internal
strategic storage. We have a dedicated team to procure raw materials and components to meet
the specific requirements of our solutions. The key raw materials and components we used for
our production include, among others, automotive-grade chips, electronic components, PCBs
and camera modules. The majority of our raw material and component suppliers are located in
the PRC while we also source from suppliers overseas, including Hong Kong. The following
table sets forth our purchase from domestic and overseas suppliers for the years/periods
indicated:
Y ear ended December 31, Six months
ended June 30,
20242021 2022 2023
(RMB in thousands)
China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118163,329 242,610 322,098 195,065
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,162 14,057 14,819 12,221
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118222,491 256,667 336,917 207,286
We adopt several measures to ensure a stable supply of raw materials and components,
such as eliminating exclusive supply, valuing alternative supply and strengthening admission
standards. We also actively monitor the inventory levels of our raw materials and we will adjust
our stock quantities accordingly to mitigate potential risks in raw material price fluctuations.
We believe that our operation is not dependent on any particular supplier or contract
manufacturer, since: (i) during the Track Record Period, we maintained multiple suppliers to
avoid over-reliance on any of suppliers. For example, we typically engage two or three
suppliers for our procurement of each type of chips that we procure; (ii) we believe there is no
significant difficulty to find suitable substitutes for our suppliers under pricing and other terms
that are similar to those of our existing suppliers; and (iii) according to CIC, we have access
to a diverse supplier base for the chip types we procure, allowing us the flexibility to identify
and engage alternative suppliers who can offer commercially reasonable pricing and terms to
meet our procurement requirements.
Although we have sufficient alternative suppliers for all of our raw materials and
components that can provide us with substitutes of comparable quality and prices, a few raw
materials may occasionally be subject to industry-wide shortage, significant pricing
fluctuations and long supply cycles. See “Risk Factors—Risks Relating to Our Business and
Industry—We are susceptible to supply shortages and increased costs of raw materials and key
components, which may materially and adversely affect our business, financial condition and
results of operations.”
We routinely engage in price discussions with our suppliers on a semiannual basis. The
prices of raw materials and components are primarily determined based on competitive
negotiation between suppliers and us. In addition, our suppliers generally bear the
transportation expenses incurred for the delivery of raw materials and components.
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Selection and Engagement of Suppliers
We develop our supplier selection strategy based on our need for raw materials and supply
conditions in the market. When selecting suppliers, we take into account diverse factors,
including, among other things, the suppliers’ background, technical capability, solution quality,
cost, production capability and delivery efficiency. We have implemented a comprehensive
supplier management system that defines the admission of suppliers, management of qualified
suppliers and termination of unqualified suppliers to ensure the efficiency of our supplier
management.
During our preliminary supplier evaluation, we scrutinize the basic information of
potential suppliers, including their company address, registered capital, supply capabilities and
relevant official certificates. After these requirements are met, we review their production
processes, product quality and market conditions. We may have on-site visits to production
sites of potential suppliers. Potential suppliers are also required to provide samples for our
testing and assessment. Successful suppliers are then admitted to our list of qualified suppliers.
We typically seek to enter into long-term cooperative agreements with our suppliers. We
carry out performance assessments to ensure the product quality and service of our suppliers
on a quarterly basis and inform the suppliers of our assessment result and rectification
requirements. In addition, we conduct regular examinations on the raw materials and
components delivered, including their appearance, functions and sizes, to ensure the
consistency of the high quality of our solutions. If certain raw materials and components fail
to meet our stringent testing standards, we are entitled to request the return of the affected
batch. The supplier is obliged to perform an analysis of the returned solutions, identify the
causes for non-compliance and propose rectification measures.
The prices of raw materials and components are primarily determined based on
negotiation between our suppliers and us. We have also achieved cost control through supply
resource consolidation, thereby enabling us to maintain a competitive edge in the fiercely
contested automotive market.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience quality and delivery issues with our raw materials and components that materially
affected our operations.
Salient Terms of Agreements with Suppliers
We typically enter into framework supply agreements with major suppliers, the salient
terms of which are set forth below:
 Solutions specifications . We specify the raw materials and/or components,
specification, price, quantity, delivery timeline and other detailed items in each
purchase order.
 Quality control . We provide our suppliers with raw materials and/or components
specifications in advance and we inspect the products upon receipt to determine any
deviations from their samples and specifications. We have the right to reject and
return any products that do not meet our specifications, at the expense of suppliers,
or to request replacement or maintenance.
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 Delivery. The suppliers are generally responsible for delivery of raw materials
and/or components to our designated location specified in each purchase order.
 Credit term . Our suppliers typically require pre-payment from us or grant us a credit
term of one month.
 Solutions recalls and return . We have the right to return or replace non-conforming
raw materials and/or components.
 Confidentiality . All confidential information provided by us shall be used solely for
the purposes of cooperation pursuant to the agreements and shall not be disclosed to
any third party without our prior consent.
BUSINESS SUSTAINABILITY
We achieved sustained business growth but had been loss-making during the Track
Record Period. The following table sets forth certain financial data for the years/periods
indicated:
Y ear Ended December 31,
Six months ended
June 30,
2021 2022 2023 2023 2024
(RMB in thousands, except for percentages)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118175,174 279,358 476,206 163,834 236,675
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,001 33,570 68,022 13,661 33,421
Gross profit margin /H1118/H1118/H1118/H1118/H11189.7% 12.0% 14.3% 8.3% 14.1%
Net loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(139,797) (220,830) (207,155) (132,832) (112,048)
Adjusted net loss (non-IFRS
measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130,995) (205,870) (184,754) (121,632) (82,439)
Adjusted net loss margin
(non-IFRS measure) /H1118/H1118/H1118/H1118/H1118(74.8)% (73.7)% (38.8)% (74.2)% (34.8)%
We have implemented a number of growth strategies including technology investment and
refinement of our solutions, strengthening manufacturing and supply chain capabilities,
expanding customer base and improving talent recruitment and retention. During the Track
Record Period, the above strategies were proven to be generally effective in improving our
operational and financial performance. As of December 31, 2021, 2022 and 2023 and June 30,
2024, we had design wins under development for 20, 36, 51 and 41 vehicle models with 14,
20, 21 and 22 OEMs, respectively, and had undertaken mass production for 22, 53, 64 and 94
vehicle models with 9, 19, 26 and 29 OEMs, respectively. As a result, we achieved strong
revenue growth during the Track Record Period, from RMB175.2 million in 2021 to RMB476.2
million in 2023 and from RMB163.8 million in the six months ended June 30, 2023 to
RMB236.7 million in the six months ended June 30, 2024. According to CIC, in 2023, we
ranked seventh among all domestic intelligent driving solutions providers and ranked fourth
among all emerging technology companies in China, with a market share of 0.6%, in terms of
revenue of Level 0 to Level 2+ solutions.
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However, our growth in revenue had yet been able to fully cover the various costs and
expenses incurred during the Track Record Period. In 2021, 2022 and 2023 and the six months
ended June 30, 2023 and 2024, we had net losses of RMB139.8 million, RMB220.8 million,
RMB207.2 million, RMB132.8 million and RMB112.0 million, respectively. After elimination
of the effects of share-based payment and listing expenses, in 2021, 2022 and 2023, and the six
months ended June 30, 2023 and 2024 our adjusted net loss (non-IFRS measure) was
RMB131.0 million, RMB205.9 million and RMB184.8 million, RMB121.6 million and
RMB82.4 million, respectively. See “Financial Information—Non-IFRS Measures.”
We incurred net losses primarily because we were still at a ramp-up stage and have yet
to fully realize economies of scale, and we aim at long-term business success and financial
return in the automotive intelligence solutions industry, rather than seeking near-term
profitability at the expense of long-term market potential. The automotive intelligence
solutions market in which we operate is highly competitive, and the technologies are rapidly
evolving. According to CIC, the top 10 domestic intelligent driving solutions providers
collectively held only a 14.7% market share in 2023, and the technology enhancements in the
computing power of chips, more complex suites of sensors and highly adaptable algorithms,
among other things, have significantly propelled the performance of intelligent driving
solutions in the past few years. In the early stages of our development, we strategically
invested heavily in our research and development to better understand the fast-paced product
demand iterations and continuous technological innovations characteristic of this fast-
developing industry, and actively increased our sales force to strengthen our customer base and
drive future growth. Our focus has always been on enhancing our core technological
capabilities and steadily launching new solutions to strengthen our customer base, rather than
pursuing short-term profitability. Accordingly, we may continue to incur net losses and net
operating cash outflows in the foreseeable future, including the year ending December 31,
2024. We are not able to predict when we will be able to start generating net profits and net
operating cash inflow due to the fast-evolving business environment and competitive
landscape. See “Risk Factors—Risks Relating to Our Business and Industry—We recorded net
losses and had net operating cash outflows during the Track Record Period” and “Risk
Factors—Risks Relating to Our Business and Industry—We have been and intend to continue
investing significantly in R&D, which may not generate the results we expect and therefore
may adversely affect our short-term cash flow, liquidity and profitability.”
From the financial perspective, our loss-making position is primarily a result of
combination of the following:
 Procurement costs of raw materials and consumables. We incurred significant
procurement costs of raw materials and consumables under our cost of sales, which
were RMB135.7 million, RMB206.3 million, RMB349.7 million, RMB122.7
million and RMB164.4 million in 2021, 2022 and 2023 and the six months ended
June 30, 2023 and 2024, respectively, representing 77.5%, 73.8%, 73.4%, 74.9% and
69.5% of our total revenue in the same periods, respectively. Such increases in the
procurement costs were generally in line with our revenue growth.
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 Investment in R&D. We made significant investment in R&D during the Track
Record Period. Our research and development expenses in 2021, 2022 and 2023 and
the six months ended June 30, 2023 and 2024 were RMB82.2 million, RMB139.3
million, RMB149.8 million, RMB81.4 million and RMB63.3 million, respectively,
representing 46.9%, 49.9%, 31.5%, 49.7% and 26.7% of our total revenue in the
same periods, respectively. We are committed to enhancing our intelligent driving
technologies and developing new technologies and solutions through our investment
in R&D activities, which we believe will further drive our future revenue growth.
 Investment in attracting and retaining talent . In order to enhance our operating
efficiency, we put substantial efforts into the recruitment and retention of talent, as
employee benefit expenses constituted a significant portion of our selling expenses,
general and administrative expenses and research and development expenses. Our
total employee benefit expenses in 2021, 2022 and 2023 and the six months ended
June 30, 2023 and 2024 were RMB107.9 million, RMB166.4 million, RMB180.7
million, RMB90.1 million and RMB86.8 million, respectively, representing 61.6%,
59.6%, 37.9%, 55.0% and 36.7% of our total revenue in the same periods,
respectively. Meanwhile, to incentivize our employees and retain our talent, we had
in place share award schemes, and incurred share-based payments of RMB8.8
million, RMB15.0 million, RMB22.4 million, RMB11.2 million and RMB15.3
million in 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024,
respectively.
See “Financial Information—Results of Operations.”
Our loss-making position is primarily a result of the complexity involved in the R&D of
intelligent driving solutions. Each step in developing intelligent driving solutions involves
substantial upfront financial investment due to the large workforce with different expertise
required, expensive equipment procurement, extensive cross-functional coordination and
significant use of computational resources. Below are the major aspects of our R&D activities
that contributed substantially to our loss-making position during the Track Record Period:
 Building comprehensive R&D capabilities. We believe comprehensive in-house
R&D capabilities are fundamental for our long-term growth, as they significantly
enhance our development autonomy and facilitate the adaptation of our technologies
to new business domains. To this end, we established various specialized R&D
teams across hardware, software and algorithm development. Our algorithm
engineers cover four specialities throughout the development cycle: perception,
fusion, mapping and localization and planning and control. We believe the full-cycle
R&D capabilities allow us to achieve high cost-efficiency in technology upgrade
and product iteration.
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 Investment in cutting-edge laboratories and equipment. Intelligent driving demands
high precision and reliability. We have made substantial investments in our R&D
infrastructure to expedite the development process and boost the technical
competitiveness of our solutions. For example, during the Track Record Period, we
established several advanced facilities, including a CNAS-accredited reliability lab,
a full-vehicle calibration facility, a simulation testing lab and several advanced
visualization systems. These industry-leading equipment and facilities help us
achieve high precision and accuracy in essential R&D steps, such as hardware
validation, software testing and algorithm optimization. Our R&D infrastructure
empowers our R&D personnel to effectively and efficiently explore the forefront of
technological innovation.
 Development of innovative algorithms. To ensure the competitiveness of our
intelligent driving solutions, we continuously develop innovative algorithms and
enhance existing algorithms. For example, we developed BEV technology and
monocular 3D object detection technology, and further improved the performance of
algorithms for iPilot solutions during the Track Record Period. The development of
such advance algorithms relies on producing the underlying neural network models,
which demands significant human resources and financial investment to prepare
massive data input and computational resources. For details of our self-developed
neural network tools HardNet and ThiNet, see “—Our Technologies—In-house
Developed Core Algorithms—Neural Network Acceleration and Deployment
Tools.”
 Joint development by perception division and planning and control division. Our
intelligent driving solutions provide over twenty functions ( e.g. , AEB, ACC and
LCC), and each of these functions needs the joint development and testing by a
substantial number of R&D personnel from two divisions: perception division and
planning and control division. The joint development process of the two divisions
encompasses numerous delicate aspects and demands intensive coordination.
Therefore, during the Track Record Period, our R&D personnel from the two
divisions put additional efforts in establishing highly efficient joint development
protocols, giving us a competitive edge in the long run against companies without
mature in-house R&D capabilities.
 Establishment of a new domain control platform. During the Track Record Period,
we established a new domain control platform compatible with mainstream SoCs.
Building the new domain control platform is highly complex, because it requires
seamless integration of various hardware, software and algorithms and involves the
joint efforts of dozens of engineers from these three specialty areas. Our engineers
dedicated considerable time to fine-tune the platform design to ensure its
compatibility with mainstream SoCs and its ability to accommodate customization
requests from different customers. The investment in the domain control platform is
crucial for our long-term growth, as its high adaptability eliminates the need to
overhaul the entire system or develop brand new algorithms or middleware for each
new product.
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Although the upfront investments incurred for our R&D activities were significant during
the Track Record Period, we believe such investments laid a robust foundation for our
long-term growth. Specifically, we believe such upfront investments will contribute to our
business sustainability and profitability growth in the long term in the following ways:
 Accumulation of highly adaptable technologies. For example, although producing
neural network models demanded significant resources as described above, the
neural network models can be applied in next-generation intelligent driving
solutions and be deployed in various vehicle models. This saves us significant time
and resources in future development of higher-level products by reducing the need
to prepare massive data input, produce and migrate models and coordinate joint
development across various R&D divisions.
 Streamlining project execution. The upfront R&D investments have allowed us to
streamline our project execution process. We have developed various hardware and
software toolchains (sets of development tools used simultaneously to complete
complex development tasks) and built a highly compatible domain control platform.
They eliminate the burden of developing from scratch and substantially enhance the
speed of product iteration and functionality extension.
Despite our losses during the Track Record Period, we believe that our business is
sustainable. We plan to narrow our losses and achieve profitability by acting vigorously on
both sides of our profit-loss equation: driving revenue growth and improving gross margin.
Driving Revenue Growth
We experienced strong revenue growth during the Track Record Period. Our revenue was
RMB175.2 million, RMB279.4 million and RMB476.2 million in 2021, 2022 and 2023,
respectively, representing a CAGR of 64.9% from 2021 to 2023 and a year-on-year growth rate
of 59.5% in 2022 and 70.4% in 2023. Our revenue also increased by 44.5% from RMB163.8
million in the six months ended June 30, 2023 to RMB236.7 million in the six months ended
June 30, 2024. We expect our revenue to continually grow, driven by the following factors:
Incremental Development Strategy: Facilitating Penetration Across V arious Product Lines
Unlike some industry peers who focus on high-level autonomous driving, we have
adopted an incremental strategy to gradually develop intelligent driving solutions across
different levels of automation. This strategy has enabled us to build a comprehensive solutions
matrix, creating synergy across different product lines. As a result, we can efficiently and
effectively address a wide range of customer needs, gaining trust and recognition from new
customers.
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OEMs frequently use an initial project to validate a supplier’s capabilities in technology,
production and service. Once validated, the supplier’s collaboration with the OEM may extend
to other vehicle models. Therefore, our proficiency across different automation levels allows
us to penetrate OEMs’ multiple product lines. For example, in 2021, we secured a design win
for a Level 2+ solution for an OEM’s premium coupes. We used this initial project to
demonstrate our technical capabilities, especially our ability to meet the OEM’s customization
requirements, and to refine our product functions swiftly and accurately. We saw this project
as the first step in establishing a long-term, mutually beneficial partnership with the OEM.
During this project, our team proactively worked with the OEM to explore further collaborative
opportunities for other vehicle models. Our efforts bore fruit in 2023, when we obtained design
wins for both Level 2 and Level 2+ solutions for a mid-size SUV model of the same OEM.
Similarly, for another OEM, we secured design wins for four models through our continuous
efforts, beginning with a compact crossover model (Level 2+) in 2022, followed by mid-size
SUV and compact SUV models (Level 2 and 2+) in 2023 and, most recently, a new SUV model
(Level 2 and 2+) in 2024.
We will continue to monitor OEMs’ evolving needs for automotive driving solutions,
deepen our understanding of their customization requirements throughout the development
cycle, and analyze client feedback for better service delivery. Executing the incremental
development strategy, we have cultivated solid, multifaceted partnerships with our customers,
which will continue to be a strong foundation for our future growth.
In-House R&D: Driving Greater Efficiency Through Efficient Chip Utilization,
Development Autonomy and High Adaptability Supported by Middleware
Our in-house R&D capabilities allow us to have greater control and flexibility in our
product development cycle. Specifically, such in-house R&D capabilities enhance efficiency
from the following three aspects:
 Greater efficiency through self-developed algorithms and efficient chip utilization.
Our capability to develop algorithms in-house generally eliminates the need for
procuring chips with pre-embedded algorithms. Instead, we implement our self-
developed algorithms directly on chips — this allows us to customize the algorithms
for real-life scenarios, allocate computing power efficiently and effectively utilize
the capacity of high-performance chips. For example, we are able to provide
driving-parking-integrated functions of driver confirmed lane change (DCLC) and
automatic parking assistance (APA) by using only one chip with a computing power
of eight TOPS, setting an industry-leading standard. In contrast, driving and parking
functions in most comparable products by industry peers are controlled by two chips
with an aggregate computing power of over ten TOPS.
 Greater efficiency attributable to development autonomy. Companies lacking
in-house R&D capabilities must incorporate algorithms from external suppliers,
particularly for perception, planning and control algorithms related to parking and
driving. The reliance on external sources may increase the complexity of
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development management and potentially impact project timelines. For example, to
identify, analyze and rectify a fault in the automatic braking system requires the
collaboration of engineers from testing, perception, fusion and planning and control
divisions. Our comprehensive in-house R&D capabilities enable us to resolve
technical problems internally and eliminate the need for coordinating with external
suppliers. In addition, the use of externally sourced algorithms typically involves
licensing fees and additional development costs for integrating these algorithms into
the overall system.
 Greater efficiency attributable to high adaptability to different vehicle models
supported by middleware. The adaptability of our intelligent solutions to different
vehicle models requires the coordination among hardware, software and algorithms.
We achieve such platform compatibility by using our in-house developed
middleware, which is an intermediary layer of software frameworks sandwiched
between upper-level application software and lower-level computing platforms. It
serves as a platform for managing, allocating and scheduling software and hardware
resources. Middleware makes it easier to implement new application software or
update existing application software without having to overhaul the entire system.
The middleware architecture is inherently scalable, accommodating additional
components or advanced functionalities as they are developed. Such scalability
supports the continuous improvement and expansion of autonomous vehicle
capabilities without the need for extensive redesigns.
Cross-Domain Expertise: Maximizing Synergies of the Three Business Segments
The automotive intelligence ecosystem includes two major pillars: individual vehicle
intelligence and vehicle infrastructure cooperation. Individual vehicle intelligence empowers
vehicles to independently perceive and process information from their surroundings through
onboard sensors and decision-making systems, while vehicle infrastructure cooperation
focuses on exchanging and sharing information between vehicles and infrastructures to
enhance the perceptual and decision-making capabilities of individual vehicles. For example,
the vehicle infrastructure cooperative system monitors the relative positions among various
vehicles, which further allows the infrastructure platform to monitor the overall road condition
and send appropriate warnings to individual vehicles. These complementary aspects contribute
to the development of automotive intelligence, and our cumulative experience and technical
expertise span across the relevant domains.
In the realm of individual vehicle intelligence, our footprint extends beyond intelligent
driving solutions into the other key domain: intelligent cabin solutions. Unlike some industry peers
that focus exclusively on autonomous driving, we believe our cross-domain expertise in both areas
creates cross-selling opportunities and maximizes potential synergies. The collaboration with
OEMs in developing intelligent driving solutions allows us to demonstrate our technical
competence and service quality, further paving the way for us to supply intelligent cabin solutions
to such OEMs. Conversely, as our new business line, our intelligent cabin solutions also enable us
to penetrate into the supply chain of large OEMs, which may further drive the sales of our
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intelligent driving solutions. For example, our business relationship with two leading Chinese
OEMs began with supplying intelligent cabin solutions. Our technological capabilities and service
quality were validated through such projects and we further obtained design-wins for intelligent
driving solutions from the same OEMs. Along with the development of autonomous driving
technology, OEMs are exploring the potential to integrate intelligent driving and intelligent cabin
functions. We believe our proficiency in providing both types of products, especially our ability
to optimize the utilization of chips and other hardware resources (such as sensors) through our
self-developed algorithms, gives us a competitive advantage against our peers.
Regarding the other pillar, vehicle infrastructure cooperation, we ventured into this field
as we believe the advancement of automotive intelligence relies heavily on increasing
information exchanges between vehicles and infrastructure. Our vehicle infrastructure
cooperative system business complements our intelligent driving solutions business. On the
one hand, developing vehicle infrastructure cooperative systems is a complex endeavor that
demands substantial expertise in perception technologies, such as radars and cameras and
various algorithms. Our intelligent driving solutions business has laid a solid technical
foundation in these areas, allowing us to apply these technologies in our vehicle infrastructure
cooperative systems. On the other hand, increased vehicle-to-infrastructure connectivity and
interactivity empower vehicles with extended perception capabilities. This connectivity not
only enhances individual vehicle performance but also facilitates a more integrated and
efficient transportation ecosystem. We anticipate that vehicle infrastructure cooperative
systems will be driving forces in expanding the adoption of intelligent driving technologies.
This growth will be synergistic with the development of our intelligent driving and intelligent
cabin businesses, driving forward the entire spectrum of automotive intelligence.
Harnessing the Positive Industry Momentum
Driven by continuous advancements in technology, increasing adoption of automotive
intelligence technology by global OEMs, and growing consumer demand for intelligent driving
functions, the automotive intelligence solutions industry, including the two pivotal segments of
intelligent driving solutions and intelligent cabin solutions, is expected to experience rapid
growth in the future, according to CIC. The global market size for intelligent driving solutions
in terms of revenue increased from RMB107.1 billion in 2019 to RMB268.7 billion in 2023
with a CAGR of 25.9%, and is projected to increase to RMB560.9 billion in 2028 with a CAGR
of 13.7% from 2024 to 2028; the market size for global intelligent cabin solutions, in terms of
revenue, increased rapidly from RMB130.2 billion in 2019 to RMB321.3 billion in 2023 with
a CAGR of 25.3% and is expected to reach RMB769.4 billion in 2028, at a CAGR of 17.0%
from 2024 to 2028. The Chinese market size for intelligent driving solutions in terms of
revenue increased from RMB17.5 billion in 2019 to RMB68.1 billion in 2023 with a CAGR of
40.5%, and is projected to increase to RMB164.2 billion in 2028 with a CAGR of 14.8% from
2024 to 2028; the market size for Chinese intelligent cabin solutions in terms of revenue
increased rapidly from RMB32.9 billion in 2019 to RMB106.9 billion in 2023 with a CAGR
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of 34.3%, and is expected to reach RMB267.0 billion in 2028, with a CAGR of 18.2% from
2024 to 2028. See “Industry Overview—Analysis of Global and Chinese Intelligent Driving
Solutions Industry” and “Industry Overview—Analysis of Global and Chinese Intelligent
Cabin Solutions Industry.”
With our in-house R&D capabilities and advanced intelligent mass production
capabilities, we have established advantages in the automotive intelligence solutions industry.
According to CIC, in 2023, we ranked seventh among all domestic intelligent driving solutions
providers and ranked fourth among all emerging technology companies in China, with a market
share of 0.6%, in terms of revenue of Level 0 to Level 2+ solutions. Similarly, we have also
entered the vehicle infrastructure cooperative systems industry, which is expected to grow
substantially in the coming years with strong PRC government policy support, fast-advancing
technologies and growing demand. Benefiting from such positive industry trends, our
established capabilities in this business will enable us to capture market potential and continue
to grow.
Capitalizing on Existing Design Wins for Mass Production
As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had design wins under
development for 20, 36, 51 and 41 vehicle models with 14, 20, 21 and 22 OEMs, respectively,
and had undertaken mass production for 22, 53, 64 and 94 vehicle models with 9, 19, 26 and
29 OEMs, respectively. This indicated strong potential for revenue growth as we gradually
achieve mass production for the remaining vehicle models. Our design wins boast a high
conversion rate to mass production, underscoring our strength in project execution. In the
intelligent driving solutions segment, for design wins secured in 2021, 2022 and 2023, the rate
of commencing mass production by the end of the Track Record Period was 96.2%, 83.9% and
50.0%, respectively; for design wins secured in 2023 and the six months ended June 30, 2024,
the rate of commencing mass production by the Latest Practicable Date was 90.9% and 58.3%,
respectively. In the intelligent cabin solutions segment, for design wins secured in 2021, 2022
and 2023, the rate of commencing mass production by the end of the Track Record Period was
100.0%, 100.0% and 63.2%, respectively; for design wins secured in 2023 and the six months
ended June 30, 2024, the rate of commencing mass production by the Latest Practicable Date
was 89.5% and 11.1%, respectively. We expect to continue to commercialize and mass produce
the design-win vehicle models in our pipeline in the coming years, leading to more SOPs of
and shipment demand for our solutions.
We anticipate broadening the scope of our design wins to encompass the entirety of
OEMs’ vehicle platforms, which are commonly used to create a range of vehicle models
sharing similar components, systems and functions, thereby requiring intelligent driving
solutions with similar specifications. By adopting this strategy, we expect to be able to secure
a substantial volume of orders covering similar vehicle models of the OEMs. This approach
will also allow us to mitigate the costs associated with developing and tailoring our solutions
for each individual vehicle model. Furthermore, as our solutions become more mature and
diversified to meet the various needs of customers, we are able to further deepen our business
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cooperation with existing customers. As a result, we can enhance our operational efficiency by
streamlining our development process and delivering our solutions more quickly and
effectively to achieve SOP for a larger number of vehicle models.
Deepening Our Relationships with Existing Customers
We expect to further enhance our relationships with existing customers. As of the Latest
Practicable Date, we had accumulatively undertaken mass production for 35 OEMs. We have
also established long-term relationships with many of our customers. As of the Latest
Practicable Date, seven of the top 10 Chinese domestic OEMs in terms of sales volume in 2023
had chosen our solutions for their mass-produced vehicle models. We intend to capitalize on
the relationships established with our existing customers to further discover and meet their
needs and stay at the technological forefront of the market. Meanwhile, we are prepared for
additional design win vehicle models with existing customers to further strengthen such ties for
long-term customer retention and loyalty.
Leveraging our in-house developed algorithms, we are well equipped to help our
customers develop customized intelligent driving functions, catering to the various needs of
target markets, and in the process foster loyalty to our solutions and establish long-term
business relationships. For example, we have collaborated with OEMs and developed
customized intelligent driving functions under off-road scenarios, such as automatically
optimizing ACC by taking considerations of various driving conditions, including paved roads,
dirt roads, grass roads, snow roads, gravel roads and waded dirt roads, through providing
additional power support or various sport driving modes. Based on solutions that we have
developed and leveraging our core advantages, we aim to continue to serve our existing
customers and extend our collaboration to other solutions. In addition, as we continually
upgrade and expand our solutions, we expect that our customers will find increasing value in
our solutions across driving, parking and in-cabin scenarios and apply them in more of their
mass-produced vehicle models, driving our revenue growth concurrently. Furthermore,
leveraging our in-house development capabilities and in-house developed middleware, we are
able to quickly respond to R&D requests from existing customers from time to time with our
platform-based R&D approach.
Capitalizing on the above, we believe we are able to deepen our relationship with existing
customers by continually offering customized and cost-effective solutions in a responsive
manner.
Attract New Customers Through Diversification Strategy
As a strategy we aim to foster a diversified customer base—given that many vehicle
brands in China are aggressively developing their autonomous driving vehicles and there is no
prediction which brands will ultimately succeed, we strategically developed business
relationships with a wide range of customers to maximize our own chance of future success.
To illustrate, as of December 31, 2021, 2022 and 2023 and June 30, 2024, we had design wins
under development for 20, 36, 51 and 41 vehicle models with 14, 20, 21 and 22 OEMs,
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respectively, and had undertaken mass production for 22, 53, 64 and 94 vehicle models with
9, 19, 26 and 29 OEMs, respectively. In the six months ended June 30, 2024, we obtained
design wins from five new customers, including two of top 10 domestic OEMs by sales
volume, covering both intelligent driving and intelligent cabin solutions. As our solutions
become more established and recognized by the markets of automotive intelligence solutions
and the wider automotive industry, we expect to further expand our customer base of
increasingly diverse customer groups.
In the current market dynamic, our decision-making is not primarily fixated on chasing
vehicle brands or models that may be popular. Rather, we focus more on enhancing our
products’ technological competitiveness and adaptivity across different vehicle brands and
models. For example, we continually develop and optimize our solutions that can run at high
computing power efficiency and therefore adapt to more vehicle models. Benefiting from our
efficient utilization of SoC computing power, our intelligent driving solutions also minimize
requirements for hardware, thus offering cost-effective solutions and assisting OEM customers
in their cost controls. In addition, by tailoring software in accordance with the hardware
combinations pre-selected by ourselves, we have established a seamless hardware-to-software
development system. We aim to attract new OEM customers by providing one-stop solutions
to them, while reducing their dependency on other external parties along the industry value
chain.
Meanwhile, we have been steadily increasing our brand visibility among a broad range of
potential customers through press conferences, trade shows and exhibitions to announce new
solutions and expand customers’ awareness of existing solutions. For example, in April 2023,
we participated in the Shanghai Auto Show, where we showcased our intelligent driving and
intelligent cabin products in two mass-produced vehicle models. We also introduced the iPilot
series, which highlighted software-hardware-integrated capabilities. This engagement led to a
design win for intelligent cabin solutions with a leading new-energy OEM in May 2023, and
mass production of the respective products commenced in September 2023. In July 2023, we
attended an exhibition for high-tech automotive suppliers organized by a renowned state-
owned OEM. We leveraged this opportunity to demonstrate the technical competitiveness of
our intelligent driving and intelligent cabin solutions to the OEM’s management team. This
engagement resulted in one design win for our intelligent driving solutions and one design win
for intelligent cabin solutions, respectively, in 2024. We attend approximately ten industry
conferences and one auto show annually. According to CIC, our marketing strategies are in line
with industry practice. We plan to continue enhancing our customer engagement through
attending such conferences and exhibitions, and we will also use such opportunities to
understand our customers’ evolving needs and to improve solutions performance based on their
feedback.
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Expand to New Geographies
Currently, substantially all of our revenue is derived from China. We plan to reinforce our
global footprint through strengthening our overseas sales and marketing capabilities and
enhancing strategic partnerships with international leading OEMs and tier-one suppliers. We
also believe that our strategic partnerships with Chinese OEMs and tier-one suppliers can turn
into great revenue growth potential worldwide due to their increasing international presence.
According to CIC, the global market size for automotive intelligence solutions in terms of
revenue, encompassing intelligent driving solutions and intelligent cabin solutions, reached
RMB589.9 billion in 2023, and is projected to increase to RMB1,330.3 billion in 2028. As the
demand for advanced driving automation grows worldwide, we can capitalize on such
opportunities by expanding our presence globally.
For our intelligent driving solutions, our expertise and technologies in meeting the high
standards of top OEMs and tier-one suppliers in China have laid a solid foundation for further
enhancing our international presence. For our intelligent cabin solutions, we are the first
supplier whose intelligent cabin solutions are deployed on vehicle models of Chinese OEMs
receiving a E-NCAP five-star rating and DDAW certifications, according to CIC. We aim to
continue to bring our well-recognized solutions in cooperation with our customers to overseas
markets, including the European Union, the UK, Australia, Southeast Asia and the Middle East.
Refining Our Solutions
We aim to refine our solutions and enhance the competitiveness of our solutions portfolio.
For our intelligent driving solutions, our iPilot 1, iPilot 2 and iPilot 3 have achieved
commercialization. Building on the success of our intelligent driving solutions, we intend to
further refine our solutions to enhance our competitiveness in terms of performance, cost
effectiveness and reliability. For example, we expect to launch our iPilot 4 in 2025, which is
expected to be equipped with the most comprehensive set of hardware in our iPilot series and
offer advanced driving and in-cabin functions.
In addition, in 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024,
revenue from our intelligent cabin solutions was RMB0.7 million, RMB1.6 million, RMB18.3
million, RMB4.1 million and RMB30.5 million, respectively, representing 0.4%, 0.6%, 3.8%,
2.5% and 12.9% of our total revenue, respectively. We have achieved rapid growth in our
intelligent cabin solutions by capturing the growing market opportunities. We intend to further
expand our intelligent cabin solutions business by way of delivering more innovative and
personalized functions for in-vehicle users, marking our efforts to capture the evolving trend.
In particular, our incremental development approach provides us with a differentiated
competitive advantage, enabling us to swiftly meet customer demands and efficiently achieve
scalability and mass production. Leveraging years of in-house expertise and first-hand
experience in algorithm development, software engineering and hardware design, we are able
to swiftly commercialize our R&D achievements and form a more flexible solutions delivery
model, as well as to refine our in-house R&D capabilities through continual iteration and
innovation for future expansion of our solutions.
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Improving Gross Margin
Our gross profit margin was 9.7%, 12.0%, 14.3%, 8.3% and 14.1% in 2021, 2022 and
2023 and the six months ended June 30, 2023 and 2024, respectively. While we have achieved
an encouraging trend of improving margins, we will endeavor to significantly further improve
our gross margin via the following measures:
Optimizing the Cost Structure of Our Solutions with Continuous Innovation
Our in-house R&D capabilities serve as the foundation for comprehensive technological
advancements and iterations, improving our profitability. With a proactive approach to
continuously introducing advanced technologies, we are able to rapidly respond to customers’
R&D requirements and provide customized solutions. Meanwhile, we are able to refine our
solutions with continuous innovative R&D activities. We plan to continue to allocate resources
to R&D initiatives aimed at fostering innovation. By doing so, we can flexibly and dynamically
optimize software development and application, hardware design, as well as the production
processes, and therefore take full control of the cost structure of our solutions, eventually
improving our gross margin performance.
For example, currently, the intelligent driving solutions in the market are designed with
more than one chip, including the versions before our iPilot 2 to support both driving and
parking functionalities. By compressing the neural network and optimizing the software
architecture, our iPilot 2 is able to support both functions on one single chip through latest
technical innovations, thereby optimizing the cost structure of our solutions.
Meanwhile, leveraging our technical expertise, we have developed intelligent driving
solutions with high cost efficiency. For example, by fine-tuning our algorithms, our intelligent
solutions utilize the computing power of chips efficiently, making our solutions compatible
with chips of relatively lower computing power and resulting in reduced costs. In addition, we
refined the power supply design of our solutions, which allows us to use more cost-effective
power supply components and enhance the effectiveness and reliability of the power supply
system in our intelligent driving solutions.
Enhancing Economies of Scale with Strong Supply Chain Capabilities
We plan to enhance our supply chain capabilities to drive cost controls. The key raw
materials and components we use for our production include, among other things, automotive-
grade chips, electronic components, PCBs and camera modules. During the Track Record
Period, as we ramped up rapidly, our procurement needs increased accordingly, and we
obtained favorable terms for the procurement of certain key raw materials and components. For
example, the purchase price of the integrated circuits that we used for our intelligent driving
solutions decreased by approximately 14% and 10% in 2023 and the first half of 2024,
respectively, due to our increasing procurement from the relevant supplier. As our business
expands, we expect to further benefit from economies of scale.
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In addition, during the Track Record Period, we have also been implementing centralized
procurement, a procurement method that reduces the cost of revenue by taking the advantage
of our economies of scale and centralizing our procurements with certain shortlisted suppliers.
We expect that the centralized procurement will increase substantially in the next few years.
In addition, we will keep seeking suppliers with favorable prices and terms and broaden our
supply channels to achieve lower cost of revenue. Our procurement costs of raw materials and
consumables, which constitutes a primary portion of our cost of sales, accounts for 77.5%,
73.8%, 73.4%, 74.9% and 69.5% of our total revenue in 2021, 2022 and 2023 and the six
months ended June 30, 2023 and 2024, respectively.
Meanwhile, we will continue to enhance our relationships with suppliers by fostering
long-term partnerships and diversify our current supplier pool for stable and affordable
supplies. By maintaining long-term relationships, we aim to ensure a consistent and reliable
supply of raw materials and components even during periods of high demand or supply
disruptions, securing our long-term profitability. Additionally, we expect to enhance our
inventory and supply chain management practices to ensure that we can always maintain a
reasonably adequate stock level that suits our long-term profitability.
Improving Solutions Mix with Higher Margin Solutions and Services
We intend to improve our gross profit margin by adjusting our solutions mix and
launching additional solutions with higher margins. The production of our series of solutions
launched in recent years recorded significantly higher gross profit margins than the solutions
we offered in our early development stage, mainly due to the continuously improved technical
content embedded in such solutions. We also expect to launch solutions and services of higher
margins in the near future. For example, we expect to launch our iPilot 4 solutions, which are
expected to achieve the integration of driving, parking and in-cabin functions and be equipped
with the most comprehensive set of hardware in our iPilot series, in 2025. We are also
developing ADS functions and expect to deliver our iRobo solutions in the first quarter of
2025, which are currently in the testing phase. Our iRobo solutions can support fully
autonomous driving in specific areas and operating scenarios. In particular, benefitting from a
series of favorable national and local government policies that encourage the development of
autonomous driving vehicles in recent years, our iRobo solutions are well positioned to capture
the sizable growth potential. We will keep allocating additional resources to R&D initiatives
aimed at developing cutting-edge technologies, so that we can keep the revenue mix from such
premium solutions at an optimal level, stay ahead of the competition and maintain our
profitability in the long term. As we endeavor to apply the latest solutions to additional vehicle
models of both our existing and new OEMs and tier-one suppliers, sales of these solutions are
expected to contribute to a larger proportion of total sales, resulting in higher overall gross
margin.
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Enhancing Manufacturing Efficiency with Intelligent Facilities
In anticipation of rising order volumes in the future, we have invested significant
resources in the expansion of our production base and the upgrade of our production facilities
to expand our production capabilities. Initial stages of SOP are often associated with low
production volume, low utilization rate and therefore high manufacturing cost per unit. As we
achieve SOP for the remaining design win vehicle models and ramp up our production volume,
we are expected to achieve economies of scale and enjoy lower average manufacturing costs,
in particular labor costs and overheads such as depreciation and amortization. We also expect
the future order flow will continue to improve the utilization rate of our production bases.
Meanwhile, we intend to improve our production capabilities and the level of automation
of our production bases. In particular, to improve manufacturing efficiency, our production
base will be equipped with fully automated assembly lines, intelligent packaging lines with
fully automated SMT production line and DIP line to enhance the automation level of our smart
production, significantly reducing labor costs and improving efficiency.
Currently, our Bao’an Production Base primarily focuses on the final three production
procedures: three-proof coating, assembly and packaging. To enhance our control over the
entire production process, especially the first three procedures, namely SMT, DIP and
depaneling, we have established our Guangzhou Production Base. We commenced production
at our Guangzhou Production Base in the third quarter of 2024. Our in-house production
capabilities allow us to effectively streamline the production processes, enhance quality and
productivity and decrease logistics costs. For example, the manufacturing cost of the SMT
procedure decreases by approximately 20% per each processing unit when completed in-house
compared with outsourcing to contract manufacturers. Also, by completing the packaging
procedure in-house, we can save logistics and inspection costs and expedite the whole
procedure compared with delivering the products through contract manufacturers.
Although the foregoing investments have resulted in and may continue to lead to an
increase in our capital expenditure in the short term, we believe the in-house production of our
solutions will allow us to simplify the supply chain and maintain a high level of cost efficiency,
and in turn improve our profitability ultimately.
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Enhancing Operating Leverage
During the Track Record Period, we incurred significant operating expenses, including
research and development expenses, selling expenses and general and administrative expenses.
The following table sets forth our research and development expenses, selling expenses and
general and administrative expenses, as a percentage of revenue for the years/periods
indicated:
Y ear ended December 31,
Six months ended
June 30,
2021 2022 2023 2023 2024
(%)
(unaudited)
As a percentage of
revenue:
Research and
development expenses /H1118 46.9 49.9 31.5 49.7 26.7
Selling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111829.5 22.7 15.3 20.2 13.5
General and
administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825.9 19.6 15.6 18.8 21.2
Total operating expenses /H1118 102.3 92.2 62.4 88.7 61.4
Our operating expenses as a percentage of total revenue decreased from 102.3% in 2021
to 92.2% in 2022 and to 62.4% in 2023 and decreased from 88.7% in the six months ended
June 30, 2023 to 61.4% in the six months ended June 30, 2024, primarily attributable to our
enhancement of operating efficiency. We expect our operating expenses as a percentage of
revenue to further decrease as we continue to ramp up our production and achieve revenue
growth and improve the efficiency of our R&D, sales and marketing and administrative
activities and our spending on such activities. In addition, a significant portion of such
expenses was related to our employee benefit expenses and share-based payment expenses,
which are less likely to increase proportionally along with our revenue growth as we scale up.
 R&D expenses. Our research and development expenses were RMB82.2 million,
RMB139.3 million, RMB149.8 million, RMB81.4 million and RMB63.3 million in
2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024,
respectively, representing 46.9%, 49.9%, 31.5%, 49.7% and 26.7% of our total
revenue, respectively. Our R&D expenses as a percentage of revenue increased in
2022 as compared to 2021, primarily due to the expansion of our R&D team. Our
R&D expenses as a percentage of revenue decreased in 2023 as compared to 2022
and decreased in the first half of 2024 as compared to the same period in 2023,
primarily attributable to the achievement in economics of scale in line with our
commercialization progress and business growth. We expect to capitalize on our
solid R&D foundation and highly iterative solutions development approach, to
further improve the efficiency of our R&D activities.
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 Selling expenses. Our selling expenses were RMB51.7 million, RMB63.4 million,
RMB72.7 million, RMB33.1 million and RMB32.0 million in 2021, 2022 and 2023
and the six months ended June 30, 2023 and 2024, respectively, representing 29.5%,
22.7%, 15.3%, 20.2% and 13.5% of our total revenue, respectively. We expect our
selling expenses to decrease as a percentage of our total revenue, leveraging our
large and growing customer base to strengthen our sales and marketing network.
 General and administrative expenses. Our general and administrative expenses were
RMB45.5 million, RMB54.8 million, RMB74.3 million, RMB30.8 million and
RMB50.2 million in 2021, 2022 and 2023 and the six months ended June 30, 2023
and 2024, respectively, representing 25.9%, 19.6%, 15.6%, 18.8% and 21.2% of our
total revenue, respectively. We plan to continually evaluate and monitor the
effectiveness and efficiency of our administrative expenses for purposes of reducing
such expenses as a percentage of our total revenue.
To maintain our leading position in technology capabilities and expand our solid customer
base, we expect our operating expenses as a percentage of revenue to decrease, as we continue
to ramp up our production and benefit from economics of scale, improve the productivity of
our R&D activities and enhance the efficiency of our sales and marketing and administrative
activities.
Optimizing Working Capital Efficiency
We have sufficient cash balance to support our business operations and future expansion.
As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had cash and cash equivalents
of RMB272.8 million, RMB243.8 million, RMB197.9 million and RMB220.1 million,
respectively, and financial assets at FVPL of RMB135.2 million, RMB44.6 million, RMB210.6
million and RMB120.9 million, respectively. As of October 31, 2024, we had unutilized
banking facilities of RMB45.0 million. We are also proactively seeking ways to optimize our
liquidity and capital management. We expect our profitability to improve and can further
solidify our working capital sufficiency. In addition to the enhanced profitability, we also aim
to enhance our working capital efficiency and improve our inventory turnover and receivable
and payable cycles through the following measures:
 Inventory. We intend to enhance communication with customers to better
understand their needs and improve our production planning capabilities
accordingly. We also plan to optimize inventory management protocols for optimal
inventory levels.
 Trade and Notes Receivables. We plan to reinforce collection efforts of receivables
with existing customers. For new customers, we will assess their creditworthiness
and financial condition before cooperation. We plan to make efforts to negotiate for
better credit terms to shorten the payment cycles with our customers.
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 Trade Payables. We intend to negotiate with suppliers for improved credit terms to
extend the payment cycles, as we expect our bargaining power to rise as our business
scales up.
As such, after taking into account the financial resources available to us, we are of the
view that we have sufficient working capital for our present requirements and for the next 12
months from the date of this prospectus.
The foregoing forward-looking statements on our future revenue and profitability are
based on numerous assumptions regarding our present and future business strategies and the
environment in which we will operate in the future. Our business growth and long-term
profitability is subject to known and unknown risks, uncertainties and other factors, some of
which are beyond our control, and they may cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements set out above. See “Risk Factors —
Risks Relating to Our Business and Industry.”
Based on the foregoing, our Directors are of the view, and the Joint Sponsors concur, that
the efforts described above have contributed to and are expected to continue to drive and
maintain the sustainability of our Group’s business.
SEASONALITY
Our results of operations of our intelligent driving and intelligent cabin solutions
businesses are affected by seasonal fluctuations in demand for our solutions and solutions, as
affected by market trends of the automotive industry. Given our customers in the automotive
industry usually deliver more of their vehicle models towards the year end, it can have an
impact on our delivery of relevant solutions in the fourth quarter of each year. Mass production
by OEMs tends to be more concentrated in the second half of the year, typically peaking in the
fourth quarter. According to the China Association of Automobile Manufacturers and CIC, the
mass production volume and sales volume of vehicles in China were usually over 20% higher
in the second half of the year compared with the first half between 2019 and 2023. According
to CIC, this is due to the following reasons: (i) vehicle dealers frequently hold large-scale
promotional events during the year-end season to achieve their annual sales targets and earn
rewards from OEMs; (ii) customers’ willingness to purchase vehicles often increases at the end
of the year, when they typically receive year-end bonuses and other benefits; and (iii) the peak
season for auto shows typically falls in September and October of each year. Auto shows
provide consumers with direct exposure to a variety of vehicle models and typically feature
special offers and promotions from dealers to stimulate sales. Our delivery of relevant
solutions typically increases in the second half of the year, which is generally in line with the
overall automotive industry in China according to CIC. See “Financial Information — Key
Factors Affecting Our Results of Operation—Seasonality.”
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COMPETITION
The Chinese automotive intelligence solutions industry is rapidly evolving and
competitive. We primarily compete with existing manufacturers and new entrants in the
automotive intelligence solutions sector. Although we believe that we have market-leading
technology, we may face competition from a range of companies which may possess more
resources and skills in design, development, manufacturing and sales. See “Risk Factors—
Risks Relating to Our Business and Industry—The industry in which we operate is highly
competitive. If we fail to compete successfully with our existing or potential competitors, our
business, results of operations and financial condition may be materially and adversely
affected.”
According to CIC, in 2023, we ranked seventh among all domestic intelligent driving
solutions providers and ranked fourth among all emerging technology companies in China,
with a market share of 0.6%, in terms of revenue of Level 0 to Level 2+ solutions. We believe
that we are strategically well positioned in our market, and we compete favorably with others
based on our in-house developed core algorithms, compatible and portable technologies,
software-hardware-integrated design capabilities, advanced in-house developed R&D
capabilities, supply chain management capabilities and mass production capabilities to attract
and retain customers and expand our market share.
INTELLECTUAL PROPERTY
Our intellectual property rights are key to our success and competitiveness. Our
intellectual property rights primarily consist of patents, trademarks and copyrights. As of the
Latest Practicable Date, we had 23 trademarks, 112 copyrights, 199 patents and 5 domain
names. See “Appendix VI—Statutory and General Information—B. Further Information about
Our Business—2. Intellectual Property Rights.”
We have formulated in-house intellectual property management rules. We also protect our
intellectual property rights through a series of confidentiality non-disclosure agreements with
our key employees, suppliers, outsourcing partners and other business partners. We adopt a
strategic and proactive approach to manage our intellectual property portfolio. We designate
dedicated personnel to handle intellectual property-related issues, including monitoring the
application status of intellectual property rights and performing routine checks to prevent and
identify any third-party infringement of our intellectual property rights. In particular, as part
of routine checks, our dedicated personnel examine whether our business partners (especially
contract manufacturers) legitimately use our self-developed intellectual property, such as
algorithms. To protect our proprietary intellectual property, we only engage contract
manufacturers in those activities with minimal interactions with our self-developed intellectual
property, such as assembling and packaging. In addition, our dedicated personnel examine the
contract terms and review all relevant documents for our business operations, including
licenses and permits obtained by the counterparties to perform contractual obligations and all
the necessary underlying due diligence materials, before we enter into any contract or business
arrangements. Despite our precautions, we may be subject to risks associated with alleged
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infringement of third parties’ intellectual property rights or face infringement of our
intellectual property rights by third parties. See “Risk Factors — We may not be able to protect
our intellectual property rights, and our ability to compete could be harmed if our intellectual
property rights are infringed by third parties” and “Risk Factors — Confidentiality agreements
and non-compete covenants with employees may not adequately protect our proprietary
rights.”
During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any material infringement of our intellectual property rights or allegations of
infringement by third parties.
DATA PRIV ACY AND SECURITY
Through cooperating with a qualified map maker, we utilize the driving data collected on
certain public roads and parking lots for developing our intelligent driving solutions. The
personal information in the driving environments are promptly desensitized and anonymized by
the qualified map maker before being provided to us in the form of images. We also collect
in-cabin data from our employees upon their confirmation or through in-cabin data service
partners for our R&D purposes of intelligent cabin solutions. We do not collect any information
through our customers and intelligent driving solutions, intelligent cabin solutions and vehicle
infrastructure cooperative systems that have been deployed. As our customers are primarily
OEMs and tier-one companies rather than individual consumers, we generally do not directly
collect and process any personal data of vehicle owners, or any data collected during the
operation of vehicles installed with our solutions. In addition, we may collect necessary
customer information when our customers enter into a cooperative arrangement with us. We
store the data collected and generated in the course of business operations in Chinese mainland
without involving cross-border data transmission. The data storage period of our data storage
system is as follows: (i) for data with a minimum storage period specified by law, storage is
carried out in accordance with the requirements; and (ii) for data with no storage period
specified by law, we determine the storage period in accordance with our business strategy. Our
Directors are of the view that the Company is able to comply with the relevant cybersecurity
laws and regulations in all material aspects.
Data security and protection are among our highest priorities. In this regard, we have
designed strict data protection and information security policies to ensure strict compliance
with applicable laws, regulations and prevalent industry practice. We have implemented
internal policies on protecting data privacy and security, with the purpose to ensure data and
information security, optimize data governance, protect the benefits of our customers, business
partners, employees and other third parties, and ensure compliance with all applicable laws and
regulations. We implement a robust internal authentication and authorization system to ensure
that our confidential and important business data and trade secrets can only be accessed for
authorized use and by authorized personnel. We have established an information system in
relation to data security requirements, national standards and industry best practices, and
intend to continually invest heavily in data security and privacy protection. Our information
system applies multiple layers of safeguards, including both internal and external firewalls, to
identity and protect us against security attacks.
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During the Track Record Period and up to the Latest Practicable Date, we have not
received any claim from any third party against us on the ground of infringement of any third
party’s right to data and privacy protection as provided by any applicable laws and regulations
in the PRC or other jurisdictions. Our PRC Legal Advisor is of the view that, during the Track
Record Period, we had complied with the applicable laws and regulations in effect in material
respects, based on: (i) we have not received any complaint relating to data privacy or security
measures; (ii) we have implemented internal policies on protecting data privacy and security,
with the purpose of ensuring data and information security and ensuring compliance with all
applicable laws and regulations; (iii) during the Track Record Period, there had been no
material incident of data or personal information leakage; (iv) during the Track Record Period,
there had been no investigation, legal proceeding or administrative penalty relating to the
violation of relevant network security, data security and personal information protection laws
or regulations, to our best knowledge, pending or threatened against us initiated by competent
government authorities or third parties; and (v) we will continue to pay close attention to the
regulatory developments in data security and comply with the latest regulatory requirements.
COMPLIANCE WITH REGULATIONS ON THE U.S. CHIP EXPORT RESTRICTIONS
For details of the U.S. Chip Export Restrictions, see “Regulatory Overview— Regulations
on the Import and Export of Goods—The United States.” In 2021, 2022, 2023 and the six
months ended June 30, 2024, the amount of semiconductors incorporated into the Group’s
solutions that were sourced from the U.S. was approximately RMB52.1 million, RMB14.4
million, RMB21.9 million and RMB9.6 million, respectively, representing 20.9%, 5.3%, 5.6%
and 6.7% of the total amount of semiconductors procured during the same period. Aware of the
U.S Chip Export Restrictions, we gradually reduced the use of semiconductors sourced from
the U.S. and formulated plans to replace such semiconductors with semiconductors sourced
from PRC or other countries.
As advised by our Legal Advisor as to U.S. export control laws, during the Track Record
Period, (i) our customers are not designated on BIS’ Entity List, Denied Persons List or
Unverified List or headquartered in or ordinarily resident in, or owned or controlled by a
government of, any countries or regions subject to Comprehensive Trade Embargos
(collectively, the “ Sanctioned Targets ”)); and (ii) our activities do not involve operations or
transactions that have violated or would violate (a) the restrictions on Sanctioned Targets; and
(b) the EAR restrictions on the end-uses set forth in the U.S. Chip Export Restrictions.
Our Directors are of the view that the restrictions imposed by the EAR, including the BIS
2022/23 IFRs, had not negatively impacted our operations or financial performance as of the
Latest Practicable Date. Given that as of the Latest Practicable Date, we did not sell our
products to customers in the United States or to customers who incorporated them into products
for sale to the United States to our best knowledge, and do not intend to actively develop our
business in the United States as a major market in the future, our Directors are of the view that
the impact of the proposed rules prohibiting the importation of certain vehicles into the U.S.
is minimal on our operations.
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On such basis and having taken into account the view and analysis of our Legal Advisor
as to U.S. export control laws, nothing material has come to the attention of the Joint Sponsors
as a non-legal expert that would cause the Joint Sponsors to disagree with the Directors’ view
above.
EMPLOYEES
As of June 30, 2024, we had 496 full-time employees, all of whom were based in the PRC.
The table below sets forth the number of our employees by function as of June 30, 2024:
As of June 30, 2024
Number %
Function
R&D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118304 61.3
Management and administration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867 13.5
Sales and marketing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865 13.1
Supply and production /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860 12.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118496 100.0
We recruited employees primarily through employment websites, on-campus recruitment
and internal referrals during the Track Record Period. We enter into standard labor contracts
with our employees and confidentiality and non-compete agreements with key management
and professionals. We emphasize the importance of training and development for our
employees to enhance their technical skills and overall performance. We provide induction
training to new joiners on our culture, business and industry to help them to fit in. We also
provide tailored, continuing training sessions by internal and external experts to employees to
improve technical skills in their practice areas and management skills training programs,
including leadership training, to cadres in key positions. Committed to providing fair and equal
opportunities to our employees, we have formulated career development and promotion path
plans covering all levels of our staff and conduct performance evaluations regularly. As part
of our retention strategy, we offer competitive remuneration packages to employees, including
salary and allowances, performance-based bonuses and long-term incentive programs,
including, but not limited to, an employee stock ownership plan for managers, high-potential
talent and key technical professionals. We have established periodical review system to assess
the performance of employees, which forms the basis of our decisions with respect to salary
increases and promotions.
As required by laws and regulations in China, we participate in various employee social
security plans that are organized by municipal and provincial governments, including, among
other things, pensions, medical insurance, unemployment insurance, maternity insurance,
on-the-job injury insurance and housing fund plans through a benefit contribution plan. We are
required under PRC law to make contributions to employee benefit plans at specified
percentages of the salaries, bonuses and certain allowances of our staff, up to a maximum
amount specified by the local government from time to time.
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We have always striven to provide our employees with comprehensive social benefits, a
diverse working environment and a wide range of career development opportunities. We are
committed to providing a safe and healthy workplace, which is backed by strict policies, robust
team member education and safety recognition awards, along with continued investments in
technology. We support the physical health and well-being of our team members by providing
an array of programs that help our people stay at their best level of health. We believe that
everyone deserves respect. We are committed to the education, recruitment, development and
advancement of diverse team members nationwide, and are recognized for our commitment to
those efforts.
We believe that we generally maintain good working relationships with our employees.
Save as disclosed in this prospectus, we did not experience any significant labor disputes or
any difficulty in recruiting staff for our operations during the Track Record Period.
Social Insurance and Housing Provident Funds
Background and Reasons for Non-compliance
During the Track Record Period, we had not made social insurance and housing provident
fund contributions for some of our employees in full, and certain of our subsidiaries engaged
third-party human resource agencies to pay social insurance premiums and housing provident
funds for certain of our employees in certain locations where they work.
Engagement of Third-Party Human Resource Agencies for Contribution of Social Insurance
and Housing Provident Funds
As of December 31, 2021, 2022 and 2023 and June 30, 2024, we used third-party agencies
to pay social insurance and housing provident fund for 62, 48, 24 and 13 employees,
respectively.
We engage third-party agencies to pay social insurance and housing provident funds
primarily because some of our employees working in different cities across the nation prefer
their social insurance and housing provident funds to be paid at their respective resident places
for convenience of utilizing such benefits locally. Therefore, we made such arrangements for
those employees in cities where we do not have legal entities.
Failure in Making Full Contributions of Social Insurance and Housing Provident Fund
As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had failed to pay social
insurance in full for 389, 517, 527 and 486 employees, respectively. As of December 31, 2021,
2022 and 2023 and June 30, 2024, we had failed to pay housing provident fund in full for 265,
341, 331 and 280 employees, respectively.
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The failure to make full contributions of social insurance and housing provident funds
was primarily because (i) certain employees were unwilling to pay the social insurance and
housing provident funds in full as it requires additional contributions from them; or (ii) our
human resources personnel did not fully understand the relevant requirements of the relevant
PRC laws and regulations.
Legal Consequences
Social Insurance
According to the Social Insurance Law, if an employer engages third-party human
resource agencies to pay the social insurance premiums or fails to make social insurance
contributions in full, the relevant authorities could order the employer to pay, within a
prescribed time limit, the outstanding amount with an additional late payment penalty at the
daily rate of 0.05%, and if the employer fails to make the overdue contributions within such
time limit, a fine equal to one to three times the outstanding amount may be imposed. Our
shortfall amount of social insurance contributions was estimated to be RMB7.1 million,
RMB12.8 million, RMB10.8 million and RMB4.7 million in 2021, 2022, 2023 and the six
months ended June 30, 2024, respectively.
According to the Urgent Notice of the General Office of the Ministry of Human Resources
and Social Security on Implementing the Spirit of the Executive Meeting of the State Council
in Stabilizing the Collection of Social Security Contributions (ღ௅፬ʮᝂ
ٝpromulgated on
September 21, 2018, all local authorities responsible for the collection of social insurance are
strictly forbidden to conduct self-collection of historical unpaid social insurance contributions
from enterprises. During the Track Record Period, no material administrative action, fine or
penalty had been imposed by the relevant regulatory authorities with respect to our social
insurance, nor had we received any order or been informed to settle the under-contributions.
As advised by our PRC Legal Advisor, on the basis that (i) the applicable laws and regulations
and the execution and supervision requirements of local government do not materially change,
and (ii) we do not receive any complaints from our employees, the likelihood that we will be
subject to a material administrative penalty by the relevant competent social insurance
authorities and be required to pay the outstanding amount is remote. As such, our Directors
believe that such non-compliance would not have a material and adverse effect on our business
and results of operations.
Housing Provident Funds
According to the Housing Provident Fund Management Regulations, if the employer
engages third-party human resource agencies to pay the housing provident funds or fails to
register and establish an account for housing provident funds, the authority could order the
employer to correct it within a prescribed time limit, where failure to do so at the expiration
of the time limit shall results in a fine of not less than RMB10,000 nor more than RMB50,000
being imposed. Where an employer is overdue in the payment and deposit of, or underpays, the
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housing provident funds, the authority could order it to make the payment and deposit within
a prescribed time limit, and where the payment and deposit has not been made after the
expiration of the time limit, an application may be made to a People’s Court of the PRC for
compulsory enforcement. Our shortfall amount of housing provident fund contributions was
estimated to be RMB2.2 million, RMB4.3 million, RMB2.6 million and RMB0.7 million in
2021, 2022, 2023 and the six months ended June 30, 2024, respectively.
Pursuant to the consultations with and confirmations from competent authorities as
advised by our PRC Legal Advisor, during the Track Record Period, no material administrative
action, fine or penalty had been imposed by the relevant regulatory authorities with respect to
our housing provident fund contributions, nor had we received any order or been informed to
settle the under-contributions. As advised by our PRC Legal Advisor, on the basis that (i) the
applicable laws and regulations and the execution and supervision requirements of local
government do not materially change, and (ii) we do not receive any complaints from our
employees, the likelihood that our Company and the subsidiaries that have obtained written
certificates of compliance from the relevant competent housing provident funds departments
are required to pay the outstanding amount and be subject to a material administrative penalty
by the relevant competent housing provident fund authorities is remote. As such, our Directors
believe that such non-compliance would not have a material and adverse effect on our business
and results of operations.
As a result, in 2021, 2022 and 2023 and the six months ended June 30, 2024, we did not
make provisions in respect of the estimated shortfall in social insurance plans and housing
provident fund contributions. See “Risk Factors—Failure to make adequate contributions to
various employee benefit plans as required by PRC regulations may subject us to penalties.”
Internal Control and Remedial Measures
We have taken the following internal control measures to prevent future occurrences of
such non-compliance:
 Human Resource Management Policies . Enhance our human resources management
policies, which explicitly require social insurance and housing provident fund
contributions to be made in full in accordance with applicable local requirements.
 Training . Strengthen the training of our personnel, including training on various
compliance-related topics for our employees;
 Increasing awareness of developments in the law . Regularly keep abreast of the
latest developments in PRC laws and regulations relating to social insurance and
housing provident funds;
 Internal control measures . Establish an internal control team to monitor our ongoing
compliance with the social insurance and housing provident fund contributions
regulations and oversee the implementation of any necessary measures; and
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 Consultation . Consult our PRC legal counsel on a regular basis for advice on
relevant PRC laws and regulations to keep us abreast of relevant regulatory
developments; and actively communicate with relevant social insurance and housing
fund local authorities to ensure we have the most updated information about the
relevant laws and regulations concerning social insurance and housing provident
fund.
Going forward, we will continue to implement the above measures to ensure we are in
compliance with the social insurance and housing provident fund contributions requirements
under the relevant laws and regulations and undertake to make timely payments for the
outstanding amount and overdue charges under our own accounts as soon as requested by the
relevant authorities. We aim to rectify the non-compliance of failure to make full contribution
of social insurance and housing provident funds within one year of the Listing. We plan to take
rectification measures to reduce the instances of payment of social insurance premiums and
housing provident funds through third-party human resource agencies by setting up
subsidiaries at relevant locations. We aim to cease the payment through third-party agencies by
June 30, 2025. In addition, we will proactively communicate with the relevant local authorities
to keep up to date with the applicable laws and regulations concerning social insurance and
housing provident funds. We will also communicate such updates with our employees to allow
them to better understand the relevant laws and regulations, increasing their understanding of
the regulatory requirements so as to enhance our compliance with the applicable laws and
regulations.
INSURANCE
We consider our insurance coverage to be adequate as we have in place all the mandatory
insurance policies required by Chinese laws and regulations and, according to CIC, in
accordance with the commercial practices in the industries in which we operate. We procure
insurance policies by type and amount that we consider sufficient and evaluate such insurance
policies from time to time. During the Track Record Period, we did not make any material
insurance claims in relation to our business. However, we may not be able to obtain or purchase
specific insurance for losses and liabilities arising from various operational risks to which we
are exposed. As of the Latest Practicable Date, we had not maintained product liability
insurance, and did not maintain any business interruption or litigation insurance. We shall be
liable for any losses caused to customers in the event that a product defect or malfunction leads
to a traffic accident and/or product recall. See “— Our Customers—After-Sale and Warranty.”
See “Risk Factors—Risks Relating to Our Business and Industry—Our insurance coverage may
not be sufficient to cover all losses or potential claims by our customers which would affect
our business, results of operations and financial condition.”
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IMPACT OF THE COVID-19 PANDEMIC AND THE GLOBAL SHORTAGE OF
SEMICONDUCTOR CHIPS
On January 30, 2020, the International Health Regulations Emergency Committee of the
World Health Organization declared the COVID-19 outbreak a public health emergency of
international concern, and on March 11, 2020, the World Health Organization declared the
global COVID-19 outbreak a pandemic. The COVID-19 virus continued to spread rapidly
worldwide in 2022. Furthermore, a global supply shortage from late 2021 to the second half
of 2022 resulted in the supply crunch of semiconductor chips. According to CIC, the average
selling price of commonly used chips for intelligent driving solutions rose to RMB351.6 per
unit in 2022 from RMB307.9 per unit in 2021, reflecting a year-on-year increase of 14.2%. In
anticipation of the supply crunch, we procured and maintained a relatively high level of
semiconductor chips inventory in 2021 to avoid disruption to our production. By the end of the
Track Record Period, 95.1% of the semiconductor chips we procured in 2021 had been utilized.
In 2021, 2022 and 2023 and the six months ended June 30, 2024, our procurement cost of chips
contributed to 35.0%, 11.3%, 12.9% and 14.9% of our total procurement cost, respectively.
However, neither the COVID-19 pandemic nor the global shortage of semiconductor chips had
any material adverse impact on our operations and financial performance during the Track
Record Period and up to the Latest Practicable Date, primarily taking into consideration that
(i) we had not experienced any difficulty in securing sufficient and prompt chip supplies, (ii)
we had not experienced significant increases in our cost of sales, (iii) there was no suspension
to our or our contract manufacturers’ production facilities due to the COVID-19 pandemic, and
(iv) we had not experienced any material labor shortage, as a result of the COVID-19 pandemic
or the supply crunch of semiconductor chips. Based on their current best knowledge and belief,
our Directors do not anticipate any further impact from COVID-19 or supply crunch of
semiconductor chips going forward. Our cost of sales primarily represents procurement costs
of raw materials and consumables, which accounted for 77.5%, 73.8%, 73.4%, 74.9% and
69.5% of our total revenue in 2021, 2022 and 2023 and the six months ended June 30, 2023
and 2024, respectively. As of the Latest Practicable Date, according to CIC, the global supply
of semiconductor chips had returned to normal.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
We believe that our continuous growth also depends on integrating social values into our
business. We are committed to utilizing our technologies and solutions to bring greener and
safer driving experiences to drivers and passengers. We have put in place various
Environmental, Social and Governance (“ ESG”) initiatives to comprehensively improve our
corporate governance for the benefit of society.
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ESG Governance
Our ESG management structure consists of three layers: the Board, the Strategy
Committee under the Board and a working group in charge of implementing our ESG policies.
 Board : primarily responsible for setting the ESG development direction, strategies
and objectives, reviewing and approving our Company’s ESG management
framework, ESG reports and major matters related to ESG.
 Strategy Committee under the Board : mainly responsible for researching,
analyzing and evaluating matters related to ESG, guiding the daily implementation
of ESG work and the preparation of ESG reports. At the same time, the Strategy
Committee has designated an ESG working group as the execution unit for our ESG
matters.
 ESG Working Group : led by the Board Secretary, the ESG Working Group is
primarily responsible for: (i) formulating our ESG strategies, objectives, plans and
related policies and submitting them to the Strategy Committee for review and
approval, (ii) developing our annual ESG work plans, collecting information about
the progress of our ESG work and reporting to the Strategy Committee, and (iii)
coordinating the various business functions of our Company in setting ESG
management indicators and detailed ESG measures and tracking the progress of the
execution of such indicators and measures, among other things.
We also engage external ESG experts to provide professional advice on our ESG work as
needed.
Compliance with Regulations
We are required to comply with the evolving and increasingly stringent ESG-related laws
and regulations. During the Track Record Period, we had not been involved in any significant
accident or claim for personal or property damage made by our employees, or, as advised by
our PRC Legal Advisor, been subject to any material fines or other penalties due to
non-compliance with ESG-related laws and regulations, which had materially and adversely
affected our financial condition or business operations.
We may be subject to more stringent compliance requirements and may incur additional
costs in the future if there is any change to the existing laws or regulations. See “Regulatory
Overview” and “Risk Factors” for more details.
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Environmental Laws and Regulations
We are subject to extensive air, water and other environmental laws and regulations in
PRC. For example, we are subject to environmental regulations such as the Environmental
Protection Law of the PRC (), the Energy Conservation Law
of the PRC (), the Water Law of the PRC ( ʕശɛ͏΍ձ਷
), the Water Pollution Prevention and Control Law of the PRC ( ʕശɛ͏΍ձ਷˥Ϯ
), and the Law of the PRC on Prevention and Control of Environmental Pollution
by Solid Waste (). Government agencies that
are charged with enforcing these laws and regulations generally have the authority to inspect
our facilities at any time.
We are also dedicated to reducing environmental impact throughout our production
process. We implement various environmental protection-related policies, including
monitoring and measuring the discharge of wastes on a regular basis and evaluating the
effectiveness of such monitoring and measuring activities on an annual basis.
Social Laws and Regulations
We are committed to fulfilling our social responsibilities and high standards of corporate
governance. We are required to comply with various PRC laws and regulations relating to
product safety and quality, labor management and occupational health and safety, including,
but not limited to, the PRC Product Quality Law (), the
Cybersecurity Law of the PRC (), the Data Security Law of
the PRC (), the Personal Information Protection Law ( ʕശ
), the Labor Law of the PRC (), the
Labor Contract Law of the PRC () and the Production Safety
Law of the PRC ().
We are also committed to complying with the regulatory requirements in the PRC to
prevent and minimize hazards and risks associated with our business. We have put in place
various internal systems related to social responsibility with the aim of continuously
optimizing our sustainable supply chain to provide safe and reliable products and services to
our customers, while ensuring the health and safety of our employees and the surrounding
communities.
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Recognition of ESG Key Issues
The identification, assessment and prioritization of ESG issues helps us to understand
sustainability and thus further improve the efficiency of the Company’s ESG practices. During
the Track Record Period, we conducted the materiality assessment of ESG key issues, the
process of which is described below:
 Step 1 — Identification : In accordance with HKEX “Guide for New Listings
Applicants—4.3 Corporate Governance and Environmental, Social and
Governance” and the “Environmental, Social and Governance Reporting
Guidelines”, while taking into account our own circumstances and the development
trends of the industry in which we operate, we have identified and set out the ESG
issues that are of strong relevance to us.
 Step 2 — Assessment : We have engaged external ESG experts to conduct
benchmarking with peers and provide professional advice and guidance to assist us
in assessing the significance of each of the ESG issues identified, and then proceed
to prioritize them.
 Step 3 — Confirmation : The ESG Working Group reviewed the results of the above
prioritization and ultimately confirmed the ESG key issues that have significant
impacts on our sustainable development.
The ESG key issues identified as a result of the above steps are as follows:
 Environmental Responsibility : energy management, water resource management,
emissions management, responding to climate change
 Social Responsibility : product safety & quality, supply chain management, labor
management, occupational health & safety
ESG Strategic Objectives and Targets
As an enterprise with a high sense of social responsibility, our products are already born
with an ESG-related nature. Our intelligent driving products can not only optimize routes
through intelligent planning and improve energy efficiency while driving, but also effectively
reduce the probability of traffic accidents through algorithm integration and protect the lives
of drivers and passengers.
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Based on the actual situation of our business operations, we have also established ESG
strategic objectives and targets with practical significance, mainly covering three major
aspects, namely quality, environment and occupational health & safety. We strive to
continuously implement a sustainable development path, and the detailed strategic objectives
are as follows:
 Quality strategic objectives : safe and reliable, continuous improvement, risk-based
mindset; customer satisfaction, employee satisfaction, win-win situation with
suppliers.
 Environmental strategic objectives : comply with laws and regulations, raise
awareness of environmental protection, promote energy-saving production, provide
environmentally friendly products.
 Occupational Health & Safety strategic objectives : full participation, prevention-
oriented, safety and health, compliance with laws and regulations, continuous
improvement.
We have defined quantitative targets for the above three aspects and regularly monitor our
performance through internal systems such as the “Inspection and Control Procedures” and the
“Environmental Safety Monitoring and Measurement Procedures”, so as to assess the
implementation of the above strategic objectives and ensure that they are effectively carried
out, while meeting the actual needs of the enterprise’s own development. Our ESG targets are
summarized below:
 Quality targets : Customer satisfaction score no less than 85.
 Environmental targets : 100% compliant disposal of wastes. By 2033, we expect to
reduce our energy consumption intensity and greenhouse gas emission intensity by
5% and water withdrawal intensity by 2%, compared to the 2023 baseline.
 Occupational Health & Safety targets : Zero fire accident and zero accidental
injury.
Risk Management and Internal Control
We have established a comprehensive risk management system and formulated the “Risk
Management System.” Our risk management process consists of the following key processes:
gathering initial risk management information, risk assessment, developing risk management
strategies, risk response and control and risk monitoring and improvement. The Board is
responsible for assessing and determining the nature and extent of risks, when considering to
achieve its strategic objectives. The Board is also accountable for establishing and maintaining
an appropriate and effective risk management and internal control system.
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We incorporate ESG risks into our overall risk management mechanism, including,
energy consumption, water withdrawal and greenhouse gas emissions. We collect important
information related to sustainability KPIs in a timely manner. While we also see “waste” as a
significant ESG-related KPI, our waste production is collected and disposed of by a qualified
third party, and we find it difficult to track its weight. Y et we strive to achieve 100% compliant
disposal of our waste, and have not been subject to any material fines or other penalties due
to non-compliance with waste disposal. ESG factors are integrated into our business operations
to accommodate management and response in this regard. The Board also conducts regular
annual reviews to ensure that ESG risk management resources are adequately budgeted.
We have developed an internal control policy to monitor and respond to a range of
operational, financial, legal and market risks that may be or have been identified, which cover
substantive ESG issues. We have established a dedicated risk management and internal control
team responsible for developing the internal control policy, conducting internal audits to
provide internal control advice, and directing any necessary corrective actions.
Environmental Responsibility
We always regard green and sustainable development as our own responsibility, and are
committed to minimizing the impact of our operations on the environment. We have already
been certified with ISO 14001 Environmental Management System, and the effective
guidelines and workflow of such management system are detailed in internal policy documents
such as the “EHS (Safety, Environment and Health) Management System” and the “Quality,
Environment and Occupational Health and Safety Management Manual.” Our employees
strictly enforce and implement the relevant systems to improve environmental practices and
energy efficiency, and to ensure the compliant discharge of waste water and solid waste.
Meanwhile, against the intensifying global climate change, we have continued to promote
the identification of risks associated with climate change and actively adopted measures to
address them. We are also aware of the opportunities that may arise from global climate
change, and continue to implement and explore sustainable development paths, with the
expectation to realize long-term business growth while maintaining our competitive edge in the
market.
Energy Management
Purchased electricity is the main energy source that we use during operation, while some
of our test vehicles also use gasoline and diesel as fuel. We strictly comply with the relevant
laws and regulations of our operating locations, including but not limited to the Energy
Conservation Law of the PRC, and have specified the requirements of electricity conservation
in our “Employee Handbook.” Without affecting the growth of our business, we will continue
to optimize our energy structure and improve the efficiency of our energy use, while making
every effort to achieve the goal of energy conservation and carbon emission reduction.
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We are actively promoting the purchase and use of green electricity. In 2023, green
electricity accounted for 50% of the electricity used in our production plants. We have also set
a clear quantitative target to use 100% green electricity in our production plants by 2025,
through purchasing green certificates and installing photovoltaic modules, thereby helping
China achieve carbon peak and carbon neutrality goals.
In addition, we prioritize the purchase of equipment and products with obvious
energy-saving effects and relatively low energy consumption under the same conditions, and
include energy-saving and environmental protection in the training of our employees. For
example, we require our staff to turn off lights and air-conditioners before leaving the office
and keep the temperature of the air-conditioning system within a reasonable range. We also
send out e-reminders to our employees on a regular basis to enhance their awareness of energy
saving and create a green corporate atmosphere. At the same time, we analyze electricity
consumption on a monthly basis, and once any anomaly is detected, repair work will be carried
out immediately to avoid wasting energy resources.
During the Track Record Period, our energy consumption and intensity are as follows:
Unit 2021 2022 2023
Six months
ended June 30,
2024 3
Purchased electricity 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118MWh 586.87 764.58 1,291.99 996.69
Of which:
Green electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
MWh 0.00 12.00 50.12 73.41
Total energy consumption 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118MWh 735.37 927.69 1,433.03 1,088.52
Energy consumption intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118MWh/million
revenue
RMB
4.20 3.32 3.01 4.59
1. Several of our offices do not pay for electricity alone, and relevant expenditure is usually included in the
management fee paid to properties. Some of the numbers for the “purchased electricity” indicator thus involve
estimation.
2. Besides purchased electricity, we also consume gasoline and diesel as fuel for test vehicles. They are included
in the “total energy consumption.”
3. Our energy consumption increased in the six months ended June 30, 2024 because of the construction of our
Guangzhou Production Base.
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Water Resource Management
We have always attached importance to the management of water resources and strictly
comply with the Water Law of the PRC and other relevant laws and regulations of the places
where we operate. We have made clear the requirements for water conservation in our
“Employee Handbook.” In addition to the water used for the daily lives of our employees, the
cleaning process in the production of our products also involves the use of water resources. The
water-based cleaning machines we have selected have an internal recycling structure, which,
through the stripping of pollutants by filtration devices, can realize the recycling of both
cleaning fluid and water, and thus significantly reduce the cost while effectively improving the
efficiency of resource use.
At the same time, we analyze water consumption on a monthly basis, and once any
anomaly is detected, we will carry out investigations immediately to eliminate leakage in a
timely manner. We also regard the publicity of water conservation awareness as an important
part of water conservation work, and have posted relevant slogans and posters in production
plants, dormitories, etc., with the aim of emphasizing the importance of water conservation to
employees and constructing an overall water conservation culture in the enterprise.
All the water resources we use are from municipal water supply. During the Track Record
Period, we did not encounter any difficulty in obtaining water sources, and our water extraction
and intensity are as follows:
Unit 2021 2022 2023
Six months
ended June 30,
2024
Water withdrawal 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118m3 1,283.73 1,561.41 1,473.41 549.71
Water withdrawal
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
m3/million
Revenue
RMB
7.33 5.59 3.09 2.32
1. Several of our offices do not pay for water alone, and relevant expenditure is usually included in the
management fee paid to properties. Some of the numbers for the “water withdrawal” indicator thus involve
estimation.
Waste Management
During the Track Record Period, our waste mainly consisted of domestic wastewater and
general solid waste, and did not involve the production and discharge of industrial wastewater,
hazardous waste or waste gas. We strictly comply with the Water Pollution Prevention and
Control Law of the PRC, the Law of the PRC on Prevention and Control of Environmental
Pollution by Solid Waste and other relevant laws and regulations in the places where we
operate, and have established and implemented stringent internal management procedures,
such as the “Procedures for Environmental Safety Monitoring and Measurement.”
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Our domestic wastewater is discharged through municipal pipes and disposed of in
wastewater treatment plants. For general solid waste, we have it collected by a qualified third
party. At the same time, we encourage our employees to conduct office work and meeting
activities online as much as possible, operate most of our business digitally, and utilize cloud
services to reduce the consumption of paper and other office supplies. Integrating the concept
of “efficiency as the basis” into our corporate culture, we take practical actions to reduce the
generation of waste.
Responding to Climate Change
Climate change has become one of the most talked about issues in the world. As a
company that puts main emphasis on sustainable development, we are always concerned about
such issue. While actively identifying climate-related risks, we are also committed to
capitalizing on the opportunities brought about by climate change and contributing to the
mitigation of global climate change.
During the Track Record Period, the total volume and intensity of our Scope 1 and Scope
2 GHG emissions are as follows:
Unit 2021 2022 2023
Six months
ended June 30,
2024
Scope 1 GHG emissions 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e 36.96 40.72 35.27 23.02
Scope 2 GHG emissions 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e 334.69 429.20 708.24 526.55
Total GHG emissions
(Scop e 1 + Scope 2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
tCO2e 371.65 469.02 743.51 549.57
GHG emission intensity
(Scop e 1 + Scope 2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
tCO2e/RMB
million
Revenue
2.12 1.68 1.56 2.32
1. Scope 1 GHG emissions come from the usage of gasoline and diesel, and the carbon dioxide emission factors
mainly refer to the Requirements of the Greenhouse Gas Emissions Accounting and Reporting – Public
Building Operating Organization (Enterprise) ().
2. Scope 2 GHG emissions are generated from the usage of purchased electricity, and the carbon dioxide emission
factor mainly refer to the Notice on the Management of Greenhouse Gas Emission Reports for Enterprises in
the Power Generation Industry from 2023 to 2025 (ਂλ2023-2025జѓ
).
We initiated statistical and accounting work on greenhouse gas emissions data, and
extended it to the dimension of Scope 3, covering part of the employee travel (transportation),
as well as upstream GHG emissions from purchased electricity (not included in Scope 1 and
Scope 2) in 2023. In 2023, the total amount of Scope 3 GHG emissions due to the above
activities was 678.35 tons of carbon dioxide equivalent. In the future, we plan to further expand
the scope of statistics and measurement of Scope 3 GHG emissions, so as to better carry out
the control of GHG emissions and related information disclosure.
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Social Responsibility
We actively fulfill our social responsibilities by identifying and focusing on supply chain
management, human resources management and occupational health and safety.
Supply Chain Management
To manage ESG risks in the supply chain, we require our suppliers to comply with our
ESG requirements. For example, in the supplier quality contract, we explicitly require
suppliers to comply with the EICC (Electronic Industry Code of Conduct), as well as legal and
regulatory requirements related to safety, reliability, hazardous substance restrictions, conflict
minerals, environmental protection and energy conservation and social responsibility. In
addition, the integrity agreement expressly prohibits bribery and other unethical behavior.
In order to build a more sustainable and resilient supply chain, we have been actively
pursuing a local sourcing strategy with a view to reducing the logistic and transportation
distance and the resulting greenhouse gas emissions. As of the Latest Practicable Date,
approximately 85% of qualified suppliers were located in the Pearl River Delta region, and
approximately 50% of our non-Pearl River Delta suppliers have set up warehousing facilities
in the Pearl River Delta region.
Human Resources Management
We strictly comply with the rules and regulations in the places of operation regarding
recruitment and dismissal, compensation and promotion, employee working hours, equal
opportunities, anti-discrimination, diversity, working hours, holidays and other benefits,
including but not limited to the Labor Law of the PRC () and the
Labor Contract Law of the PRC (). In accordance with these
regulations, we have established a comprehensive labor management system and are committed
to building a diverse, equal and inclusive work environment for our employees.
We have formulated and implemented internal policy documents such as the “Recruitment
Management Regulations” () to standardize the recruitment process and
strive to build a team composed of employees of different backgrounds and personalities,
without discriminating between job seekers on the basis of their race, religion, gender,
pregnancy status or disability. We follow the principles of fairness, justice, lawfulness and
compliance in signing labor contracts with our employees, and we strictly check their personal
identification documents when they join us to avoid any inadvertent recruitment of child labor.
We also support the career development of female employees and ensures that both
female and male employees enjoy the same opportunities for development and advancement in
the workplace through transparent and fair recruitment, promotion and performance evaluation
processes. After the Listing, we will continue to enhance and strive to achieve gender balance
of the Board in accordance with the Board Diversity Policy through certain initiatives
implemented by the nomination committee.
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We emphasize talents cultivation and long-term career development, and have formulated
internal system documents such as the “staff training management procedures.” We provide
diversified and extensive internal and external training opportunities tailored to the specific
needs of our employees. Our goal is to offer paths for employees to enhance their vocational
skills, fostering a corporate culture that values continuous learning. In order to ensure the
orderly implementation of training, the human resources department annually formulates the
overall training plan for the following year in December. Each departments then formulate their
own detailed training plans after identifying their personnel improvement needs, with regularly
tracking by the human resources department.
In order to establish a more harmonious, warm and happy working atmosphere, we
regularly conduct surveys on employee satisfaction across various aspects of work and life,
covering areas such as remuneration and benefits, working condition, training system,
corporate culture, etc. The human resources department is responsible for collecting and
analyzing feedbacks from these surveys, compiling recommendations for adjustments. The
survey results and recommendations are then reviewed by senior management and department
leaders.
Occupational Health and Safety
We have strictly complied with the Production Safety Law of the PRC and other relevant
laws and regulations in the places of operation, and have formulated a series of rules and
regulations relating to work safety and health protection, including the “Production Safety
Regulations and System” and the “Production Workshop Management System.” We have also
obtained ISO 45001 Occupational Health and Safety Management System Certification.
We have set up a safety management organization led by the general manager to clarify
the safety responsibilities across all levels, so as to ensure the implementation and enforcement
of various safety systems. In addition, in order to efficiently respond to safety emergencies, we
have set up an emergency response team and regularly conduct safety-related emergency drills.
Fire safety training is also conducted regularly to enhance the safety awareness and skills of
our staff.
PROPERTIES
Our corporate headquarters are located in Shenzhen, China. As of the Latest Practicable
Date, we had one self-owned property with the gross floor area of approximately 272.2 square
meters, two land parcels of approximately 50,589.3 square meters in total, and leased 13
properties. As of the Latest Practicable Date, we intend to use our self-owned property for
leasing purposes. Our leased properties are primarily used for office, R&D, production and
warehousing purposes. All of our self-owned and leased properties were located in China.
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As of the Latest Practicable Date, no single property interest forming part of our Group’s
property activities had a carrying amount of 1% or more of our total assets and no single
property interest forming part of our Group’s non-property activities had a carrying amount of
15% or more of our total assets. According to section 6(2) of the Companies (Exemption of
Companies and Prospectuses from Compliance with Provisions) Notice, this document is
exempt from the requirements of section 342(1)(b) of the Companies (Winding up and
Miscellaneous Provisions) Ordinance to include all interests in land or buildings in a valuation
report as described under paragraph 34(2) of the Third Schedule to the Companies (Winding
up and Miscellaneous Provisions) Ordinance.
Non-compliance Relating to Leased Properties
As of the Latest Practicable Date, we leased 13 properties in China, which were used for
R&D, production and general office work. We had certain non-compliant incidents involving
our leased properties, mainly due to (i) non-registration of lease agreements; (ii) absence of
valid title certificates; and (iii) subletting by lessors.
Non-registration of Lease Agreements
As of the Latest Practicable Date, the 13 lease agreements had not been registered with
relevant authorities. As advised by our PRC Legal Advisor, the non-registration of lease
agreements will not affect the validity of the lease agreement and will not lead to any risks of
relocation from those leased properties, but the relevant local housing administrative
authorities can require us to complete registrations within a specified timeframe and we may
be subject to a fine of between RMB1,000 and RMB10,000 for any delay in making registration
for each of these lease agreements. During the Track Record Period and up to the Latest
Practicable Date, we had not been required by the relevant local housing administrative
authorities to complete the registrations, nor been penalized or fined by the relevant
authorities. The aggregate amount of maximum fine will be approximately RMB120,000,
which our Directors believe will not have any material adverse impact on our business and
results of operations.
The reasons behind the failure to register the above lease agreements are beyond our
control because, among other things, the lessors’ willingness to cooperate in the registration
process and provision of relevant documents for registration is necessary. To minimize the
potential negative impact of the above lack of registration of lease agreements, we will
continue to maintain regular communications with such lessors seeking their cooperation to
complete a late registration of the relevant leases. In addition, we will seek the landlord’s
cooperation to register a lease agreement before signing in order to ensure compliance with
applicable PRC laws and regulations in the future. We will actively liaise with the respective
lessors to complete the registration of all such lease agreements, if possible.
See “Risk Factors—Risks Relating to Our Business and Industry—Failure to renew our
leases or to comply with PRC property-related laws and regulations regarding certain of our
leased properties could adversely affect our business.”
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Absence of V alid Title Certificates
As of the Latest Practicable Date, the lessors of ten properties had provided their title
certificates of the relevant properties, while the lessors of the remaining three properties had
not provided any title certificates.
We believe that the reasons that the lessors failed to provide us with the relevant real
estate ownership certificates or proof of authorizations are beyond our control. As advised by
our PRC Legal Advisor, without valid real estate ownership certificates or proof of
authorizations from the property owners, our use of these leased properties may not be valid.
In addition, if the lessors do not have the requisite rights to lease these properties, we may be
required to vacate these leased properties and relocate. As advised by our PRC Legal Advisor,
in case any such lease is deemed void and we are required to relocate, we are entitled to
demand the applicable lessor to return prepaid rent and indemnify us for damages caused by
the title defect. In the unlikely event that we are required to relocate due to such title defects,
we believe we will be able to easily find alternative properties. In the event that we are required
to relocate from the leased properties, we expect that the relocation cost will be less than
RMB0.4 million.
Our Directors believe that the likelihood of our business and results of operations being
materially and adversely affected by these title defects is remote, considering that: (i) as
advised by our PRC Legal Advisor, the owners of these properties or the subdistrict offices
where the properties are located have provided written confirmations that the properties had
undergone fire safety registration or have passed quality and safety appraisals upon completion
and were not illegal structures; (ii) during the Track Record Period and up to the Latest
Practicable Date, we had not been required to cease operations due to the lessors’ right to lease
being challenged by a third-party rights holder; and (iii) we maintain a pool of site candidates,
and we believe that we would be able to relocate to a different site without materially and
adversely affecting our business and results of operations should we be required to do so. See
“Risk Factors—Risks Relating to Our Business and Industry—Failure to renew our leases or
to comply with PRC property-related laws and regulations regarding certain of our leased
properties could adversely affect our business.”
Subletting by Lessors
With respect to one of our leased properties, the relevant lessor did not provide the
property owner’s consent to sublet the property to us. The leased property was used as offices.
As advised by our PRC Legal Advisor, if the lessor of the leased properties does not have the
requisite rights to lease the relevant property, the relevant lease may be deemed invalid, and
we may be forced to vacate the relevant property and relocate our offices.
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Our Directors believe that the likelihood of our business and results of operations being
materially and adversely affected by subletting is remote, considering that: (i) the total gross
floor area of the properties affected only accounts for a small percentage of that of our total
leased properties; (ii) we maintain a pool of site candidates, and we believe that we would be
able to relocate to a different site without materially affecting our business should we be
required to do so; and (iii) our offices in other locations can adequately support our business
operations of the offices at the properties affected.
The reasons behind the lessors’ failure to provide us with the valid title certificates and
documents evidencing rights to sublease are beyond our control, such as such lessors failed to
obtain the relevant title certificates.
As the lessors failed to provide us with the valid title certificates and documents
evidencing rights to sublease, the relevant leases may not be valid and there are risks that we
may not be able to continue to use such properties, according to our PRC Legal Advisor. As
of the date of this prospectus, we are not aware of any challenges being made by a third party
or government authority to the titles of any of these leased properties that might affect our
current occupation. According to relevant laws and regulations and as confirmed by our PRC
legal advisor, there are no rules or regulations requiring the lessee to obtain the ownership
certificate or imposing regulatory punishment on the lessee for not doing so. Accordingly, our
PRC legal advisor is of the view that we are not subject to any material administrative penalty
for any of the title defects in the leased properties. Moreover, according to relevant PRC laws
and regulations and the lease agreements, if the lessor fails to perform the contract, the lessee
is entitled to seek reimbursement of any rent paid in advance and hold the lessor accountable
for any breach of contract.
To minimize the potential negative impact of the absence of valid title certificates and
documents evidencing rights to sublease on our operations, we will communicate with such
lessors regarding the progress of their rectification of the title defects to the extent feasible. In
addition, we have established internal guidelines and enhanced our internal control procedures
to improve our evaluation of new leased properties from a compliance perspective. We will
also consult our external legal advisors for reviewing the title certificates and other documents
of our new leased properties in the future in order to ensure compliance with applicable PRC
laws and regulations.
LICENSES, APPROV ALS AND PERMITS
We are required to obtain various licenses, permits, approvals and certificates for our
business. As advised by our PRC Legal Advisor, we have obtained the requisite licenses,
permits, approvals and certificates from applicable authorities for our operations, and such
licenses, permits, approvals and certificates were valid and effective as of the Latest
Practicable Date.
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LEGAL PROCEEDINGS AND COMPLIANCE
Legal Proceedings
We may from time to time become a party to various litigation, arbitration or
administrative proceedings arising in the ordinary course of our business. See “Risk Factors—
Risks Relating to Our Business and Industry—We may be involved in legal proceedings and
disputes, which could materially and adversely affect our reputation, business, results of
operations and financial condition.”
During the Track Record Period and up to the Latest Practicable Date, we had not been
and were not a party to any material legal, arbitral or administrative proceedings, and we were
not aware of any pending or threatened legal, arbitral or administrative proceedings against us
or our Directors that could, individually or in the aggregate, have a material adverse effect on
our business, financial condition and results of operations.
Compliance
During the Track Record Period and up to the Latest Practicable Date, we had not been
and were not involved in any material noncompliance incidents that have led to fines,
enforcement actions or other penalties that could, individually or in the aggregate, have a
material adverse effect on our business, financial condition and results of operations.
RISK MANAGEMENT AND INTERNAL CONTROL
We have developed and implemented comprehensive risk management and internal
control policies that encompass various aspects of our business operations to supervise and
address a spectrum of operational, financial, legal and market risks that may be or have been
identified. These extensive risk management and internal control measures are supported by
our specific monitoring and reporting procedures and systems as delineated in the relevant
policies. Our Board assumes the responsibilities for overseeing our overall risk management,
ensuring that our risk management policies are not only implemented but also regularly
reviewed and upgraded to reflect the evolving business landscape.
Furthermore, we established a dedicated risk management and internal control team
which is responsible for formulating risk management and internal control policies, conducting
internal audit, providing internal control consultation and guiding any necessary rectification
measures.
Business Operational Risk Management
We have established a series of internal procedures to manage business operational risks
including risks related to incomplete or problematic internal processes, personnel mistakes, IT
system failures and external events. We take a comprehensive approach to operational risk
management and implement a decentralized mechanism with detailed responsibilities, clear
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rewards and penalty systems. Our business operations, finance, IT and human resources
departments are collectively responsible for ensuring that our business operations comply and
conform with internal procedures. On the occurrence of a major adverse event, the matter will
be escalated to our senior management and the Board of Directors may take appropriate
measures. Through effective business operational risk management, we expect to control
operational risks within a reasonable range by identifying, measuring, monitoring and
containing operational risks to reduce potential losses.
Financial Reporting Risk Management
We have in place a set of accounting policies in connection with our financial reporting
risk management. We have various procedures in place to implement accounting policies, and
our financial department reviews our management accounts based on such procedures. We also
provide trainings from time to time to our employees in the finance department to ensure that
they understand our financial management and accounting policies and implement them in our
daily operations.
Internal Control Risk Management
We have designed and adopted strict internal procedures to ensure the compliance of our
business operations with the relevant rules and regulations. Our compliance team works closely
with our finance and business departments to: (i) perform risk assessments and advise on risk
management strategies; (ii) improve business process efficiency and monitor internal control
effectiveness; and (iii) promote risk awareness throughout our Company. We maintain internal
procedures to ensure that we have obtained all material requisite licenses, permits and
approvals for our business operations, and our internal control team reviews and monitors the
status and effectiveness of those licenses and approvals. Our compliance team works with
relevant business departments to obtain requisite governmental approvals or consents for filing
with relevant government authorities.
Human Resources Risk Management
We provide regular and specialized training tailored to the needs of our employees in
different departments. Through this training, we ensure that our staff’s skill sets remain up to
date and enable them to discover and meet our customers’ needs. We have in place an employee
handbook approved by our management and distributed to all our employees, which contains
internal rules and guidelines regarding best commercial practice, work ethics, fraud prevention
mechanism, negligence and corruption.
We also have in place a code of business conduct and ethics, and an anti-bribery and
corruption policy approved by our board of directors, providing our employees with the best
commercial practice and work ethics as well as our anti-bribery guidance and measures. We
make our internal reporting channel open and available to our staff for any wrongdoing or
misconduct. Reported incidents and persons will be investigated and appropriate measures will
be taken in response to the findings. Further, we have implemented policies to avoid any
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potential conflicts of interest between our Group and our employees. Our employees are not
permitted to take concurrent employment, unless they have obtained prior written approval
from the relevant supervisor for engaging in or taking up, whether directly or indirectly, any
outside business/employment with reward or any outside business/employment during office
hours irrespective of whether there is any reward. We will only permit our employees to take
outside business/employment if such business/employment does not directly/indirectly
compete with our business.
Audit Committee Experience and Qualification and Board Oversight
We have established an audit committee to monitor the implementation of our risk
management policies across our Company on an ongoing basis to ensure that our internal
control system is effective in identifying, managing and mitigating risks involved in our
business operations. The audit committee consists of three members, namely Dr. Xiang Y ang,
Mr. Tan Kaiguo and Dr. Tan Mingkui, all being independent non-executive Directors. For the
professional qualifications and experience of the members of our audit committee, see
“Directors, Supervisors and Senior Management—Board Committees.”
We also maintain an internal audit department that is responsible for reviewing the
effectiveness of internal controls and reporting to the audit committee on any issues identified.
Our internal audit department holds meetings with the management from time to time to
discuss any internal control issues we face and the corresponding measures.
A W ARDS AND RECOGNITIONS
We have received various awards and recognitions in respect of our technologies and
solutions. The following table sets out major awards and recognitions we received during the
Track Record Period:
Y ear Name of award or recognition Awarding Authority
2023 /H1118/H11182023 China Auto Parts Industry Award
in Mass Production (ཕ৐ᆤඎ
ପᎴӸᆤ)
Auto Business Review ( ӛԓਠุ൙ሞ)
2023 /H1118/H1118Supplier Innovation Award in the
Integrated Safety Category
ZF Group
2023 /H1118/H1118Top 100 High-Growth Enterprises in
the Greater Bay Area in 2023 (2023
Άุ100੶)
GuangDong Academy of Greater Bay
Studies (Ӻ৫)
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Y ear Name of award or recognition Awarding Authority
2023 /H1118/H1118National-level Specialized, Special and
New Enterprise (ॴਖ਼ၚतอʃ
̶ɛΆุ)
Ministry of Industry and Information
Technology of the PRC ( ʕശɛ͏΍
ʷ௅)
2023 /H1118/H1118National High-Tech Enterprise (৷
อҦஔΆุ)
Shenzhen Science and Technology
Innovation Commission (Ҧ
ึ), Shenzhen Finance
Bureau (҅), Shenzhen
Taxation Service, State Taxation
Administration (೼ਕᐼ҅ଉέ̹
೼ਕ҅)
2023 /H1118/H11182023 China’s Top 100 New Automotive
Supply Chains (2023 ʕ਷ӛԓอԶᏐ
ᗡϵ੶)
Fifth Jinji Award of Gasgoo ( ႊ˰ӛԓ
፨ᆤ)
2022 /H1118/H1118Hurun China Cheetahs in mid-2022
(2022ᆗʕ਷ᓳোΆุ)
Hurun Research Institute (Ӻ৫)
2022 /H1118/H1118High Growth Enterprise of the Y ear ( ϋ
Άุ)
The Securities Times (జ)
2021 /H1118/H1118Best Automotive Solution ( ௰Գӛԓ༆
ࣩ)
Edge AI and Vision Alliance
2021 /H1118/H1118Guangdong Provincial Autonomous
Driving Big Data Engineering
Technology Research Center (޲؇
Ӻʕː)
Department of Science and Technology
of Guangdong Province (ኪ
Ҧஔᝂ)
2021 /H1118/H1118100 Technology Pioneers of 2021 World Economic Forum
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DIRECTORS
Our Board consists of nine Directors, including four executive Directors, two non-
executive Directors and three independent non-executive Directors.
Name Age Position
Date of
appointment as
Director
Timing of
joining our
Group
Principal roles and
responsibilities
Executive Directors
Liu Guoqing
(ᄎ਷૶) /H1118/H1118/H1118/H1118/H1118
37 Co-founder, chairman of
the Board, executive
Director, general
manager
December 10,
2014
December 2014 Overseeing the overall
operation plan and
objectives, strategy
development and
technical research
direction, and
product
development,
production and
layout of our Group
Y ang Guang
(เᄿ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
35 Co-founder, executive
Director, deputy
general manager
April 11, 2016 December 2014 Overseeing the
intelligent driving
solutions business,
production,
manufacturing,
quality control and
compliance affairs of
our Group
Zhou Xiang
(մജ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
37 Co-founder, executive
Director, deputy
general manager
April 11, 2016 December 2014 Overseeing the vehicle
infrastructure
cooperative system
business and the
operations and
management of
subsidiaries of our
Group
Wang Qicheng
(ˮ઼೻) /H1118/H1118/H1118/H1118/H1118
40 Co-founder, executive
Director, deputy
general manager
January 8, 2019 December 2014 Overseeing the
strategic planning
and overseas
business
development of our
Group
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Name Age Position
Date of
appointment as
Director
Timing of
joining our
Group
Principal roles and
responsibilities
Non-executive Directors
Bi Lei ( ଭᓍ) /H1118/H1118/H1118/H111847 Non-executive Director March 10, 2019 March 2019 Providing advice to the
Board
Liu Yiran
(್) /H1118/H1118/H1118/H1118/H1118
35 Non-executive Director December 27,
2021
December 2021 Providing advice to the
Board
Independent Non-executive Directors
Xiang Y ang
(ධජ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
56 Independent non-
executive Director
April 17, 2023 April 2023 Providing independent
judgment to the
Board
Tan Kaiguo
(ᗈක਷) /H1118/H1118/H1118/H1118/H1118
50 Independent non-
executive Director
April 17, 2023 April 2023 Providing independent
judgment to the
Board
Tan Mingkui
(۲׼)H1118/H1118/H1118/H1118/H1118
41 Independent non-
executive Director
April 17, 2023 April 2023 Providing independent
judgment to the
Board
Note:
(1) Other than their roles as Directors, there are no family or other relationships among any of the Directors or
with the Supervisors or other senior management members of our Company.
Executive Directors
Dr. Liu Guoqing ( ᄎ਷૶), aged 37, is our co-founder, chairman of the Board, executive
Director, and general manager of our Company. He was appointed as a Director of our
Company on December 10, 2014, and was redesignated as an executive Director on May 13,
2024. He is primarily responsible for overseeing the overall operation plan and objectives,
strategy development and technical research direction, and product development, production
and layout of our Group.
Dr. Liu has approximately 12 years of experience in management, technology and
industry of solutions for automotive intelligence. Since starting his career in 2012, Dr. Liu has
consistently worked in the field of automation. He has been holding directorship and
management role in several subsidiaries of our Group, including serving as the executive
director of Hubei Y oujia since December 2017, the executive director of Nanjing Y oujia since
February 2018, the executive director and general manager of Chongqing Y oujia since March
2019, the executive director and general manager of Ruijian Zhixing since November 2022,
and the executive director and general manager of Guangzhou Y oujia since May 2023. During
his tenure in his current position as the general manager of our Company, he has led the
research and development of several major projects for our Company. Dr. Liu has
systematically mastered fundamental theoretical knowledge and specialised technical
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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knowledge in the field of automotive intelligence solutions, possesses the ability to stay at the
forefront of technological advancements, and is proficient in applying industry standards and
procedures. He has achieved important outcomes in his area of expertise. Dr. Liu also has a
certain level of technical research ability, capable of writing research findings or technical
reports aimed at solving complex technical problems. He has played a significant role in
mentoring and cultivating young and middle-aged academic and technical talents and is able
to guide the work and studies of engineers or postgraduate students. Prior to founding our
Group, Dr. Liu was a project officer at the School of Computer Engineering of the Nanyang
Technological University in Singapore from July 2012 to July 2014, and served as general
manager and chief engineer at Nanjing Cherui Information Technology Co., Ltd. (ڦ
ʮ̡)( “ Nanjing Cherui ”) from July 2013 to November 2014. Nanjing Cherui was
a start-up enterprise principally engaged in research and development, and had no substantive
business operations at that time.
Dr. Liu obtained his bachelor’s degree in mathematics from Huazhong University of
Science and Technology (Ҧɽኪ) in the PRC in June 2008, his bachelor’s degree in
management from Wuhan University (ဏɽኪ) in the PRC in June 2008, and his doctorate
degree in computer science from Nanyang Technological University in Singapore in May 2013.
Dr. Liu was recognized as 30X30 Entrepreneur Leader (30X30 ௴ุჯங) by the Hurun
Research Institute in September 2017, in the 30 Under 30 Asia List by Forbes in 2017, as
Nanjing Leading Technological Talent (ԯ̹৷ᄴϣ௴ุɛʑ) by the Nanjing Talent Working
Group (ԯ̹ɛʑʈЪჯኬʃଡ଼) in December 2019, and as Shenzhen High-level Talent ( ଉ
έ̹৷ᄴϣɛʑ) by the Shenzhen Municipal Human Resources and Social Security Bureau ( ଉ
ღ҅) in September 2020. In October 2016, he was awarded the China
Artificial Intelligence Technology Innovation Leader Award (ᆤ)
from the China Center for Information Industry Development (Ӻ৫)
under the MIIT.
Dr. Liu has been deeply involved in the research and development of automotive
intelligence solutions. Dr. Liu is the leader of several Shenzhen municipal projects, including
but not limited to the Shenzhen Peacock Project ( ଉέ̹ˆ௚ධͦ) and the technological
projects of the Shenzhen Science and Technology Innovation Commission (Ҧ௴อ։
ึ). Dr. Liu has published several papers in the journals including AAAI Conference on
Artificial Intelligence, Conference on Neural Information Processing Systems (ஈଣ
ӻ୕ɽึ) (NeurIPS). Dr. Liu is one of the primary drafters of the national standard for
integrated circuit — test method for CMOS image sensors ( ණϓཥ༩CMOS ྡ྅ช಻ኜ಻༊˙
جGB/T43063-2023), which was promulgated by the SAMR and the National
Standardization Administration (ึ) and came into effect in January 2024.
As at the Latest Practicable Date, Dr. Liu owned 178 patents in the field of automotive
intelligence solutions.
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Mr. Y ang Guang ( เᄿ), aged 35, is our co-founder, executive Director, and deputy
general manager of our Company. He was appointed as a Director of our Company on April 11,
2016, and was redesignated as an executive Director on May 13, 2024. He is primarily
responsible for overseeing the intelligent driving solutions business, production,
manufacturing, quality control and compliance affairs of our Group.
Mr. Y ang has approximately 14 years of experience in management and technology. He
has been holding directorship and management role in our subsidiaries, including serving as a
director of Jiangsu Y uanshi since June 2022, and the director and general manager of Wuhan
Y oujia since August 2022 where he contributed to the establishment of our Company’s
software, hardware and algorithm teams. He led the teams to develop software algorithms for
automotive intelligence solutions, achieving hardware integration and mass production
delivery. Mr. Y ang demonstrated the technical and managerial ability to drive products from
concept to mass production and to scale algorithms from prototypes to large-scale production
products. He played a crucial role in building the research and development team and leading
technical development. He has an in-depth understanding of the hardware manufacturing and
quality systems for automotive intelligence solutions. He established the relevant
manufacturing and quality capabilities for our Company, earning recognition from numerous
automotive OEM customers. Prior to founding our Group, Mr. Y ang served as a deputy general
manager and engineer at Nanjing Cherui from July 2013 to November 2014 and worked in
Tencent Holdings Limited (a company listed on the Hong Kong Stock Exchange (stock code:
700)) from July 2010 to June 2013. He has systematically mastered the foundational theories
and specialised technical knowledge required for developing complex software systems and
possesses the capability to develop cutting-edge software systems. Since August 2021, Mr.
Y ang has served as a director of the Guangdong Automotive Big Data Engineering Technology
Research Center (Ӻʕː) of which one of the supporting
units is our Company.
Mr. Y ang obtained his bachelor’s degree in electrical engineering and automation from
Huazhong University of Science and Technology (Ҧɽኪ) in the PRC in June 2010.
Mr. Y ang was recognized as Shenzhen Leading Talent (ɛʑ) by Shenzhen
Municipal Human Resources and Social Security Bureau (ღ҅)i n
November 2021 and has served as a director of Guangdong Engineering Center (ʈ೻
Ӻʕː) at Department of Science and Technology of Guangdong Province (ኪҦஔ
ᝂ) since 2021. As of the Latest Practicable Date, Mr. Y ang owned 147 patents in the field of
automotive intelligence solutions.
Mr. Zhou Xiang ( մജ), aged 37, is our co-founder, executive Director, and deputy
general manager of our Company. He was appointed as a Director of our Company on April 11,
2016, and was redesignated as an executive Director on May 13, 2024. He is primarily
responsible for overseeing the vehicle infrastructure cooperative system business and the
operations and management of subsidiaries of our Group.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Zhou has approximately 11 years of experience in management and technology. He
has been holding directorship and management role in several subsidiaries of our Group,
including serving as the director and general manager of Hunan Y ouxiang since December
2020, and the chairman of the board of directors and general manager of Jiangsu Y uanshi since
June 2022. His expertise in computer science and engineering has provided him with a solid
technical foundation. As our Company has grown and developed, Mr. Zhou has continually
gained experience in vehicle infrastructure cooperative system research, allowing him to gain
a deep understanding of industry development trends and technological frontiers. During the
daily management, Mr. Zhou has shown excellent management and innovation awareness. As
the primary responsible person of our Company’s vehicle infrastructure cooperative system
business, he has successfully led several important research and development projects,
bringing significant economic benefits to our Company. Prior to founding our group, Mr. Zhou
served as a software engineer at R&D center of Trend Micro Technology (China) Co., Ltd.
Nanjing Branch (Ҧ(ʕ਷)ԯʱʮ̡) from July 2011 and May 2013, and as
a deputy general manager and engineer at Nanjing Cherui from July 2013 to November 2014.
Since October 2024, Mr. Zhou has served as the deputy secretary-general of the automotive
working committee of the China Highway & Transportation Society ( ʕ਷ʮ༩՘ึІਗቷትʈ
ึ). Mr. Zhou participated in the drafting of the group standard, namely the Framework
for the Construction of Smart Highways in Ordinary Countries and Provinces (฀ᇞ
ݖ࣪which was issued by the China ITS Industry Alliance ( ʕ਷౽ঐʹஷପุ
ᑌຑ) and took effect in March 2022. As of the Latest Practicable Date, Mr. Zhou owned nine
patents in the field of automotive intelligence solutions.
Mr. Zhou obtained his master’s degree in computer software and theory from the
Southeast University (ɽኪ) in the PRC in March 2011.
Mr. Wang Qicheng ( ˮ઼೻), aged 40, is our co-founder, executive Director, and deputy
general manager of our Company. He was appointed as a Director of our Company on January
8, 2019, and was redesignated as an executive Director on May 13, 2024. He is primarily
responsible for overseeing the strategic planning and overseas business development of our
Group.
Mr. Wang has over 10 years of experience in management, technology and industry of
solutions for automotive intelligence. He has been holding directorship and management role
in our subsidiaries, including serving as the executive director of Shanghai Y ouxing, since
September 2020 and a director of Minsight SG since November 2023. As the head of our
overseas business, Mr. Wang integrates automotive intelligence technologies into the strategic
planning for international business expansion, promoting our Company’s international
cooperation and project implementation in the field of automotive intelligence solutions. He
excels at collaborating with leading international intelligent driving enterprises, introducing
advanced technologies and solutions, and securing a competitive edge for our Company in the
global market. In addition, Mr. Wang’s expertise and experience enable him to deeply
understand industry development trends and technological innovations. By participating in the
implementation and management of multiple automotive intelligence projects, he has
accumulated a wealth of practical experience and mastered the core principles and application
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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scenarios of automotive intelligence technologies. Prior to founding our group, Mr. Wang
previously served at Beijing Guoxin Communication Systems Co., Ltd. (ஷৃӻ୕Ϟ
ʮ̡) from July 2007 to June 2008, and as a deputy general manager and engineer at Nanjing
Cherui from July 2013 to November 2014. As of the Latest Practicable Date, Mr. Wang owned
125 patents in the field of automotive intelligence solutions.
Mr. Wang obtained his bachelor’s degree in electronic engineering from Tsinghua
University ( ૶ശɽኪ) in the PRC in July 2007.
Non-executive Directors
Mr. Bi Lei ( ଭᓍ), aged 47, was appointed as a Director of our Company on March 10,
2019, and was redesignated as a non-executive Director on May 13, 2024.
Mr. Bi has extensive experience in communication engineering and management. Mr. Bi
previously served as the general manager at Zhonghuan Satellite Navigation Communication
Co Ltd (ʮ̡) from October 2011 to August 2013 and has served as the
deputy general manager and director of NavInfo Co., Ltd (ʮ̡)( a
company listed on the Shenzhen Stock Exchange (stock code: 002405)) (“ NavInfo ”) since
August 2013.
Mr. Bi obtained his bachelor’s degree in communication engineering from
Communication University of China ( ʕ਷ෂదɽኪ) (previously known as Beijing
Broadcasting Institute ( ̏ԯᄿᅧኪ৫)), in the PRC in July 1999.
Ms. Liu Yiran (್), aged 35, was appointed as a Director of our Company on
December 27, 2021, and was redesignated as a non-executive Director on May 13, 2024.
Ms. Liu is a Director nominated by Guokai Zhizao, a substantial Shareholder holding over
5% of the share capital of the Company. Guokai Zhizao is a national-level fund principally
engaged in the equity investment in industries including the new information technology and
electrical equipment. Ms. Liu previously served at Ernst & Y oung Hua Ming LLP (׼
ה(౷ஷΥྫ)) and CITIC Trust Co., Ltd. (ப΂ʮ̡). Since
2017, Ms. Liu has served as an investment manager and a senior investment manager at China
Development Bank Capital Co., Ltd. (ப΂ʮ̡). Since 2019, she has also acted
as a senior investment manager at the Guokai Zhizao, overseeing the overall investment in the
automotive industry. Ms. Liu has extensive investment experience in the technology industry,
enabling her to provide effective advice on the strategic direction of the Company.
Ms. Liu obtained her bachelor’s degree in accounting from the University of Sydney in
Australia in June 2012.
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Independent non-executive Directors
Dr. Xiang Y ang ( ධජ), aged 56, was appointed as an independent non-executive Director
of our Company on April 17, 2023.
Dr. Xiang has approximately 21 years of experience in mathematics. Since July 2003, Dr.
Xiang has served as the assistant professor, associate professor, and is currently a professor at
Department of Mathematics at The Hong Kong University of Science and Technology.
Dr. Xiang was a research associate at Princeton University in the U.S. from October 2001 to
September 2003. In addition, Dr. Xiang currently serves as the president of the East Asia
Section of the Society for Industrial and Applied Mathematics (ԭʈุၾᏐ͜ᅰኪึ).
Dr. Xiang obtained his bachelor’s degree in applied mathematics from Tsinghua
University ( ૶ശɽኪ) in the PRC in July 1991, his master’s degree in applied mathematics
from Tsinghua University ( ૶ശɽኪ) in the PRC in March 1995, and his Ph.D. degree in
mathematics from New Y ork University in the U.S. in September 2001.
Mr. Tan Kaiguo ( ᗈක਷), aged 50, was appointed as an independent non-executive
Director of our Company on April 17, 2023.
Mr. Tan has approximately 28 years of experience in auditing and financial management.
Mr. Tan has served as the deputy general manager and financial manager of Ningbo Future
Houseware Co., Ltd. (ʮ̡) (a company listed on the National Equities
Exchange and Quotations (stock code: 834282)) since May 2023. He previously worked in
BDO China SHU LUN PAN Certified Public Accountants LLP (ה(౷ஷ
Υྫ)) from June 2000 to June 2001, served as a project manager at the investment banking
department at Shenyin & Wanguo Securities Co., Ltd. (ʮ̡) (one of the
predecessors of Shenwan Hongyuan Group Co., Ltd. (ʮ̡), a company
listed on the Shenzhen Stock Exchange (stock code: 000166) and the Stock Exchange (stock
code: 6806)) from June 2001 to January 2003, worked in Deloitte Touche Tohmatsu Certified
Public Accountants LLP (ה(౷ஷΥྫ)) from January 2003 to August
2007, served as the financial director at Goldbond Group Holdings Limited (Ϟ
ʮ̡) from September 2007 to December 2012, served as the chief financial officer at
Zhongjing Industrial (Group) Co., Ltd. ( ʕ᎑ྼุ(ණྠ)ʮ̡) from January 2013 to April
2021, worked in Jiangsu Asia Electronics Technology Co., Ltd. (ʮ̡) from
May 2021 to April 2022, and served as the deputy general manager and chief financial officer
at Shandong Golddafeng Machinery Co., Ltd. (ʮ̡) from May 2022 to
April 2023.
Mr. Tan obtained his bachelor’s degree in auditing from the East China University of
Technology (ʈุɽኪ) (one of the predecessors of the University of Shanghai for Science
and Technology ( ɪऎଣʈɽኪ)) in the PRC in July 1996, and Master of Business
Administration (MBA) from China Europe International Business School ( ʕᆄ਷ყʈਠኪ৫)
in the PRC in August 2014. Mr. Tan was qualified as a certified public accountant
(non-practising) by the Shanghai Institute of Certified Public Accountants (ࢪࠇ
՘ึ) in December 2009.
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Dr. Tan Mingkui (۲׼)aged 41, was appointed as an independent non-executive
Director of our Company on April 17, 2023.
Dr. Tan has approximately 10 years of experience in computer science. Dr. Tan served as
a senior research associate on computer vision in the School of Computer Science at the
University of Adelaide in Australia from June 2014 to August 2016, and has served as a
professor and director of the computing center in the School of Software Engineering at South
China University of Technology (ଣʈɽኪ) since September 2016.
Dr. Tan obtained his bachelor’s degree in environmental science and engineering from
Hunan University (ɽኪ) in the PRC in June 2006, his master’s degree in control science
and engineering from Hunan University (ɽኪ) in the PRC in June 2009, and his Ph.D.
degree in computer science from Nanyang Technological University in Singapore in October
2014.
Save as disclosed above in this section, none of our Directors held any directorship in any
other listed companies in the three years immediately prior to the Latest Practicable Date. Save
as disclosed above, to the best knowledge, information and belief of our Company having made
all reasonable enquiries, there is no other information relating to our Directors that is required
to be disclosed pursuant to Rule 13.51(2) of the Listing Rules or other material matter with
respect to the appointment of our Directors that need to be brought to the attention of our
Shareholders.
SUPERVISORS
Our Supervisory Committee consists of three Supervisors. The following table provides
certain information of our Supervisors:
Name Age Position
Date of
appointment as
Supervisor
Timing of
joining our
Group
Principal roles and
responsibilities
Liao Diguang
(ᄿ) /H1118/H1118/H1118/H1118/H1118
39 Chairman of the
Supervisory
Committee,
Supervisor
May 31, 2021 June 2017 Overseeing the
operations and
financial activities of
our Group
Ao Zhengguang
(Έ) /H1118/H1118/H1118/H1118/H1118
38 Supervisor April 17, 2023 April 2015 Overseeing the
operations and
financial activities of
our Group
Wan Hao (ख) /H1118/H111832 Supervisor September 18,
2020
January 2015 Overseeing the
operations and
financial activities of
our Group
Note:
(1) Other than their roles as Supervisors, there are no family or other relationships among any of the Supervisors
or with the Directors or other senior management members of our Company.
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Mr. Liao Diguang (ᄿ), aged 39, was appointed as a Supervisor of our Company on
May 31, 2021. Mr. Liao joined our Group in July 2017 and is currently a project manager of
the research and development center of our Company.
Mr. Liao is experienced in technology engineering including serving as technology
supporting engineer, technology department manager, and product manager at Beijing
Timecloud Technology Co., Ltd. (ʮ̡).
Mr. Liao obtained his bachelor’s degree in communication engineering from Wuhan
University of Technology (ဏଣʈɽኪ) in the PRC in June 2007.
Mr. Ao Zhengguang (Έ), aged 38, was appointed as a Supervisor of our Company
on April 17, 2023. Mr. Ao joined our Group in April 2015, and is currently a algorithm engineer
at the research and development center of our Company.
Prior to joining our Group, Mr. Ao worked in Tencent Holdings Limited (a company listed
on the Hong Kong Stock Exchange (stock code: 700)) from April 2010 to April 2015.
Mr. Ao obtained his bachelor’s degree in computer science and technology from China
University of Geosciences ( ʕ਷ήሯɽኪ) in the PRC in June 2007, and his master’s degree
in pattern recognition and intelligent systems from Huazhong University of Science and
Technology (Ҧɽኪ) in the PRC in March 2010. He was recognized as an intermediate
level software designer (ࢪࠇ(ʕॴ)) by the Hubei Professional Titles Reform Work
Group (ʈЪჯኬʃଡ଼) in November 2006.
Mr. Wan Hao (ख), aged 32, was appointed as a Supervisor of our Company on
September 18, 2020. Mr. Wan joined our Group in January 2015 and is currently the design
director of our Company.
Prior to joining our Group, Mr. Wan served as a designer at Zhuhai Kingsoft Office
Software Co., Ltd. (ʮ̡), a subsidiary of Beijing Kingsoft Office
Software, Inc. (ʮ̡) (a company listed on the Shanghai Stock
Exchange (stock code: 688111)), from January 2014 to December 2014.
Mr. Wan obtained his bachelor’s degree in industrial design from Jiangxi University of
Science and Technology ( ϪГଣʈɽኪ) in the PRC in July 2014.
Save as disclosed above in this section, none of our Supervisors held any directorship in
any other listed companies in the three years immediately prior to the Latest Practicable Date.
Save as disclosed above, to the best knowledge, information and belief of our Company having
made all reasonable enquiries, there is no other information relating to our Supervisors that is
required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules or other material matter
with respect to the appointment of our Supervisors that need to be brought to the attention of
our Shareholders.
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SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management of our business.
The following table provides certain information about members of our senior management:
Name Age Position
Date of
appointment as
senior
management
Timing of
joining our
Group
Principal roles and
responsibilities
Liu Guoqing
(ᄎ਷૶) /H1118/H1118/H1118/H1118/H1118
37 Co-founder, chairman of
the Board, executive
Director, general
manager
December 10,
2014
December 2014 Overseeing the overall
operation plan and
objectives, business
strategies and
technical research
direction, and
product
development,
production and
layout of our Group
Y ang Guang
(เᄿ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
35 Co-founder, executive
Director, deputy
general manager
December 10,
2014
December 2014 Overseeing the
intelligent driving
business, production,
manufacturing,
quality control and
compliance affairs of
our Group
Zhou Xiang
(մജ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
37 Co-founder, executive
Director, deputy
general manager
December 10,
2014
December 2014 Overseeing the vehicle
infrastructure
cooperative system
business and the
operations and
management of
subsidiaries of our
Group
Wang Qicheng
(ˮ઼೻) /H1118/H1118/H1118/H1118/H1118
40 Co-founder, executive
Director, deputy
general manager
December 10,
2014
December 2014 Overseeing the
strategic planning
and overseas
business
development of our
Group
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Name Age Position
Date of
appointment as
senior
management
Timing of
joining our
Group
Principal roles and
responsibilities
Zheng Wei
(ቍਃ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
41 Deputy general manager June 7, 2023 February 2017 Overseeing the
algorithm research
and development and
technology related
affairs of our Group
Y ang Yihong
(ح)H1118/H1118/H1118/H1118/H1118
33 Deputy general manager June 7, 2023 September 2015 Overseeing sales and
intelligent cabin
affairs of our Group
Cheng Zhui
(೻৛) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
37 Deputy general manager June 7, 2023 July 2015 Overseeing the product
research and
development, supply
chain and cost
management related
affairs of our Group
W e nQ i( ၲփ) /H1118/H1118/H111842 Chief financial officer
and Board secretary
June 7, 2023 December 2020 Overseeing the
financial, taxation
and board secretarial
affairs of our Group
Note:
(1) Other than their roles as executive Directors and/or senior management members, there are no family or other
relationships among any of them or with the other Directors or Supervisors of our Company.
Dr. Liu Guoqing ( ᄎ਷૶), aged 37, is our co-founder, chairman of the Board, executive
Director, and general manager of our Company. See “—Directors—Executive Directors” for
his biographical details.
Mr. Y ang Guang ( เᄿ), aged 35, is our co-founder, executive Director, and deputy
general manager of our Company. See “—Directors—Executive Directors” for his biographical
details.
Mr. Zhou Xiang ( մജ), aged 37, is our co-founder, executive Director, and deputy
general manager of our Company. See “—Directors—Executive Directors” for their
biographical details.
Mr. Wang Qicheng ( ˮ઼೻), aged 40, is our co-founder, executive Director, and deputy
general manager of our Company. See “—Directors—Executive Directors” for his biographical
details.
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Dr. Zheng Wei ( ቍਃ), aged 41, is a deputy general manager of our Company. Dr. Zheng
joined our Company in February 2017, and is currently responsible for overseeing the
algorithm research and development and technology related affairs of our Group.
Dr. Zheng has approximately 11 years of experience in technology research and
development. He has served as the executive director and general manager of Y oujia Beijing
since December 2020. Prior to joining our Group, he served as a research and development
engineer at Beijing Samsung Telecommunications Technology Research Co., Ltd (ஷ
ʮ̡), a subsidiary of Samsung Electronics Co., Ltd. (ٟa
company listed on the Korea Exchange (stock code: 005930)), from July 2013 to February
2017.
Dr. Zheng obtained his bachelor’s degree in electronic engineering from Tsinghua
University ( ૶ശɽኪ) in the PRC in July 2006, and his doctorate degree in computer
application technology from the University of Chinese Academy of Sciences (ኪ৫ɽኪ)
in the PRC in July 2013. Dr. Zheng was recognized as a senior engineer (ࢪb yt h e
Shenzhen Municipal Human Resources and Social Security Bureau (ڭ
ღ҅) in July 2022.
Ms. Y ang Yihong (ح)aged 33, is a deputy general manager of our Company. Ms.
Y ang joined our Group in September 2015 and is currently responsible for overseeing sales and
intelligent cabin affairs of our Group.
Ms. Y ang has been serving as the executive director of Shanghai Y ouqu since June 2020.
Ms. Y ang obtained her bachelor’s degree in criminology and criminal justice from the
University of New South Wales in Australia in December 2012, and her master’s degree in
criminal justice from Boston University in the U.S. in January 2015.
Mr. Cheng Zhui ( ೻৛), aged 37, is a deputy general manager of our Company. Mr.
Cheng joined our Group in July 2015, and is currently responsible for overseeing product
research and development, supply chain and cost management related affairs of our Group.
Prior to joining our Group, Mr. Cheng served as a structural engineer at TP-Link
Technologies Co., Ltd. (ʮ̡) from July 2010 to July 2015.
Mr. Cheng obtained his bachelor’s degree in mechanical design, manufacturing and
automation from Huazhong University of Science and Technology (Ҧɽኪ) in the PRC
in June 2010.
Mr. Wen Qi ( ၲփ), aged 42, is the chief financial officer and Board secretary of our
Company. Mr. Wen joined our Group in December 2020, and is responsible for overseeing the
financial, taxation and board secretarial affairs of our Group.
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Mr. Wen has approximately 20 years of experience in accounting and finance. Mr. Wen
served as an auditor at PricewaterhouseCoopers Zhong Tian LLP (ה
(౷ஷΥྫ)) from June 2004 to August 2010, the chief financial officer at Shanghai
Fanwen Industrial Development Co., Ltd. (ʮ̡) from August 2010 to
September 2014, and a partner at Shanghai Compliance Enterprise Management Consulting
Co., Ltd. (ʮ̡) from September 2014 to December 2020.
Mr. Wen obtained his bachelor’s degrees in biotechnology and business management from
Nankai University (කɽኪ) in the PRC in June 2004.
JOINT COMPANY SECRETARIES
Mr. Wen Qi ( ၲփ), our chief financial officer and Board secretary, has been appointed
as a joint company secretary of our Company effective upon Listing. See “—Senior
Management” for his biographical details.
Ms. Lam Wing Chi (ٺ)has been appointed as a joint company secretary of our
Company effective upon Listing.
Ms. Lam is a senior manager of corporate services of Tricor Services Limited, a global
professional services provider specializing in integrated business, corporate and investor
services.
Ms. Lam has over ten years of experience in the corporate secretarial field. She has been
providing professional corporate services to Hong Kong listed companies as well as
multinational, private and offshore companies. Ms. Lam is a Chartered Secretary, a Chartered
Governance Professional and an Associate of both The Hong Kong Chartered Governance
Institute and The Chartered Governance Institute in the United Kingdom. Ms. Lam received her
bachelor’s degree in Accounting from the Hong Kong Shue Y an University in July 2012.
Ms. Lam currently holds company secretary positions in Canggang Railway Limited (a
company listed on the Main Board of the Stock Exchange, stock code: 2169), AIM V accine Co.,
Ltd (a company listed on the Main Board of the Stock Exchange, stock code: 6660) and
Powerwin Tech Group Limited (a company listed on the Main Board of the Stock Exchange,
stock code: 2405).
BOARD COMMITTEES
Our Company has established four Board Committees in accordance with the relevant
laws and regulations, the Articles and the corporate governance practice under the Listing
Rules, namely the Audit Committee, the Remuneration and Appraisal Committee, the
Nomination Committee, and the Strategy Committee.
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Audit Committee
We have established an Audit Committee with written terms of reference in compliance
with Rule 3.21 of the Listing Rules and the Corporate Governance Code as set out in Appendix
C1 to the Listing Rules. Our Audit Committee consists of three members, namely, Dr. Xiang
Y ang, Mr. Tan Kaiguo and Dr. Tan Mingkui. Mr. Tan Kaiguo has been appointed as the
chairperson of the Audit Committee, and is our independent non-executive Director who
possesses the appropriate professional qualification and relevant financial management
experience. The primary responsibilities of the Audit Committee are, among others, to review
the financial controls and the internal control and risk management systems of our Group,
monitor the integrity of the Company’s financial statements, review and monitor the external
auditor’s independence and objectivity and effectiveness of the audit process, and perform
other duties and responsibilities as assigned by our Board.
Remuneration and Appraisal Committee
We have established a Remuneration and Appraisal Committee with written terms of
reference in compliance with Rule 3.25 of the Listing Rules and the Corporate Governance
Code as set out in Appendix C1 to the Listing Rules. Our Remuneration and Appraisal
Committee consists of three members, namely, Dr. Xiang Y ang, Mr. Tan Kaiguo and Dr. Tan
Mingkui. Dr. Tan Mingkui has been appointed as the chairperson of the Remuneration and
Appraisal Committee. The primary responsibilities of the Remuneration and Appraisal
Committee are, among others, to establish and review the policy and structure of the
remuneration for our Directors and senior management, and make recommendations on
remuneration packages of individual executive Directors and senior management.
Nomination Committee
We have established a Nomination Committee with written terms of reference in
compliance with Rule 3.27A of the Listing Rules and the Corporate Governance Code as set
out in Appendix C1 to the Listing Rules. Our Nomination Committee consists of three
members, namely Dr. Liu Guoqing, Dr. Xiang Y ang and Dr. Tan Mingkui. Dr. Xiang Y ang has
been appointed as the chairperson of the Nomination Committee. The primary responsibilities
of the Nomination Committee are, among others, to review the Board structure, size and
composition, make recommendations to our Board on the appointment or re-appointment of
Directors, and review the Company’s board diversity policy.
Strategy Committee
We have established a Strategy Committee with written terms of reference. Our Strategy
Committee consists of three members, namely, Dr. Liu Guoqing, Mr. Y ang Guang and Dr. Tan
Mingkui. Dr. Liu Guoqing has been appointed as the chairperson of the Strategy Committee.
The primary responsibilities of the Strategy Committee are, among others, to consider, review
and make recommendation on the Company’s long-term development strategies and other
material matters that might impact our development, consider, review and make
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recommendation on material investments, financing transactions and transactions involving
our capital, assets or operations, which are required to be approved by the Board pursuant to
the Articles of Association, and perform other duties and responsibilities as assigned by our
Board.
CORPORATE GOVERNANCE
We are committed to achieving high standards of corporate governance which are crucial
to our development and safeguard the interests of our Shareholders. To accomplish this, we
intend to comply with the corporate governance requirements under the Corporate Governance
Code and Corporate Governance Report as set out in Appendix C1 to the Listing Rules after
the Listing.
Our Directors recognize the importance of incorporating elements of good corporate
governance in the management structures and internal control procedures of our Group to
achieve effective accountability. Our Company intends to comply with all code provisions in
the Corporate Governance Code as set out in Appendix C1 to the Listing Rules after the
Listing, except for Code Provision C.2.1 of the Corporate Governance Code, which provides
that the roles of chairman of the board and chief executive officer should be separate and
should not be performed by the same individual.
The roles of chairman of the Board and general manager are currently performed by Dr.
Liu Guoqing. In view of Dr. Liu’s substantial contribution to our Group since our establishment
and his extensive experience, we consider that having Dr. Liu acting as both our chairman of
the Board and general manager will provide strong and consistent leadership to our Group and
facilitate efficient execution of our business strategies. We consider it appropriate and
beneficial to our business development and prospects that Dr. Liu continues to act as both our
chairman of the Board and general manager after Listing, and therefore currently do not
propose to separate the functions of chairman of the Board and general manager. While this
would constitute a deviation from Code Provision C.2.1 of the Corporate Governance Code, the
Board believes that this structure will not impair the balance of power and authority between
the Board and the management of our Group, given that (i) there are sufficient checks and
balances in the Board, as a decision to be made by our Board requires approval by at least a
majority of our Directors, and our Board comprises three independent non-executive Directors,
which is in compliance with the requirement under the Listing Rules; (ii) Dr. Liu and the other
Directors are aware of and undertake to fulfill their fiduciary duties as Directors, which
require, among other things, that he or she acts for the benefit and in the best interests of our
Company and will make decisions for our Group accordingly; and (iii) the balance of power
and authority is ensured by the operations of the Board which comprises experienced and high
caliber individuals who meet regularly to discuss issues affecting the operations of our
Company. Moreover, the overall strategic and other key business, financial, and operational
policies of our Group are made collectively after thorough discussion at the Board and/or
senior management levels. The 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 of the Board and general manager is necessary.
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BOARD DIVERSITY POLICY
In order to enhance the effectiveness of our Board and to maintain high standard of
corporate governance, the Board will adopt a board diversity policy (the “ Board Diversity
Policy ”) with effect from Listing. The Board Diversity Policy sets out the criteria in selecting
candidates to our Board, including but not limited to gender, age, cultural and educational
background, ethnicity, professional experience, skills, knowledge and length of service. The
ultimate decision will be based on merit and contribution that the selected candidates will bring
to the Board.
Our Board currently consists of nine Directors, including four executive Director, two
non-executive Directors and three independent non-executive Directors. Our board has a broad
array of expertise across various sectors, such as overall management, technology, investment
accounting and financial management, as well as industry knowledge and experience relevant
to our business operations, which equips the Board with a rich tapestry of perspectives and
skills. We have three independent non-executive Directors with diverse background and
experience, representing one-third of the members of our Board. We have one female Director,
and target to maintain at least one female representation in the Board. We will strive to achieve
gender balance of the Board through certain measures to be implemented by our Nomination
Committee in accordance with our Board Diversity Policy. In particular, we will engage
resources in training female staff who have relevant experience in our business, and actively
identify female individuals suitably qualified to become our Board members. The collective
experience and knowledge of our Board members and our senior management members are
instrumental in fostering robust decision-making and enhancing business performance. We are
committed to adopting a consistent approach to promote diversity at all levels of our Company
from the Board to our senior management to all our employees, in order to enhance the
effectiveness of our corporate governance as a whole.
The Nomination Committee is responsible for reviewing the structure and diversity of the
Board and selecting individuals to be nominated as Directors. After the Listing, the
Nomination Committee will monitor and evaluate the implementation of the Board Diversity
Policy from time to time to ensure its continued effectiveness, and when necessary, make any
revisions that may be required and recommend any such revisions to our Board for
consideration and approval. The Nomination Committee will also include in successive annual
reports a summary of the Board Diversity Policy, including any measurable objectives set for
implementing the Board Diversity Policy and the progress on achieving these objectives.
CONFIRMATION FROM OUR DIRECTORS
Each of our Directors confirms that he or she (i) has obtained the legal advice referred
to under Rule 3.09D of the Listing Rules on May 21, 2024, respectively; and (ii) understands
his or her obligations as a director of a listed issuer on the Hong Kong Stock Exchange under
the Listing Rules.
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Save as disclosed below, each of our Directors further confirms that as of the Latest
Practicable Date, he or she did not have any interest in a business which competes or is likely
to compete, directly or indirectly, with our business, and requires disclosure under Rule 8.10
of the Listing Rules.
Since August 2013, Mr. Bi Lei has served as the deputy general manager and director of
NavInfo. As of the Latest Practicable Date, Mr. Bi held approximately 0.08% of the total issued
shares of NavInfo.
NavInfo is a company listed on the Shenzhen Stock Exchange (stock code: 002405),
which principally operates in the intelligent driving solutions industry in the PRC. Our
Directors are of the view that our Group and NavInfo are delineated from each other in terms
of their respective principal businesses and key products, and there is neither any substantial
competition between our Group and NavInfo, nor any material conflict of interests arising from
Mr. Bi’s position and interest in NavInfo for reasons, including but not limited to:
(a) NavInfo principally operates in the upstream segment of the smart mobility
solutions industry as a core component supplier, with a focus on the provision of
navigation map services, which contributed to over 50% of its total revenue in 2023
according to its 2023 annual report. On the other hand, our Group principally
operates in the midstream segment of the industry as an intelligent driving solutions
provider, offering a broad range of intelligent driving solutions and creating
intelligent driving system with a combination of sensors and algorithms; and
(b) although NavInfo also provides intelligent cabin solutions which contributed to less
than 15% of its total revenue in 2023 according to its 2023 annual report, NavInfo
focuses on the offering of navigation, infotainment and driving assistance in the
cabin, while our Group’s intelligent cabin solutions center around our DMS
solutions, which focus on monitoring driver behaviors with real-time tracking
functions, and our OMS solutions, which focus on providing smart and advanced
entertainment functions and enhancing in-cabin user experience for both drivers and
passengers.
Our Directors believe that we are capable of performing our business independently of,
and at arm’s length from, NavInfo based on the following grounds:
(i) Mr. Bi Lei, as a non-executive Director, is not and will not be involved in the daily
management and operation of our Group. In addition, other than Mr. Bi Lei, our
Directors and members of our senior management do not hold any position in
NavInfo;
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(ii) our Company has appointed three independent non-executive Directors, comprising
one-third of our Board in order to promote the interests of our Company and our
Shareholders as a whole. Where necessary, our independent non-executive Directors
may engage professional advisors at our costs for advice on matters relating to any
potential conflict of interest involving our Directors;
(iii) each of our Directors (including Mr. Bi Lei) has attended training provided by our
Hong Kong legal advisors, and is aware of his/her fiduciary duties and
responsibilities under the Listing Rules as a director, which require that he/she acts
in the best interests of our Company and our Shareholders as a whole;
(iv) the principal businesses of our Group and NavInfo are delineated from each other
as set out above; and
(v) our Company has established relevant corporate governance measures to avoid
conflicts of interest between our Group and any Director, including that a Director
shall abstain from voting and shall not be counted towards the quorum for voting on
any matters which he/she might be in conflict of interest.
Each of our independent non-executive Directors confirms (i) his independence as regards
each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules; (ii) that he has no
past or present financial or other interest in the business of the Company or its subsidiaries or
any connection with any core connected person of the Company under the Listing Rules as of
the Latest Practicable Date; and (iii) that there are no other factors that may affect his
independence at the time of his appointments.
REMUNERATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
Our Company offers our executive Directors, Supervisors and senior management
members, who are also our employees, with remuneration in the form of fees, wages, salaries,
discretionary bonuses, pension contributions, housing funds, medical insurances, other social
insurances, share-based compensation expenses and other employee benefits. Independent
non-executive Directors will receive compensation according to their duties, including serving
as members or chairpersons of the Board committees.
For each of the years ended December 31, 2021, 2022 and 2023 and six months ended
June 30, 2024, the aggregate amount of remuneration paid to our Directors and Supervisors,
including fees, salaries and other benefits, discretionary bonus, retirement benefit scheme
contributions and equity-settled share-based payments, were approximately RMB3.1 million,
RMB2.6 million, RMB3.8 million and RMB2.1 million, respectively.
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Under the arrangement currently in force, we estimate the total compensation before
taxation, including estimated share-based compensation, to be accrued to our Directors and our
Supervisors for the year ending December 31, 2024 to be approximately RMB4.2 million. The
actual remuneration of Directors and Supervisors in 2024 may be different from the expected
remuneration.
The total emoluments paid to the five highest paid individuals were approximately
RMB8.5 million, RMB10.1 million, RMB11.5 million and RMB7.1 million, for the years
ended December 31, 2021, 2022 and 2023 and six months ended June 30, 2024, respectively.
We confirmed that, during the Track Record Period, no consideration was paid by our
Company to, or receivable by, our Directors for making available directors’ services or as
termination benefits.
Save as disclosed above, no other payments have been paid, or are payable, by our
Company or any of our subsidiary to our Directors, Supervisors or the five highest paid
individuals during the Track Record Period.
For the details of the service contracts and appointment letters that we have entered into
with our Directors and Supervisors, see “Appendix VI—Statutory and General Information
—C. Further Information about our Directors, Supervisors, Management and Substantial
Shareholders—3. Service Contracts.” For further details of the incentives granted to our
officers and employees, see “Appendix VI—Statutory and General Information—D. Employee
Incentive Scheme.”
EMPLOYEE OWNERSHIP PLATFORMS
For further details of our employees’ ownership platforms, see “Appendix VI—Statutory
and General Information—D. Employee Incentive Scheme.”
COMPLIANCE ADVISOR
We have appointed SBI China Capital Hong Kong Securities Limited as our Compliance
Advisor pursuant to Rules 3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of the Listing
Rules, we must consult with and, if necessary, seek advice from our Compliance Advisor on
a timely basis in the following circumstances:
(i) before the publication of any regulatory announcement, circular or financial report;
(ii) where a transaction, which might be a notifiable or connected transaction, is
contemplated including but not limited to share issues and share repurchases;
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(iii) where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this prospectus or where our business activities, developments
or results deviate from any forecast, estimate or other information in this prospectus;
and
(iv) where the Hong Kong Stock Exchange makes an inquiry to our Company regarding
unusual movements in the price or trading volume of its listed securities or any other
matters in accordance with Rule 13.10 of the Listing Rules.
Our Compliance Advisor will, in a timely manner, inform us of any amendments or
supplements to the Listing Rules and any new or amended law, regulation or code in Hong
Kong applicable to our Group.
The term of the appointment of our Compliance Advisor shall commence on the Listing
Date and end on the date when our Company publishes our annual report in respect of our
financial results for the first full financial year commencing after the Listing, and such
appointment may be subject to extension by mutual agreement.
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OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
As at the Latest Practicable Date, (i) the Concert Party Group, consisting of Dr. Liu
Guoqing, Mr. Y ang Guang, Mr. Zhou Xiang, Mr. Wang Qicheng, Mr. Y an Shengye and Mr. Wu
Jianxin, were collectively interested in approximately 24.35% of the Shares, and pursuant to
the Amended Concert Party Agreement, members of the Concert Party Group will follow Dr.
Liu Guoqing’s vote to arrive at a unanimous consent in case of any disagreement in aligning
votes in the Shareholders’ meeting; and (ii) Dr. Liu Guoqing, by virtue of his role as the general
partner of each of the ESOP Holding Entities, was deemed to be interested in approximately
5.86% of the Shares held by the ESOP Holding Entities. Accordingly, the Concert Party Group
and the ESOP Holding Entities constituted our Single Largest Group of Shareholders, holding
in aggregate approximately 30.22% of the Shares.
Immediately following the completion the Global Offering, the Single Largest Group of
Shareholders will in aggregate hold approximately 27.25% of the Shares (assuming the
Over-Allotment Option is not exercised). Therefore, upon Listing, they will remain as our
Single Largest Group of Shareholders and our Company will not have any controlling
shareholders as defined under the Listing Rules upon Listing.
For details of the Concert Party Group and the ESOP Holding Entities, and their
shareholding in our Company, see “History, Development and Corporate Structure.”
INDEPENDENCE FROM OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable
of carrying on our business independently from our Single Largest Group of Shareholders and
their close associates after Listing.
Management Independence
We are able to carry on our business independently from the Single Largest Group of
Shareholders from management perspective. Our Board consists of nine Directors, including four
executive Directors, two non-executive Directors and three independent non-executive Directors.
Each of Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou Xiang and Mr. Wang Qicheng who are
members of the Single Largest Group of Shareholders, are also our executive Directors.
Our Directors are of the view that our Company is able to function independently from
the Single Largest Group of Shareholders for the following reasons:
(a) our daily management and operations are carried out by a senior management team,
all of whom have substantial experience in the industry in which our Company is
engaged, and will therefore be able to make business decisions that are in the best
interests of our Group. For details of the industry experience of our senior
management team, see “Directors, Supervisors and Senior Management—Senior
Management”;
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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(b) each Director is aware of his/her fiduciary duties as a director which require, among
other things, that he/she acts for the benefit and in the interest of our Company and
does not allow any conflict between his/her duties as a Director and his/her personal
interests;
(c) we have three independent non-executive Directors and certain matters of our
Company must always be referred to the independent non-executive Directors for
review; and
(d) we have adopted a series of corporate governance measures to manage conflicts of
interest, if any, between our Group and the Single Largest Group of Shareholders
which would support our independent management. See “—Corporate Governance”
below for details.
Based on the above, our Directors believe that our Board as a whole and together with our
senior management are able to perform the managerial role in our Group independently from
the Single Largest Group of Shareholders and their close associates after the Listing.
Operational Independence
We do not rely on the Single Largest Group of Shareholders and their close associates for
our operations. While we are led by our executive Directors (who are also members of the
Single Largest Group of Shareholders) and other senior management team, we have our own
departments specializing in business development, research and development, production,
quality control, administration, finance, internal audit, information technology, sales and
marketing, human resources, legal and compliance, or company secretarial functions. Such
departments specializing in these respective areas which have been in operation and are
expected to continue to operate separately and independently from the Single Largest Group of
Shareholders and their close associates. In addition, we have our own headcount of employees
for our operations and management for human resources.
We have 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 relevant licenses
necessary to carry on and operate our principal businesses and we have sufficient operational
capacity in terms of capital and employees to operate independently.
As of the Latest Practicable Date, the Group did not expect to have any continuing
connected transactions in its ordinary and usual course of business with any of the Single
Largest Group of Shareholders or their respective associates upon Listing.
Based on the above, our Directors believe that we are able to operate independently from
the Single Largest Group of Shareholders and their close associates.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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Financial Independence
We have an independent financial system and make financial decisions according to our
Group’s own business needs. We have internal control and accounting systems and an
independent finance department. We do not expect to rely on the Single Largest Group of
Shareholders and their close associates for financing after the Listing as we expect that our
working capital will be funded by the cash, cash equivalent on hand as well as the proceeds
from the Global Offering.
During the Track Record Period, each of Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou
Xiang and Mr. Wang Qicheng provided personal guarantee to secure certain of our Group’s
bank borrowings (the “ Guaranteed Loans ”). As of June 30, 2024, the outstanding principal
amount of the Guaranteed Loans was approximately RMB151.9 million. We have obtained
confirmations from the banks providing us with the Guaranteed Loans, which consent to the
release of the personal guarantees provided by members of the Single Largest Group of
Shareholders prior to the Listing. See “Financial Information—Related Party Transactions”
and Note 37 of the Accountants’ Report as set out in Appendix I to this Prospectus for details.
As of June 30, 2024, our Group had an amount due from Dr. Liu Guoqing of
approximately RMB0.5 million, which was non-trade in nature. Our Directors confirm that all
outstanding balances due from Dr. Liu Guoqing will be fully settled before Listing.
Save for the above, our Group did not rely on the Single Largest Group of Shareholders
and/or their close associates for any provision of financial assistance. Our Directors confirm
that as of the Latest Practicable Date, none of the Single Largest Group of Shareholders or their
close associates had provided any loans, guarantees or pledges to our Group and our Group did
not provide any loans, guarantees or pledges to our Single Largest Group of Shareholders.
Based on the above, our Directors are of the view that we are able to maintain financial
independence from our Single Largest Group of Shareholders and their close associates.
INTERESTS OF OUR SINGLE LARGEST GROUP OF SHAREHOLDERS IN OTHER
BUSINESSES
The Single Largest Group of Shareholders confirm that as of the Latest Practicable Date,
they did not have any interest in a business, apart from the business of our Group, which
competes or is likely to compete, directly or indirectly, with our business, which would require
disclosure under Rule 8.10 of the Listing Rules.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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--- page 364 ---
CORPORATE GOVERNANCE
Our Company will comply with the provisions of the Corporate Governance Code, which
sets out principles of good corporate governance, upon Listing.
Our Directors recognize the importance of good corporate governance in protection of our
Shareholders’ interests. We would adopt the following measures to safeguard good corporate
governance standards and to avoid potential conflict of interests between our Group and the
Single Largest Group of Shareholders:
(a) where a Shareholders’ meeting is to be held for considering proposed transactions
in which the Single Largest Group of Shareholders or any of their respective
associates has a material interest, the Single Largest Group of Shareholders will not
vote on the resolutions and shall not be counted in the quorum in the voting;
(b) our Company has established internal control mechanisms to identify connected
transactions. Upon Listing, if our Company enters into connected transactions with
a member of the Single Largest Group of Shareholders or any of their respective
associates, our Company will comply with the applicable Listing Rules;
(c) we are committed that our Board shall include a balanced composition of executive
Directors and non-executive Directors (including independent non-executive
Directors). We have appointed three independent non-executive Directors, and
believe our independent non-executive Directors (i) possess sufficient and diverse
experiences, (ii) are free of any business or other relationship which could interfere
in any material manner with the exercise of their independent judgment, and (iii)
will be able to provide an impartial and external opinion to protect the interests of
our Shareholders as a whole. For details of the independent non-executive Directors,
see “Directors, Supervisors and Senior Management—Directors—Independent Non-
executive Directors”;
(d) where our Directors reasonably request the advice of independent professionals,
such as financial advisors, valuers or legal advisors, the appointment of such
independent professionals will be made at our Company’s expenses; and
(e) we have appointed SBI China Capital Hong Kong Securities Limited as our
Compliance Advisor to provide advice and guidance to us in respect of compliance
with the Listing Rules, including various requirements relating to corporate
governance.
Based on the above, our Directors are satisfied that sufficient corporate governance
measures have been put in place to manage any conflicts of interest between our Group and the
Single Largest Group of Shareholders, and to protect minority Shareholders’ interests after the
Listing.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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--- page 365 ---
This section presents certain information regarding our share capital before and upon
completion of the Global Offering.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the registered capital of our Company was
RMB360,000,000, comprising 360,000,000 Unlisted Shares of nominal value RMB1.00 each.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately following completion of the Global Offering and the Conversion of Unlisted
Shares into H Shares, assuming the Over-allotment Option is not exercised, the share capital
of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage to
total share capital
(%)
Unlisted Shares in issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,576,892 22.44
H Shares converted from Unlisted Shares (1) /H1118/H1118/H1118/H1118/H1118270,423,108 67.74
H Shares to be issued under the Global Offering /H1118 39,190,000 9.82
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118399,190,000 100.00
(1) For details of the identities of the Shareholders whose Shares will be converted into H Shares upon
Listing, see “History, Development and Corporate Structure—Public Float.”
Immediately following completion of the Global Offering and conversion of Unlisted
Shares into H Shares, assuming the Over-allotment Option is fully exercised, the share capital
of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage to
total share capital
(%)
Unlisted Shares in issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,576,892 22.11
H Shares converted from Unlisted Shares (1) /H1118/H1118/H1118/H1118/H1118270,423,108 66.76
H Shares to be issued under the Global Offering /H1118 45,068,400 11.13
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,068,400 100.00
(1) For details of the identities of the Shareholders whose Shares will be converted into H Shares upon
Listing, see “History, Development and Corporate Structure—Public Float.”
SHARE CAPITAL
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--- page 366 ---
SHARE CLASSES
Upon completion of the Global Offering and the Conversion of Unlisted Shares into H
Shares, the Shares will consist of Unlisted Shares and H Shares. Unlisted Shares and H Shares
are all ordinary Shares in the share capital of our Company.
Apart from certain qualified domestic institutional investors in the PRC, the qualified
PRC investors under the Shanghai — Hong Kong Stock Connect or the Shenzhen — Hong
Kong Stock Connect and other persons who are entitled to hold our H Shares pursuant to
relevant PRC laws and regulations or upon approvals of any competent authorities (such as our
certain existing Shareholders the Unlisted Shares held by whom will be converted into H shares
according to the approval of the CSRC), H Shares generally cannot be subscribed for by or
traded between legal or natural persons of the PRC. Unlisted Shares can only be subscribed for
by and traded between legal or natural persons of the PRC, qualified foreign institutional
investors and foreign strategic investors.
RANKING
Unlisted Shares and H Shares shall rank pari passu with each other in all respects and,
in particular, will rank equally for dividends or distributions declared, paid or made. All
dividends for H Shares will be denominated and declared in Renminbi, and paid in Hong Kong
dollars or Renminbi, whereas all dividends for Unlisted Shares will be paid in Renminbi. Other
than cash, dividends may also be paid in the form of Shares.
CONVERSION OF UNLISTED SHARES INTO H SHARES
If any of the Unlisted Shares are to be converted, listed and traded as H Shares on the
Hong Kong Stock Exchange, such conversion, listing and trading will need the registration
with the relevant PRC regulatory authorities, including the CSRC, and the approval of the
Hong Kong Stock Exchange.
Filing with the CSRC and Full Circulation Application
In accordance with the Overseas Listing Trial Measures and related guidelines, H-share
listed companies which apply for the conversion of unlisted shares into H shares for listing and
circulation on the Hong Kong Stock Exchange shall file with the CSRC by filing materials on
key compliance issues. An unlisted domestic joint stock company may apply for “full
circulation” when applying for an overseas listing.
We have filed with the CSRC for, and received the filing notice from the CSRC dated
October 28, 2024 in relation to the Global Offering and the conversion of 270,423,108 Unlisted
Shares into H Shares on a one-for-one basis upon Listing.
SHARE CAPITAL
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--- page 367 ---
Listing Approval by the Hong Kong Stock Exchange
We have applied to the Hong Kong 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
H Shares which may be issued pursuant to the exercise of the Over-allotment Option) and the
H Shares to be converted from 270,423,108 Unlisted Shares on the Hong Kong Stock
Exchange, which is subject to the approval by the Hong Kong Stock Exchange.
We will perform the following procedures for the conversion of the relevant Unlisted
Shares into H Shares after receiving the approval of the Hong Kong Stock Exchange: (1) giving
instructions to our H Share Registrar regarding relevant share certificates of the converted H
Shares; and (2) enabling the converted H Shares to be accepted as eligible securities by
HKSCC for deposit, clearance and settlement in the CCASS.
The Conversion of Unlisted Shares into H Shares will involve an aggregate of
270,423,108 Unlisted Shares held by 56 existing Shareholders, representing approximately
75.12% of total issued Shares of the Company as at the date of this Prospectus and
approximately 67.74% of total issued Shares of the Company upon completion of the
Conversion of Unlisted Shares into H Shares and the Global Offering (assuming the
Over-allotment Option is not exercised). Set out below are number of Shares held by our
existing Shareholders and their respective shareholding as at the date of this Prospectus and
upon completion of the Conversion of Unlisted Shares into H Shares and the Global Offering
(assuming the Over-allotment Option is not exercised).
Number of Shares
upon completion of the
Global Offering (1)
Shareholders
Number of Shares
held by the
Shareholder as at
the date of this
prospectus
H Shares to be
converted from
Unlisted Shares Unlisted Shares
Aggregate
ownership
percentage as at
the date of this
prospectus
Aggregate
ownership
percentage upon
completion of
the Global
Offering (1)
Single Largest Group of
Shareholders
Concert Party Group
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,283,503 17,141,752 17,141,751 9.52% 8.59%
Mr. Y ang Guang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,928,508 7,464,254 7,464,254 4.15% 3.74%
Mr. Zhou Xiang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,928,508 7,464,254 7,464,254 4.15% 3.74%
Mr. Wang Qicheng /H1118/H1118/H1118/H1118/H1118/H111813,348,191 6,674,096 6,674,095 3.71% 3.34%
Mr. Y an Shengye /H1118/H1118/H1118/H1118/H1118/H1118/H11185,993,470 2,996,735 2,996,735 1.66% 1.50%
Mr. Wu Jianxin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,195,615 2,097,808 2,097,807 1.17% 1.05%
SHARE CAPITAL
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--- page 368 ---
Number of Shares
upon completion of the
Global Offering (1)
Shareholders
Number of Shares
held by the
Shareholder as at
the date of this
prospectus
H Shares to be
converted from
Unlisted Shares Unlisted Shares
Aggregate
ownership
percentage as at
the date of this
prospectus
Aggregate
ownership
percentage upon
completion of
the Global
Offering (1)
ESOP Holding Entities
Y oujia Qingcheng /H1118/H1118/H1118/H1118/H1118/H1118/H111812,386,181 6,193,091 6,193,090 3.44% 3.10%
Y oujia Zhongcheng /H1118/H1118/H1118/H1118/H1118/H11185,815,267 2,907,634 2,907,633 1.62% 1.46%
Y oujia Licheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,907,634 1,453,817 1,453,817 0.81% 0.73%
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,000,000 54,393,441 54,393,436 30.22% 27.25%
Major Pre-IPO Investors
Beijing Siwei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,611,320 32,611,320 N/A 9.06% 8.17%
Shenzhen Zeyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,421,719 21,421,719 N/A 5.95% 5.37%
Guokai Zhizao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,548,643 N/A 20,548,643 5.71% 5.15%
CICC Capital
Liantong CICC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,183,861 8,183,861 N/A 2.27% 2.05%
CICC Alpha /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,209,625 7,209,625 N/A 2.00% 1.81%
CICC Changde /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,623,446 4,623,446 N/A 1.28% 1.16%
Mr. Wu Y ongming and his
controlled entity
Mr. Wu Y ongming /H1118/H1118/H1118/H1118/H1118/H1118/H11188,316,675 8,316,675 N/A 2.31% 2.08%
Hangzhou Y uanjing Lechi /H1118/H1118 673,092 673,092 N/A 0.19% 0.17%
Hangzhou Y uanjing Erjiu
Suzhou Y uanjing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,408,171 4,408,171 N/A 1.22% 1.10%
Hangzhou Y uanjing
Chuangheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,408,171 4,408,171 N/A 1.22% 1.10%
Zhiying Huirong
Jiashi Shengqi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,956,891 5,956,891 N/A 1.65% 1.49%
Jiashi Shengde /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,628,665 5,628,665 N/A 1.56% 1.41%
Jiashi Shengxuan /H1118/H1118/H1118/H1118/H1118/H1118/H11185,415,346 5,415,346 N/A 1.50% 1.36%
Puhua
Puhua Fengqi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,730,883 6,730,883 N/A 1.87% 1.69%
Binjiang Puhua /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,640,749 4,640,749 N/A 1.29% 1.16%
Puhua Tianqin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,640,749 4,640,749 N/A 1.29% 1.16%
Kangchengheng
Jiaxin Y uande /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,307,511 10,307,511 N/A 2.86% 2.58%
Kangchengheng Ruixiang /H1118/H1118/H1118 4,119,784 4,119,784 N/A 1.14% 1.03%
Controlled entities of
Mr. Zhang Tieshuang
Xinrong Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,970,342 5,181,496 1,788,846 1.94% 1.75%
Shenzhen Wanhe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,769,609 188,480 3,581,129 1.05% 0.94%
SHARE CAPITAL
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--- page 369 ---
Number of Shares
upon completion of the
Global Offering (1)
Shareholders
Number of Shares
held by the
Shareholder as at
the date of this
prospectus
H Shares to be
converted from
Unlisted Shares Unlisted Shares
Aggregate
ownership
percentage as at
the date of this
prospectus
Aggregate
ownership
percentage upon
completion of
the Global
Offering (1)
Controlled entities of
Mr. Ding Mingfeng
Hechuang Intelligent /H1118/H1118/H1118/H1118/H11187,701,739 7,701,739 N/A 2.14% 1.93%
Qingdao Xinda /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131,864 131,864 N/A 0.04% 0.03%
OFC
SME Development /H1118/H1118/H1118/H1118/H1118/H11186,179,681 6,179,681 N/A 1.72% 1.55%
Dongfang Fuhai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,541,149 1,541,149 N/A 0.43% 0.39%
Fuhai Y ouxuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,541,149 1,541,149 N/A 0.43% 0.39%
Xinzhifeng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,209,625 7,209,625 N/A 2.00% 1.81%
Hubei Cathay Cartech /H1118/H1118/H1118/H1118/H1118/H11186,727,996 6,727,996 N/A 1.87% 1.69%
Shenzhen Shanchuang /H1118/H1118/H1118/H1118/H1118/H11186,349,372 6,349,372 N/A 1.76% 1.59%
Moqin Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,232,967 4,232,967 N/A 1.18% 1.06%
Shanghai Ganche /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,176,618 N/A 4,176,618 1.16% 1.05%
Other Pre-IPO Investors
Jinning Qianglian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,551,922 3,551,922 N/A 0.99% 0.89%
Zhejiang Huihong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,093,770 3,093,770 N/A 0.86% 0.78%
Shanghai Hongjin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,793,724 2,793,724 N/A 0.78% 0.70%
Chantou Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,692,349 2,692,349 N/A 0.75% 0.67%
Chongqing Shenghehui /H1118/H1118/H1118/H1118/H11182,054,859 2,054,859 N/A 0.57% 0.51%
Huazhi Xingrui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,019,267 1,009,633 1,009,634 0.56% 0.51%
Boyuan Hongcheng /H1118/H1118/H1118/H1118/H1118/H1118/H11182,019,267 2,019,267 N/A 0.56% 0.51%
Suikai Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,884,646 1,884,646 N/A 0.52% 0.47%
Fulin Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,546,978 1,546,978 N/A 0.43% 0.39%
Chongqing Kexing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,541,149 1,541,149 N/A 0.43% 0.39%
Suikai Intelligent No. 2 /H1118/H1118/H1118/H1118/H11181,480,795 1,480,795 N/A 0.41% 0.37%
Chaogaoqing Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,346,175 1,346,175 N/A 0.37% 0.34%
Xinjing Fuying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,346,175 1,346,175 N/A 0.37% 0.34%
Shenhong Huichuang /H1118/H1118/H1118/H1118/H1118/H1118962,950 962,950 N/A 0.27% 0.24%
Shenwan Changhong /H1118/H1118/H1118/H1118/H1118/H1118/H1118962,950 962,950 N/A 0.27% 0.24%
Kexi Zhongke /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118807,703 807,703 N/A 0.22% 0.20%
Kechuangzhihui No. 2 /H1118/H1118/H1118/H1118/H1118/H1118336,541 336,541 N/A 0.09% 0.08%
Jipei Xinsheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216,290 216,290 N/A 0.06% 0.05%
Hehe Suikai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,615 99,615 N/A 0.03% 0.02%
Other Shareholder
Nanchang Municipal /H1118/H1118/H1118/H1118/H1118/H1118/H11184,078,586 N/A 4,078,586 1.13% 1.02%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,000,000 270,423,108 89,576,892 100% 90.18%
SHARE CAPITAL
– 359 –


--- page 370 ---
Notes:
(1) Assuming the Over-allotment Option is not exercised.
(2) The percentage figures included in this table have been subject to rounding adjustments. Accordingly,
percentage figures shown as totals in the table may not be an arithmetic aggregation of the figures preceding
them.
RESTRICTION ON TRANSFER OF SHARES ISSUED PRIOR TO THE GLOBAL
OFFERING
In accordance with Article 160 of the PRC Company Law, the shares issued prior to any
listing of shares by a company cannot be transferred within one year from the date on which
such publicly offered shares are listed and traded on the relevant stock exchange. As such, the
Shares issued by the Company prior to the Global Offering will be subject to such statutory
restriction on transfer within a period of one year from the Listing. See “History, Development
and Corporate Structure—Pre-IPO Investments.”
CIRCUMSTANCES UNDER WHICH GENERAL MEETINGS ARE REQUIRED
Pursuant to the PRC Company Law and the terms of the Articles of Association, our
Company may from time to time by special resolution of shareholders, among others, increase
its capital or decrease its capital or repurchase of shares. See “Appendix V—Summary of
Articles of Association.”
SHARE CAPITAL
– 360 –


--- page 371 ---
THE CORNERSTONE PLACING
We, the Joint Sponsors and the Overall Coordinators have entered into cornerstone
investment agreements (the “ Cornerstone Investment Agreements ”) with the cornerstone
investors set forth below (the “ Cornerstone Investors ”) who have agreed to subscribe for such
number of our Offer Shares (rounded down to the nearest whole board lot of 200 H Shares)
which may be purchased at the Offer Price with an aggregate amount of approximately
HK$540.2 million) (exclusive of the brokerage, the SFC transaction levy, the AFRC transaction
levy and the Stock Exchange trading fee) (the “ Cornerstone Placing ”).
Assuming an Offer Price of HK$17.00 per Offer Share (being the low-end of the
indicative Offer Price range set out in this prospectus), the total number of Offer Shares to be
subscribed by the Cornerstone Investors would be 31,778,600 H Shares, representing
approximately (i) 81.1% of the Offer Shares pursuant to the Global Offering, assuming that the
Over-allotment Option is not exercised, (ii) 8.0% of our total issued share capital upon
completion of the Global Offering and assuming that the Over-allotment Option is not
exercised, and (iii) 7.8% of our total issued share capital upon completion of the Global
Offering and assuming full exercise of the Over-allotment Option.
Assuming an Offer Price of HK$18.60 per Offer Share (being the mid-point of the
indicative Offer Price range set out in this prospectus), the total number of Offer Shares to be
subscribed by the Cornerstone Investors would be 29,045,000 H Shares, representing
approximately (i) 74.1% of the Offer Shares pursuant to the Global Offering, assuming that the
Over-allotment Option is not exercised, (ii) 7.3% of our total issued share capital upon
completion of the Global Offering and assuming that the Over-allotment Option is not
exercised, and (iii) 7.2% of our total issued share capital upon completion of the Global
Offering and assuming full exercise of the Over-allotment Option.
Assuming an Offer Price of HK$20.20 per Offer Share (being the high-end of the
indicative Offer Price range set out in this prospectus), the total number of Offer Shares to be
subscribed by the Cornerstone Investors would be 26,744,400 H Shares, representing
approximately (i) 68.2% of the Offer Shares pursuant to the Global Offering, assuming that the
Over-allotment Option is not exercised, (ii) 6.7% of our total issued share capital upon
completion of the Global Offering and assuming that the Over-allotment Option is not
exercised, and (iii) 6.6% of our total issued share capital upon completion of the Global
Offering and assuming full exercise of the Over-allotment Option.
Our Company is of the view that, leveraging on the Cornerstone Investors’ investment
experience and market position, the Cornerstone Placing will help to raise the profile of our
Company and to signify that such Cornerstone Investors have confidence in our Company’s
business and prospect. Our Company became acquainted with each of the Cornerstone
Investors in its ordinary course of operation through the Group’s business network or through
introduction by the Company’s existing shareholders or business partners in the Global
Offering.
CORNERSTONE INVESTORS
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--- page 372 ---
The Cornerstone Placing will form part of the International Placing, and the Cornerstone
Investors will not acquire any Offer Shares under the Global Offering (other than pursuant to
the Cornerstone Investment Agreements). The Offer Shares to be subscribed by the
Cornerstone Investors will rank pari passu in all respects with the fully paid Shares in issue
and, save for Offer Shares to be subscribed by KCH International Investment Limited, will be
counted towards the public float of our Company for the purpose of Rule 8.08 of the Listing
Rules. Immediately following the completion of the Global Offering, the Cornerstone Investors
and their respective close associates will not, by virtue of the Cornerstone Placing, have any
Board representation in our Company; and, save for KCH International Investment Limited,
none of the other Cornerstone Investor and its respective close associates will become a
substantial Shareholder of our Company. Other than a guaranteed allocation of the relevant
Offer Shares at the Offer Price, the Cornerstone Investors do not have any preferential rights
in the Cornerstone Investment Agreements compared with other public Shareholders. As
confirmed by the Cornerstone Investors, none of the Cornerstone Investors or any of their
respective affiliates, directors, supervisors, officers, employees, agents or representatives, has
accepted or entered into any side agreement or arrangement to accept any direct or indirect
benefits by side letter or otherwise, from our Company, any member of our Group, or any of
their respective affiliates, directors, supervisors, officers, employees, agents or representatives
in the Global Offering or otherwise has engaged in any conduct or activity inconsistent with,
or in contravention of, Chapter 4.15 of the Guide for New Listing Applicants.
To the best knowledge, information and belief of our Company, (i) save for KCH
International Investment Limited, the other Cornerstone Investors and its respective ultimate
beneficial owners are an Independent Third Parties; (ii) none of the Cornerstone Investors is
accustomed to take or has taken instructions from our Company, the Directors, the Supervisors,
chief executive of our Company, substantial Shareholders (save for Kangchengheng), existing
Shareholders (save for Kangchengheng) or any of their respective subsidiaries or their
respective close associates in relation to the acquisition, disposal, voting or other disposition
of the Offer Shares; and (iii) none of the subscription of the Offer Shares by the Cornerstone
Investors is directly or indirectly financed by our Company, the Directors, the Supervisors,
chief executive of our Company, substantial Shareholders, existing Shareholders or any of their
respective subsidiaries or their respective close associates.
As confirmed by each Cornerstone Investor, its subscription under the Cornerstone
Placing would be financed by its own internal financial resources to settle its investment under
the Cornerstone Placing. Each of the Cornerstone Investors has confirmed that all necessary
approvals have been obtained with respect to the Cornerstone Placing.
KCH International Investment Limited was held as to 70% and 30% by Tianjin
Kangchengheng Enterprise Management Consultation Partnership (Limited Partnership) (ݵ
̹ੰϓЖΆุ၍ଣፔ༔ΥྫΆุ(Υྫ)) (“ Tianjin KCH ”) and Fortuna Capital
Management (“ Fortuna Capital ”), respectively, as at the Latest Practicable Date. Tianjin KCH
was in turn held as to (i) 1% by its general partner, Kangchengheng and (ii) as to 99% by its
limited partner, Zhuji Kangchengheng Huiying Investment Partnership (Limited Partnership)
(௴ุҳ༟ΥྫΆุ(Υྫ)), respectively, as at the Latest Practicable Date.
CORNERSTONE INVESTORS
– 362 –


--- page 373 ---
Zhuji Kangchengheng Huiying Investment Partnership (Limited Partnership) was held as to (i)
1% by its general partner, Kangchengheng and (ii) 99% its limited partner, Zhuji Economic
Development and Financing Investment Co., Ltd. (ʮ̡), which was
ultimately controlled by Zhuji Municipal Finance Bureau (҅), respectively, as at
the Latest Practicable Date. Therefore, KCH International Investment Limited is a close
associate of Kangchengheng. Fortuna Capital holds a minority stake and is a passive investor
in KCH International Investment Limited. As Fortuna Capital does not control any controlling
stake or the board of directors of KCH International Investment Limited, it has no
decision-making power in respect of the actions taken by KCH International Investment
Limited. As at the Latest Practicable Date, KCH International Investment Limited was
ultimately controlled by Kangchengheng, see “History, Development and Corporate Structure
—Pre-IPO Investments—Information about our Major Pre-IPO Investors—9. Kangchengheng”
in this prospectus for details of Kangchengheng. Save as disclosed above, KCH International
Investment Limited is not a close associate of any other existing shareholders of the Company.
Kangchengheng will become a substantial shareholder of the Company upon completion of the
Global Offering. We have applied for, and the Stock Exchange has granted us, a waiver from
strict compliance with Rule 10.04 and consent under paragraph 5(2) of Appendix F1 to the
Listing Rules to permit us to allocate the Offer Shares to KCH International Investment
Limited in the Global Offering. For details, see “Waivers from Strict Compliance with the
Hong Kong Listing Rules” in this prospectus.
The number of Offer Shares to be subscribed by the Cornerstone Investors pursuant to the
Cornerstone Investment may be affected by reallocation of the Offer Shares between the
International Placing and the Hong Kong Public Offering in the event of over-subscription
under the Hong Kong Public Offering as described in the section headed “Structure of the
Global Offering—The Hong Kong Public Offering—Reallocation.”
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors
will be disclosed in the allotment results announcement of our Company to be published on or
around December 24, 2024. The Cornerstone Investors have agreed to pay for the relevant
Offer Shares that they have subscribed before dealings in the Company’s H Shares commence
on the Stock Exchange. The Cornerstone Investors have agreed that the Overall Coordinators
may defer the delivery of all or any part of the Offer Shares it will subscribe to a date later than
the Listing Date. Such delayed delivery arrangement is in place to facilitate the over-allocation
in the International Placing. There will be no delayed delivery if there is no over-allocation in
the International Placing. For details of the Over-allotment Option and the stabilization action
by the Stabilizing Manager, see “Structure of the Global Offering—Over-allotment Option”
and “Structure of the Global Offering—Stabilization” in this prospectus.
CORNERSTONE INVESTORS
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--- page 374 ---
OUR CORNERSTONE INVESTORS
The information about our Cornerstone Investors set forth below has been provided by the
Cornerstone Investors in connection with the Cornerstone Placing.
KCH International Investment Limited is a company incorporated under the laws of Hong
Kong on November 15, 2024. KCH International Investment Limited was held as to 70% and
30% by Tianjin KCH and Fortuna Capital, respectively, as at the Latest Practicable Date.
Tianjin KCH was in turn held as to (i) 1% by its general partner, Kangchengheng and (ii) 99%
by its limited partner, Zhuji Kangchengheng Huiying Investment Partnership (Limited
Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)) respectively, as at the Latest
Practicable Date. Zhuji Kangchengheng Huiying Investment Partnership (Limited Partnership)
was held as to (i) 1% by its general partner, Kangchengheng and (ii) 99% by its limited partner,
Zhuji Economic Development and Financing Investment Co., Ltd. (ʮ
̡), which was ultimately controlled by Zhuji Municipal Finance Bureau (҅),
respectively, as at the Latest Practicable Date. Fortuna Capital is a company incorporated in the
British Virgin Islands in November 2023, and is principally engaged in equity investment,
including primary and secondary equity markets in Hong Kong and the U.S., with a focus in
the technology, consumer and healthcare sectors. Its ultimate beneficial owner is Y ANG Dehui
(เᅃึ), who is an Independent Third Party. Fortuna Capital holds a minority stake and is a
passive investor in KCH International Investment Limited. As Fortuna Capital does not control
any controlling stake or the board of directors of KCH International Investment Limited, it has
no decision-making power in respect of the actions taken by KCH International Investment
Limited. As at the Latest Practicable Date, KCH International Investment Limited was
ultimately controlled by Kangchengheng. Save as disclosed above, KCH International
Investment Limited is not a close associate of any other existing shareholders of the Company.
KCH International Investment Limited is a special purpose vehicle primarily established for
the purpose of holding the Offer Shares to be acquired under the Cornerstone Placing.
Kangchengheng is principally engaged in equity investment.
Horizon Together Holding Ltd. is an exempted company with limited liability
incorporated under the laws of the Cayman Islands on August 29, 2022. Horizon Together
Holding Ltd. is wholly owned by Horizon Robotics, a company listed on the Stock Exchange
(stock code: 9660) and a leading provider of advanced driver assistance systems and
autonomous driving solutions for passenger vehicles, empowered by its proprietary software
and hardware technologies.
CORNERSTONE INVESTORS
– 364 –


--- page 375 ---
The table below sets forth the details of the Cornerstone Placing:
Based on the Offer Price of HK$17.00 (being the low-end of the indicative Offer Price
range)
Cornerstone Investors
Total
Investment
Amount
Number of
Offer Shares
to be
acquired (1)
Approximate
%o ft h e
Offer Shares
Approximate %
of our total
issued share
capital
immediately
upon completion
of the Global
Offering
(in HK$)
KCH International
Investment Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118528,577,600 31,092,800 79.3% 7.8%
Horizon Together Holding Ltd. /H111811,658,600 685,800 1.7% 0.2%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118540,236,200 31,778,600 81.1% 8.0%
Note 1: Subject to rounding down to the nearest whole board lot of 200 H Shares. Calculated based on the exchange
rate set out in “Information about this Prospectus and the Global Offering—Exchange Rate Conversion.”
Based on the Offer Price of HK$18.60 (being the mid-point of the indicative Offer Price
range)
Cornerstone Investors
Total
Investment
Amount
Number of
Offer Shares
to be
acquired (1)
Approximate
%o ft h e
Offer Shares
Approximate %
of our total
issued share
capital
immediately
upon completion
of the Global
Offering
(in HK$)
KCH International
Investment Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118528,578,520 28,418,200 72.5% 7.1%
Horizon Together Holding Ltd. /H111811,658,480 626,800 1.6% 0.2%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118540,237,000 29,045,000 74.1% 7.3%
Note 1: Subject to rounding down to the nearest whole board lot of 200 H Shares. Calculated based on the exchange
rate set out in “Information about this Prospectus and the Global Offering—Exchange Rate Conversion.”
CORNERSTONE INVESTORS
– 365 –


--- page 376 ---
Based on the Offer Price of HK$20.20 (being the high-end of the indicative Offer Price
range)
Cornerstone Investors
Total
Investment
Amount
Number of
Offer Shares
to be
acquired (1)
Approximate
%o ft h e
Offer Shares
Approximate %
of our total
issued share
capital
immediately
upon completion
of the Global
Offering
(in HK$)
KCH International
Investment Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118528,577,440 26,167,200 66.8% 6.6%
Horizon Together Holding Ltd. /H111811,659,440 577,200 1.5% 0.1%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118540,236,880 26,744,400 68.2% 6.7%
Note 1: Subject to rounding down to the nearest whole board lot of 200 H Shares. Calculated based on the exchange
rate set out in “Information about this Prospectus and the Global Offering—Exchange Rate Conversion.”
CLOSING CONDITIONS
The obligation of each of Cornerstone Investors to acquire the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things, the following
closing conditions:
(i) the Hong Kong Underwriting Agreement and the International Underwriting
Agreement being entered into and having become effective and unconditional (in
accordance with their respective original terms or as subsequently waived or varied
by agreement of the parties thereto) by no later than the time and date as specified
in the Hong Kong Underwriting Agreement and the International Underwriting
Agreement, and neither the Hong Kong Underwriting Agreement nor the
International Underwriting Agreement having been terminated;
(ii) the Offer Price having been agreed in a manner according to the Hong Kong
Underwriting Agreement;
(iii) the Hong Kong Stock Exchange having granted the approval for the listing of, and
permission to deal in, the H Shares (including the H Shares under the Cornerstone
Placing) as well as other applicable waivers and approvals and such approval,
permission or waiver having not been revoked prior to the commencement of
dealings in the H Shares on the Stock Exchange;
CORNERSTONE INVESTORS
– 366 –


--- page 377 ---
(iv) the CSRC having accepted of the Company’s filing and published the filing results
in respect of the Company’s filing on its website, and such notice of acceptance
and/or filing results published not having otherwise been rejected, withdrawn,
revoked or invalidated prior to the commencement of dealings in the H Shares on the
Stock Exchange;
(v) no laws shall have been enacted or promulgated which prohibits the consummation
of the transactions contemplated in the Global Offering or the respective
Cornerstone Investment Agreement, and there being no orders or injunctions from
a court of competent jurisdiction in effect precluding or prohibiting consummation
of such transactions; and
(vi) the agreement, representations, warranties, acknowledgements, undertakings and
confirmations of the Cornerstone Investors under the respective Cornerstone
Investment Agreement are (as of the date of the respective Cornerstone Investment
Agreement) and will be (as of the Closing (as defined in the respective Cornerstone
Investment Agreement)) accurate and true in all respects and not misleading and that
there is no material breach of the respective Cornerstone Investment Agreement on
the part of the relevant Cornerstone Investors.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that without the prior written consent of our
Company, the Joint Sponsors and the Overall Coordinators, it will not, whether directly or
indirectly, at any time during the period of six months following the Listing Date (both days
inclusive) (the “ Lock-up Period ”), dispose of, in any way, any of the Offer Shares it has
purchased, pursuant to the respective Cornerstone Investment Agreement, save for certain
limited circumstances, such as transfers to any of its wholly-owned subsidiaries who will be
bound by the same obligations of the Cornerstone Investors, including the Lock-up Period
restriction.
CORNERSTONE INVESTORS
– 367 –


--- page 378 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering and assuming the Over-allotment Option is not exercised, the following persons will
have interests and/or short positions in the Shares or underlying shares of our Company which
would fall to be disclosed pursuant to the provisions of Divisions 2 and 3 of Part XV of the
SFO, or, directly 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:
Name of Shareholder
Type of Shares
to be held upon
Listing Nature of Interest
As of the Latest
Practicable Date
Immediately following the completion of the
Global Offering (assuming the Over-Allotment
Option is not exercised) (2)
Number of
Shares (1)
Approximate
percentage
in the total
issued
Shares
Number of
Shares (1)
Approximate
percentage of
shareholding in
the relevant
type of Shares
Approximate
percentage in
the total issued
Shares
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest 34,283,503 9.52% 17,141,751 19.14%
27.25%
Interests held jointly with
another person (3)
53,394,292 14.83% 26,697,145 29.80%
Interest in controlled
Corporations (4)
21,109,082 5.86% 10,554,540 11.78%
H Shares Beneficial interest – – 17,141,752 5.54%
Interests held jointly with
another person (3)
– – 26,697,147 8.62%
Interest in controlled
corporations (4)
– – 10,554,542 3.41%
Mr. Y ang Guang /H1118/H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest 14,928,508 4.15% 7,464,254 8.33%
21.96%
Interests held jointly with
another person (3)
72,749,287 20.21% 36,374,642 40.61%
H Shares Beneficial interest – – 7,464,254 2.41%
Interests held jointly with
another person (3)
– – 36,374,645 11.75%
Mr. Zhou Xiang /H1118/H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest 14,928,508 4.15% 7,464,254 8.33%
21.96%
Interests held jointly with
another person (3)
72,749,287 20.21% 36,374,642 40.61%
H Shares Beneficial interest – – 7,464,254 2.41%
Interests held jointly with
another person (3)
– – 36,374,645 11.75%
SUBSTANTIAL SHAREHOLDERS
– 368 –


--- page 379 ---
Name of Shareholder
Type of Shares
to be held upon
Listing Nature of Interest
As of the Latest
Practicable Date
Immediately following the completion of the
Global Offering (assuming the Over-Allotment
Option is not exercised) (2)
Number of
Shares (1)
Approximate
percentage
in the total
issued
Shares
Number of
Shares (1)
Approximate
percentage of
shareholding in
the relevant
type of Shares
Approximate
percentage in
the total issued
Shares
Mr. Wang Qicheng /H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest 13,348,191 3.71% 6,674,095 7.45%
21.96%
Interests held jointly with
another person (3)
74,329,604 20.65% 37,164,801 41.49%
H Shares Beneficial interest – – 6,674,096 2.16%
Interests held jointly with
another person (3)
– – 37,164,803 12.00%
Mr. Y an Shengye /H1118/H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest 5,993,470 1.66% 2,996,735 3.35%
21.96%
Interests held jointly with
another person (3)
81,684,325 22.69% 40,842,161 45.59%
H Shares Beneficial interest – – 2,996,735 0.97%
Interests held jointly with
another person (3)
– – 40,842,164 13.19%
Mr. Wu Jianxin /H1118/H1118/H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest 4,195,615 1.17% 2,097,807 2.34%
21.96%
Interests held jointly with
another person (3)
83,482,180 23.19% 41,741,089 46.60%
H Shares Beneficial interest – – 2,097,808 0.68%
Interests held jointly with
another person (3)
– – 41,741,091 13.48%
Y oujia Qingcheng /H1118/H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest (4) 12,386,181 3.44% 6,193,090 6.91% 3.10%H Shares – – 6,193,091 2.00%
Beijing Siwei /H1118/H1118/H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest 32,611,320 9.06% – – 8.17%H Shares – – 32,611,320 10.53%
Shenzhen Zeyi /H1118/H1118/H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest 21,421,719 5.95% – – 5.37%H Shares – – 21,421,719 6.92%
Guokai Zhizao /H1118/H1118/H1118/H1118/H1118/H1118Unlisted Shares Beneficial interest 20,548,643 5.71% 20,548,643 22.94% 5.15%
China International Capital
Corporation Ltd. /H1118/H1118/H1118/H1118
Unlisted Shares Interest in controlled
corporations (5)
20,016,932 5.56% – – 5.01%H Shares – – 20,016,932 6.47%
Zhiying Huirong Private
Fund Management
(Beijing) Co., Ltd. /H1118/H1118/H1118
Unlisted Shares Interest in controlled
corporations
(6)
17,000,902 4.72% – –
4.26%H Shares – – 17,000,902 5.49%
SUBSTANTIAL SHAREHOLDERS
– 369 –


--- page 380 ---
Name of Shareholder
Type of Shares
to be held upon
Listing Nature of Interest
As of the Latest
Practicable Date
Immediately following the completion of the
Global Offering (assuming the Over-Allotment
Option is not exercised) (2)
Number of
Shares (1)
Approximate
percentage
in the total
issued
Shares
Number of
Shares (1)
Approximate
percentage of
shareholding in
the relevant
type of Shares
Approximate
percentage in
the total issued
Shares
Zhejiang Puhua Tianqin
Equity Investment
Management Co., Ltd. /H1118/H1118
Unlisted Shares Interest in controlled
corporations
(7)
16,012,381 4.45% – –
4.01%H Shares – – 16,012,381 5.17%
Mr. Zhang Tieshuang /H1118/H1118/H1118Unlisted Shares Interest in controlled
Corporations (8)
10,739,951 2.98% 5,369,975 5.99% 2.69%H Shares – – 5,369,976 1.73%
Kangchengheng /H1118/H1118/H1118/H1118/H1118Unlisted Shares Interest in controlled
corporations (9)
14,427,295 4.01% – – 3.61%H Shares – – 14,427,295 4.66%
(1) All interests stated are long positions.
(2) The calculation is based on the assumption that immediately following the completion of the Global Offering,
there will be (i) a total number of 89,576,892 Unlisted Shares in issue; and (ii) a total number of 309,613,108
H Shares (including 270,423,108 H Shares converted from Unlisted Shares without taking into consideration
the exercise of Over-allotment Option) in issue. For details, see “Share Capital.”
(3) Pursuant to the Amended Concert Party Agreement, each of Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou
Xiang, Mr. Wang Qicheng, Mr. Y an Shengye and Mr. Wu Jianxin agreed to be parties acting in concert in (i)
aligning their votes in the board meetings of our Company, and (ii) aligning their votes in the Shareholders’
meeting of our Company in respect of the Shares in our Company beneficially owned by each of them from
time to time, since they became and remained as Directors or Shareholders of our Company. Therefore, under
the SFO, each of Dr. Liu Guoqing, Mr. Y ang Guang, Mr. Zhou Xiang, Mr. Wang Qicheng, Mr. Y an Shengye
and Mr. Wu Jianxin is deemed to be interested in the Shares held by each other.
(4) Dr. Liu Guoqing is the general partner of Y oujia Qingcheng, Y oujia Zhongcheng and Y oujia Licheng, the ESOP
Holding Entities. Therefore, under the SFO, Dr. Liu is deemed to be interested in Shares held by Y oujia
Qingcheng, Y oujia Zhongcheng and Y oujia Licheng.
(5) The general partner of Liantong Zhongjin Innovation Industry Equity Investment Fund (Shenzhen) Partnership
(Limited Partnership) (ږ(ଉέ)ΥྫΆุ(Υྫ)) (“ Liantong CICC ”) is
Liantong CICC Private Equity Investment Management (Shenzhen) Co., Ltd. (ᛆҳ༟၍ଣ(ଉ
έ)ʮ̡), which is in turn held as to 51% by CICC Capital Operations Co., Ltd. (ʮ̡)
(the “ CICC Capital ”). CICC Capital is ultimately wholly owned by China International Capital Corporation
Ltd. (ʮ̡). The general partner of Qingdao CICC Alpha Intelligent Internet Industry
Equity Investment Fund (Limited Partnership) (ږ(Υྫ)) (“ CICC
Alpha ”) is CICC ALPHA (Beijing) Private Equity Investment Fund Management Co., Ltd. (͠ɿ(̏ԯ)
ʮ̡), which is in turn held by CICC Capital as to 51%. The general partner of
Zhongjin (Changde) Emerging Industry V enture Capital Partnership (Limited Partnership) (ږ(੬ᅃ)อጳପ
ุ௴ุҳ༟ΥྫΆุ(Υྫ)) (“ CICC Changde ”) is CICC Capital. Therefore, under the SFO, each of
China International Capital Corporation Ltd. and CICC Capital is deemed to be interested in Shares held by
Liantong CICC, CICC Alpha, and CICC Changde. See “History, Development and Corporate Structure—
Pre-IPO Investments—Information about our Major Pre-IPO Investors.”
SUBSTANTIAL SHAREHOLDERS
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(6) The general partner of each of Zhuhai Jiashi Shengqi V enture Capital Fund Partnership (Limited Partnership)
(ΥྫΆุ(Υྫ)) (“ Jiashi Shengqi ”), Zhuhai Jiashi Shengde V enture Capital
Fund Partnership (Limited Partnership) (ΥྫΆุ(Υྫ)) (“ Jiashi Shengde ”)
and Zhuhai Jiashi Shengxuan V enture Capital Fund Partnership (Limited Partnership) ( मऎྗྼସᴚ௴ุҳ༟
ΥྫΆุ(Υྫ)) (“ Jiashi Shengxuan ”) is Zhiying Huirong Private Fund Management (Beijing) Co.,
Ltd. (၍ଣ(̏ԯ)ʮ̡)( “ Zhiying Huirong ”). Therefore, under the SFO, Zhiying
Huirong is deemed to be interested in Shares held by Jiashi Shengqi, Jiashi Shengde and Jiashi Shengxuan. See
“History, Development and Corporate Structure—Pre-IPO Investments—Information about our Major Pre-IPO
Investors.”
(7) The general partner of each of Tongxiang Wuzhen Puhua Fengqi V enture Capital Partnership (Limited
Partnership) (ඊढᕄ౷ശჾಐ௴ุҳ༟ΥྫΆุ(Υྫ)) (“ Puhua Fengqi ”) and Jinhua Puhua Tianqin
Equity Investment Fund Partnership (Limited Partnership) (ΥྫΆุ(Υྫ))
(“Puhua Tianqin ”) is Zhejiang Puhua Tianqin Equity Investment Management Co., Ltd. (ᛆ
ʮ̡)( “ Puhua ”). The general partner of Hangzhou Binjiang Puhua Tianqing Equity
Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Binjiang
Puhua ”) is Hangzhou Binjiang Puhua Equity Investment Management Co., Ltd. (ᛆҳ༟၍ଣ
ʮ̡), which is in turn held by Puhua as to 70%. Therefore, under the SFO, Puhua is deemed to be
interested in Shares held by Puhua Fengqi, Binjiang Puhua and Puhua Tianqin. See “History, Development and
Corporate Structure—Pre-IPO Investments—Information about our Major Pre-IPO Investors.”
(8) The general partner of Harbin Xinrong Qihang V enture Capital Enterprise (Limited Partnership) (ဧᏵ㒥࿰
઼ঘ௴ุҳ༟Άุ(Υྫ)) (“ Xinrong Capital ”) is Zhoushan Guangchuan V enture Capital Partnership
(Limited Partnership) which is in turn held as to 95% by Mr. Zhang Tieshuang. The general partner of
Shenzhen Qianhe Wanhe V enture Capital Partnership (Limited Partnership) ( ଉέɷ൭ຬͫ௴ุҳ༟ΥྫΆุ
(Υྫ)) (“ Shenzhen Wanhe ”) is Tianjin Y uerong Qihe Enterprise Management Partnership (Limited
Partnership) (൳࿰઼ႺΆุ၍ଣΥྫΆุ(Υྫ)) which is held by its general partner, Mr. Zhang
Tieshuang as to 10%. Therefore, under the SFO, Mr. Zhang Tieshuang is deemed to be interested in Shares held
by Xinrong Capital and Shenzhen Wanhe. For details, see “History, Development and corporate structure—
Pre-IPO Investments—Information about our Major Pre-IPO Investors.”
(9) The general partner of Jiaxin Y uande is Jialin Management , which is in turn held by Kangchengheng as to
approximately 51.5%. The general partner of Kangchengheng Ruixiang is Kangchengheng. Kangchengheng is
held as to 87% by Mr. Y uan Y akang ( ঺ԭੰ). Therefore, under the SFO, each of Kangchengheng and Mr. Y uan
Y akang is deemed to be interested in Shares held by Jiaxin Y uande and Kangchengheng Ruixiang. See
“History, Development and Corporate Structure—Pre-IPO Investments—Information about our Major Pre-IPO
Investors.” Kangchengheng will be one of our substantial shareholder holding 45,520,095 H Shares upon
Listing (calculated based on the low-end of the indicative Offer Price range), representing 11.40% of total
issued Shares upon Listing (assuming the Overallotment Option is not exercised). See “Cornerstone Investors”
in this prospectus for details of the subscription by KCH International Investment Limited.
Saved as disclosed herein, our Directors are not aware of any other person who will,
immediately following the completion of the Global Offering (assuming that the Over-
allotment Option is not exercised) and the Conversion of Unlisted Shares into H Shares, have
any interest and/or short positions in the Shares or underlying shares of our Company which
would fall to be disclosed to the Company pursuant to the provisions of Divisions 2 and 3 of
Part XV of the SFO, or, who is, directly or indirectly, interested in 10% or more of the nominal
value of any class of our share capital carrying rights to vote in all circumstances at general
meetings of our Company.
SUBSTANTIAL SHAREHOLDERS
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The following discussion and analysis should be read in conjunction with our
consolidated financial statements included in “Appendix I—Accountant’s Report,”
together with the accompanying notes. Our consolidated financial statements have been
prepared in accordance with IFRS.
The following discussion and analysis contains forward-looking statements that
involve risks and uncertainties. These statements are based on assumptions and analysis
that we make 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, but are not limited to, those discussed in “Risk Factors” and “Forward-Looking
Statements” and elsewhere in this prospectus.
OVERVIEW
We are an intelligent driving and cabin solutions provider in China offering solutions for
critical aspects of the driving experience, including piloting, parking and in-cabin functions.
Adhering to an incremental approach of intelligent driving development, we gradually develop
our intelligent driving solutions across different levels of automation, and together with
intelligent cabin solutions and vehicle infrastructure cooperative systems, we are devoted to
becoming a leader in the automotive intelligence solutions industry. In particular, our solutions
comprise:
 Intelligent Driving Solutions. Our intelligent driving solutions primarily include
the iSafety and iPilot series. Our iSafety solutions, developed based on ADAS
technologies, feature: (i) a rich array of cost-effective functions enhancing
automotive intelligence and safety; and (ii) high compatibility with various vehicle
models, SoC platforms and other components. Leveraging our technological
capabilities at higher levels of intelligent driving techniques, we provide iPilot
solutions to accommodate the various customization needs of OEMs and tier-one
suppliers for more innovative automation functions of their vehicles in a wide range
of application scenarios. Furthermore, we are developing ADS functions and expect
to deliver our iRobo solutions in the first quarter of 2025, which is currently in the
testing phase. Our iRobo solutions can support fully autonomous driving in specific
areas and operating scenarios.
 Intelligent Cabin Solutions. Our intelligent cabin solutions are centered around
in-cabin sensing and in-cabin interaction, with primary offerings comprising DMS
solutions, OMS solutions and other solutions. Supported by our in-house proprietary
perception algorithms, our intelligent cabin solutions are able to achieve high
stability and accuracy while performing a broad spectrum of functions that enrich
the in-vehicle user experience and automotive safety.
FINANCIAL INFORMATION
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 Vehicle Infrastructure Cooperative Systems. Leveraging our core technologies
and our extensive experience of intelligent driving and cabin solutions that have
been validated on a large scale, we offer vehicle infrastructure cooperative systems,
that integrate in-house developed sensor devices such as radar and cameras and
advanced V2X technologies. Our collaboration typically involves customers in the
transportation infrastructure sector aiming to augment road safety and traffic
efficiency, as well as to improve control over traffic flow. Meanwhile, we also help
customers manage traffic flows in industry parks and parking areas.
We achieved fast revenue growth during the Track Record Period. Our revenue increased
from RMB175.2 million in 2021 to RMB279.4 million in 2022, and further increased to
RMB476.2 million in 2023, representing a CAGR of 64.9% from 2021 to 2023. Our revenue
also increased by 44.5% from RMB163.8 million in the six months ended June 30, 2023 to
RMB236.7 million in the six months ended June 30, 2024. We had net losses of RMB139.8
million, RMB220.8 million, RMB207.2 million, RMB132.8 million and RMB112.0 million,
respectively, in 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024. Our
net loss margin was 79.8%, 79.0%, 43.5%, 81.1% and 47.3% in 2021, 2022 and 2023 and the
six months ended June 30, 2023 and 2024, respectively.
BASIS OF PRESENTATION
Our historical financial information has been prepared in accordance with IFRS, issued
by the International Accounting Standards Board. The historical financial information has been
prepared under the historical cost convention, as modified by the revaluation of financial assets
and financial liabilities at fair value, which are carried at fair value.
The preparation of the historical financial information in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires management to exercise its
judgement in the process of applying our accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant
to the historical financial information are disclosed in Note 4 to the Accountant’s Report
included in Appendix I to this prospectus.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
The success and growth of our business depend on many factors. While each of these
factors presents significant opportunities for our business, they also pose important challenges
that we must successfully address to optimize our results of operations and sustain our growth.
FINANCIAL INFORMATION
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Our ability to successfully develop and commercialize our solutions and to optimize our
solutions mix
The success of our business depends on our ability to develop competitive intelligent
driving solutions, intelligent cabin solutions and vehicle infrastructure cooperative systems and
collaborate with downstream OEMs and tier-one suppliers towards commercialization. We
generate most of our revenue from sales of intelligent driving solutions to automotive OEMs
and tier-one suppliers during the Track Record Period. Our revenue increased significantly
from RMB175.2 million in 2021 to RMB279.4 million in 2022 and to RMB476.2 million in
2023 and increased from RMB163.8 million in the six months ended June 30, 2023 to
RMB236.7 million in the six months ended June 30, 2024. Such growth was mainly due to (i)
an increase in the number of design wins we obtained from OEMs, which was in line with the
increased market demand for intelligent driving solutions, (ii) an increase in the number of
delivered projects of iSafety and iPilot solutions, and (iii) the commercialization of our
intelligent cabin solutions and vehicle infrastructure cooperative systems. As of December 31,
2021, 2022 and 2023 and June 30, 2024, we had design wins under development for 20, 36,
51 and 41 vehicle models with 14, 20, 21 and 22 OEMs, respectively, and had undertaken mass
production for 22, 53, 64 and 94 vehicle models with 9, 19, 26 and 29 OEMs, respectively.
Our gross margin varies across business lines, due to a variety of factors including
manufacturing costs, technological advancement, pricing power, market demand and
availability of competing solutions, among other things. See “—Description of Key
Components of Our Results of Operations—Gross Profit and Gross Margin.” In addition, some
of our business lines, such as vehicle infrastructure cooperative systems, have achieved a high
growth rate during the Track Record Period, affecting our revenue mix. Changes in our
solutions mix and revenue mix may also affect our overall gross margin and subsequently other
aspects of our business performance.
Our gross margin increased from 9.7% in 2021 to 12.0% in 2022 and to 14.3% in 2023
and from 8.3% in the six months ended June 30, 2023 to 14.1% in the six months ended
June 30, 2024, primarily attributable to (i) the achievement of economies of scale as we scaled
up our business, and (ii) the increase in the number of delivered projects with a higher gross
margin.
Our ability to deepen relationships with existing customers and expand our customer base
Our future growth depends on our ability to maintain and deepen relationships with our
existing customers, as well as expand our customer base. Our customers are mostly automotive
OEMs and tier-one suppliers in China. For the years ended December 31, 2021, 2022 and 2023
and the six months ended June 30, 2024, the revenue from our five largest customers for the
respective years/period in aggregate was RMB136.8 million, RMB119.1 million, RMB175.6
million and RMB94.0 million, respectively, representing 78.0%, 42.7%, 37.0% and 39.8% of
our total revenue, respectively. For details, see “Business—Our Customers—Major
Customers.”
FINANCIAL INFORMATION
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Changes in relationship with our existing customers may affect our results of operation
and financial condition. We had maintained close and sustainable business relationships with
our five largest customers in each year/period of the Track Record Period. We are committed
to deepening our relationships with existing customers. Leveraging our leading technology and
diverse solutions portfolio, we believe we will be able to continue to provide competitive
intelligent driving solutions, intelligent cabin solutions and vehicle infrastructure cooperative
systems to our customers and further reinforce our cooperation with them.
Furthermore, we are dedicated to identifying and engaging new customers to expand our
customer base. Leveraging our deep insights and strong R&D capabilities in intelligent driving,
we are committed to attracting new OEM customers with our innovative solutions catering to
end users’ evolving needs. As of December 31, 2021, 2022 and 2023 and June 30, 2024, we
had design wins under development for 20, 36, 51 and 41 vehicle models with 14, 20, 21 and
22 OEMs, respectively, and had undertaken mass production for 22, 53, 64 and 94 vehicle
models with 9, 19, 26 and 29 OEMs, respectively. As we continue to optimize our solutions and
expand our sales network, we expect to attract more OEM customers in the future.
To expand our customer base, our selling expenses may increase due to our promotion and
marketing activities. Our selling expenses primarily consist of employee benefit expenses and
share-based payments related to our sales and marketing personnel and services fees. Our
selling expenses were RMB51.7 million, RMB63.4 million, RMB72.7 million, RMB33.1
million and RMB32.0 million in 2021, 2022 and 2023 and the six months ended June 30, 2023
and 2024, respectively, representing 29.5%, 22.7%, 15.3%, 20.2% and 13.5% of our total
revenue, respectively. Our selling expenses decreased as a percentage of our total revenue
during the Track Record Period as we continued to improve operational efficiency.
Our ability to effectively invest in technology and talent
Our financial performance is dependent on our ability to maintain our leading position in
the automotive intelligence solutions industry. According to CIC, in 2023, we ranked seventh
among all domestic intelligent driving solutions providers and ranked fourth among all
emerging technology companies in China, with a market share of 0.6%, in terms of revenue of
Level 0 to Level 2+ solutions. Our market share is affected by our ability to maintain our
leading position in solution performance, which further depends on our effective investments
in R&D. In particular, we are committed to enhancing our intelligent driving technology
capabilities through our investment in R&D, which we believe will further drive our future
revenue growth.
It is essential that we continually and effectively invest in technology and talent to
develop and introduce innovative solutions catering to our customers’ evolving needs. In
particular, our research and development expenses were RMB82.2 million, RMB139.3 million,
RMB149.8 million, RMB81.4 million and RMB63.3 million in 2021, 2022 and 2023 and the
six months ended June 30, 2023 and 2024, respectively. We also plan to utilize a major portion
of our net proceeds from the Global Offering to enhance our R&D capabilities. For details, see
“Future Plans and Use of Proceeds—Use of Proceeds.” Meanwhile, we intend to continually
FINANCIAL INFORMATION
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invest in attracting and retaining key talent to strengthen our technological advantages and
support our business growth. As of June 30, 2024, our R&D team comprised 304 dedicated
employees, of which 53.9% held a bachelor’s degree and 28.9% held a master’s degree or
above.
Our ability to effectively manage our costs and expenses and enhance operating efficiency
Our future profitability depends significantly on our ability to control manufacturing
costs, which are affected by a number of factors, such as production volume and raw material
prices. Our cost of sales was RMB158.2 million, RMB245.8 million, RMB408.2 million,
RMB150.2 million and RMB203.3 million in 2021, 2022 and 2023 and the six months ended
June 30, 2023 and 2024, respectively, representing 90.3%, 88.0%, 85.7%, 91.7% and 85.9% of
our total revenue, respectively. Our cost of sales primarily consists of raw materials and
components used. The key raw materials and components used in our production include
electronic components, automotive-grade chips, PCB and camera modules. We believe that as
we ramp up the production volume of our intelligent driving and in-cabin solutions, we can
achieve economies of scale such that our manufacturing costs as a percentage of our total
revenue will decrease. In addition, we also plan to continually leverage digital intelligence and
automation to optimize our operating efficiency and cost structure.
Seasonality
Our results of operations of our intelligent driving and intelligent cabin solutions
businesses are affected by seasonal fluctuations in demand for our solutions, as affected by
market trends of the automotive industry. Given our customers in the automotive industry
usually deliver more of their vehicle models towards the year end, it can have an impact on our
delivery of relevant solutions in the fourth quarter of each year. Our delivery of relevant
solutions typically increase in the second half of the year, which is generally in line with the
overall automotive industry in China according to CIC. Such fluctuations are seasonal in nature
and thus quarterly or half-year results are not indicative of our results of operations for the full
year. For relevant risks, see “Risk Factors—Risks Relating to Our Business and Industry—Our
operations are subject to seasonal fluctuations.”
CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS
The preparation of the historical financial information requires the use of accounting
estimates which, by definition, will seldom equal the actual results. Our management also
needs to exercise judgment in applying our accounting policies. Estimates and judgments are
continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on us and that are believed to
be reasonable under the circumstances. For details on such estimates and judgments, see Note
4 to the Accountant’s Report included in Appendix I to this prospectus.
FINANCIAL INFORMATION
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Our management has identified below the accounting policies, estimates and judgments
that they believe are critical to the preparation of our financial statements:
Revenue Recognition
Revenue is recognized when or as the control of the goods or services is transferred to a
customer. A customer is the party that contracts with us to purchase goods or services which
are the output of our ordinary activities in exchange for consideration.
Contracts with customers may include multiple performance obligations. For such
arrangements, we allocate revenue to each performance obligation based on its relative
standalone selling price. We generally determine standalone selling prices based on the prices
charged to customers. If the standalone selling price is not directly observable, it is estimated
using expected cost plus a margin or adjusted market assessment approach, depending on the
availability of observable information. Assumptions and estimations have been made in
estimating the relative selling price of each distinct performance obligation, and changes in
judgments on these assumptions and estimates may impact the revenue recognition.
When either party to a contract has performed, we present the contract on the consolidated
statements of balance sheets as a contract asset or a contract liability, depending on the
relationship between the entity’s performance and the customer’s payment.
If a customer pays consideration or we have a right to an amount of consideration that is
unconditional, before we transfer a good or service to the customer, we present the contract
liability when the payment is made or a receivable is recorded (whichever is earlier). A contract
liability is our obligation to transfer goods or services to a customer for which we have
received consideration (or an amount of consideration is due) from the customer.
The revenue is measured at the transaction price agreed under the contract. Amounts
disclosed as revenue are net of return, trade allowances and amounts collected on behalf of
third parties.
Sales of Solutions
We manufacture and sell intelligent driving solutions in the market and generate revenue
from sales of driving assistance solutions (iSafety), intelligent navigation assistance solutions
(iPilot), intelligent cabin solutions and other related solutions.
The revenue for sales of solutions mentioned above is recognized at a point in time when
the control of the solutions mentioned above are transferred to the customer. Specifically, sales
are recognized when the solutions have been shipped to the specific location in accordance
with the sales contract and the customers have inspected and accepted the solutions.
FINANCIAL INFORMATION
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Services and V ehicle infrastructure cooperative systems
We provide services and vehicle infrastructure cooperative systems to customers. We
recognize revenue at a point in time when performance obligations are satisfied as well as the
agreed deliverables are accepted by customers. We do not have any enforceable right to
payment before the agreed deliverables are accepted by customers.
Others
Others mainly refer to the revenue generated from sales of spare parts and rendering
maintenance services. Such revenue is recognized at a point in time.
Leases
We lease various buildings, factories and warehouses. Rental contracts are typically made
for fixed periods of one year to four years but may have extension options as described below.
Lease terms are negotiated on an individual basis and contain a wide range of different
terms and conditions. The lease agreements do not impose any covenants other than the
security interests in the leased assets that are held by the lessor. Leased assets may not be used
as security for borrowing purposes.
The lease payments are discounted using the interest rate implicit in the lease. If that rate
cannot be readily determined, which is generally the case for leases in our Group, the lessee’s
incremental borrowing rate is used, being the rate that the individual lessee would have to pay
to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a
similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, we:
 where possible, use recent third-party financing received by the individual lessee as
a starting point, adjusted to reflect changes in financing conditions since third party
financing was received;
 use a build-up approach that starts with a risk-free interest rate adjusted for credit
risk for leases held by us, which does not have recent third-party financing; and
 make adjustments specific to the lease, such as term, country, currency and security.
If a readily observable amortizing loan rate is available to the individual lessee (through
recent financing or market data) which has a similar payment profile to the lease, then the
entities within our Group use that rate as a starting point to determine the incremental
borrowing rate.
FINANCIAL INFORMATION
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Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and
the lease term on a straight-line basis. If we are reasonably certain to exercise a purchase
option, the right-of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases of building are recognized on a straight-line
basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months
or less without a purchase option.
Impairment of Financial Assets
The loss allowances for financial assets are based on assumptions about risk of default
and expected loss rates. We use judgment in making these assumptions and selecting the inputs
to the impairment calculation, based on our past history, existing market conditions, as well as
forward-looking estimates at the end of each Track Record Period. Details of the key
assumptions and inputs used are disclosed in the tables in Note 3.1 to the Accountant’s Report
included in Appendix I to this prospectus.
Inventory Provision
Inventories are stated at the lower of cost and net realizable value. The net realizable
value is the estimated selling price in the ordinary course of business less the estimated costs
of completion and the estimated costs necessary to make the sale. Even though our
management has made the best estimate about the inventory write-down loss predicted to occur
and provided allowance for write-down, the write-down assessment may still be significantly
changed due to the change of market situations.
Recognition of Share-based Payment Expenses
As disclosed in Note 29 to the Accountant’s Report included in Appendix I to this
prospectus, we granted shares to our employees, which are viewed as share-based payment
transaction in substance. These transactions resulted in the recognition of share-based payment
expenses. The directors of our Company have used the discounted cash flow method and
back-solve method to determine the fair value of the equity instruments granted. Significant
estimate on assumptions, such as the risk-free interest rate, expected volatility, dividend yield
and discount for lack of discount on marketability are made based on management’s best
estimates.
FINANCIAL INFORMATION
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RESULTS OF OPERATIONS
The following table summarizes our results of operations for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue
(RMB in thousands, except for percentages)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118175,174 100.0 279,358 100.0 476,206 100.0 163,834 100.0 236,675 100.0
Cost of sales /H1118/H1118/H1118/H1118(158,173) (90.3) (245,788) (88.0) (408,184) (85.7) (150,173) (91.7) (203,254) (85.9)
Gross profit /H1118/H1118/H1118/H111817,001 9.7 33,570 12.0 68,022 14.3 13,661 8.3 33,421 14.1
Selling expenses /H1118/H1118(51,717) (29.5) (63,374) (22.7) (72,735) (15.3) (33,118) (20.2) (32,015) (13.5)
General and
administrative
expenses /H1118/H1118/H1118/H1118/H1118(45,454) (25.9) (54,769) (19.6) (74,294) (15.6) (30,836) (18.8) (50,196) (21.2)
Research and
development
expenses /H1118/H1118/H1118/H1118/H1118(82,201) (46.9) (139,349) (49.9) (149,826) (31.5) (81,389) (49.7) (63,310) (26.7)
Net impairment
losses on
financial assets /H1118/H1118(2,196) (1.3) (7,517) (2.7) (6,116) (1.3) (4,603) (2.8) (6,595) (2.8)
Other income /H1118/H1118/H1118/H111823,908 13.6 4,734 1.7 27,922 5.9 3,160 1.9 6,259 2.6
Other gains – net /H1118/H11182,016 1.2 6,334 2.3 1,338 0.3 822 0.5 2,501 1.1
Operating loss /H1118/H1118/H1118(138,643) (79.1) (220,371) (78.9) (205,689) (43.2) (132,303) (80.8) (109,935) (46.4)
Finance costs – net /H1118 (704) (0.4) (287) (0.1) (1,406) (0.3) (496) (0.3) (2,113) (0.9)
Loss before income
tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(139,347) (79.5) (220,658) (79.0) (207,095) (43.5) (132,799) (81.1) (112,048) (47.3)
Income tax expense /H1118 (450) (0.3) (172) (0.1) (60) (0.0) (33) (0.0) – –
Loss for the year
/period /H1118/H1118/H1118/H1118/H1118/H1118(139,797) (79.8) (220,830) (79.0) (207,155) (43.5) (132,832) (81.1) (112,048) (47.3)
Loss for the
year/period
attributable to:
Owners of the
Company /H1118/H1118/H1118/H1118(132,220) (75.5) (214,864) (76.9) (197,238) (41.4) (125,830) (76.8) (108,135) (45.7)
Non-controlling
interest /H1118/H1118/H1118/H1118/H1118(7,577) (4.3) (5,966) (2.1) (9,917) (2.1) (7,002) (4.3) (3,913) (1.6)
FINANCIAL INFORMATION
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NON-IFRS MEASURES
To supplement our consolidated financial statements, which are presented in accordance
with IFRS, we also use adjusted net loss (non-IFRS measure) and adjusted net loss margin
(non-IFRS measure) as additional financial measures, which are not required by, or presented
in accordance with IFRS. We believe these non-IFRS measures, when shown in conjunction
with the corresponding IFRS measures, facilitate comparisons of operating performance from
period to period and company to company by eliminating potential impacts of items.
We believe these measures provide useful information to investors and others in
understanding and evaluating our consolidated results of operations in the same manner as they
help our management. However, our presentation of adjusted net loss (non-IFRS measure) may
not be comparable to similarly titled measures presented by other companies. The use of these
non-IFRS measures has limitations as an analytical tool, and you should not consider them in
isolation from, or as a substitute for an analysis of, our results of operations or financial
condition as reported under IFRS. We define adjusted net loss (non-IFRS measure) as net loss
for the year/period adjusted by adding back share-based payment and listing expenses and
adjusted net loss margin (non-IFRS measure) as adjusted net loss (non-IFRS measure) divided
by revenue. The adjustments have been consistently made during the Track Record Period.
The following table reconciles our adjusted net loss (non-IFRS measure) for the
year/period indicated with our net loss, or loss for the year/period presented in accordance with
IFRS:
Y ear ended December 31,
Six months ended
June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Loss for the year/period /H1118/H1118/H1118/H1118(139,797) (220,830) (207,155) (132,832) (112,048)
Add:
Share-based payment (1) /H1118/H1118/H1118/H11188,802 14,960 22,401 11,200 15,311
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 14,298
Adjusted net loss (non-IFRS
measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130,995) (205,870) (184,754) (121,632) (82,439)
Adjusted net loss margin
(non-IFRS measure) (2) /H1118/H1118/H1118(74.8)% (73.7)% (38.8)% (74.2)% (34.8)%
FINANCIAL INFORMATION
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Notes:
(1) Share-based payment is a non-cash expense arising from granting share-based awards to selected
employees. It mainly represents the arrangement that we receive services from employees as
consideration for our equity instruments. Share-based payment is not expected to result in future cash
payments. Share-based payment is recorded under our selling expenses, general and administrative
expenses and research and development expenses; and share-based payment in the above table
represents the sum of that recorded under each type of such expenses.
(2) Adjusted net loss margin (non-IFRS measure) equals adjusted net loss (non-IFRS measure) for the
year/period divided by revenue for the year/period and multiplied by 100%.
Our adjusted net loss (non-IFRS measure) increased from RMB131.0 million in 2021 to
RMB205.9 million in 2022, and decreased to RMB184.8 million in 2023. Our adjusted net loss
(non-IFRS measure) decreased from RMB121.6 million in the six months ended June 30, 2023
to RMB82.4 million in the six months ended June 30, 2024.
The increase in our adjusted net loss (non-IFRS measure) in 2022 was mainly due to: (i)
an increase in our research and development expenses, mainly arising from an increase in our
employee benefit expenses as a result of the expansion of our R&D team; and (ii) a decrease
in our other income, due to fluctuations in the one-off financial subsidies from the local
government that we received, which was partially offset by a significant increase in our gross
profit.
The decrease in our adjusted net loss (non-IFRS measure) in 2023 was mainly due to: (i)
a significant increase in our gross profit; and (ii) an increase in our other income, due to our
receipt of certain one-off financial subsidies from the local government, which was partially
offset by: (i) an increase in our general and administrative expenses, mainly arising from an
increase in our employee benefit expenses contributed by the expansion of our administrative
team; and (ii) an increase in our selling expenses, mainly due to increases in our share-based
payment and depreciation and amortization in line with our business growth.
The decrease in our adjusted net loss (non-IFRS measure) from the six months ended June
30, 2023 to the same period in 2024 was mainly due to (i) a significant increase in our gross
profit, and (ii) a decrease in our research and development expenses, as we had benefited from
earlier R&D achievements and thus optimized our R&D team structure and incurred less
non-project-specific research and development costs, which are categorized as research and
development expenses, in the six months ended June 30, 2024.
We had relatively low adjusted net loss margin (non-IFRS measure) in 2023 and the six
months ended June 30, 2024, mainly due to the increase in our revenue in such periods,
reflecting our business growth.
FINANCIAL INFORMATION
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DESCRIPTION OF KEY COMPONENTS OF OUR RESULTS OF OPERATIONS
Revenue
Our revenue increased from RMB175.2 million in 2021 to RMB279.4 million in 2022,
and further increased to RMB476.2 million in 2023, representing a CAGR of 64.9% from 2021
to 2023, which generally reflects the fast growth of our business. Our revenue also increased
by 44.5% from RMB163.8 million in the six months ended June 30, 2023 to RMB236.7 million
in the six months ended June 30, 2024, in line with our business growth. During the Track
Record Period, although we generated a small portion of revenue from overseas markets,
substantially all of our revenue was generated from the PRC market, as most of our customers
are located in the PRC.
Revenue by Business Line
During the Track Record Period, we generated revenue primarily from intelligent driving
solutions, intelligent cabin solutions and vehicle infrastructure cooperative systems. We
generally recognize revenue from sales of solutions and provision of solutions and services for
our intelligent driving solutions and intelligent cabin solutions businesses, while we recognize
revenue primarily from provision of solutions and services for our vehicle infrastructure
cooperative systems business. The following table sets forth a breakdown of our revenue by
business line for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentages)
(unaudited)
Intelligent driving
solutions /H1118/H1118/H1118/H1118/H1118173,019 98.8 267,312 95.7 386,150 81.1 142,617 87.0 182,279 77.0
iSafety solutions /H1118173,007 98.8 231,501 82.9 334,780 70.3 125,307 76.5 152,867 64.6
iPilot solutions /H1118/H1118 12 0.0 35,811 12.8 51,370 10.8 17,310 10.5 29,412 12.4
Intelligent cabin
solutions /H1118/H1118/H1118/H1118/H1118696 0.4 1,565 0.6 18,346 3.8 4,089 2.5 30,540 12.9
V ehicle infrastructure
cooperative
systems /H1118/H1118/H1118/H1118/H1118/H1118– – 722 0.3 71,454 15.0 16,965 10.4 23,626 10.0
Others
(1) /H1118/H1118/H1118/H1118/H1118/H11181,459 0.8 9,759 3.4 256 0.1 163 0.1 230 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118175,174 100.0 279,358 100.0 476,206 100.0 163,834 100.0 236,675 100.0
Note:
(1) Others mainly refer to revenue generated from sales of spare parts and rendering maintenance services.
FINANCIAL INFORMATION
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Intelligent Driving Solutions
During the Track Record Period, we derived a substantial portion of our revenue from
sales of various types of intelligent driving solutions to OEMs and tier-one suppliers. In 2021,
2022 and 2023 and the six months ended June 30, 2023 and 2024, revenue from our intelligent
driving solutions was RMB173.0 million, RMB267.3 million, RMB386.2 million, RMB142.6
million and RMB182.3 million, respectively, accounting for 98.8%, 95.7%, 81.1%, 87.0% and
77.0% of our total revenue, respectively. The overall increase in revenue from our intelligent
driving solutions was mainly attributable to: (i) an increase in the number of design wins we
obtained from OEMs, which was in line with the increased market demand for intelligent
driving solutions; and (ii) an increase in the delivered projects of our iSafety and iPilot
solutions.
Intelligent Cabin Solutions
In 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, revenue from
our intelligent cabin solutions was RMB0.7 million, RMB1.6 million, RMB18.3 million,
RMB4.1 million and RMB30.5 million, respectively, accounting for 0.4%, 0.6%, 3.8%, 2.5%
and 12.9% of our total revenue, respectively. The significant increase in such revenue from
2022 to 2023 and from the six months ended June 30, 2023 to the same period in 2024 was
primarily because (i) we developed increasingly diverse intelligent cabin solutions that cater
to various customer needs, and (ii) during the initial prototype sample phase in 2021 and 2022,
we only delivered a limited number of projects, and we gradually ramped up this business
segment since the second half of 2023.
V ehicle Infrastructure Cooperative Systems
In 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, revenue from
our vehicle infrastructure cooperative systems was nil, RMB0.7 million, RMB71.5 million,
RMB17.0 million and RMB23.6 million, respectively, accounting for nil, 0.3%, 15.0%, 10.4%
and 10.0% of our total revenue, respectively. The significant increase in such revenue in 2023
compared to 2022 was primarily due to the delivery of more large-scale projects in 2023 as
compared to a few small-scale projects delivered in 2022 when we first started delivering for
this business, as our offerings of vehicle infrastructure cooperative systems became more
established and versatile. Similarly, our revenue from vehicle infrastructure cooperative
increased from the six months ended June 30, 2023 to the same period in 2024. There were
seven, six and four new typical projects under our vehicle infrastructure cooperative systems
business in 2022 and 2023 and the six months ended June 30, 2024, respectively.
FINANCIAL INFORMATION
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--- page 395 ---
Cost of Sales
The following table sets forth a breakdown of our cost of sales by nature for the
years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue Amount
%o f
revenue
(RMB in thousands, except for percentages)
(unaudited)
Raw materials and
consumables used /H1118135,710 77.5 206,277 73.8 349,681 73.4 122,734 74.9 164,416 69.5
Employee benefit
expenses /H1118/H1118/H1118/H1118/H11184,296 2.5 12,299 4.4 16,084 3.4 7,040 4.3 13,995 5.9
Provision for
impairment of
inventories /H1118/H1118/H1118/H1118/H11184,494 2.6 5,347 1.9 6,235 1.3 4,747 2.9 9,119 3.9
Processing expenses /H1118 5,024 2.9 2,543 0.9 4,969 1.0 2,295 1.4 3,133 1.3
Outsourcing
installation fee /H1118/H11183,337 1.9 8,082 2.9 4,087 0.9 1,109 0.7 1,466 0.6
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,312 3.0 11,240 4.0 27,128 5.7 12,248 7.5 11,125 4.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158,173 90.3 245,788 88.0 408,184 85.7 150,173 91.7 203,254 85.9
Our cost of sales primarily consist of procurement costs of raw materials and
consumables, which accounts for 77.5%, 73.8%, 73.4%, 74.9% and 69.5% of our total revenue
in 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, respectively.
Throughout the Track Record Period, the procurement costs of raw materials and consumables
increased mainly in line with our revenue growth, and such increases are primarily attributable
to the increases in the delivered volume of our solutions.
FINANCIAL INFORMATION
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--- page 396 ---
Our cost of sales primarily relates to costs incurred to deliver our intelligent driving
solutions, and, to a lesser extent, our intelligent cabin solutions and vehicle infrastructure
cooperative systems. The cost of sales for each of our major business lines are therefore largely
affected by changes in the delivered volume of such solutions in a particular period. The
following table sets forth a breakdown of our cost of sales by business line for the years/periods
indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentages)
(unaudited)
Intelligent driving
solutions /H1118/H1118/H1118/H1118/H1118154,523 97.7 240,358 97.8 333,056 81.6 131,219 87.4 156,989 77.3
iSafety /H1118/H1118/H1118/H1118/H1118/H1118/H1118154,521 97.7 212,670 86.5 295,086 72.3 114,528 76.3 137,137 67.5
iPilot /H1118/H1118/H1118/H1118/H1118/H1118/H11182 0.0 27,688 11.3 37,970 9.3 16,691 11.1 19,852 9.8
Intelligent cabin
solutions /H1118/H1118/H1118/H1118/H1118708 0.4 853 0.3 17,270 4.2 4,503 3.0 28,933 14.2
V ehicle infrastructure
cooperative
systems /H1118/H1118/H1118/H1118/H1118/H1118– – 648 0.3 57,316 14.1 14,322 9.5 16,741 8.2
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,942 1.9 3,929 1.6 542 0.1 129 0.1 591 0.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158,173 100.0 245,788 100.0 408,184 100.0 150,173 100.0 203,254 100.0
FINANCIAL INFORMATION
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Gross Profit and Gross Margin
The following table sets forth our gross profit and gross margins by business line for the
years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Gross
profit
Gross
margin
Gross
profit
Gross
margin
Gross
profit
Gross
margin
Gross
profit
Gross
margin
Gross
profit
Gross
margin
(RMB in thousands, except for percentages)
(unaudited)
Intelligent driving
solutions /H1118/H1118/H1118/H1118/H111818,496 10.7% 26,954 10.1% 53,094 13.7% 11,398 8.0% 25,290 13.9%
iSafety /H1118/H1118/H1118/H1118/H1118/H111818,486 10.7% 18,832 8.1% 39,694 11.9% 10,779 8.6% 15,730 10.3%
iPilot /H1118/H1118/H1118/H1118/H1118/H1118/H111810 85.2% 8,122 22.7% 13,400 26.1% 619 3.6% 9,560 32.5%
Intelligent cabin
solutions /H1118/H1118/H1118/H1118/H1118(12) (1.7)% 712 45.5% 1,076 5.9% (414) (10.1)% 1,607 5.3%
V ehicle infrastructure
cooperative
systems /H1118/H1118/H1118/H1118/H1118/H1118– – 74 10.2% 14,138 19.8% 2,643 15.6% 6,885 29.1%
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118(1,483) (101.6)% 5,830 59.7% (286) (111.7)% 34 20.9% (361) (157.0)%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,001 9.7% 33,570 12.0% 68,022 14.3% 13,661 8.3% 33,421 14.1%
Note:
(1) Others mainly refer to gross profit and gross margin of sales of spare parts and rendering maintenance
services. These activities contributed an insignificant portion of our revenue during the Track Record
Period. The gross profit and gross margin of others fluctuated significantly during the Track Record
Period, as we performed the aforementioned activities only based on actual operating needs.
Our gross margin increased from 9.7% in 2021 to 12.0% in 2022 and to 14.3% in 2023,
primarily attributable to (i) the achievement of economies of scale as we scaled up our
business, and (ii) an increase in the revenue contribution of our solutions, such as iPilot
solutions, under the intelligent driving solutions and vehicle infrastructure cooperative systems
businesses with a higher gross margin. Similarly, our gross margin increased from 8.3% in the
six months ended June 30, 2023 to 14.1% in the six months ended June 30, 2024. The gross
margin of our iSafety solutions decreased from 10.7% in 2021 to 8.1% in 2022 as a result of
the changes in product mix and a decrease in the unit price of earlier product series. As we
launched new product series with relatively higher margins in 2023, the gross margin of our
iSafety solutions increased from 8.1% in 2022 to 11.9% in 2023. The gross margin of our iPilot
solutions in 2021 is not considered to be representative, as we only started the delivery of iPilot
solutions in 2021 and the revenue from our iPilot solutions only amounted to RMB12,000 in
2021. The gross margin of our iPilot solutions was relatively high during such year primarily
because we were able to secure relatively high selling prices from customers due to our
FINANCIAL INFORMATION
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--- page 398 ---
significant efforts to develop such prototype samples and limited supply of comparable
products in the market. The gross margin of our iPilot solutions increased significantly from
3.6% in the six months ended June 30, 2023 to 32.5% in the six months ended June 30, 2024,
as we advanced the product specifications and performance of our iPilot solutions, which
boosted our selling prices and gross profit margin.
Meanwhile, our intelligent cabin solutions experienced significant fluctuations in its
gross margins during the Track Record Period. The gross margins of this business segment in
2021, 2022 and the six months ended June 30, 2023 were not representative, as we only
delivered a limited number of projects during its prototype sample phase in such periods. The
relatively high gross margin in 2022 was primarily attributable to the relatively high selling
prices resulted from our significant efforts to develop such prototype samples and limited
supply of such finished products. We gradually ramped up this business segment since the
second half of 2023 but have not yet fully realized economies of scale.
The gross margin of our vehicle infrastructure cooperative systems increased significantly
from 2022 to 2023 and from the six months ended June 30, 2023 to the same period in 2024,
primarily as such segment became more established in the second half of 2023 and we had
obtained and delivered more large-scale projects that had relatively higher gross margin since
then.
During the Track Record Period, the gross profit margin of our intelligent cabin solutions
was generally lower than that of our intelligent driving solutions, primarily because our
intelligent driving solution business was more established and we had begun benefiting from
economies of scale for this segment while we were still gradually ramping up our intelligent
cabin solution business and strategically lowered our selling prices to capture market
opportunities. During the Track Record Period, we had relatively high gross profit margins for
our vehicle infrastructure cooperative systems primarily because projects in such segment were
generally large in scale and broad in scope. In addition, we were able to utilize technology
developed for the intelligent driving solutions in developing our vehicle infrastructure
cooperative systems and thus realized relatively high gross margin through such synergistic
effect.
FINANCIAL INFORMATION
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--- page 399 ---
Selling Expenses
Our selling expenses primarily consist of (i) employee benefit expenses, (ii) service fees,
(iii) share-based payment, (iv) office and travel expenses, and (v) advertising and publicity
expenses. The following table sets forth a breakdown of our selling expenses for the
years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentages)
(unaudited)
Employee benefit
expenses /H1118/H1118/H1118/H1118/H1118/H111825,535 49.4 29,887 47.2 29,883 41.1 15,290 46.2 11,532 36.0
Services fees /H1118/H1118/H1118/H1118/H11187,221 14.0 8,947 14.1 10,475 14.4 4,065 12.3 3,348 10.5
Office and travel
expenses /H1118/H1118/H1118/H1118/H1118/H11187,874 15.2 9,874 15.6 10,156 13.9 4,539 13.7 3,930 12.3
Share-based payment /H1118 1,073 2.1 3,176 5.0 6,698 9.2 3,348 10.1 8,923 27.9
Advertising and
publicity expenses /H1118 3,195 6.2 4,174 6.6 5,790 8.0 2,324 7.0 691 2.2
Depreciation and
amortization /H1118/H1118/H1118/H1118850 1.6 1,903 3.0 3,579 4.9 1,693 5.1 1,586 5.0
Materials consumed in
sales activities /H1118/H1118/H11181,545 3.0 1,140 1.8 2,186 3.0 409 1.2 1,246 3.9
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,424 8.5 4,273 6.7 3,968 5.5 1,450 4.4 759 2.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,717 100.0 63,374 100.0 72,735 100.0 33,118 100.0 32,015 100.0
Our selling expenses were RMB51.7 million, RMB63.4 million, RMB72.7 million,
RMB33.1 million and RMB32.0 million in 2021, 2022 and 2023 and the six months ended June
30, 2023 and 2024, respectively, representing 29.5%, 22.7%, 15.3%, 20.2% and 13.5% of our
total revenue, respectively. Our selling expenses decreased as a percentage of our total revenue
during the Track Record Period, as we continued to improve operational efficiency.
In particular, our employee benefit expenses under our selling expenses increased from
RMB25.5 million in 2021 to RMB29.9 million in 2022, primarily due to the expansion of our
sales and marketing team, and remained relatively stable at RMB29.9 million in 2023
compared to 2022. Our employee benefit expenses under our selling expenses decreased from
RMB15.3 million in the six months ended June 30, 2023 to RMB11.5 million in the six months
ended June 30, 2024 primarily because we benefited from our stable customer relationships and
thus optimized our sales and marketing team structure. Our service fees were RMB7.2 million,
RMB8.9 million, RMB10.5 million, RMB4.1 million and RMB3.3 million in 2021, 2022 and
2023 and the six months ended June 30, 2023 and 2024, respectively, and mainly comprise
maintenance fees and after-sales technical support service fees.
FINANCIAL INFORMATION
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General and Administrative Expenses
Our general and administrative expenses primarily consist of (i) employee benefit
expenses, (ii) service fees, (iii) depreciation and amortization, (iv) office and travel expenses,
and (v) share-based payment. The following table sets forth a breakdown of our general and
administrative expenses for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentages)
(unaudited)
Employee benefit
expenses /H1118/H1118/H1118/H1118/H1118/H111824,313 53.5 30,073 54.9 43,829 59.0 18,370 59.6 20,440 40.7
Listing expenses /H1118/H1118/H1118 – – – – – – – – 14,298 28.5
Service fees /H1118/H1118/H1118/H1118/H11184,457 9.8 5,986 10.9 7,931 10.7 1,866 6.1 2,847 5.7
Depreciation and
amortization /H1118/H1118/H1118/H11183,561 7.8 5,935 10.8 7,156 9.6 3,580 11.6 4,105 8.2
Office and travel
expenses /H1118/H1118/H1118/H1118/H1118/H11184,965 10.9 5,025 9.2 6,327 8.5 2,805 9.1 2,215 4.4
Share-based payment /H1118 4,267 9.4 4,986 9.1 5,689 7.7 2,845 9.2 3,678 7.3
Rent, water, electricity
and property
management fees /H1118/H11181,059 2.3 737 1.3 1,246 1.7 278 0.9 1,009 2.0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,832 6.3 2,027 3.8 2,116 2.8 1,092 3.5 1,604 3.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,454 100.0 54,769 100.0 74,294 100.0 30,836 100.0 50,196 100.0
Our general and administrative expenses were RMB45.5 million, RMB54.8 million,
RMB74.3 million, RMB30.8 million and RMB50.2 million in 2021, 2022 and 2023 and the six
months ended June 30, 2023 and 2024, respectively, representing 25.9%, 19.6%, 15.6%, 18.8%
and 21.2% of our total revenue, respectively. Our general and administrative expenses
decreased as a percentage of our total revenue from 2021 to 2023, as we made continued efforts
to improve our administrative efficiency. Our general and administrate expenses increased as
a percentage of our total revenue from the six months ended June 30, 2023 to the same period
in 2024 primarily attributable to the listing expenses incurred in the six months ended June 30,
2024. Our rent, water, electricity and property management fees were relatively low in the
six months ended June 30, 2023 as we benefited from reduction in rent for our offices in Wuhan
and Nanjing in relation to certain governmental policies to mitigate impacts of COVID-19
pandemic on small- and medium-sized enterprises.
FINANCIAL INFORMATION
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--- page 401 ---
Our employee benefit expenses under our general and administrative expenses increased
throughout the Track Record Period, primarily contributed by the expansion of our
administrative team. During the Track Record Period, the service fees under our general and
administrative expenses were primarily audit fees, legal service fees and other service fees.
Research and Development Expenses
Our research and development expenses primarily consist of (i) employee benefit
expenses, and (ii) service fees. The following table sets forth a breakdown of our research and
development expenses for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount % Amount % Amount % Amount % Amount %
(RMB in thousands, except for percentages)
(unaudited)
Employee benefit
expenses /H1118/H1118/H1118/H1118/H1118/H111853,714 65.3 94,136 67.6 90,907 60.7 49,352 60.6 40,784 64.4
Service fees /H1118/H1118/H1118/H1118/H111810,411 12.7 16,871 12.1 26,949 18.0 16,761 20.6 9,762 15.4
Depreciation and
amortization /H1118/H1118/H1118/H11183,809 4.6 6,910 5.0 9,834 6.6 5,025 6.2 4,912 7.8
Share-based payment /H1118 3,462 4.2 6,798 4.9 10,014 6.7 5,007 6.2 2,710 4.3
Office and travel
expenses /H1118/H1118/H1118/H1118/H1118/H11182,726 3.3 3,624 2.6 3,448 2.3 2,002 2.5 816 1.3
Rent, water, electricity
and property
management fees /H1118/H1118 894 1.1 1,682 1.2 2,590 1.7 854 1.0 1,386 2.2
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,185 8.8 9,328 6.6 6,084 4.0 2,388 2.9 2,940 4.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,201 100.0 139,349 100.0 149,826 100.0 81,389 100.0 63,310 100.0
Our research and development expenses were RMB82.2 million, RMB139.3 million,
RMB149.8 million, RMB81.4 million and RMB63.3 million in 2021, 2022 and 2023 and the
six months ended June 30, 2023 and 2024, respectively, representing 46.9%, 49.9%, 31.5%,
49.7% and 26.7% of our total revenue, respectively.
In particular, our employee benefit expenses under our research and development
expenses increased from RMB53.7 million in 2021 to RMB94.1 million in 2022, primarily due
to the expansion of our R&D team. Such employee benefit expenses remained relatively stable
at RMB90.9 million in 2023 compared to 2022. This expense line item decreased from
RMB49.4 million in the six months ended June 30, 2023 to RMB40.8 million in the six months
ended June 30, 2024 as we had benefited from earlier R&D achievements and thus optimized
our R&D team structure and conducted less general research and development activities in the
FINANCIAL INFORMATION
– 391 –


--- page 402 ---
six months ended June 30, 2024. We record costs of general research and development
activities as research and development expenses and costs of project-specific research and
development activities as costs of sales.
We also experienced increases in our service fees during the Track Record Period.
Such service fees were mainly in relation to the development of certain projects to support the
continual enhancement of our technological capabilities and expansion of our solutions
portfolio, such as V2X platform construction project and vehicle management platform
technology development project. Our service fees under our research and development
expenses decreased from RMB16.8 million in the six months ended June 30, 2023 to RMB9.8
million in the six months ended June 30, 2024 primarily attributable to a decrease in our
engagement of third parties for such services during such period as we had benefited from
earlier R&D achievements. Nevertheless, as our solutions portfolio becomes increasingly more
comprehensive, we expect to continue to incur such service fees to optimize the efficiency of
our R&D activities.
Net Impairment Losses on Financial Assets
Our net impairment losses on financial assets primarily represent impairment losses of
trade and notes receivables. In 2021, 2022 and 2023 and the six months ended June 30, 2023
and 2024, we recorded net impairment losses on financial assets of RMB2.2 million, RMB7.5
million, RMB6.1 million, RMB4.6 million and RMB6.6 million, respectively. The increase in
such impairment losses from 2021 to 2022 and from the six months ended June 30, 2023 to the
six months ended June 30, 2024 was primarily due to an increase in our provision for trade and
notes receivables, mainly in line with the expansion in our business scale.
Other Income
Our other income, primarily consisting of government grants, was RMB23.9 million,
RMB4.7 million, RMB27.9 million, RMB3.2 million and RMB6.3 million in 2021, 2022 and
2023 and the six months ended June 30, 2023 and 2024, respectively. Such government grants
were primarily financial subsidies from the local government. The fluctuations in our other
income during the Track Record Period were primarily due to (i) our receipt of RMB12.5
million and RMB12.5 million as one-off financial subsidies for new resident enterprises from
the local government in 2021 and 2023, respectively, and (ii) our receipt of RMB3.5 million,
RMB6.6 million and RMB3.0 million as V A T tax rebate in 2021, 2023 and the six months
ended June 30, 2024, respectively. There are no unfulfilled conditions or other contingencies
attaching to the grants recognized.
FINANCIAL INFORMATION
– 392 –


--- page 403 ---
Other Gains – Net
Our net other gains primarily consist of net fair value gains on financial assets at fair
value through profit or loss (“ FVPL ”). Our net other gains were RMB2.0 million, RMB6.3
million, RMB1.3 million, RMB0.8 million and RMB2.5 million in 2021, 2022 and 2023 and
the six months ended June 30, 2023 and 2024, respectively. The following table sets forth a
breakdown of our net other gains for the years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Net fair value gains on
financial assets at FVPL /H1118/H1118 2,689 8,054 3,786 1,414 2,385
Net foreign exchange losses /H1118/H1118 (174) (96) (198) (148) (204)
Net gains/(losses) from
termination of leases /H1118/H1118/H1118/H1118/H11188 61 (13) 22 –
Net losses on disposals of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2) (47) (2) (54)
Donation expenditure /H1118/H1118/H1118/H1118/H1118/H1118(118) (175) (50) – –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(389) (1,508) (2,140) (464) 374
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,016 6,334 1,338 822 2,501
We had net fair value gains on financial assets at FVPL, which were primarily in relation
to our investments in structured deposits and wealth management products, of RMB2.7 million,
RMB8.1 million, RMB3.8 million, RMB1.4 million and RMB2.4 million in 2021, 2022 and
2023 and the six months ended June 30, 2023 and 2024, respectively. See “—Discussion of
Certain Key Balance Sheet Items—Financial Assets at FVPL” and Note 24 to the Accountant’s
Report in Appendix I to this prospectus for details on the fair value measurement of financial
assets at FVPL.
FINANCIAL INFORMATION
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--- page 404 ---
Finance Costs – Net
Our finance income represents interest income from cash and cash equivalents, while our
finance costs primarily consist of interest expenses on bank borrowings and lease liabilities.
The following table sets forth a breakdown of our finance income and finance costs for the
years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Finance income:
Interest income from cash and
cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865 909 1,760 890 1,606
Other interest income /H1118/H1118/H1118/H1118/H1118/H1118147 325 207 124 63
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212 1,234 1,967 1,014 1,669
Finance costs:
Interest expenses on bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(472) (858) (2,139) (1,082) (3,039)
Interest expenses on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(444) (663) (1,234) (428) (743)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(916) (1,521) (3,373) (1,510) (3,782)
Finance costs – net /H1118/H1118/H1118/H1118/H1118/H1118/H1118(704) (287) (1,406) (496) (2,113)
In 2021, 2022 and 2023, our finance income was RMB0.2 million, RMB1.2 million and
RMB2.0 million, respectively. The increasing trend was primarily due to an increase in the
interest income from cash and cash equivalents in relation to our deposit with a relatively high
interest rate. Our finance income increased from RMB1.0 million in the six months ended June
30, 2023 to RMB1.7 million in the six months ended June 30, 2024 primarily due to an increase
in our cash deposit balance during such period.
Our finance costs increased from RMB0.9 million in 2021 to RMB1.5 million in 2022 and
to RMB3.4 million in 2023, and increased from RMB1.5 million in the six months ended
June 30, 2023 to RMB3.8 million in the six months ended June 30, 2024, primarily due to: (i)
an increase in the interest expenses on bank borrowings, in line with an increase in our
interest-bearing bank borrowings; and (ii) an increase in the interest expenses on lease
liabilities from 2021 to 2023, which was in relation to our new leases for offices and factories
in line with our business expansion.
FINANCIAL INFORMATION
– 394 –


--- page 405 ---
Income Tax Expense
In 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, our income
tax expense was RMB0.5 million, RMB0.2 million, RMB60,000, RMB33,000 and nil,
respectively.
Our Company and its PRC subsidiaries were subject to a statutory income tax rate of 25%
on the assessable profits during the Track Record Period, based on the existing legislation,
interpretations and practices in respect thereof, except as disclosed below:
Our Company was recognized as a national High and New Technology Enterprise
(“HNTE ”) in 2020 and 2023, and hence has been entitled to a preferential income tax rate of
15% from 2020 until three years after 2023. In addition, a subsidiary of our Group, Nanjing
Y oujia Technology Co., Ltd. (ʮ̡), was recognized as a national HNTE in
2020 and 2023, and has been entitled to a preferential income tax rate of 15% from 2020 until
three years after 2023. Meanwhile, during the Track Record Period, certain PRC subsidiaries
of our Group were qualified as “small low-profit enterprises” under the EIT Law of the PRC
and enjoyed a preferential income tax rate of 20% for certain portion of their respective taxable
income pursuant to relevant legal requirements. For details, see Note 12 to the Accountant’s
Report in Appendix I to this prospectus.
PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Revenue
Our revenue increased by 44.5% from RMB163.8 million in the six months ended June
30, 2023 to RMB236.7 million in the six months ended June 30, 2024. The increase was
primarily driven by the increased revenue from our intelligent driving solutions and intelligent
cabin solutions.
 Revenue from our intelligent driving solutions increased by 27.8% from RMB142.6
million in the six months ended June 30, 2023 to RMB182.3 million in the six
months ended June 30, 2024, primarily due to an increase in the delivered projects
of our iSafety and iPilot solutions primarily attributable to an increase in the number
of our customers in such period.
 Revenue from our intelligent cabin solutions increased significantly from RMB4.1
million in the six months ended June 30, 2023 to RMB30.5 million in the six months
ended June 30, 2024, primarily because we gradually ramped up this business
segment since the second half of 2023 after the initial prototype sample phase,
during which we only delivered a limited number of projects.
FINANCIAL INFORMATION
– 395 –


--- page 406 ---
 Revenue from our vehicle infrastructure cooperative systems increased by 39.3%
from RMB17.0 million in the six months ended June 30, 2023 to RMB23.6 million
in the six months ended June 30, 2024, primarily because we delivered more
large-scale projects in the six months ended June 30, 2024 as compared to the same
period in 2023 as our offerings of vehicle infrastructure cooperative systems became
more established and versatile.
Cost of Sales
Our cost of sales increased by 35.3% from RMB150.2 million in the six months ended
June 30, 2023 to RMB203.3 million in the six months ended June 30, 2024, mainly in line with
the increase in our revenue.
Gross Profit and Gross Margin
As a result of the forgoing, our gross profit increased significantly from RMB13.7 million
in the six months ended June 30, 2023 to RMB33.4 million in the six months ended June 30,
2024.
Our gross margin increased from 8.3% in the six months ended June 30, 2023 to 14.1%
in the six months ended June 30, 2024, primarily attributable to the increases in the revenue
contribution of our iPilot solutions, which have a higher gross margin.
 Gross margin of our intelligent driving solutions increased from 8.0% in the six
months ended June 30, 2023 to 13.9% in the six months ended June 30, 2024,
primarily attributable to: (i) the achievement of economies of scale, since we were
able to deliver more of our intelligent driving solutions and scale up our business
with increased efficiency, as our portfolio became mature and more comprehensive
leveraging our R&D capabilities; and (ii) an increase in the gross profit margin of
our iPilot solutions as we advanced our product specifications and performance.
 We recorded gross loss margin of our intelligent cabin solutions of 10.1% for in the
six months ended June 30, 2023 and gross margin of 5.3% in the six months ended
June 30, 2024. As we only delivered a limited number of projects during its
prototype sample phase in the first half of 2023, the gross loss margin in such period
was not representative.
 Gross margin of our vehicle infrastructure cooperative systems increased from
15.6% in the six months ended June 30, 2023 to 29.1% in the six months ended June
30, 2024, primarily because we delivered more large-scale projects that had a
relatively higher gross margin in the six months ended June 30, 2024 as our
offerings of vehicle infrastructure cooperative systems became more established and
versatile.
FINANCIAL INFORMATION
– 396 –


--- page 407 ---
Selling Expenses
Our selling expenses slightly decreased from RMB33.1 million in the six months ended
June 30, 2023 to RMB32.0 million in the six months ended June 30, 2024, primarily
attributable to a decrease of RMB3.8 million in our employee benefit expenses primarily
because we benefited from our stable customer relationships and thus optimized our sales and
marketing team structure, partially offset by an increase of RMB5.6 million in our share-based
payment mainly due to the amortization of equity incentives granted in 2023.
General and Administrative Expenses
Our general and administrative expenses increased by 62.8% from RMB30.8 million in
the six months ended June 30, 2023 to RMB50.2 million in the six months ended June 30, 2024,
primarily attributable to the listing expenses incurred in the six months ended June 30, 2024.
Research and Development Expenses
Our research and development expenses decreased by 22.2% from RMB81.4 million in
the six months ended June 30, 2023 to RMB63.3 million in the six months ended June 30, 2024,
as we had benefited from earlier R&D achievements and thus optimized our R&D team
structure and incurred less non-project-specific research and development costs, which are
categorized as research and development expenses, in the six months ended June 30, 2024.
Net Impairment Losses on Financial Assets
Our net impairment losses on financial assets increased by 43.3% from RMB4.6 million
in the six months ended June 30, 2023 to RMB6.6 million in the six months ended June 30,
2024, primarily due to an increase in our provision for trade and notes receivables, mainly in
line with the expansion in our business scale.
Other Income
Our other income increased by 98.1% from RMB3.2 million in the six months ended
June 30, 2023 to RMB6.3 million in the six months ended June 30, 2024, primarily attributable
to our receipt of RMB3.0 million as V A T tax rebate in the six months ended June 30, 2024.
Other Gains – Net
Our net other gains increased significantly from RMB0.8 million in the six months ended
June 30, 2023 to RMB2.5 million in the six months ended June 30, 2024, primarily attributable
to an increase of RMB1.0 million in net fair value gains on financial assets at FVPL from our
investments in structured deposits and wealth management products.
FINANCIAL INFORMATION
– 397 –


--- page 408 ---
Finance Costs – Net
Our net finance costs increased significantly from RMB0.5 million in the six months
ended June 30, 2023 to RMB2.1 million in the six months ended June 30, 2024, primarily due
to an increase in the interest expenses on bank borrowings, in line with an increase in our
interest-bearing bank borrowings, partially offset by an increase in the interest income from
cash and cash equivalents primarily due to an increase in our cash deposit balance during such
period.
Loss for the Period
As a result of the foregoing, our loss for the period decreased by 15.6% from RMB132.8
million in the six months ended June 30, 2023 to RMB112.0 million in the six months ended
June 30, 2024.
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Our revenue increased by 70.4% from RMB279.4 million in 2022 to RMB476.2 million
in 2023. The increase was primarily driven by the increased revenue from our intelligent
driving solutions and vehicle infrastructure cooperative systems.
 Revenue from our intelligent driving solutions increased by 44.5% from RMB267.3
million in 2022 to RMB386.2 million in 2023, primarily due to: (i) an increase in
the number of design wins we obtained from OEMs, which was in line with the
increased market demand for intelligent driving solutions; and (ii) an increase in the
revenue from our delivery of iPilot solutions.
 Revenue from our intelligent cabin solutions increased significantly from RMB1.6
million in 2022 to RMB18.3 million in 2023, primarily because we were gradually
ramping up this business in 2023 after the initial prototype sample phase, during
which we only delivered a limited number of projects.
 Revenue from our vehicle infrastructure cooperative systems increased significantly
from RMB0.7 million in 2022 to RMB71.5 million in 2023, primarily due to the
delivery of more large-scale projects in 2023 as compared to a few small-scale
projects delivered in 2022 when we first started delivering for this business, as our
offerings of vehicle infrastructure cooperative systems became more established and
versatile. There were seven and six typical projects under our vehicle infrastructure
cooperative systems business in 2022 and 2023, respectively.
FINANCIAL INFORMATION
– 398 –


--- page 409 ---
Cost of Sales
Our cost of sales increased by 66.1% from RMB245.8 million in 2022 to RMB408.2
million in 2023, mainly in line with the increase in our revenue.
Gross Profit and Gross Margin
As a result of the forgoing, our gross profit increased significantly from RMB33.6 million
in 2022 to RMB68.0 million in 2023.
Our gross margin increased from 12.0% in 2022 to 14.3% in 2023, primarily attributable
to the increases in the revenue contribution of our vehicle infrastructure cooperative systems,
which have a higher gross margin.
 Gross margin of our intelligent driving solutions increased from 10.1% in 2022 to
13.7% in 2023, primarily attributable to: (i) the achievement of economies of scale,
since we were able to deliver more of our intelligent driving solutions and scale up
our business with increased efficiency, as our portfolio became mature and more
comprehensive leveraging our R&D capabilities; and (ii) an increase in the number
of delivered projects of iPilot solutions, which have a higher gross margin.
 Gross margin of our intelligent cabin solutions decreased from 45.5% in 2022 to
5.9% in 2023. The gross margin of our intelligent cabin solutions business in 2022
is not considered to be representative, as such business was in a prototype sample
phase in 2022, during which we only delivered a limited number of projects. The
relatively high gross margin in 2022 was primarily attributable to the relatively high
selling prices resulted from significant efforts devoted to develop such prototype
samples and limited supply of such finished products. In 2023, we were gradually
ramping up this business but had not yet achieved economies of scale.
 Gross margin of our vehicle infrastructure cooperative systems increased from
10.2% in 2022 to 19.8% in 2023. As our offerings of vehicle infrastructure
cooperative systems became more established and versatile in 2023, we obtained
and delivered more large-scale projects that had a relatively higher gross margin.
Selling Expenses
Our selling expenses increased by 14.8% from RMB63.4 million in 2022 to RMB72.7
million in 2023, primarily due to an increase in share-based payment recorded for our sales and
marketing personnel.
FINANCIAL INFORMATION
– 399 –


--- page 410 ---
General and Administrative Expenses
Our general and administrative expenses increased by 35.6% from RMB54.8 million in
2022 to RMB74.3 million in 2023, primarily due to an increase in employee benefit expenses
contributed by the expansion of our administrative team.
Research and Development Expenses
Our research and development expenses increased by 7.5% from RMB139.3 million in
2022 to RMB149.8 million in 2023, primarily due to: (i) an increase in the service fees in
relation to the development of certain projects to support the continual enhancement of our
technological capabilities and expansion of our solutions portfolio, such as V2X platform
construction project and vehicle management platform technology development project; (ii) an
increase in the depreciation and amortization, which was in line with our business expansion;
and (iii) an increase in share-based payment recorded for our R&D personnel.
Net Impairment Losses on Financial Assets
Our net impairment losses on financial assets remained relatively stable at RMB7.5
million and RMB6.1 million in 2022 and 2023, respectively.
Other Income
Our other income increased significantly from RMB4.7 million in 2022 to RMB27.9
million in 2023, primarily attributable to (i) our receipt of a one-off financial subsidy for new
resident enterprises from the local government in 2023, and (ii) our receipts of V A T tax rebate
in 2023.
Other Gains – Net
Our net other gains decreased by 78.9% from RMB6.3 million in 2022 to RMB1.3 million
in 2023, primarily due to a decrease in net fair value gains on financial assets at FVPL in
relation to our investments in structured deposits and wealth management products.
Finance Costs – Net
Our net finance costs increased significantly from RMB0.3 million in 2022 to RMB1.4
million in 2023, primarily due to: (i) an increase in the interest expenses on bank borrowings,
in line with an increase in our interest-bearing bank borrowings; and (ii) an increase in the
interest expenses on lease liabilities, which was in relation to our new leases for offices and
factories in line with our business expansion, partially offset by an increase in the interest
income from cash and cash equivalents in relation to our deposit with a relatively high interest
rate.
FINANCIAL INFORMATION
– 400 –


--- page 411 ---
Loss for the Y ear
As a result of the foregoing, our loss for the year decreased by 6.2% from RMB220.8
million in 2022 to RMB207.2 million in 2023.
Y ear Ended December 31, 2022 Compared to Y ear Ended December 31, 2021
Revenue
Our revenue increased by 59.5% from RMB175.2 million in 2021 to RMB279.4 million
in 2022. The increase was primarily attributable to the increased sales of our intelligent driving
solutions.
 Revenue from our intelligent driving solutions increased by 54.5% from RMB173.0
million in 2021 to RMB267.3 million in 2022, primarily due to an increase in the
number of design wins we obtained from OEMs, which was in line with the
increased market demand for intelligent driving solutions.
 Revenue from our intelligent cabin solutions increased significantly from RMB0.7
million in 2021 to RMB1.6 million in 2022, as we were in the prototype sample
phase of our intelligent cabin solutions business, and delivered more projects in
2022 compared to 2021 as this business became maturer.
 Revenue from our vehicle infrastructure cooperative systems was nil in 2021 and
RMB0.7 million in 2022, primarily because we commenced the delivery of projects
for this business in 2022.
Cost of Sales
Our cost of sales increased by 55.4% from RMB158.2 million in 2021 to RMB245.8
million in 2022, mainly in line with the increase in our revenue.
Gross Profit and Gross Margin
As a result of the forgoing, our gross profit increased by 97.5% from RMB17.0 million
in 2021 to RMB33.6 million in 2022.
Our gross margin increased from 9.7% in 2021 to 12.0% in 2022, primarily attributable
to our sales of certain spare parts. We generally enter into such type of transactions for
inventory management purposes based on our actual inventory needs and market conditions.
 Gross margin of our intelligent driving solutions remained relatively stable at 10.7%
in 2021 and 10.1% in 2022.
FINANCIAL INFORMATION
– 401 –


--- page 412 ---
 Gross margin of our intelligent cabin solutions changed from a gross loss margin of
1.7% in 2021 to a gross profit margin of 45.5% in 2022. As we only delivered a
limited number of projects during its prototype sample phase in 2021 and 2022, the
gross margins of this business in 2021 and 2022 are not considered to be
representative.
 Our vehicle infrastructure cooperative systems had a gross profit margin of nil in
2021 and 10.2% in 2022, primarily because we commenced the delivery of projects
for this business in 2022.
Selling Expenses
Our selling expenses increased by 22.5% from RMB51.7 million in 2021 to RMB63.4
million in 2022, primarily due to (i) an increase in employee benefit expenses in relation to the
expansion of our sales and marketing team, and (ii) an increase in share-based payment
recorded for our sales and marketing personnel.
General and Administrative Expenses
Our general and administrative expenses increased by 20.5% from RMB45.5 million in
2021 to RMB54.8 million in 2022, primarily due to (i) an increase in employee benefit
expenses contributed by the expansion of our administrative team, and (ii) an increase in
depreciation and amortization in relation to the office equipment, software and office
renovation in line with our business expansion.
Research and Development Expenses
Our research and development expenses increased by 69.5% from RMB82.2 million in
2021 to RMB139.3 million in 2022, primarily due to (i) an increase in employee benefit
expenses, as a result of the expansion of our R&D team, and (ii) an increase in the service fees
in relation to the development of certain projects to support the continual enhancement of our
technological capabilities and expansion of our solutions portfolio, such as V2X platform
construction project and vehicle management platform technology development project.
Net Impairment Losses on Financial Assets
Our net impairment losses on financial assets increased significantly from RMB2.2
million in 2021 to RMB7.5 million in 2022, primarily due to the increase in our provision for
trade and notes receivables in line with the expansion in our business scale.
Other Income
Our other income decreased by 80.2% from RMB23.9 million in 2021 to RMB4.7 million
2022, primarily due to our receipt of a one-off financial subsidy for new resident enterprises
from the local government and V A T tax rebate in 2021.
FINANCIAL INFORMATION
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--- page 413 ---
Other Gains – Net
Our net other gains increased significantly from RMB2.0 million in 2021 to RMB6.3
million in 2022, primarily due to an increase in net fair value gains on financial assets at FVPL
from our investments in structured deposits and wealth management products.
Finance Costs – Net
Our net finance costs decreased by 59.2% from RMB0.7 million in 2021 to RMB0.3
million in 2022, primarily due to an increase in the interest income from cash and cash
equivalents in relation to our deposit with a relatively high interest rate, partially offset by: (i)
an increase in the interest expenses on bank borrowings, in line with an increase in our
interest-bearing bank borrowings; and (ii) an increase in the interest expenses on lease
liabilities, which was in relation to our new leases for offices and factories in line with our
business expansion.
Loss for the Y ear
As a result of the foregoing, our loss for the year increased by 58.0% from RMB139.8
million in 2021 to RMB220.8 million in 2022.
DISCUSSION OF CERTAIN KEY BALANCE SHEET ITEMS
The following table sets forth a summary of our consolidated statement of financial
position as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Non-current assets
Property, plant and equipment /H1118/H111814,152 24,984 35,697 40,510
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,682 13,899 32,535 50,829
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,778 9,161 10,340 15,883
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,013 4,771 4,650
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H11187,927 5,028 12,358 28,994
Total non-current assets /H1118/H1118/H1118/H1118/H111840,539 58,085 95,701 140,866
FINANCIAL INFORMATION
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--- page 414 ---
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,770 168,485 144,961 129,595
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,010 1,690 1,690
Trade and notes receivables /H1118/H1118/H1118100,890 217,670 333,585 398,360
Other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,037 40,833 66,878 69,214
Financial assets at fair value
through other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,438 23,558 36,462 7,008
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118135,187 44,581 210,597 120,901
Cash and cash equivalents /H1118/H1118/H1118/H1118272,824 243,785 197,934 220,125
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118705,146 758,922 992,107 946,893
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118745,685 817,007 1,087,808 1,087,759
Non-current liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,569 6,143 19,095 12,243
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,888 14,870 12,885 11,876
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 18,800 45,031
Total non-current liabilities /H1118/H111810,457 21,013 50,780 69,150
Current liabilities
Trade and notes payable /H1118/H1118/H1118/H1118/H1118/H111832,186 111,196 130,098 149,505
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,928 24,029 5,405 3,210
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,600 55,560 77,860 137,221
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,898 7,997 15,196 15,773
Other payables and accruals /H1118/H1118/H1118246,556 53,139 55,395 56,563
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118318,168 251,921 283,954 362,272
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118328,625 272,934 334,734 431,422
Equity
Paid-in capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,162 36,139 – –
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 360,000 360,000
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118791,919 1,105,785 780,675 795,986
Accumulated losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(397,478) (612,342) (407,175) (515,310)
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118(9,543) 14,491 19,574 15,661
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118417,060 544,073 753,074 656,337
Total equity and liabilities /H1118/H1118/H1118745,685 817,007 1,087,808 1,087,759
FINANCIAL INFORMATION
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--- page 415 ---
Property, Plant and Equipment
Our property, plant and equipment mainly consist of manufacturing equipment,
transportation, computers and electronic equipment, office renovation and construction
in-progress. Our property, plant and equipment increased from RMB14.2 million as of
December 31, 2021 to RMB25.0 million as of December 31, 2022, further to RMB35.7 million
as of December 31, 2023, and then increased to RMB40.5 million as of June 30, 2024,
primarily due to the increase in our manufacturing equipment and construction in progress in
line with our business expansion.
Right-of-use Assets
Our right-of-use assets represent carrying amounts of leased offices and factories for our
operations. Such leases typically have a term of one to four years. Lease terms are negotiated
on an individual basis and contain different terms and conditions. In determining the lease term
and assessing the length of the non-cancellable period, we apply the definition of a contract and
determine the period for which the contract is enforceable. See Note 16 to the Accountant’s
Report in Appendix I to this prospectus for a detailed description of the change of right-of-use
assets during the Track Record Period.
Our right-of-use assets remained relatively stable at RMB14.7 million and RMB13.9
million as of December 31, 2021 and 2022, respectively. Our right-of-use assets significantly
increased from RMB13.9 million as of December 31, 2022 to RMB32.5 million as of
December 31, 2023, primarily in relation to new leases for offices and factories, in line with
our business expansion. Our right-of-use assets further increased to RMB50.8 million as of
June 30, 2024 as we acquired land use rights for our Guangzhou Production Base in June 2024.
FINANCIAL INFORMATION
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--- page 416 ---
Inventories
Our inventories primarily comprise (i) raw materials, (ii) finished goods, and (iii) contract
fulfillment costs. Raw materials primarily include (i) materials for production, such as
electronic components, automotive-grade chips, PCB and camera modules, and (ii) those
mainly for trial production or R&D activities, which are expensed as incurred. Finished goods
primarily consist of our intelligent driving and in-cabin products that are ready for transit at
our manufacturing facilities or in transit to fulfill customer orders. Contract fulfillment costs
represent costs of projects in progress as of the dates indicated, which were subsequently
recognized as cost of sales after the delivery of related projects. The following table sets forth
a breakdown of our inventories as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,202 62,353 64,718 60,832
Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H11187,795 7,887 6,799 8,450
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,984 40,682 64,944 52,540
Contract fulfillment costs /H1118/H1118/H111823,976 72,002 26,732 26,867
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,957 182,924 163,193 148,689
Less: provision of inventories (12,187) (14,439) (18,232) (19,094)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,770 168,485 144,961 129,595
Our inventories increased from RMB122.8 million as of December 31, 2021 to
RMB168.5 million as of December 31, 2022, primarily in line with our business expansion.
Our inventories subsequently decreased from RMB168.5 million as of December 31, 2022 to
RMB145.0 million as of December 31, 2023, primarily due to a decrease in the contract
fulfillment costs, as we delivered several projects of our vehicle infrastructure cooperative
systems in 2023 that were still in progress as of December 31, 2022. Our inventories decreased
from RMB145.0 million as of December 31, 2023 to RMB129.6 million as of June 30, 2024,
primarily attributable to a decrease in finished goods, in line with the increase in our delivered
projects and revenue in the first half of 2024.
FINANCIAL INFORMATION
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--- page 417 ---
As of December 31, 2021, 2022 and 2023 and June 30, 2024, a substantial majority of our
inventories balance was aged within one year. The following table sets forth an aging analysis
of our inventories based on recognition date as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,957 158,291 142,296 136,536
Over one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180 24,633 20,897 12,153
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,957 182,924 163,193 148,689
The following table sets forth our inventory turnover days for the years/period indicated:
Y ear ended December 31, As of
June 30,
20242021 2022 2023
(days)
Inventory turnover days (1) /H1118/H1118/H1118 194 216 140 123
Note:
(1) Inventory turnover days equal the average of opening balance and closing balance of the inventories for
relevant period divided by cost of sales for the same period and multiplied by the number of days during
such period (which is 365 days for one fiscal year or 182 days for the six-month period, as the case
may be).
Our inventory turnover days increased from 194 days in 2021 to 216 days in 2022,
primarily due to an increase in the contract fulfillment costs in relation to the delivery of
projects for our vehicle infrastructure cooperative systems business that were still in progress
as of December 31, 2022. Our inventory turnover days decreased from 216 days in 2022 to 140
days in 2023, primarily because we recognized certain contract fulfillment costs as of
December 31, 2022 as cost of sales in 2023 upon the delivery of the relevant projects. Our
inventory turnover days decreased from 140 days in 2023 to 123 days in the six months ended
June 30, 2024, primarily due to the increase in delivery of finished goods, in line with our
business growth and our enhanced inventory management.
We provided provisions of inventories of RMB12.2 million, RMB14.4 million, RMB18.2
million and RMB19.1 million as of December 31, 2021, 2022 and 2023 and June 30, 2024,
respectively. We state inventories at the lower of cost and net realizable value. The net
realizable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale. See
“—Critical Accounting Policies, Estimates and Judgments—Inventory Provision” for details.
We review the condition of our inventories regularly and review recoverability and aging of
FINANCIAL INFORMATION
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--- page 418 ---
inventories at the end of each year. We make allowances for inventories that are identified as
obsolete, slow-moving or no longer recoverable, taking into account the latest market selling
price and subsequent deliveries of such goods.
Taking into account that (i) our comprehensive solution portfolio requires various
hardware of varying sophistication; (ii) we strategically maintain sufficient supply to meet the
demand and support our business growth; (iii) a substantial majority of our inventories as of
December 31, 2021, 2022 and 2023 and June 30, 2024 aged within one year and were
subsequently settled or expected to be settled in one year; (iv) we have made full provision for
inventories of raw materials that age over one year with no explicit usage plan and the
remaining inventories of raw materials remain in working order and suitable for production; (v)
we have made provision to the net realizable value for finished goods and made full provision
for a small portion of finished goods which we do not have explicit sales plan; and (vi) we have
implemented an effective inventory management system to monitor our inventory levels and
recoverability, we are of the view that we have made sufficient impairment provision for
inventories during the Track Record Period and there is no material recoverability issue for our
inventories.
As of October 31, 2024, RMB50.5 million, or approximately 39.0%, of our inventories as
of June 30, 2024 had been subsequently sold or utilized.
Trade and Notes Receivables
Our trade and notes receivables represent amounts due from customers for goods sold or
services performed in our ordinary course of business. The following table sets forth our trade
and notes receivables as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,867 201,146 309,044 383,861
Notes receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,381 26,414 38,446 33,964
Less: provision for
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,358) (9,890) (13,905) (19,465)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,890 217,670 333,585 398,360
Our trade and notes receivables increased from RMB100.9 million as of December 31,
2021 to RMB217.7 million as of December 31, 2022, further to RMB333.6 million as of
December 31, 2023, and then increased to RMB398.4 million as of June 30, 2024, primarily
due to our business growth throughout the Track Record Period.
FINANCIAL INFORMATION
– 408 –


--- page 419 ---
We apply the simplified approach in relation to the impairment of trade and notes
receivables as prescribed by IFRS 9 to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade and notes receivables. As of December 31, 2021, 2022 and
2023 and June 30, 2024, we recognized provision for impairment of RMB4.4 million, RMB9.9
million, RMB13.9 million and RMB19.5 million, respectively, which we believe were
sufficient as of the relevant dates.
The credit period that we granted to customers during the Track Record Period was
typically within one year. Our trade and notes receivables are generally settled in line with the
terms of relevant contracts. During the Track Record Period, most of our trade and notes
receivables were outstanding for less than one year. The following table sets forth an aging
analysis of our trade and notes receivables, including related provision for impairment, based
on recognition date as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Up to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,833 214,510 323,236 390,402
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,011 9,333 16,704 18,792
2-3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,404 2,714 4,662 4,827
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,003 2,888 3,804
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118105,248 227,560 347,490 417,825
The following table sets forth the turnover days of our trade and notes receivables for the
years/period indicated:
Y ear ended December 31, As of
June 30,
20242021 2022 2023
(days)
Trade and notes receivables
turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118191 217 220 294
Note:
(1) Trade and notes receivables turnover days equal the average of opening balance and closing balance of
trade and notes receivables for relevant period divided by total revenue for the same period and
multiplied by the number of days during such period (which is 365 days for one fiscal year or 182 days
for the six-month period, as the case may be).
FINANCIAL INFORMATION
– 409 –


--- page 420 ---
Our trade and notes receivables turnover days increased from 191 days in 2021 to 217
days in 2022, primarily due to changes to the structure of our customer base as we engaged
more OEMs and tier-one suppliers and fewer vehicle owners, and some of such OEMs and
tier-one suppliers are typically given a longer credit period of nine months given their strong
market presence. Our trade and notes receivables turnover days remained relatively stable at
217 days and 220 days in 2022 and 2023, respectively. Our trade and notes receivables turnover
days increased from 220 days in 2023 to 294 days in the six months ended June 30, 2024,
primarily because the increase in our trade receivables in the first half of 2024 outpaced the
increase in our revenue in the same period, which was affected by the seasonal fluctuations in
demand of our solutions. See “—Key Factors Affecting Our Results of Operation—
Seasonality.”
As of December 31, 2021, 2022 and 2023 and June 30, 2024, our provision for
impairment of trade and notes receivables were RMB4.4 million, RMB9.9 million, RMB13.9
million and RMB19.5 million, respectively. With respect to trade and notes receivables, we
have assessed the expected credit losses by considering a number of factors including historical
default rates, existing market conditions and forward-looking information. Our management
performed below procedures to ensure the provision of ECL is sufficient: (a) evaluating the
related accounting policies and historical judgments adopted in ECL; (b) maintaining regular
communication with customers to confirm the balances of receivables; (c) taking into
consideration of both current and future economic conditions including the historical recovery
rate of these trade and notes receivables and reviewing the forward-looking macroeconomic
data used in ECL model of trade and notes receivables; (d) examining the recoverability based
on the financial and non-financial status of the customers and other external factors and
considerations.
Our Directors believe that there is no material recoverability issue with respect to our
trade and notes receivables and that we have sufficient provision for impairment in light of the
prevailing circumstances as of the Latest Practicable Date, based on (i) our periodic evaluation
to closely monitor our credit risks and make proper provision for expected impairment, (ii) our
stringent internal controls on the management of trade and notes receivables, and (iii) the
creditability of our major customers, which are reputable with solid track record in the
industry. See Note 3.1(b) to the Accountant’s Report included in Appendix I to this prospectus.
As of October 31, 2024, RMB130.1 million, or approximately 32.7%, of our trade and
notes receivables as of June 30, 2024 had been subsequently settled.
FINANCIAL INFORMATION
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--- page 421 ---
Other Current Assets
Our other current assets primarily represent (i) prepayments for products and services
procurement, such as prepayments for raw materials to our suppliers, (ii) value-added tax
(“VAT”) recoverable relating to input V A T to be deducted for further V A T payments, and (iii)
deposits relating to leases for office space. The following table sets forth a breakdown of our
other current assets as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Other receivables
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118701 2,246 4,712 6,607
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,196 1,651 2,142 1,960
Advance to staff /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118791 982 961 1,351
Less: allowance for credit losses (126) (307) (720) (813)
2,562 4,572 7,095 9,105
Prepayments
Products and services
procurement /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,924 13,490 32,918 35,303
Prepaid listing expenses /H1118/H1118/H1118/H1118/H1118/H1118– – – 2,019
Other assets
V A T recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,088 20,191 24,163 20,023
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,463 2,580 2,702 2,764
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,037 40,833 66,878 69,214
Our other current assets increased from RMB35.0 million as of December 31, 2021 to
RMB40.8 million as of December 31, 2022, further to RMB66.9 million as of December 31,
2023, and then slightly increased to RMB69.2 million as of June 30, 2024, primarily due to the
increase in (i) the prepayments for products and services we procured, which were made to
secure timely and stable supplies in anticipation of increased demand from customers based on
their purchase orders, and (ii) the lease deposits of our offices and factories, which was in line
with our business expansion during the Track Record Period.
Our advance to staff represents advance payments to our employees to cover expenses
incurred by them on behalf of the Group, such as expenses for business trips and procurement
of office supplies.
FINANCIAL INFORMATION
–4 1 1–


--- page 422 ---
Financial Assets at FVPL
Financial assets at FVPL comprise structured deposits and low risk wealth management
products that are issued by major reputable commercial banks in the PRC. We managed and
evaluated the performance of investments on a fair value basis in accordance with our business
needs and investment strategy. We endeavor to increase the return of idle cash and bank
balances by placing investments in structured deposits and wealth management products with
high liquidity, low risk and a maturity of typically no more than one year such that our risk
exposure arising from such investments is controlled.
Our finance department is responsible for proposing, analyzing and evaluating potential
investment in such products. Our management, including our finance department, has extensive
experience in managing the financial aspects of an enterprise’s operations. In particular,
Mr. Wen Qi, our Board secretary and chief financial officer, has approximately 20 years of
experience in accounting and finance. Furthermore, all of such investment proposals by our
finance department are subject to the review and approval by our authorized personnel. In
particular, prior to making investments in wealth management products amounting to more
than RMB50 million, the proposal shall be reviewed and approved by Mr. Wen Qi, and where
such investments amount to more than RMB100 million, the approval of Mr. Liu Guoqing, our
chairman of the Board and general manager, is required. See “—Financial Risks Management.”
After Listing, we intend to continue our investments in structured deposits and wealth
management products in accordance with our internal policies and the applicable requirements
under Chapter 14 of the Listing Rules.
Our investment strategy related to such products focuses on minimizing the financial risks
by reasonably and conservatively matching the maturities of the portfolio to anticipated
operating cash needs, while generating desirable investment returns. We make investment
decisions after thoroughly considering a number of factors, including, but not limited to,
macro-economic environment, general market conditions, risk control and credit of issuing
financial institutions, our own working capital conditions, and the expected profit or potential
loss of the investment.
Details of the fair value measurement of financial assets at FVPL, particularly the fair
value hierarchy, the valuation techniques and key inputs, including significant unobservable
inputs, and the relationship of unobservable inputs to fair value are disclosed in Note 3.3 to the
Accountant’s Report in Appendix I to this prospectus.
FINANCIAL INFORMATION
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The following table sets forth our financial assets at FVPL as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Investment in structured
deposits and wealth
management products
issued by banks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,187 44,581 210,597 120,901
Our financial assets at FVPL decreased from RMB135.2 million as of December 31, 2021
to RMB44.6 million as of December 31, 2022, subsequently increased to RMB210.6 million
as of December 31, 2023, and then decreased to RMB120.9 million as of June 30, 2024. The
fluctuations in our financial assets at FVPL were primarily in relation to changes to the balance
of our investments in structured deposits and wealth management products as of the dates
indicated.
Trade and Notes Payables
Our trade and notes payables primarily consist of our trade payables for the purchase of
raw materials. The following table sets forth our trade and notes payables as of the dates
indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,279 111,196 130,098 149,505
Notes payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 0 7–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,186 111,196 130,098 149,505
FINANCIAL INFORMATION
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--- page 424 ---
Our trade and notes payables increased significantly from RMB32.2 million as of
December 31, 2021 to RMB111.2 million as of December 31, 2022, further to RMB130.1
million, and then increased to RMB149.5 million as of June 30, 2024, primarily due to an
increase in our procurement of raw materials in line with our business expansion. During the
Track Record Period, our suppliers typically granted us a credit period of 30 to 90 days after
the date of the V A T invoices. The following table sets forth an aging analysis of our trade and
notes payables as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,695 105,913 100,802 121,188
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118482 5,281 26,539 24,966
Over 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 2 2,757 3,351
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,186 111,196 130,098 149,505
The following table sets forth the turnover days of our trade and notes payables for the
years/period indicated:
Y ear ended December 31, As of
June 30,
20242021 2022 2023
(days)
Trade and notes payables
turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867 106 108 125
Note:
(1) Trade and notes payables turnover days equal the average of the opening and closing balances of trade
and notes payables for relevant period divided by total cost of sales for the same period and multiplied
by the number of days during such period (which is 365 days for one fiscal year or 182 days for the
six-month period, as the case may be).
Our trade and notes payables turnover days increased from 67 days in 2021 to 106 days
in 2022, primarily because we were granted longer credit periods by certain suppliers, as we
scaled up and had more procurement needs, and our bargaining power increased accordingly.
Our trade and notes payables turnover days remained relatively stable at 106 days and 108 days
in 2022 and 2023, respectively. Our trade and notes payables turnover days increased from 108
days in 2023 to 125 days in the six months ended June 30, 2024, primarily due to a further
increase in our bargaining power and credit periods granted by certain suppliers.
As of October 31, 2024, RMB79.4 million, or approximately 53.1%, of our trade and
notes payables as of June 30, 2024 had been subsequently settled.
FINANCIAL INFORMATION
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Contract Liabilities
Our contract liabilities represent advance payments made by customers while the
underlying goods or services are yet to be provided. Our contract liabilities were RMB3.9
million, RMB24.0 million, RMB5.4 million and RMB3.2 million as of December 31, 2021,
2022 and 2023 and June 30, 2024, respectively. The fluctuations in our contract liabilities were
primarily due to our receipt of advance payments made by customers in 2022 and recognition
of revenue upon delivery of the relevant projects in 2023 and the first half of 2024.
Other Payables and Accruals
Our other payables and accruals primarily consist of payroll and welfare payables, V A T
and other taxes payables, accrued expenses, warranty provision and others. The following table
sets forth a breakdown of our other payables and accruals as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Payroll and welfare payables /H1118/H111824,740 29,131 24,507 15,383
V A T and other taxes payables /H1118/H1118 4,175 4,584 5,026 3,985
Accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,129 10,950 7,900 7,485
Payable for long-term assets /H1118/H1118/H1118359 1,412 3,520 6,186
Advance receipts of financing /H1118/H1118200,00 0–––
Warranty provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,518 5,605 9,297 10,765
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118– – – 7,799
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,635 1,457 5,145 4,960
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118246,556 53,139 55,395 56,563
Our other payables and accruals significantly decreased from RMB246.6 million as of
December 31, 2021 to RMB53.1 million as of December 31, 2022, primarily due to a decrease
of RMB200 million in the advance receipts of financing we received in 2021 following the
completion of the capital increase in 2022. Our other payables and accruals remained relatively
stable at RMB53.1 million, RMB55.4 million and RMB56.6 million as of December 31, 2022
and 2023 and June 30, 2024, respectively.
FINANCIAL INFORMATION
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--- page 426 ---
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios as of the dates or for the
years/period indicated:
As of or for the year
ended December 31,
As of or for
the six months
ended June 30,
20242021 2022 2023
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.7% 12.0% 14.3% 14.1%
Net loss margin (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(79.8)% (79.0)% (43.5)% (47.3)%
Current ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.22x 3.01x 3.49x 2.61x
Adjusted net loss margin
(non-IFRS measure) (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(74.8)% (73.7)% (38.8)% (34.8)%
Asset-liability ratio (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.27x 2.99x 3.25x 2.52x
(1) Gross profit margin equals gross profit divided by revenue for the year/period indicated and multiplied
by 100%.
(2) Net loss margin equals net loss divided by revenue for the year/period indicated and multiplied by
100%.
(3) Current ratio equals total current assets divided by total current liabilities as of the date indicated.
(4) Adjusted net loss margin (non-IFRS measure) equals adjusted net loss (non-IFRS measure) divided by
revenue for the year/period indicated and multiplied by 100%.
(5) Asset-liability ratio equals total assets divided by total liabilities as of the date indicated.
See “—Results of Operations” for a discussion of the factors affecting our gross margin
during the Track Record Period.
Our net loss margin was 79.8%, 79.0%, 43.5% and 47.3% in 2021, 2022 and 2023 and the
six months ended June 30, 2024, respectively. Our net loss margin was relatively low in 2023
and the six months ended June 30, 2024, primarily due to (i) an increase in our gross margin,
and (ii) decreases in our operating expenses as a percentage of the total revenue attributable
to increased operating efficiency.
FINANCIAL INFORMATION
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--- page 427 ---
Our current ratio increased from 2.22x as of December 31, 2021 to 3.01x as of December
31, 2022, primarily due to a decrease in our current liabilities, which is attributable to a
decrease in our other payables and accruals in relation to the advance receipts of financing we
received in 2021 following the completion of the capital increase in 2022, partially offset by
an increase in our trade and notes payables attributable to an increase in our procurement of
raw materials in line with our business expansion. Our current ratio increased from 3.01x as
of December 31, 2022 to 3.49x as of December 31, 2023, primarily due to an increase in our
current assets, which is attributable to (i) an increase in our trade and notes receivables in line
with our business growth, and (ii) an increase in our financial assets at FVPL in relation to our
investments in structured deposits and wealth management products. Our current ratio
decreased from 3.49x as of December 31, 2023 to 2.61x as of June 30, 2024, primarily
attributable to (i) a decrease in our financial assets at FVPL in relation to our investments in
structured deposits and wealth management products, and (ii) an increase in interest-bearing
bank borrowings as we optimized our debt structure by making better utilization of our debt
financing resources, partially offset by an increase in our trade and notes receivables, which
was in line with our business growth.
See “—Non-IFRS Measures” for a discussion of the factors affecting our adjusted net loss
margin (non-IFRS measure) during the Track Record Period.
Our asset-liability ratio increased from 2.27x as of December 31, 2021 to 2.99x as of
December 31, 2022, primarily due to (i) an increase in our trade and notes receivables in line
with our business growth, and (ii) a decrease in our other payables and accruals in relation to
the advance receipts of financing we received in 2021 following the completion of the capital
increase in 2022, partially offset by a decrease in our financial assets at FVPL in relation to
our investments in structured deposits and wealth management products. Our asset-liability
ratio increased from 2.99x as of December 31, 2022 to 3.25x as of December 31, 2023,
primarily due to (i) an increase in our trade and notes receivables in line with our business
growth, and (ii) an increase in our financial assets at FVPL in relation to our investments in
structured deposits and wealth management products. Our asset-liability ratio decreased from
3.25x as of December 31, 2023 to 2.52x as of June 30, 2024, primarily due to (i) an increase
in our long-term borrowings and interest-bearing bank borrowings as we optimized our debt
structure by making better utilization of our debt financing resources, and (ii) a decrease in our
financial assets at FVPL in relation to our investments in structured deposits and wealth
management products.
FINANCIAL INFORMATION
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NET CURRENT ASSETS
The following table sets forth our current assets and current liabilities as of the dates
indicated:
As of December 31, As of
June 30,
2024
As of
October 31,
20242021 2022 2023
(RMB in thousands)
(unaudited)
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,770 168,485 144,961 129,595 134,997
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118– 20,010 1,690 1,690 4,842
Trade and notes
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118100,890 217,670 333,585 398,360 466,752
Other current assets /H1118/H111835,037 40,833 66,878 69,214 89,368
Financial assets at fair
value through other
comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,438 23,558 36,462 7,008 13,497
Financial assets at fair
value through profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,187 44,581 210,597 120,901 55,864
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118272,824 243,785 197,934 220,125 179,067
Total current assets /H1118/H1118705,146 758,922 992,107 946,893 944,387
Current liabilities
Trade and notes
payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,186 111,196 130,098 149,505 177,891
Contract liabilities /H1118/H1118/H11183,928 24,029 5,405 3,210 5,586
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,600 55,560 77,860 137,221 178,380
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11188,898 7,997 15,196 15,773 15,738
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118246,556 53,139 55,395 56,563 43,001
Total current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118318,168 251,921 283,954 362,272 420,596
Net current assets /H1118/H1118/H1118386,978 507,001 708,153 584,621 523,791
FINANCIAL INFORMATION
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Our net current assets decreased by 10.4% from RMB584.6 million as of June 30, 2024
to RMB523.8 million as of October 31, 2024, primarily due to (i) a decrease of RMB65.0
million in financial assets at FVPL in relation to our investments in structured deposits and
wealth management products, (ii) an increase of RMB41.2 million in current borrowings, as we
optimized our debt structure by making better utilization of our debt financing resources, and
(iii) a decrease of RMB41.1 million in cash and cash equivalents as we spent cash to support
our daily operations during such period, partially offset by an increase of RMB68.4 million in
trade and notes receivables, which was in line with our business growth.
Our net current assets decreased by 17.4% from RMB708.2 million as of December 31,
2023 to RMB584.6 million as of June 30, 2024, primarily due to (i) a decrease of RMB89.7
million in financial assets at FVPL in relation to our investments in structured deposits and
wealth management products, and (ii) an increase of RMB59.4 million in current borrowings,
as we optimized our debt structure by making better utilization of our debt financing resources,
partially offset by an increase of RMB64.8 million in trade and notes receivables, which was
in line with our business growth.
Our net current assets increased by 39.7% from RMB507.0 million as of December 31,
2022 to RMB708.2 million as of December 31, 2023, primarily due to (i) an increase of
RMB115.9 million in trade and notes receivables in line with our business growth, and (ii) an
increase of RMB166.0 million in financial assets at FVPL in relation to our investments in
structured deposits and wealth management products.
Our net current assets increased by 31.0% from RMB387.0 million as of December 31,
2021 to RMB507.0 million as of December 31, 2022, primarily due to (i) an increase of
RMB116.8 million in trade and notes receivables in line with our business growth, and (ii) a
decrease of RMB193.4 million in other payables and accruals, primarily due to a decrease in
the advance receipts of financing we received in 2021 following the completion of the capital
increase in 2022, partially offset by (i) a decrease of RMB90.6 million in financial assets at
FVPL in relation to our investments in structured deposits and wealth management products,
and (ii) an increase of RMB79.0 million in trade and notes payables in line with our business
growth.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital Sufficiency
Our Directors are of the view, and the Joint Sponsors concur, that taking into account our
available resources including cash and cash equivalents on hand, the operating cash flows, the
available banking facilities and the net estimated proceeds from the Global Offering, we have
sufficient working capital for our present requirements and for the next 12 months from the
date of this prospectus.
During the Track Record Period and up to the Latest Practicable Date, we primarily
funded our cash requirements from cash from operations, bank borrowings and proceeds we
received from Pre-IPO Investments. As of October 31, 2024, we had cash and cash equivalents
of RMB179.1 million and financial assets at FVPL of RMB55.9 million.
FINANCIAL INFORMATION
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--- page 430 ---
Cash Flows
The following table sets forth selected cash flow statement information for the
years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Operating loss before changes in
working capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(121,327) (186,842) (150,302) (101,565) (67,299)
Changes in working capital /H1118/H1118/H1118/H1118(130,516) (69,380) (127,943) (13,822) (18,934)
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213 1,234 1,967 1,015 1,669
Income taxes paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(450) (172) (60) (60) (15)
Net cash used in operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(252,080) (255,160) (276,338) (114,432) (84,579)
Net cash (used in)/generated
from investing activities /H1118/H1118/H1118/H1118(55,405) 75,411 (188,357) (47,975) 32,653
Net cash generated from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118535,336 150,589 418,870 44,458 74,105
Net increase/(decrease) in cash
and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118227,851 (29,160) (45,825) (117,949) 22,179
Cash and cash equivalents
at the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,001 272,824 243,785 243,785 197,934
Effects of exchange rate changes
on cash and cash equivalents /H1118 (28) 121 (26) 68 12
Cash and cash equivalents at
the end of the year/period /H1118/H1118272,824 243,785 197,934 125,904 220,125
Net Cash Used in Operating Activities
Our net cash used in operating activities primarily represent our loss before income tax
for the year/period, adjusted by (i) non-cash and non-operating items (such as depreciation and
amortization, share-based compensation and inventory provision), (ii) the effects of movement
in working capital (such as changes in inventories, trade and notes receivables, prepayments,
other receivables and other assets), and (iii) other cash items (such as interest received and
income tax paid).
FINANCIAL INFORMATION
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--- page 431 ---
In the six months ended June 30, 2024, we had net cash used in operating activities of
RMB84.6 million, which represents our loss before income tax of RMB112.0 million, as
adjusted by non-cash and non-operating items and movements in working capital primarily
consisting of (i) a decrease in financial assets at FVOCI of RMB29.5 million, mainly due to
a decrease in our notes receivables classified as financial assets at FVOCI in the first half of
2024; and (ii) an increase in trade payables and accruals of RMB19.4 million, primarily due
to an increase in our procurement of raw materials in line with our business expansion,
partially offset by an increase in trade and notes receivables of RMB68.2 million in line with
our business growth.
In 2023, we had net cash used in operating activities of RMB276.3 million, which
represents our loss before income tax of RMB207.1 million, as adjusted by non-cash and
non-operating items and movements in working capital primarily consisting of an increase in
trade and notes receivables of RMB120.1 million in line with our business growth.
In 2022, we had net cash used in operating activities of RMB255.2 million, which
represents our loss before income tax of RMB220.7 million, as adjusted by non-cash and
non-operating items and movements in working capital primarily consisting of an increase in
trade and notes receivables of RMB127.7 million in line with our business growth, partially
offset by an increase in trade payables of RMB79.0 million primarily due to an increase in our
procurement of raw materials in line with our business expansion.
In 2021, we had net cash used in operating activities of RMB252.1 million, which
represents our loss before income tax of RMB139.3 million, as adjusted by non-cash and
non-operating items and movements in working capital primarily consisting of (i) an increase
in inventories of RMB82.2 million, primarily because we procured and maintained a relatively
high level of semiconductor chips inventory in 2021 to ensure that our production would not
be disrupted in light of any supply crunch, see “Business—Impact of the COVID-19 Pandemic
and the Global Shortage of Semiconductor Chips,” and (ii) an increase in financial assets at fair
value through other comprehensive income of RMB35.2 million, primarily due to the increase
in our notes receivables classified as financial assets at FVOCI in 2021, see Note 23 to the
Accountant’s Report in Appendix I to this prospectus.
We expect our net operating cash outflows position to improve concurrently with our
results of operations, mainly through: (i) capturing the rapid growth of the automotive
intelligence solutions industry; (ii) capitalizing on our existing design wins to achieve mass
production of similar vehicle models; (iii) further enhancing our relationships with existing
customers by continually offering customized and cost-effective solutions in a responsive
manner; (iv) growing our customer base and expanding to new geographies through
strengthening our sales and marketing capabilities and enhancing strategic partnerships with
international leading OEMs and tier-one suppliers; (v) refining our solutions and launching our
iPilot 4 in 2025; (vi) improving our gross profit margin by optimizing our cost structure,
enhancing economies of scale and improving manufacturing efficiency with intelligent
facilities and (vii) enhancing our working capital efficiency and improve our inventory
turnover and receivable and payable cycles. See “Business—Business Sustainability” for
details.
For analysis on our loss-making position, see “—Period-to-Period Comparison of Results
of Operations” and “Business—Business Sustainability.”
FINANCIAL INFORMATION
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--- page 432 ---
Net Cash Used in/Generated from Investing Activities
In the six months ended June 30, 2024, we had net cash used in investing activities of
RMB32.7 million, which was primarily attributable to net cash generated from investment in
structured deposits and wealth management products of RMB92.1 million, partially offset by
purchase of land use rights in relation to our Guangzhou Production Base and a production base
to be constructed of RMB42.0 million.
In 2023, we had net cash used in investing activities of RMB188.4 million, which was
primarily due to net cash used in investment in structured deposits and wealth management
products of RMB162.2 million.
In 2022, we had net cash generated from investing activities of RMB75.4 million, which
was primarily attributable to net cash generated from investment in structured deposits and
wealth management products of RMB98.7 million, partially offset by purchase of property,
plant and equipment of RMB17.2 million.
In 2021, we had net cash used in investing activities of RMB55.4 million, which was
primarily due to net cash used in investment in structured deposits and wealth management
products of RMB41.1 million, and purchase of property, plant and equipment of RMB11.9
million.
Net Cash Generated from Financing Activities
In the six months ended June 30, 2024, we had net cash generated from financing
activities of RMB74.1 million, which was primarily attributable to proceeds from bank
borrowings of RMB168.5 million, partially offset by repayment of bank borrowings of
RMB82.9 million.
In 2023, we had net cash generated from financing activities of RMB418.9 million, which
was primarily attributable to (i) receipt of share capital from ordinary shareholders of
RMB348.5 million, (ii) proceeds from bank borrowings of RMB104.8 million, and (iii)
proceeds from investments of non-controlling interests of RMB50.0 million, partially offset by
repayment of bank borrowings of RMB63.7 million.
In 2022, we had net cash generated from financing activities of RMB150.6 million, which
was primarily attributable to (i) receipt of share capital from ordinary shareholders RMB105.9
million, and (ii) proceeds from bank borrowings of RMB57.0 million.
In 2021, we had net cash generated from financing activities of RMB535.3 million, which
was primarily attributable to (i) receipt of share capital from ordinary shareholders of
RMB526.0 million, and (ii) proceeds from bank borrowings of RMB32.9 million, partially
offset by repayment of bank borrowings of RMB17.7 million.
FINANCIAL INFORMATION
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INDEBTEDNESS
The table below sets forth a breakdown of our indebtedness as of the dates indicated:
As of December 31, As of
June 30,
2024
As of
October 31,
20242021 2022 2023
(RMB in thousands)
(unaudited)
Current
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,600 55,560 77,860 137,221 178,380
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11188,898 7,997 15,196 15,773 15,738
Non-current
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 18,800 45,031 32,250
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11186,569 6,143 19,095 12,243 7,831
Total indebtedness /H1118/H1118/H111842,067 69,700 130,951 210,268 234,199
Borrowings
As of December 31, 2021, 2022 and 2023, June 30, 2024 and October 31, 2024, we had
total borrowings of RMB26.6 million, RMB55.6 million, RMB96.7 million, RMB182.3 million
and RMB210.6 million, respectively. The increases in the balance of our borrowings were
primarily due to the growing cash requirements in line with our business expansion and our
continued efforts to optimize our debt structure by making better utilization of our debt
financing resources and raising funds with lower costs. We borrow primarily from well-
established commercial banks in China. As of October 31, 2024, all of our borrowings were
denominated in Renminbi, and had an effective interest rate ranging from 3.00% to 4.90% per
annum, and a maturity date from November 2024 to September 2026. As of the same date, a
majority of our borrowings were guaranteed by Dr. Liu Guoqing alone, while certain of our
borrowings were jointly guaranteed by Dr. Liu Guoqing and others including Mr. Y ang Guang
and Mr. Wang Qicheng. We expect to release all of the aforementioned personal guarantees
before the proposed Listing.
FINANCIAL INFORMATION
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The table below sets forth a breakdown of our borrowings into (i) unsecured and
guaranteed and (ii) secured and guaranteed as of the dates indicated:
As of December 31, As of
June 30,
2024
As of
October 31,
20242021 2022 2023
(RMB in thousands)
(unaudited)
Unsecured and
guaranteed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,050 9,560 96,660 131,868 165,780
Secured and guaranteed 9,550 46,000 – 20,000 20,000
Unsecured and
unguaranteed /H1118/H1118/H1118/H1118/H1118/H1118– – – 30,384 24,850
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,600 55,560 96,660 182,252 210,630
As of October 31, 2024, RMB20.0 million of our borrowings were secured by our
intellectual property rights. For details, see Note 31 to the Accountant’s Report included in
Appendix I to this prospectus. As of October 31, 2024, we had unutilized banking facilities of
RMB45.0 million.
Lease Liabilities
Our lease liabilities are in relation to properties that we lease primarily for our offices and
factories. As of December 31, 2021, 2022 and 2023, June 30, 2024 and October 31, 2024, we
recognized total lease liabilities of RMB15.5 million, RMB14.1 million, RMB34.3 million,
RMB28.0 million and RMB23.6 million, respectively. The fluctuation in our lease liabilities
was primarily due to the changes in leases for offices and factories in line with our business
expansion strategy.
Contingent Liabilities
As of December 31, 2021, 2022 and 2023 and June 30, 2024, we did not have any
significant contingent liabilities. Our Directors confirmed that there had not been any material
change in the contingent liabilities of our Company since June 30, 2024 and up to the Latest
Practicable Date.
Indebtedness Statement
Our Directors confirm that (i) as of the Latest Practicable Date, our Group did not
experience any difficulty in obtaining bank loans and other borrowings, and (ii) during the
Track Record Period and up to the date of this prospectus, (a) our Group did not experience
any material default in payment of trade and non-trade payables, bank loans and other
borrowings and (b) there was no material covenant on any of our outstanding debt and there
was no breach of any covenant.
FINANCIAL INFORMATION
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Save as disclosed above, as of October 31, 2024, being the latest practicable date for
determining our indebtedness, we did not have any outstanding mortgages, charges,
debentures, other issued debt capital, bank overdrafts, borrowings, liabilities under acceptance
or other similar indebtedness, hire purchase commitments, guarantees or other material
contingent liabilities. Our Directors have confirmed that there had been no material change in
our indebtedness since October 31, 2024 and up to the date of this prospectus.
CAPITAL EXPENDITURES
Our capital expenditures were RMB14.3 million, RMB23.2 million, RMB27.2 million,
RMB7.7 million and RMB59.7 million in 2021, 2022 and 2023 and the six months ended
June 30, 2023 and 2024, respectively. The following table sets forth our capital expenditures
for the years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Purchase of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,942 17,151 24,540 6,832 11,145
Purchase of Intangible assets /H1118/H11182,350 6,098 2,648 824 6,518
Purchase of land use rights /H1118/H1118/H1118/H1118–––– 42,017
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,292 23,249 27,188 7,656 59,680
During the Track Record Period, our capital expenditures were primarily in relation to
acquisition of land use rights for our production bases, construction of our manufacturing
facilities, as well as purchases of R&D and office equipment. See “Business—Our Strategies
—Continuously Enhancing Intelligent Production Capability to Accelerate Commercialization”
and “Business—Our Production” for details on our expansion plans. We expect to finance our
capital expenditures through existing cash on hand, bank loans and the net proceeds from the
Global Offering. We may adjust our capital expenditures for any given year according to our
development plans or in light of market conditions and other factors we believe to be
appropriate.
FINANCIAL INFORMATION
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CAPITAL COMMITMENTS
Our capital commitments as of December 31, 2021, 2022 and 2023 and June 30, 2024
were primarily related to property, plant and equipment. See Note 39 to the Accountant’s
Report in Appendix I to this prospectus. The following table sets forth our capital commitments
as of the dates indicated:
As of December 31, As of
June 30,
20242021 2022 2023
(RMB in thousands)
Contracted but not provided for:
Property, plant and equipment – 67 9,416 4,606
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,000 1,008
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 67 10,416 5,614
FINANCIAL RISK MANAGEMENT
Our activities expose us to a variety of financial risks: market risk (including foreign
exchange risk, cash flow and fair value interest rate risk and price risk), credit risk and liquidity
risk. Our risk management is predominantly controlled by the treasury department under
policies approved by the Board. Our treasury department identifies, evaluates and hedges
financial risks in close cooperation with our operating units. The Board provides written
principles for overall risk management, as well as policies covering specific areas, such as
foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and
non-derivative financial instruments and investment of excess liquidity. For details, see Note
3 to the Accountant’s Report included in Appendix I to this prospectus.
Market Risk
Foreign Exchange Risk
Foreign exchange risk arises from future commercial transactions and recognized assets
and liabilities denominated in a currency that is not the functional currency of the relevant
group entity. Our Company and its primary subsidiaries were incorporated in the PRC and
considered Renminbi as their functional currency.
We are primarily exposed to changes in RMB/USD exchange rates. As of December 31,
2021, 2022 and 2023 and June 30, 2024, if US dollar strengthened/weakened by 10% against
Renminbi, with all other variables held constant, the gain or loss before income tax for the
year/period then ended would have been RMB72,000, RMB(356,000), RMB(513,000) and
RMB(914,000) lower/higher respectively as a result of foreign exchange gains/losses on
translation of USD denominated cash and cash equivalents.
FINANCIAL INFORMATION
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Cash Flow and Fair V alue Interest Rate Risk
Except for cash and cash equivalents and restricted cash, we have no significant
interest-bearing assets. Our income and operating cash flows are substantially independent of
changes in market interest rates.
Our interest-rate risk mainly arises from borrowings. Borrowings obtained at variable
rates expose us to cash flow interest-rate risk. Borrowings obtained at fixed rates expose us to
fair value interest-rate risk. The interest rates and terms of repayments of borrowings are
disclosed in Note 31 to the Accountant’s Report included in Appendix I to this prospectus. We
did not use any interest rate swap contracts or other financial instruments to hedge against its
interest rate risk for the Track Record Period.
As of December 31, 2021, 2022 and 2023 and June 30, 2024, if our interest rates on
borrowings obtained at variable rates had been 100 basis points higher/lower, the loss before
income tax for the year/period then ended would have been approximately RMB39,000,
RMB49,000, RMB168,000 and RMB114,000 higher/lower, respectively.
Price Risk
We are exposed to price risk in respect of financial assets at FVPL, which mainly include
investments in structured deposits and wealth management products. We are not exposed to
commodity price risk. See Note 3.3 to the Accountant’s Report included in Appendix I to this
prospectus.
Credit Risk
Credit risk arises from cash and cash equivalents, restricted cash, trade and notes
receivables, other receivables, financial assets at FVOCI and other non-current assets. The
carrying amount of each class of the above financial assets represents our maximum exposure
to credit risk in relation to the corresponding class of financial assets.
Risk Management
To manage this risk, cash and cash equivalents and restricted cash are mainly placed with
state-owned or reputable financial institutions in Mainland China which are all high-credit-
quality financial institutions.
To manage risk arising from trade and notes receivables and financial assets at FVOCI,
we have policies in place to ensure that credit terms are made to counterparties with an
appropriate credit history and management performs ongoing credit evaluations of the
counterparties. Trade and notes receivables have been grouped based on shared credit risk
characteristics and aging to measure the expected credit losses. Trade and notes receivables are
FINANCIAL INFORMATION
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--- page 438 ---
written off when there is no reasonable expectation of recovery. Impairment losses on trade and
notes receivables are presented as net impairment losses within operating profit. Subsequent
recoveries of amounts previously written off are credited against the same line item.
For other receivables, management makes periodic collective assessments as well as
individual assessment on the recoverability of other receivables based on historical settlement
records, past experiences and forward-looking information.
Impairment of Financial Assets
Cash and Cash Equivalents and Restricted Cash
To manage risk arising from cash and cash equivalents and restricted cash, we only
transact with state-owned or reputable financial institutions in Mainland China. There has been
no recent history of default in relation to these financial institutions. These instruments are
considered to have low credit risk because they have a low risk of default and the counterparty
has a strong capacity to meet its contractual cash flow obligations in the near term. Cash and
cash equivalents and restricted cash are also subject to the impairment requirements of IFRS
9, while the identified credit loss was immaterial.
Trade Receivables, Notes Receivables and Financial Assets at FVOCI
We apply the IFRS 9 simplified approach to measure expected credit losses which uses
a lifetime expected loss allowance for all trade and notes receivables. To measure the expected
credit losses, trade and notes receivables have been grouped based on shared credit risk
characteristics and aging.
The expected loss rates are based on the credit rating of counter parties and the payment
profiles of sales and probability of default of counter parties on an ongoing basis throughout
each Track Record Period. The historical loss rates are adjusted to reflect current and
forward-looking information on macroeconomic factors affecting the ability of the customers
to settle the receivables. Our Group has identified the GDP to be the most relevant factor, and
accordingly adjusts the historical loss rates based on expected changes in these factors.
Individually impaired trade receivables are related to customers who are experiencing
unexpected economic difficulties. We expect that the amounts of the receivables will partially
or entirely have difficulty to be recovered and has recognized impairment losses.
FINANCIAL INFORMATION
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Other Receivables
Other receivables that are not credit-impaired on initial recognition are classified in stage
1 and the expected credit losses are measured as 12-month expected credit losses. If a
significant increase in credit risk of other receivable has occurred since initial recognition, the
financial asset is moved to “stage 2” but is not yet deemed to be credit impaired. The expected
credit losses are measured as lifetime expected credit loss. If any financial asset is
credit-impaired, it is then moved to “stage 3” and the expected credit loss is measured as
lifetime expected credit loss.
Our management considers the probability of default upon initial recognition of asset and
whether there has been significant increase in credit risk on an ongoing basis during the Track
Record Period. To assess whether there is a significant increase in credit risk, our Group
compares risk of a default occurring on the assets as of the reporting date with the risk of
default as of the date of initial recognition. Especially the following indicators are
incorporated:
 Transfer between stage 1, stage 2 or stage 3 due to other receivables experiencing
significant increases (or decreases) of credit risk in the period, and the subsequent
“step up” (or “step down”) between 12-month and lifetime ECL;
 Additional allowances for new financial instruments recognized, as well as releases
for other receivables derecognized in the period; and
 Other receivables derecognized and write-offs of allowance related to assets that
were written off during the year.
Other Non-current Assets
Our other non-current assets include long-term receivables, which are sales proceeds
collected over a three-year period. We choose to apply the simplified approach (that is, to
measure the loss allowance at an amount equal to lifetime ECL at initial recognition and
throughout its life) for long-term receivables which contain a significant financing component.
See Note 3.1(b) to the Accountant’s Report included in Appendix I to this prospectus.
Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and cash
equivalents. Due to the dynamic nature of the underlying businesses, our policy is to regularly
monitor our liquidity risk and to maintain adequate cash and cash equivalents to meet our
liquidity requirements.
FINANCIAL INFORMATION
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The table below analyses our financial liabilities into relevant maturity groupings based
on their contractual maturities. The amounts disclosed in the table are the contractual
undiscounted cash flows. Balances due within 12 months equal their carrying balances as the
impact of discounting is not significant.
Less than
1 year
Between 1
and 2 years
Between 2
and 5 years Total
(RMB in thousands)
As of December 31, 2021
Borrowings (including
interest payables) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,941 – – 27,941
Trade payables and notes
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,186 – – 32,186
Other payables and accruals
(excluding salaries and
welfare payables, V A T and
other taxes payables and
warranty provision) /H1118/H1118/H1118/H1118/H1118/H1118214,123 – – 214,123
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,520 5,042 1,710 16,272
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118283,770 5,042 1,710 290,522
Less than
1 year
Between 1
and 2 years
Between 2
and 5 years Total
(RMB in thousands)
As of December 31, 2022
Borrowings (including
interest payables) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,595 – – 56,595
Trade payables and notes
payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,196 – – 111,196
Other payables and accruals
(excluding salaries and
welfare payables, V A T and
other taxes payables and
warranty provision) /H1118/H1118/H1118/H1118/H1118/H111813,819 – – 13,819
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,463 4,345 2,063 14,871
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,073 4,345 2,063 196,481
FINANCIAL INFORMATION
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Less than 1
year
Between 1
and 2 years
Between 2
and 5 years Total
(RMB in thousands)
As of December 31, 2023
Borrowings (including
interest payables) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,545 19,118 – 97,663
Trade payables and notes
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,098 – – 130,098
Other payables and accruals
(excluding salaries and
welfare payables, V A T and
other taxes payables and
warranty provision) /H1118/H1118/H1118/H1118/H1118/H111816,565 – – 16,565
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,485 14,831 4,915 36,231
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,693 33,949 4,915 280,557
Less than
1 year
Between 1
and 2 years
Between 2
and 5 years Total
(RMB in thousands)
As of June 30, 2024
Borrowings (including
interest payables) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,983 47,460 – 186,443
Trade payables and notes
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,505 – – 149,505
Other payables and accruals
(excluding salaries and
welfare payables, V A T and
other taxes payables and
warranty provision) /H1118/H1118/H1118/H1118/H1118/H111826,430 – – 26,430
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,742 11,960 552 29,254
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118331,660 59,420 552 391,632
OFF-BALANCE SHEET ARRANGEMENTS
As of the Latest Practicable Date, we did not have any outstanding off-balance sheet
arrangements.
FINANCIAL INFORMATION
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--- page 442 ---
RELATED PARTY TRANSACTIONS
During the Track Record Period, we entered into a number of related party transactions,
pursuant to which: (i) we sold services and goods to certain related parties, (ii) we accepted
guarantees from certain related parties for our borrowings, and (iii) we paid compensation to
key management personnel who are related parties of our Company, among other things.
Substantially all of our balances with related parties were trade in nature during the Track
Record Period. We expect that the balances with related parties that were non-trade in nature
will be settled before the proposed Listing.
See Note 37 to Accountant’s Report in Appendix I to this prospectus. Our Directors
believe that these transactions were conducted on normal commercial terms and on an arm’s
length basis in the ordinary and usual course of business, and did not distort our results of
operations or make our historical results not reflective of our future performance.
DIVIDEND
We did not declare or pay dividends on our Shares during and after the Track Record
Period. We currently expect to retain all future earnings for use in operation and expansion of
our business, and do not anticipate paying cash dividends in the foreseeable future. The
declaration and payment of any dividends in the future will be determined by our Board and
subject to our Articles of Association and the PRC Company Law, and will depend on a number
of factors, including our earnings and financial condition, operating requirements, capital
requirements and any other conditions that our Directors may deem relevant. As confirmed by
our PRC Legal Advisor, any future net profit that we make will have to be applied to make up
for our historically accumulated losses in accordance with the PRC laws, after which we will
be obliged to allocate 10% of our profit to our statutory common reserve fund until such fund
has reached more than 50% of our registered capital. We will therefore only be able to declare
dividends after (i) all our historically accumulated losses have been made up for, and (ii) we
have allocated sufficient profit to our statutory common reserve fund as described above. In
addition, according to our dividend policy, any distribution of dividends shall be subject to (i)
our remaining after-tax profit after making up losses and allocation of common reserve fund
being positive, and our belief that our cash flow is adequate and such distribution would not
affect our business sustainability, (ii) our auditors issuing a standard unqualified audit report
for the year of the distribution, and (iii) the absence of major investment plans or significant
capital expenditures (except for investment projects with raised funds) in the next 12 months.
Currently, our Company does not have any pre-determined dividend distribution ratio.
DISTRIBUTABLE RESERVES
As of June 30, 2024, we did not have any distributable reserves.
FINANCIAL INFORMATION
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--- page 443 ---
UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS
See Unaudited Pro Forma Financial Information in Appendix II to this prospectus for
details.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commission and other fees
incurred in connection with the Global Offering. Listing expenses to be borne by us are
estimated to be approximately RMB58.7 million (HK$63.0 million), comprising: (i)
underwriting fees of RMB25.8 million (HK$27.7 million); and (ii) non-underwriting-related
expenses of RMB32.9 million (HK$35.3 million), which are further categorized into: (a) fees
and expenses of legal advisors and accountants of RMB20.3 million (HK$21.8 million); and
(b) other fees and expenses of RMB12.6 million (HK$13.5 million), assuming the Over-
allotment Option is not exercised and based on the Offer Price of HK$18.60 per Offer Share
(being the mid-point of the Offer Price range), approximately RMB28.1 million (HK$30.1
million) of which was charged or is expected to be charged to our consolidated statements of
profit or loss, and approximately RMB30.6 million (HK$32.9 million) of which is expected to
be deducted from equity upon the completion of the Global Offering. The listing expenses are
expected to represent approximately 8.6% of the gross proceeds of the Global Offering,
assuming an Offer Price of HK$18.60 per Offer Share (being the mid-point of the indicative
Offer Price range) and that the Over-allotment Option is not exercised. The listing expenses
above are the latest practicable estimate for reference only, and the actual amount may differ
from this estimate.
NO MATERIAL ADVERSE CHANGE
After performing sufficient due diligence work that our Directors consider appropriate
and after due and careful consideration, our Directors confirm that, up to the date of this
prospectus, there has been no material adverse change in our financial or trading position or
prospects since June 30, 2024 (being the end date of the period reported on in the Accountant’s
Report in Appendix I to this prospectus) and there has been no event since June 30, 2024 that
would materially affect the information as set out in the Accountant’s Report in Appendix I to
this prospectus.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
Our Directors confirm that as of the Latest Practicable Date, there was no circumstance
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing
Rules.
FINANCIAL INFORMATION
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--- page 444 ---
FUTURE PLANS
See “Business—Our Strategies” in this prospectus for a detailed description of our future
plans.
USE OF PROCEEDS
Assuming that the Over-allotment Option is not exercised, after deducting the
underwriting commissions and other estimated offering expenses payable by us in connection
with the Global Offering, and assuming an Offer Price of HK$18.60 per Share (being the
mid-point of the indicative Offer Price range of HK$17.00 to HK$20.20), we estimate that we
will receive net proceeds of approximately HK$665.9 million from the Global Offering. We
intend to use the proceeds from the Global Offering for the purposes and in the amounts set
forth below:
 Approximately 40% of the net proceeds, or HK$266.3 million, for enhancing our
R&D capabilities as well as recruiting and retaining relevant R&D talents to
(i) research artificial intelligence technologies, (ii) refine our product R&D abilities
and reinforce our capabilities to commercialize innovations, and (iii) boost the
scalability as well as efficiency and effectiveness of our R&D process. In particular,
we plan to allocate:
 Approximately 12% of the net proceeds, or HK$79.8 million, over the next
three years, for researching artificial intelligence technologies to maintain our
leading edge in technology innovation in the automotive intelligence solutions
industry. In particular, we plan to focus on R&D projects on emerging
technologies, such as: (i) development of our end-to-end technology to build a
comprehensive intelligent driving architecture. We believe that the end-to-end
technology will offer a more simplified, efficient intelligent driving
architecture where the different modules are jointly optimized with a data-
driven approach, thereby achieving the overarching goal of delivering a more
human-like, accurate and comfortable driving experience; and (ii) improving
our capabilities in designing, training and deploying the large-scale AI model
for our intelligent cabin solutions. Leveraging the large-scale AI model, we
aim to continually enhance the multimodal in-cabin perception capabilities to
achieve a more intelligent human-vehicle interaction experience.
 Approximately 10% of the net proceeds, or HK$66.6 million, over the next
three years, for refining our product R&D abilities and reinforcing our
capabilities to commercialize innovations. We intend to refine our product
R&D abilities through researching new R&D tools, recruiting high quality
talents with software skills and strengthening data processing abilities, among
other things. Meanwhile, in light of the advancement in chip technology, we
plan to research domain controller products intended for SOP based on new
chips to enhance the competitiveness of our iPilot solutions.
FUTURE PLANS AND USE OF PROCEEDS
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 Approximately 18% of the net proceeds, or HK$119.9 million, over the next
three years, for improving our R&D infrastructure, equipment and tools and
expanding our R&D team to strengthen the scalability as well as efficiency and
effectiveness of our R&D process. In particular, we plan to: (i) expand our
computational capacity via purchasing or leasing data servers (the purchase
price or rent of which is expected to depend on the types and features of data
servers) and reinforce our data computing and storage capabilities via
deploying data centers. We expect such enhancement to bolster our efforts in
efficient data mining and large-scale AI model training, which are intended to
further facilitate the development of the advanced functions of our solutions;
(ii) expand our laboratories and testing facilities as well as upgrade laboratory
equipment. We expect the enlarged facilities to accommodate more pieces of
laboratory equipment and support more research projects concurrently
conducted, thereby improving our overall testing efficiency. We intend to lease
space with aggregate gross floor area of approximately 100 sq.m. for our
hardware and calibration laboratories, subject to changes to our actual needs,
for the next three years; and (iii) upgrade our hardware and software toolchains
in the course of our R&D activities, to enhance the quality and efficiency of
our R&D process.
To support the foregoing use of proceeds, we expect to hire around 100 R&D talents
over the next three years. These R&D talents are expected to focus on algorithms,
software and hardware and project management and operational maintenance,
among other things. These talents are also expected to have expertise in such
relevant areas and years of experience in the automotive intelligence solutions
industry.
 Approximately 30% of the net proceeds, or HK$199.8 million, over the next three
years, for increasing our production efficiency and solution competitiveness. In
particular, we plan to: (i) switch certain production processes that are currently done
by external parties to in-house production, thereby providing us with more control
over the overall product workstream and the quality of production outcomes; (ii)
introduce advanced automated production equipment and systems to further enhance
the intelligence of our production lines, thereby improving our operational and
production efficiency; and (iii) vertically integrate certain parts of our supply chain
which we believe are more beneficial to manufacture in-house than through
procurement from external parties.
FUTURE PLANS AND USE OF PROCEEDS
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We plan to allocate approximately HK$108.0 million to switch certain production
processes and enhance the production lines. As to switching certain production
processes that are currently done by external parties to in-house production, we
intend to purchase relevant production equipment and recruit relevant
manufacturing personnel to establish SMT lines at our Guangzhou Production Base.
We also plan to establish DIP lines, automated assembly lines and intelligent
packaging lines in our Guangzhou Production Base to enhance the intelligence of
our production lines. By establishing in-house SMT lines and DIP lines, we expect
to reduce our cost of sales and thus increase our gross profit margin. By establishing
in-house automated assembly lines and intelligent packaging lines, we expect to
reduce the transportation and packaging costs and production cycle while
safeguarding the quality of our products. We also expect automated production lines
to reduce our labor costs, increase our production efficiency and improve our
inventory turnover.
We plan to allocate approximately HK$91.8 million for the vertical integration of
certain parts of our supply chain which we believe are more beneficial to
manufacture in-house than through procurement from external parties. We plan to
develop in-house advanced sensors leveraging our strong perception technology and
establish an automated sensor production line. We plan to establish production lines
to manufacture advanced sensors through purchasing relevant production equipment
and recruiting relevant manufacturing personnel. By developing and manufacturing
advanced sensors in-house, we expect to have a stable supply of sensors with
guaranteed quality while reducing our production cycle and improving our
production efficiency. We believe the in-house sensor manufacturing capabilities
will be beneficial for us to capture market demands of integrated intelligent driving
solutions that consist of both domain controllers and sensors.
For details, see “Business—Our Strategies—Continuously Enhancing Intelligent
Production Capability to Accelerate Commercialization” and “Business—Our
Production.”
 Approximately 20% of the net proceeds, or HK$133.2 million, over the next three
years, for reinforcing our sales and marketing capabilities. In particular, we plan to
expand our sales network in China to deepen our relationships with existing
customers and diversify our customer base. Meanwhile, we also intend to establish
sales network in overseas markets such as Europe and Southeast Asia to extend our
geographic footprint beyond the PRC market. Moreover, we plan to enhance the
effectiveness of our overall sales and marketing activities through recruiting
experienced sales and marketing personnel in both the PRC and overseas markets to
facilitate our business collaborations with automotive OEMs and tier-one suppliers
in China and overseas.
FUTURE PLANS AND USE OF PROCEEDS
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We intend to utilize the net proceeds to reinforce our sales and marketing
capabilities over the next three years. In particular, we plan to establish offices in
Shanghai, Singapore and Munich to address the PRC, Southeast Asian and European
markets respectively. We plan to allocate approximately HK$67.8 million for
recruiting a total of around 30 sales and marketing personnel and leasing office
space with aggregate gross floor area of approximately 2,000 sq.m., among other
things, for these new offices. Moreover, we plan to allocate approximately HK$65.4
million for carrying out a variety of public relations activities, such as attending
exhibitions and trade fairs, sponsoring or presenting at industry conferences, hosting
product launch events, as well as conducting marketing activities through
advertising campaigns and cooperation with media, corporations and academic
institutions.
According to CIC, the total addressable market in Southeast Asia for intelligent
driving solutions and IMS solutions is expected to reach RMB151.4 billion and
RMB4.7 billion, respectively, by 2028. Meanwhile, in Europe, the overall
penetration rate of intelligent driving solutions is expected to increase from 75.4%
in 2023 to 96.0% in 2028, and the average price of intelligent driving solutions per
vehicle is also expected to continue to increase from RMB5,461.6 in 2023 to
RMB7,490.4 in 2028, driving the overall intelligent driving solution market to grow
from RMB70.0 billion in 2023 to RMB137.3 billion in 2028, at a CAGR of 13.0%
from 2024 to 2028. The market size for IMS solutions in Europe is expected to grow
from RMB2.2 billion in 2023 to RMB16.2 billion in 2028, at a CAGR of 40.2% from
2024 to 2028. To establish sales network in Southeast Asia and Europe to capture
such market potential, we plan to establish an office in Munich and an office in
Singapore. We plan to hire approximately ten employees, including a regional sales
leader, sales managers, administrative staff, pre-sale and post-sale supporting staff
and a field application engineer, for each office. We plan to set up a showroom with
approximately five demonstration cars of our intelligent driving solutions and
intelligent cabin solutions on display, in each office. In addition, we plan to attend
international exhibitions and trade fairs, present at global industry conferences and
launch advertisements in oversea markets. Given the increasing market demand, our
rich global customer base and our solid track record in overseas expansion, we
believe that we are well-positioned to expand into Southeast Asia and Europe. See
“Business—Our Strengths—Top-Tier Customer Base and Proven Track Record with
a Solid Foundation for Overseas Expansion” for details. According to CIC, it is not
uncommon for intelligent driving and cabin solutions provider to expand into such
overseas markets.
 Approximately 10% of the net proceeds or HK$66.6 million, for working capital and
general corporate purposes.
FUTURE PLANS AND USE OF PROCEEDS
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In the event that the Offer Price is set at the maximum Offer Price or the minimum Offer
Price of the indicative Offer Price range, the net proceeds of the Global Offering will increase
or decrease by approximately HK$60.3 million.
The additional net proceeds that we would receive if the Over-allotment Option were
exercised in full would be: (i) HK$114.2 million (assuming an Offer Price of HK$20.20 per
Share, being the maximum Offer Price of the indicative Offer Price range); (ii) HK$105.2
million (assuming an Offer Price of HK$18.60 per Share, being the mid-point of the indicative
Offer Price range); and (iii) HK$96.1 million (assuming an Offer Price of HK$17.00 per Share,
being the minimum Offer Price of the indicative Offer Price range).
To the extent that the net proceeds from the Global Offering are either more or less than
expected, we will adjust our allocation of the net proceeds for the above purposes on a pro rata
basis.
To the extent that the net proceeds of the Global Offering are not immediately used for
the above purposes, we will only deposit such funds into short-term interest-bearing accounts
at licensed commercial banks and/or other authorized financial institutions (as defined under
the Securities and Futures Ordinance or applicable laws and regulations in other jurisdictions).
In such event, we will comply with the appropriate disclosure requirements under the Listing
Rules. We will issue an appropriate announcement if there is any material change to the above
proposed use of proceeds in accordance with the Listing Rules.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 449 ---
HONG KONG UNDERWRITERS
CLSA Limited
China International Capital Corporation Hong Kong Securities Limited
SBI China Capital Financial Services Limited
SDICS International Securities (Hong Kong) Limited
Long Bridge HK Limited
ABCI Securities Company Limited
BOCI Asia Limited
CMBC Securities Company Limited
Fosun International Securities Limited
Futu Securities International (Hong Kong) Limited
Patrons Securities Limited
Phillip Securities (Hong Kong) Limited
Shenwan Hongyuan Securities (H.K.) Limited
SPDB International Capital Limited
Tiger Brokers (HK) Global Limited
TradeGo Markets Limited
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering 3,919,000
Hong Kong Offer Shares (subject to reallocation) for subscription by the public in Hong Kong
on, and subject to, the terms and conditions set out in this prospectus.
Subject to:
(a) the Stock Exchange granting the listing of, and permission to deal in, the 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) as
mentioned in this prospectus and such listing and permission not subsequently being
revoked; and
(b) certain other conditions set out in the Hong Kong Underwriting Agreement
(including but not limited to the Offer Price being agreed upon between us and the
Overall Coordinators (for themselves and on behalf of the Underwriters and the
Capital Market Intermediaries)),
UNDERWRITING
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--- page 450 ---
the Hong Kong Underwriters have agreed severally, and not jointly, to subscribe for, or procure
subscribers for, the Hong Kong Offer Shares which are being offered but are not taken up under
the Hong Kong Public Offering, on the terms and conditions set out in this prospectus and the
Hong Kong Underwriting Agreement. If, for any reason, the Offer Price is not agreed between
us and the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters
and the Capital Market Intermediaries), the Global Offering will not proceed and will lapse.
The Hong Kong Underwriting Agreement is conditional upon and subject to the
International Underwriting Agreement having been signed and becoming unconditional and not
having been terminated.
Grounds for termination
The obligations of the Hong Kong Underwriters to subscribe or procure subscribers for
the Hong Kong Offer Shares will be subject to termination by notice in writing to our Company
from the Joint Sponsors and CLSA Limited and China International Capital Corporation Hong
Kong Securities Limited (the “ Joint Representatives ”) (for themselves and as representatives
of the Hong Kong Underwriters) with immediate effect if any of the following events occur at
or prior to 8:00 a.m. on the Listing Date:
(a) there has come to the notice of the Joint Sponsors and/or the Joint Representatives:
(i) any statement contained in any of this prospectus and/or any notices,
announcements, advertisements, communications or other documents
(including any announcement, circular document or other communication
pursuant to the Hong Kong Underwriting Agreement) issued or used by or on
behalf of our Company in connection with the Global Offering (including any
supplement or amendments thereto) (collectively, the “ Relevant Documents ”),
was, when it was issued, or has become, untrue, incorrect, inaccurate or
incomplete in any material respect or misleading or deceptive in any respect;
or
(ii) any forecast, expression of opinion, intention or expectation expressed in any
of the Relevant Documents is not, in the sole and absolute opinion of the Joint
Sponsors and/or the Joint Representatives, fair and honest and based on
reasonable assumptions, when taken as a whole; or
(iii) any matter has arisen or has been discovered which would or might, had it
arisen or been discovered immediately before the respective dates of the
publication of the Relevant Documents, constitute an omission therefrom; or
(iv) any material breach of any of the obligations imposed or to be imposed upon
any party to the Hong Kong Underwriting Agreement or the International
Underwriting Agreement (including any supplemental or amendment thereto,
as applicable) (in each case, other than on the part of any of the Underwriters);
or
UNDERWRITING
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--- page 451 ---
(v) any event, act or omission which gives or is likely to give rise to any liability
of any of our Company and the Warranting Shareholders (as defined in the
Hong Kong Underwriting Agreement) (the “ Warranting Shareholders ”)
pursuant to the indemnities given by them under the Hong Kong Underwriting
Agreement or under the International Underwriting Agreement; or
(vi) any adverse change or development involving a prospective adverse change in
the assets, liabilities, general affairs, management, business prospects,
shareholders’ equity, profits, losses, results of operations, position or
conditions (financial, trading or otherwise) or performance of any member of
our Group (the “ Group Company ”); or
(vii) any material breach of any of the agreements and undertakings to be given by
our Company and the Warranting Shareholders respectively in terms set out in
the Hong Kong Underwriting Agreement; or
(viii) any breach of, or any event or circumstance rendering untrue or incorrect in
any respect, any of the representations and warranties to be given by our
Company and the Warranting Shareholders respectively in terms set out in the
Hong Kong Underwriting Agreement; or
(ix) the approval by the Stock Exchange of the listing of, and permission to deal in,
the H Shares in issue and to be issued pursuant to the Global Offering
(including any additional Shares that may be issued upon the exercise of the
Over-allotment Option) is refused or not granted, or is qualified (other than
subject to customary conditions), on or before the Listing Date, or if granted,
the approval is subsequently withdrawn, qualified (other than by customary
conditions) or withheld in writing; or
(x) our Company withdraws any of the Relevant Documents or the Global
Offering; or
(xi) any expert (other than the Joint Sponsors) whose consent is required to the
issue of this prospectus with the inclusion of its reports, letters and/or legal
opinions (as the case may be) and references to its name included in the form
and context in which it respectively appears, has withdrawn or sought to
withdraw its consent to being named in this prospectus; or
(xii) a portion of the orders in the book-building process, which is considered by the
Joint Representatives in their sole and absolute opinion to be material, at the
time the International Underwriting Agreement is entered into, or the
investment commitments by any cornerstone investors after signing of
agreements with such cornerstone investors, have been withdrawn, terminated
or canceled, and the Joint Representatives, at their sole and absolute discretion,
conclude that it is therefore inadvisable or inexpedient or impracticable to
proceed with the Global Offering; or
UNDERWRITING
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--- page 452 ---
(b) there shall develop, occur, exist or come into effect:
(i) any local, national, regional, international event or circumstance, or series of
events or circumstances, in the nature of force majeure and beyond the
reasonable control of the Underwriters (including, without limitation, any acts
of government or orders of any courts, strikes, calamity, crisis, lock-outs, other
industrial actions, fire, explosion, flooding, earthquake, tsunami, volcanic
eruption, civil commotion, acts of war, outbreak or escalation of hostilities
(whether or not war is declared), acts of God, acts of terrorism (whether or not
responsibility has been claimed), paralysis in government operations,
interruptions, declaration of a local, regional, national or international
emergency, riot, public disorder, economic sanctions, outbreaks or escalation
of diseases, pandemics or epidemics (including, without limitation, COVID-
19, Severe Acute Respiratory Syndrome, swine or avian flu, avian influenza A
(H5N1), Swine Flu (H1N1), H7N9, Ebola virus, Middle East Respiratory
Syndrome, coronavirus or such related or mutated forms) or interruption or
delay in transportation) in or affecting any of Hong Kong, the PRC, the United
States, United Kingdom, the European Union (or any member thereof) or any
other jurisdictions relevant to any Group Company or the Global Offering (the
“Specific Jurisdictions ”); or
(ii) any change or development involving a prospective change, or any event or
circumstance or series of events or circumstances likely to result in any change
or development involving a prospective change, in any local, regional,
national, international, financial, economic, political, military, industrial,
fiscal, legal regulatory, currency, credit or market conditions, equity securities
or exchange control or any monetary or trading settlement system or other
financial markets (including, without limitation, conditions in the stock and
bond markets, money and foreign exchange markets, the interbank markets and
credit markets) in or affecting any of the Specific Jurisdictions; or
(iii) any moratorium, suspension or restriction on trading in securities generally
(including, without limitation, any imposition of or requirement for any
minimum or maximum price limit or price range) on the Stock Exchange, the
New Y ork Stock Exchange, the London Stock Exchange, the NASDAQ Global
Market, the Shanghai Stock Exchange and the Shenzhen Stock Exchange; or
(iv) any new national, central, federal, provincial, state, regional, municipal, local,
domestic or foreign laws (including, without limitation, any common law or
case law), statutes, ordinances, legal codes, regulations or rules (including,
without limitation, any and all regulations, rules, orders, judgments, decrees,
rulings, opinions, guidelines, measures, notices or circulars (in each case,
whether formally published or not and to the extent mandatory or, if not
complied with, the basis for legal, administrative, regulatory or judicial
consequences) any administrative, governmental or regulatory commission,
UNDERWRITING
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--- page 453 ---
board, body, authority or agency, or any stock exchange, self-regulatory
organisation or other non-governmental regulatory authority, or any court,
tribunal or arbitrator, in each case whether national, central, federal,
provincial, state, regional, municipal, local, domestic, foreign or supranational
(including without limitation the CSRC, the Stock Exchange and the SFC) (the
“Authority ”) (“Laws ”), or any change or development involving a prospective
change in existing Laws, or any event or circumstance or series of events or
circumstances likely to result in any change or development involving a
prospective change in the interpretation or application of existing Laws by any
court or other competent authority, in each case, in or affecting any of the
Specific Jurisdictions; or
(v) any general moratorium on commercial banking activities, or any disruption in
commercial banking activities, foreign exchange trading or securities
settlement or clearance services or procedures or matters, in or affecting any
of the Specific Jurisdictions; or
(vi) the imposition of economic sanctions or export control, in whatever form, on
any Group Company or any of the Warranting Shareholders, or the withdrawal
of trading privileges which existed on the date of the Hong Kong Underwriting
Agreement, in whatever form, directly or indirectly, by or for any of the
Specific Jurisdictions; or
(vii) a change or development involving a prospective change or amendment in or
affecting taxation or exchange control (or the implementation of any exchange
control), currency exchange rates or foreign investment Laws (including,
without limitation, any change in the system under which the value of the Hong
Kong currency is linked to that of the currency of the United States or a
fluctuation in the exchange rate of the Hong Kong dollar or the Renminbi
against any foreign currency) in or affecting any of the Specific Jurisdictions
or affecting an investment in the H Shares; or
(viii) any change or development involving a prospective change in, or a
materialization of, any of the risks set out in the section headed “Risk Factors”
in this prospectus; or
(ix) any litigation or claim of any third party being threatened or instigated against
any Group Company or any of our Company and the Warranting Shareholders;
or
UNDERWRITING
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--- page 454 ---
(x) any of the Directors, Supervisors and senior management member of our
Company as set out in the “Directors, Supervisors and Senior Management”
section of this prospectus being charged with an indictable offense or
prohibited by operation of Law or otherwise disqualified from taking part in
the management of a company; or
(xi) the chairman or general manager of our Company vacating his office; or
(xii) the commencement by any Authority of any action against a Director in his or
her capacity as such or an announcement by any Authority that it intends to
take any such action; or
(xiii) a contravention by any Group Company or any Director of the Listing Rules,
the Companies Ordinance or any other Laws applicable to the Global Offering;
or
(xiv) a prohibition on our Company for whatever reason from allotting, issuing or
selling the Offer Shares and/or the Offer Shares to be issued pursuant to the
exercise of the Over-allotment Option pursuant to the terms of the Global
Offering; or
(xv) non-compliance of this prospectus, any letters, filings, correspondences,
communications, documents, responses, undertakings and submissions in any
form, including any amendments, supplements and/or modifications thereof,
made or to be made to the CSRC, relating to or in connection with the Global
Offering pursuant to the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮೯БᗇՎձɪ̹
جthe “ CSRC Filing Rules ”, together with the Provisions on
Strengthening Confidentiality and Archives Administration of Overseas
Securities Offering and Listing by Domestic Companies (̋੶ྤʫΆุྤ
֛the “ CSRC Rules ”) and
other applicable rules and requirements of the CSRC (the “ CSRC Filings ”)
and the other Relevant Documents or any aspect of the Global Offering with
any applicable Laws (including but not limited to the Listing Rules, the
Companies Ordinance, the Companies (Winding up and Miscellaneous
Provisions) Ordinance and the CSRC Rules); or
(xvi) the issue or requirement to issue by our Company of a supplement or
amendment to this prospectus and/or any of the other Relevant Documents
pursuant to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, the Listing Rules or any requirement or request of the CSRC, the
Stock Exchange and/or the SFC; or
(xvii) a valid demand by any creditor for repayment or payment of any indebtedness
of any Group Company or in respect of which any Group Company is liable
prior to its stated maturity; or
UNDERWRITING
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--- page 455 ---
(xviii) a petition or an order is presented for the winding-up or liquidation of any
Group Company or any Group Company 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 Group Company or the
appointment of a provisional liquidator, receiver or manager is appointed to
take over all or part of the assets or undertaking of any Group Company or
anything analogous thereto occurs in respect of any Group Company; or
(xix) an Authority has commenced any investigation or other action, or announced
an intention to investigate or take other action, against any of the Directors,
Supervisors and senior management member of the Group as set out in the
“Directors, Supervisors and Senior Management” section of this prospectus; or
(xx) any loss or damage has been sustained by any Group Company (howsoever
caused and whether or not the subject of any insurance or claim against any
person);
which in each case individually or in aggregate in the sole and absolute opinion of the Joint
Sponsors and the Joint Representatives:
(a) has or will or may to have a material adverse effect on the assets, liabilities,
business, general affairs, management, shareholders’ equity, profits, losses, results
of operation, financial, trading or other condition or position or prospects or risks of
our Company or our Group or any Group Company or on any present or prospective
shareholder of our Company in his, her or its capacity as such; or
(b) has or will or may have or could be expected to have a material adverse effect on
the success, marketability or pricing of the Global Offering or the level of
applications for or the distribution of the Offer Shares under the Hong Kong Public
Offering or the level of interest under the International Placing; or
(c) makes or will make or may make it inadvisable, inexpedient or impracticable for any
part of the Hong Kong Underwriting Agreement or the Global Offering to be
performed or implemented or proceeded with as envisaged or to market the Global
Offering or the delivery or distribution of the Offer Shares on the terms and manner
contemplated by the Offering Documents (as defined in the Hong Kong
Underwriting Agreement) shall otherwise result in an interruption to or delay
thereof; or
(d) has or will or may have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance in
accordance with its terms or which prevents the processing of applications and/or
payments pursuant to the Global Offering or pursuant to the underwriting thereof.
UNDERWRITING
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--- page 456 ---
Undertakings given to the Stock Exchange pursuant to the Listing Rules
By our Company
We have undertaken to the Stock Exchange that we shall not issue any further Shares or
securities convertible into our equity securities (whether or not of a class already listed) may
be issued or sold or transferred out of treasury by us or form the subject of any agreement to
such an issue or sale or transfer out of treasury within six months from the Listing Date
(whether or not such issue of Shares will be completed within six months from the Listing
Date), except in certain circumstances prescribed by Rule 10.08 of the Listing Rules.
By our Single Largest Group of Shareholders
Pursuant to Rule 10.07 of the Listing Rules and pursuant to Chapter 4.13 of the Guide for
New Listing Applicants, each of our Single Largest Group of Shareholders has undertaken to
us and to the Stock Exchange that except pursuant to the Global Offering (including the
exercise of the Over-allotment Option), it/he shall not, without the prior written consent of the
Stock Exchange or unless permitted under the Listing Rules, at any time in the period
commencing on the date by reference to which disclosure of its shareholdings in our Company
is made in this prospectus and ending on the date which is six months from the Listing Date,
dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights,
interests or encumbrances in respect of, any of the Shares that it/he is shown to be the
beneficial owner in this prospectus (the “ Relevant Shares ”).
Note 2 to Rule 10.07(2) of the Listing Rules provides that Rule 10.07 does not prevent
any member of the Single Largest Group of Shareholders from using the Shares beneficially
owned by it/him as security (including a charge or pledge) in 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.
Further, pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, each of our Single
Largest Group of Shareholders has further undertaken to us and the Stock Exchange that,
within the period commencing on the date by reference to which disclosure of its/his
shareholding in our Company is made in this prospectus and ending on the date which is six
months from the Listing Date, it/he will:
(a) when it/he pledges or charges any Relevant Shares beneficially owned by it/him in
favor of an authorized institution pursuant to Note (2) to Rule 10.07(2) of the Listing
Rules, immediately inform us and the Stock Exchange in writing of such pledge or
charge together with the number of the Shares so pledged or charged; and
(b) when it/he receives indications, either verbal or written, from the pledgee or chargee
that any of our pledged or charged securities beneficially owned by it will be
disposed of, immediately inform us and the Stock Exchange in writing of such
indications.
UNDERWRITING
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--- page 457 ---
We will also inform the Stock Exchange as soon as we have been informed of the matters
mentioned in the paragraphs (a) and (b) above (if any) by any of the Single Largest Group of
Shareholders and subject to the then requirements of the Listing Rules disclose such matters
by way of an announcement in accordance with Rule 2.07C of the Listing Rules as soon as
possible after so being informed.
Undertakings given to the Hong Kong Underwriters
Undertakings by our Company
Our Company has undertaken to each of the Joint Sponsors, the Overall Coordinators, the
Joint Global Coordinators, the Hong Kong Underwriters and the Capital Market Intermediaries
that, except for the issue, offer or sale of the Offer Shares by our Company pursuant to the
Global Offering (including pursuant to any exercise of the Over-allotment Option), 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 ”), we will not, without the prior written consent of the Joint Sponsors and
the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters and the
Capital Market Intermediaries) and unless in compliance with the requirements of the Listing
Rules:
(a) offer, allot, issue, sell, accept subscription for, offer to allot, contract or agree to
allot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or create 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 pledge, charge, lien, mortgage, option, restriction, right of
first refusal, security interest, claim, pre-emption rights, equity interest, third party
rights or interests or rights of the same nature as that of the foregoing or other
encumbrances or security interest of any kind or another type of preferential
arrangement (including without limitation, retention arrangement) having similar
effect (“ Encumbrance ”) over, or agree to transfer or dispose of or create an
Encumbrance over, either directly or indirectly, conditionally or unconditionally,
any legal or beneficial interest in any Shares or other securities of the Company, or
any interest in any of the foregoing (including, without limitation, any securities
convertible into or exchangeable or exercisable for or that represent the right to
receive, or any other warrants or other rights to purchase, any Shares), or deposit
any Shares or other securities of our Company, with a depositary in connection with
the issue of depositary receipts; or
UNDERWRITING
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(b) enter into any swap 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 other securities of our Company, or any interest in any
of the foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any warrants
or other rights to purchase, any Shares or other securities of our Company); or
(c) enter into any transaction with the same economic effect as any transactions
specified in (a) or (b) above; or
(d) offer to or contract to or agree to or announce any intention to effect any transaction
specified in (a), (b) or (c) above,
in each case, whether any of the transactions specified in (a), (b) or (c) above is to be settled
by delivery of Shares, or 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).
Our Company has further undertaken that, we will not enter into any of the transactions
described in (a), (b) or (c) above or offers to or agrees to or announces any intention to effect
any such transaction, such that any of the Warranting Shareholders and other Single Largest
Group of Shareholders would cease to be the single largest group of shareholders of our
Company during the period of six months immediately following the expiry of the First
Six-Month Period expires (the “ Second Six-Month Period ”). In the event that, during the
Second Six-Month Period, our Company enters into any of the transactions described in (a), (b)
or (c) above or offers or agrees or contracts to, or announces, or publicly discloses, any
intention to, enter into any such transactions, our Company will take all reasonable steps to
ensure that we will not create a disorderly or false market in any Shares or other securities of
our Company.
Our Company and the Warranting Shareholders have agreed and undertaken to each of the
Joint Sponsors, the Sponsor-OC, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries and the Hong
Kong Underwriters that it will not, and our Company and each of the Warranting Shareholders
has further undertaken to procure that our Company will not, effect any purchase of H Shares,
or agree to do so, which may reduce the holdings of H Shares held by the public (as defined
in Rule 8.24 of the Listing Rules) below minimum public float requirements specified in the
Listing Rules or any waiver granted and not revoked by the Stock Exchange, on or before the
date falling one year after the Listing Date without having first obtained the prior written
consent of the Joint Sponsors and Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters).
UNDERWRITING
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By the Warranting Shareholders
Each of the Warranting Shareholders has jointly and severally agreed and undertaken to
each of our Company, the Joint Sponsors, the Sponsor-OC, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries that, except in compliance with the
requirements under Rule 10.07(3) of the Listing Rules, without the prior written consent of the
Joint Sponsors and the Overall Coordinators and the (for themselves and on behalf of the Hong
Kong Underwriters):
(i) at any time during the First Six-Month Period, he shall not, and shall procure that
the relevant registered holder(s), any nominee or trustee holding on trust for him and
the companies controlled by him (together, the “ Controlled Entities ”) shall not:
(a) sell, offer to sell, contract or agree to sell, mortgage, charge, pledge,
hypothecate, lend, grant or sell any option, warrant, contract or right to sell, or
otherwise transfer or dispose of or create an Encumbrance over, or agree to
transfer or dispose of or create an Encumbrance over, either directly or
indirectly, conditionally or unconditionally, legal or beneficial interest in 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 the Company) beneficially
owned by him directly or indirectly through his Controlled Entities (the
“Relevant Securities ”), or deposit any Relevant Securities with a depositary in
connection with the issue of depositary receipts; or
(b) enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of the Relevant
Securities; or
(c) enter into or effect any transaction with the same economic effect as any of the
transactions referred to in sub-paragraphs (a) or (b) above; or
(d) offer to or agree to or announce any intention to enter into or effect any of the
transactions referred to in sub-paragraphs (a), (b) or (c) above,
in each case, whether any of the foregoing transactions referred to in sub-paragraphs
(a), (b) or (c) is to be settled by delivery of such Shares or any other securities of
our Company or in cash or otherwise (whether or not the issue of such Shares or
other securities will be completed within the First Six-Month Period);
UNDERWRITING
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(ii) at any time during the Second Six-Month Period, he will not, and will procure that
the Controlled Entities will not, enter into any of the transactions described in (i)(a),
(b) or (c) above or offer to, or agree or announce any intention to enter into any such
transaction, if, immediately following any sale, transfer or disposal or upon the
exercise or enforcement of any option, right, interest or Encumbrance pursuant to
such transaction, he will, together with the Warranting Shareholders and other
Single Largest Group of Shareholders, cease to be the single largest group of
shareholders of the Company;
(iii) in the event that he enters into any of the transactions specified in (i)(a), (b) or (c)
above or offer to or agrees to or announce any intention to effect any such
transaction within the Second Six-Month Period, he shall take all reasonable steps
to ensure that he will not create a disorderly or false market for any Shares or other
securities of our Company;
(iv) he shall, and shall procure that the relevant registered holder(s) and other Controlled
Entities shall, comply with all the restrictions and requirements under the Listing
Rules on the sale, transfer or disposal by him or by the registered holder(s) and/or
other Controlled Entities of any Shares or other securities of the Company.
Each of the Warranting Shareholders has further undertaken to each of our Company, the
Joint Sponsors, the Sponsor-OC, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries and the Hong
Kong Underwriters that, within the period from the date by reference to which disclosure of
their shareholding in our Company is made in this prospectus and ending on the date which is
twelve months from the Listing Date, he will:
(i) when he pledges or charges any securities or interests in the Relevant Securities in
favor of an authorized institution pursuant to Note 2 to Rule 10.07(2) of the Listing
Rules, immediately inform our Company, the Joint Sponsors, the Overall
Coordinators and the Joint Global Coordinators in writing of such pledges or
charges together with the number of securities and nature of interest so pledged or
charged; and
(ii) when he receives indications, either verbal or written, from any pledgee or chargee
that any of the pledged or charged securities or interests in the securities of our
Company will be sold, transferred or disposed of, immediately inform our Company,
the Joint Sponsors, the Overall Coordinators and the Joint Global Coordinators in
writing of such indications.
UNDERWRITING
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Underwriters’ interests in our Group
Save for their respective obligations under the Hong Kong Underwriting Agreement and
the International Underwriting Agreement or as otherwise disclosed in this prospectus, as of
the Latest Practicable Date, none of the Underwriters was interested directly or indirectly in
any of our Shares or securities or any shares or securities of any other member of our Group
or had any right or option (whether legally enforceable or not) to subscribe for, or to nominate
persons to subscribe for, any of our Shares or securities or any shares or securities of any other
member of our Group.
Following the completion of the Global Offering, the Underwriters and their affiliated
companies may hold a certain portion of our Shares as a result of fulfilling their respective
obligations under the Hong Kong Underwriting Agreement and International Underwriting
Agreement.
The Joint Sponsors’ Independence
As members of the sponsor group (as defined in the Listing Rules) of China International
Capital Corporation Hong Kong Securities Limited collectively held or will hold, directly or
indirectly, more than 5% of the number of issued shares of our Company as of the Latest
Practicable Date and up to the Listing Date, China International Capital Corporation Hong
Kong Securities Limited does not satisfy the independence criteria applicable to sponsor set out
in Rule 3A.07 of the Listing Rules. For details relating to the interests of China International
Capital Corporation Hong Kong Securities Limited in our Company, see “Substantial
Shareholders” section in this prospectus.
CITIC Securities (Hong Kong) Limited satisfies the independence criteria applicable to
sponsor set out in Rule 3A.07 of the Listing Rules.
The International Placing
International Placing
In connection with the International Placing, we expect to enter into the International
Underwriting Agreement on the Price Determination Date with, among others, the International
Underwriters. Under the International Underwriting Agreement, the International Underwriters
would, subject to certain conditions, severally and not jointly, agree to purchase the
International Placing Shares or procure purchasers for the International Placing Shares initially
being offered pursuant to the International Placing. See “Structure of the Global Offering —
The International Placing” in this prospectus.
Under the International Underwriting Agreement, we intend to grant to the International
Underwriters the Over-allotment Option, exercisable in whole or in part at one or more times,
at the sole and absolute discretion of the Overall Coordinators on behalf of the International
Underwriters from the Listing Date until 30 days from the last day for the lodging of
applications under the Hong Kong Public Offering to require us to issue and allot up to an
aggregate of 5,878,400 additional H Shares, representing 15% of the Offer Shares initially
available under the Global Offering and at the Offer Price, to cover, among other things, any
over-allocations in the International Placing, if any.
UNDERWRITING
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Commission and Expenses
The Underwriters will receive an underwriting commission of 2.0% of the aggregate
Offer Price of the Offer Shares (including any Offer Shares to be issued pursuant to the
exercise of the Over-allotment Option) (“ Fixed Fees ”). In addition, we may, at our discretion,
pay to the Capital Market Intermediaries (including the Overall Coordinators) an additional
incentive fee of up to 1.8% of the aggregate Offer Price of the Offer Shares (including any
Offer Shares to be issued pursuant to the exercise of the Over-allotment Option)
(“Discretionary Fees ”). Assuming the Discretionary Fees are paid in full, the ratio of the
Fixed Fees and the Discretionary Fees is therefore approximately 52.6:47.4.
Assuming the Over-allotment Option is not exercised and based on an Offer Price of
HK$18.60 (being the mid-point of the stated range of the Offer Price between HK$17.00 and
HK$20.20), the aggregate commissions and estimated expenses, together with the Stock
Exchange listing fee, SFC transaction levy, AFRC transaction levy, Stock Exchange trading
fee, legal and other professional fees, printing and other fees and expenses relating to the
Global Offering, are estimated to amount to approximately HK$63.0 million in total.
Indemnity
Our Company and each of the Warranting Shareholders has undertaken to indemnify,
defend, hold harmless and keep fully indemnified (on an after-tax basis), on demand, each of
the Overall Coordinators, the Joint Global Coordinators, the Joint Sponsors, the Hong Kong
Underwriters and the Capital Market Intermediaries from and against certain losses which they
may suffer, including losses arising from their performance of their obligations under the Hong
Kong Underwriting Agreement and any breach by us or any of the Warranting Shareholders of
the Hong Kong Underwriting Agreement.
Restrictions on the Offer Shares
No action has been taken to permit a public offering of the Offer Shares, other than in
Hong Kong, or the distribution of this prospectus in any jurisdiction other than Hong Kong.
Accordingly, this prospectus may not be used for the purpose of, and does not constitute, an
offer or invitation in any jurisdiction or in any circumstances in which such an offer or
invitation is not authorized or to any person to whom it is unlawful to make such an offer or
invitation.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Placing
(together, the “ Syndicate Members ”) and their affiliates may each individually undertake a
variety of activities (as further described below) which do not form part of the underwriting or
stabilizing process.
UNDERWRITING
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The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In the
ordinary course of their various business activities, the Syndicate Members and their respective
affiliates may purchase, sell or hold a broad array of investments and actively trade securities,
derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers. Such investment and
trading activities may involve or relate to assets, securities and/or instruments our Company
and/or persons and entities with relationships with our Company and may also include swaps
and other financial instruments entered into for hedging purposes in connection with our
Group’s loans and other debt.
In relation to the H Shares, the activities of the Syndicate Members and their affiliates
could include acting as agent for buyers and sellers of the H Shares, entering into transactions
with those buyers and sellers in a principal capacity, including as a lender to initial purchasers
of the H Shares (which financing may be secured by the H Shares) in the Global Offering,
proprietary trading in the H Shares, and entering into over the counter or listed derivative
transactions or listed or unlisted securities transactions (including issuing securities such as
derivative warrants listed on a stock exchange) which have as their underlying assets, assets
including the H Shares. Such transactions may be carried out as bilateral agreements or trades
with selected counterparties. Those activities may require hedging activity by those entities
involving, directly or indirectly, the buying and selling of the H Shares, which may have a
negative impact on the trading price of the H Shares. All such activities could occur in Hong
Kong and elsewhere in the world and may result in the Syndicate Members and their affiliates
holding long and/or short positions in the H Shares, in baskets of securities or indices including
the H Shares, in units of funds that may purchase the H Shares, or in derivatives related to any
of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the 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 hedging activity in the Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period
described in the section headed “Structure of the Global Offering” in this Prospectus. Such
activities may affect the market price or value of the Shares, the liquidity or trading volume
in the Shares and the volatility of the price of the Shares, and the extent to which this occurs
from day to day cannot be estimated.
UNDERWRITING
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It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the following:
(a) the Syndicate Members (other than the Stabilizing Manager or any person acting for
it) must not, in connection with the distribution of the Offer Shares, effect any
transactions (including issuing or entering into any option or other derivative
transactions relating to the Offer Shares) whether in the open market or otherwise,
with a view to stabilizing or maintaining the market price of any of the Offer Shares
at levels other than those which might otherwise prevail in the open market; and
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking and other services to our
Company and its affiliates for which such Syndicate Members or their respective affiliates have
received or will receive customary fees and commissions.
UNDERWRITING
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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. The Global Offering comprises:
 the Hong Kong Public Offering of initially 3,919,000 Offer Shares (subject to
reallocation as mentioned below) in Hong Kong as described below in “— The Hong
Kong Public Offering”; and
 the International Placing of initially 35,271,000 Offer Shares (subject to reallocation
and the Over-allotment Option as described below) outside the United States
(including to professional, institutional and corporate investors and other investors
anticipated to have a sizeable demand for the Offer Shares in Hong Kong) in
offshore transactions in reliance on Regulation S.
Investors may either:
 apply for the Hong Kong Offer Shares under the Hong Kong Public Offering; or
 apply for or indicate an interest for the International Placing Shares under the
International Placing,
but may not do both.
The 39,190,000 Offer Shares in the Global Offering will represent approximately 9.8% of
our enlarged share capital immediately after the completion of the Global Offering, without
taking into account the exercise of the Over-allotment Option. If the Over-allotment Option is
exercised in full, the Offer Shares will represent approximately 11.1% of our enlarged share
capital immediately following the completion of the Global Offering.
References to applications, application monies or procedure for applications relate solely
to the Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
We are initially offering for subscription by the public in Hong Kong 3,919,000 Offer
Shares, representing 10% of the total number of Offer Shares initially available under the
Global Offering. Subject to the reallocation of Offer Shares between the International Placing
and the Hong Kong Public Offering, the number of Offer Shares offered under the Hong Kong
Public Offering will represent approximately 1.0% of our enlarged issued share capital
immediately after completion of the Global Offering, assuming the Over-allotment Option is
not exercised.
STRUCTURE OF THE GLOBAL OFFERING
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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 as set forth
below in “— Conditions of the Global Offering.”
Allocation
Allocation of Hong Kong Offer Shares to investors under the Hong Kong Public Offering
will be based 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. We may, if necessary, allocate the Hong Kong Offer Shares on the
basis of balloting, which would mean that some applicants may receive a higher allocation than
others who have applied for the same number of Hong Kong Offer Shares and those applicants
who are not successful in the ballot may not receive any Hong Kong Offer Shares. For
allocation purposes only, the total number of Offer Shares available under the Hong Kong
Public Offering is to be divided equally into two pools, Pool A and Pool B with any odd board
lots being allocated to Pool A:
 Pool A : The Hong Kong Offer Shares in pool A will be allocated on an equitable
basis to applicants who have applied for the Hong Kong Offer Shares with an
aggregate subscription price of HK$5 million or less (excluding brokerage, SFC
transaction levy, AFRC transaction levy and Stock Exchange trading fee payable);
and
 Pool B : The Hong Kong Offer Shares in pool B will be allocated on an equitable
basis to applicants who have applied for the Hong Kong Offer Shares with an
aggregate subscription price of more than HK$5 million and up to the value of pool
B (excluding brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee payable).
Investors should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of the
pools are under-subscribed, the surplus Hong Kong Offer Shares will be transferred to the other
pool to satisfy demand in the pool and be allocated accordingly. For the purpose of this
subsection only, the “subscription price” for the Hong Kong Offer Shares means the price
payable on application therefor (without regard to the Offer Price as finally determined).
Applicants can only receive an allocation of Hong Kong Offer Shares from either pool A or
pool B but not from both pools. Multiple or suspected multiple applications under the Hong
Kong Public Offering and any application for more than 1,959,400 Hong Kong Offer Shares
will be rejected.
STRUCTURE OF THE GLOBAL OFFERING
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Reallocation
The allocation of the Offer Shares between the Hong Kong Public Offering and the
International Placing is subject to reallocation at the discretion of the Overall Coordinators and
the Joint Global Coordinators, subject to the following:
(a) where the International Placing Shares are fully subscribed or oversubscribed:
(i) if the Hong Kong Offer Shares are undersubscribed, the Overall Coordinators
and the Joint Global Coordinators have the authority to reallocate all or any
unsubscribed Hong Kong Offer Shares to the International Placing, in such
proportions as the Overall Coordinators and the Joint Global Coordinators
deems appropriate;
(ii) if the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents less than 15 times the number of the Offer Shares initially
available for subscription under the Hong Kong Public Offering, then up to
3,919,000 Offer Shares may be reallocated to the Hong Kong Public Offering
from the International Placing, so that the total number of the Offer Shares
available under the Hong Kong Public Offering will be increased to 7,838,000
Offer Shares, representing 20% of the total number of the Offer Shares initially
available under the Global Offering;
(iii) if the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents (1) 15 times or more but less than 50 times, (2) 50 times
or more but less than 100 times, and (3) 100 times or more of the number of
Offer Shares initially available under the Hong Kong Public Offering, the Offer
Shares will be reallocated to the Hong Kong Public Offering from the
International Placing in accordance with the clawback requirements set forth in
paragraph 4.2 of Practice Note 18 of the Listing Rules, so that the total number
of Hong Kong Offer Shares will be increased to 11,757,000 Offer Shares (in
the case of (1)), 15,676,000 Offer Shares (in the case of (2)) and 19,595,000
Offer Shares (in the case of (3)), representing 30%, 40% and 50% of the Offer
Shares initially available under the Global Offering, respectively;
(b) where the International Placing Shares are undersubscribed:
(i) if the Hong Kong Offer Shares are also undersubscribed, the Global Offering
will not proceed unless the Underwriters would subscribe for or procure
subscribers for their respective applicable proportions of the Offer Shares
being offered which are not taken up under the Global Offering on the terms
and conditions of this prospectus and the Underwriting Agreements; and
STRUCTURE OF THE GLOBAL OFFERING
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(ii) if the Hong Kong Offer Shares are fully subscribed or oversubscribed
(irrespective of the extent of over-subscription), then up to 3,919,000 Offer
Shares may be reallocated to the Hong Kong Public Offering from the
International Placing, so that the total number of the Offer Shares available
under the Hong Kong Public Offering will be increased to 7,838,000 Offer
Shares, representing 20% of the total number of the Offer Shares initially
available under the Global Offering.
In the event of reallocation of Offer Shares from the International Placing to the Hong
Kong Public Offering in the circumstances described in paragraph (a)(ii) or (b)(ii) above, the
final Offer Price shall be fixed at the bottom end of the Offer Price Range (i.e. HK$17.00 per
Offer Share) according to Chapter 4.14 of Guide for New Listing Applicants issued by the
Stock Exchange.
In all cases of reallocation of Offer Shares from the International Placing to the Hong
Kong Public Offering, the additional Offer Shares reallocated to the Hong Kong Public
Offering will be allocated between pool A and pool B in equal proportion and the number of
Offer Shares allocated to the International Placing will be correspondingly reduced.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an
undertaking and confirmation in the application submitted by him that he and any person(s) for
whose benefit he 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
Placing Shares under the International Placing, and such applicant’s application is liable to be
rejected if the said undertaking and/or confirmation is breached and/or untrue (as the case may
be) or it has been or will be placed or allocated International Placing Shares under the
International Placing.
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), maximum price of HK$20.20 per Offer Share in addition to
brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and
Stock Exchange trading fee of 0.00565% on each Offer Share, amounting to a total of
HK$4,080.75 for one board lot of 200 H Shares. If the Offer Price, as finally determined on
the Price Determination Date in the manner as described below in “— Pricing and Allocation”,
is less than the maximum price of HK$20.20 per Offer Share, appropriate refund payments
(including brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange
trading fee attributable to the surplus application monies) will be made to successful applicants
(subject to application channels), without interest. See “How to Apply for the Hong Kong Offer
Shares.”
STRUCTURE OF THE GLOBAL OFFERING
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THE INTERNATIONAL PLACING
Number of Offer Shares Initially Offered
We will be initially offering for subscription under the International Placing 35,271,000
Offer Shares, representing 90% of the Offer Shares under the Global Offering. Subject to the
reallocation of Offer Shares between the International Placing and the Hong Kong Public
Offering, the number of Offer Shares offered under the International Placing will represent
approximately 9.0% of our enlarged issued share capital immediately after completion of the
Global Offering, assuming the Over-allotment Option is not exercised.
Allocation
The International Placing Shares will conditionally be offered to selected professional,
institutional and corporate investors and other investors anticipated to have a sizeable demand
for our Offer Shares in Hong Kong and other jurisdictions outside the United States in offshore
transactions in reliance on Regulation S. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in
shares and other securities and corporate entities which regularly invest in shares and other
securities. Prospective professional, institutional and other investors will be required to specify
the number of the International Placing Shares under the International Placing they would be
prepared to acquire either at different prices or at a particular price. This process, known as
“book-building,” is expected to continue up to the Price Determination Date.
Allocation of the International Placing Shares pursuant to the International Placing will
be determined by the Overall Coordinators and the Joint Global Coordinators and will be based
on a number of factors including the level and timing of demand, total size of the relevant
investor’s invested assets or equity assets in the relevant sector and whether or not it is
expected that the relevant investor is likely to buy further, and/or hold or sell its H Shares, after
the listing of the H Shares on the Stock Exchange. Such allocation is intended to result in a
distribution of the International Placing Shares on a basis which would lead to the
establishment of a solid professional and institutional shareholder base to the benefit of our
Company and our Shareholders as a whole.
The Overall Coordinators and the Joint Global Coordinators (for themselves and on
behalf of the Underwriters) may require any investor who has been offered Offer Shares under
the International Placing and who has made an application under the Hong Kong Public
Offering to provide sufficient information to the Overall Coordinators and the Joint Global
Coordinators so as to allow them to identify the relevant applications under the Hong Kong
Public Offering and to ensure that they are excluded from any applications of Hong Kong Offer
Shares under the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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Reallocation
The total number of Offer Shares to be issued pursuant to the International Placing may
change as a result of the clawback arrangement as described above in “The Hong Kong Public
Offering—Reallocation” or 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, it is expected that we will grant the Over-
allotment Option to 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 from the Listing Date until 30 days after the last day for lodging
applications under the Hong Kong Public Offering, to require the Company to issue up to
5,878,400 H Shares, representing approximately 15% of the Offer Shares initially available
under the Global Offering, at the Offer Price under the International Placing to, among other
things (such as effecting the permitted stabilizing actions as set out in “Stabilization” below),
cover over-allocations in the International Placing, if any.
If the Over-allotment Option is exercised in full, the additional H Shares to be issued
pursuant thereto will represent approximately 1.5% of our enlarged issued share capital
immediately following the completion of the Global Offering. In the event that the
Over-allotment Option is exercised, an announcement will be made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities
in the secondary market, during a specified period of time, to retard and, if possible, prevent
a decline in the initial public market price of the securities below the offer price. Such
transactions may be effected in all jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulatory requirements, including those of Hong
Kong. In Hong Kong, the price at which stabilization is effected is not permitted to exceed the
Offer Price.
In connection with the Global Offering, the Stabilizing Manager, or any person acting for
it, on behalf of the Underwriters, may over-allocate or effect transactions with a view to
stabilizing or supporting the market price of our H Shares at a level higher than that which
might otherwise prevail in the open market for a limited period after the Listing Date.
However, there is no obligation on the Stabilizing Manager or any persons acting for it to
conduct any such stabilizing action. Such stabilizing action, if taken, will be conducted at the
absolute discretion of the Stabilizing Manager or any person acting for it and may be
discontinued at any time, and is required to be brought to an end on the 30th day after the last
day for lodging applications under the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 471 ---
Stabilization action permitted in Hong Kong under the Securities and Futures (Price
Stabilizing) Rules of the SFO includes (i) over-allocating for the purpose of preventing or
minimizing any reduction in the market price of our H Shares, (ii) selling or agreeing to sell
our H Shares so as to establish a short position in them for the purpose of preventing or
minimizing any reduction in the market price of our H Shares, (iii) purchasing, or agreeing to
purchase, our H Shares pursuant to the Over-allotment Option in order to close out any position
established under (i) or (ii) above, (iv) purchasing, or agreeing to purchase, any of our H Shares
for the sole purpose of preventing or minimizing any reduction in the market price of our H
Shares, (v) selling or agreeing to sell any H Shares in order to liquidate any position
established as a result of those purchases, and (vi) offering or attempting to do anything as
described in (ii), (iii), (iv) or (v) above.
Specifically, prospective applicants for and investors in H Shares should note that:
 the Stabilizing Manager (or any person acting for it) may, in connection with the
stabilizing action, maintain a long position in the H Shares;
 there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager (or any person acting for it) will maintain such a long position;
 liquidation of any such long position by the Stabilizing Manager (or any person
acting for it) and selling in the open market may have an adverse impact on the
market price of the H Shares;
 no stabilizing action can be taken to support the price of the H Shares for longer than
the stabilizing period which will begin on the Listing Date and is expected to expire
on Sunday, January 19, 2025 being the 30th day after the last day for lodging
applications under the Hong Kong Public Offering. After this date, when no further
action may be taken to support the price of the H Shares, demand for the H Shares,
and therefore the price of the H Shares, could fall;
 the price of the H Shares cannot be assured to stay at or above the Offer Price by
the taking of any stabilizing action; and
 stabilizing bids or transactions effected in the course of the stabilizing action may
be made at any price at or below the Offer Price, which means that stabilizing bids
or transactions effected may be made at a price below the price paid by applicants
for, or investors in, the Offer Shares.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 472 ---
In order to effect stabilization actions, the Stabilizing Manager will arrange cover of up
to an aggregate of 5,878,400 H Shares, representing up to approximately 15% of the initial
Offer Shares, through delayed delivery arrangements with investors who have been allocated
Offer Shares in the International Placing. The delayed delivery arrangements (if specifically
agreed by an investor) relate only to the delay in the delivery of the Offer Shares to such
investor and the Offer Price for the Offer Shares allocated to such investor will be fully paid
on the Listing Date, and before the commencement of dealings accordingly there will be no
delayed settlement of the Offer Shares.
Our Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules of the SFO will be made within seven days of
the expiration of the stabilization period.
OVER-ALLOCATION
Following any over-allocation of H Shares in connection with the Global Offering, the
Stabilizing Manager (or any person acting for it) may cover such over-allocations by (among
other methods) exercising the Over-allotment Option in full or in part, using H Shares
purchased by the Stabilizing Manager (or any person acting for it) in the secondary market at
prices that do not exceed the Offer Price as detailed below or a combination of these means.
PRICING AND ALLOCATION
Our Company, the Overall Coordinators (for themselves and on behalf of the
Underwriters) will determine the Offer Price and sign an agreement on the Price Determination
Date, when market demand for the Offer Shares will be determined. The Price Determination
Date is expected to be on or around Monday, December 23, 2024, and in any event, not later
than 12:00 noon on Monday, December 23, 2024.
The Offer Price will not be more than HK$20.20 per Offer Share and is expected to be
not less than HK$17.00 per Offer Share, unless otherwise announced, as further explained
below. If you apply for the Offer Shares under the Hong Kong Public Offering, you may be
required to pay the maximum price of HK$20.20 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% fee, amounting to a total of HK$4,080.75 for one board lot of 200 H Shares.
If the Offer Price, as finally determined in the manner described below, is lower than
HK$20.20, we will refund the respective difference, including brokerage, SFC transaction levy,
AFRC transaction levy and Stock Exchange trading fee attributable to the surplus application
monies (subject to application channels). We will not pay interest on any refunded amounts.
See “How to Apply for the Hong Kong Offer Shares.”
STRUCTURE OF THE GLOBAL OFFERING
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The International Underwriters will be soliciting from prospective investors indications
of interest in acquiring Offer Shares in the International Placing. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Placing they would be prepared to acquire either at different prices or at a
particular price. This process, known as “book-building”, is expected to continue up to, and to
cease on or around, the last day for lodging applications under the Hong Kong Public Offering.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where
considered appropriate, based on the level of interest expressed by prospective professional,
institutional and other investors during the book-building process, and with the consent of our
Company, reduce the number of Offer Shares and/or the Offer Price Range below that stated
in this prospectus at any time prior to the morning of the last day for lodging applications under
the Hong Kong Public Offering. In such a case, we 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 publish an announcement or
supplemental prospectus on the website of the Stock Exchange at www.hkexnews.hk and on
our website at www.minieye.cc (the contents of the website do not form a part of this
prospectus). The Global Offering must first be canceled and subsequently relaunched on FINI
pursuant to the supplemental prospectus. Upon issue of such announcement or supplemental
prospectus, the revised number of Offer Shares and/or offer price range will be final and
conclusive and the Offer Price, if agreed upon by us, will be fixed within such revised offer
price range.
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any announcement of a reduction in the number of Offer Shares
and/or the Offer Price Range may not be made until the day which is the last day for lodging
applications under the Hong Kong Public Offering. Such notice will also confirm or revise, as
appropriate, the working capital statement, the Global Offering statistics as currently set out in
“Summary” in this prospectus, and any other financial information which may change as a
result of such reduction. In the absence of any such notice so published, the Offer Price, if
agreed upon with the Company and the Overall Coordinators (for themselves and on behalf of
the Underwriters) will under no circumstances be set outside the Offer Price Range as stated
in this prospectus.
If you have already submitted an application for the Hong Kong Offer Shares before the
last day for lodging applications under the Hong Kong Public Offering, you will not be allowed
to subsequently withdraw your application. However, if the number of Offer Shares and/or the
Offer Price Range is reduced, applicants will be notified that they are required to confirm their
applications. If applicants have been so notified but have not confirmed their applications in
accordance with the procedure to be notified, all unconfirmed applications will be deemed
revoked.
STRUCTURE OF THE GLOBAL OFFERING
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In the event of a reduction in the number of Offer Shares, the Overall Coordinators may,
at their discretion, reallocate the number of Offer Shares to be offered in the Hong Kong Public
Offering and the International Placing, provided that the number of Offer Shares comprised in
the Hong Kong Public Offering shall not be less than 10% of the total number of Offer Shares
available under the Global Offering (assuming the Over-allotment Option is not exercised).
The final Offer Price, the level of indication of interest in the International Placing, the
basis of allotment of Offer Shares available under the Hong Kong Public Offering and the
identification document numbers of successful applicants under the Hong Kong Public
Offering are expected to be made available in a variety of channels in the manner described in
“How to Apply for the Hong Kong Offer Shares—B. Publication of Results.”
If, for any reason, the Offer Price is not agreed between the Overall Coordinator (for
themselves and on behalf of the Underwriters and the Capital Market Intermediaries) and
our Company on or before 12:00 noon on Monday, December 23, 2024, the Global
Offering will not proceed and will lapse immediately.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares is conditional on:
 the Stock Exchange granting approval for the listing of, and permission to deal in,
our H Shares in issue and to be issued as described in this prospectus (including the
H Shares which may be issued pursuant to the exercise of the Over-allotment
Option);
 the Offer Price having been agreed between us and the Overall Coordinators (on
behalf the Underwriters);
 the execution and delivery of the International Underwriting Agreement on or about
the Price Determination Date; and
 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 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 Hong Kong Underwriting
Agreement and/or the International Underwriting Agreement, as the case may be (unless and
to the extent such conditions are validly waived on or before such dates and times) and in any
event not later than Thursday, January 16, 2025, being the 30th date after the date of this
prospectus.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 475 ---
If, for any reason, the Offer Price is not agreed between us and the Overall Coordinators
(for themselves and on behalf of the Underwriters) on or before 12:00 noon on Monday,
December 23, 2024, the Global Offering will not proceed and will lapse.
The consummation of each of the Hong Kong Public Offering and the International
Placing is conditional upon, among other things, each other offering becoming unconditional
and not having been terminated in accordance with its respective terms. If the above conditions
are not fulfilled or waived prior to the times and dates specified, the Global Offering will lapse
and the Stock Exchange will be notified immediately. Notice of the lapse of the Hong Kong
Public Offering will be published by the Company on our website at www.minieye.cc and the
website of the Stock Exchange at www.hkexnews.hk on the next day following such lapse. In
such an event, all application monies will be returned (subject to application channels), without
interest, on the terms set out in “How to Apply for the Hong Kong Offer Shares—D.
Despatch/Collection of H Share certificates and Refund of Application Monies.” In the
meantime, all application monies will be held in separate bank account(s) with the receiving
bank or other bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155 of the
Laws of Hong Kong).
UNDERWRITING AGREEMENTS
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms of the Hong Kong Underwriting Agreement and is subject to, among other
conditions, us and the Overall Coordinators (for themselves and on behalf of the Underwriters)
agreeing on the Offer Price on the Price Determination Date.
We expect to enter into the International Underwriting Agreement relating to the
International Placing on the Price Determination Date.
Certain terms of the underwriting arrangements, the Hong Kong Underwriting Agreement
and the International Underwriting Agreement, are summarized in “Underwriting.”
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Friday, December 27, 2024, it is expected that dealings in our H Shares
on the Stock Exchange will commence at 9:00 a.m. on Friday, December 27, 2024.
The H Shares will be traded in board lots of 200 H Shares each.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 476 ---
IMPORTANT NOTICE TO INVESTORS
OF HONG KONG PUBLIC OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at www.minieye.cc.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older;
 have a Hong Kong address (for the HK eIPO White Form service only) ; and
 are outside the United States, and are not a United States Person (as defined in
Regulation S under the U.S. Securities Act).
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, a Supervisor or any of his/her close associates.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Tuesday,
December 17, 2024 and end at 12:00 noon on Friday, December 20, 2024 (Hong Kong
time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
HK eIPO White Form
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
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 Tuesday,
December 17, 2024 to
11:30 a.m. on Friday,
December 20, 2024, Hong
Kong time.
The latest time for completing
full payment of application
monies will be 12:00 noon
on Friday, December 20,
2024, Hong Kong time.
HKSCC EIPO channel /H1118/H1118Y our 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 THE HONG KONG OFFER SHARES
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--- page 478 ---
For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instructions given by you or for your benefit through the
HK eIPO White Form service to make an application for Hong Kong Offer Shares, an actual
application shall be deemed to have been made. If you are a person for whose benefit the
electronic application instructions are given, you shall be deemed to have declared that only
one set of electronic application instructions has been given for your benefit. If you are an
agent for another person, you shall be deemed to have declared that you have only given one
set of electronic application instructions for the benefit of the person for whom you are an
agent and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the HK eIPO White
Form service more than once and obtaining different payment reference numbers without
effecting full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the HK eIPO White Form service, you are deemed to have
authorized the HK eIPO White Form Service Provider to apply on the terms and conditions
in this prospectus, as supplemented and amended by the terms and conditions of the HK eIPO
White Form service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO Channel , you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong
Offer Shares on your behalf and to do on your behalf all the things stated in this prospectus
and any supplement to it.
For those applying through HKSCC EIPO channel , an actual application will be deemed
to have been made for any application instructions given by you or for your benefit to HKSCC
(in which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time
of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 479 ---
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual Applicants For Corporate Applicants
 Full name(s) 2 as shown on your identity
document
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. HKID card; or
ii. National identification document;
or
iii. Passport; and
 Identity document number
 Full name(s)
2 as shown on your
identity
 document Identity document’s
issuing country or jurisdiction
 Identity document type, with
order of priority:
i. Legal Entity Identifier
(“LEI”) registration
document; or
ii. Certificate of incorporation;
or
iii. Business registration
certificate; or
iv. Other equivalent document;
and
 Identity document number
Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a valid
e-mail address, a contact telephone number and a Hong Kong Address. Y ou are also required to declare
that the identity information provided by you follows the requirements as described in Note 2 below. In
particular, where you cannot provide a HKID number, you must confirm that you do not hold a HKID
card. The number of joint applicants may not exceed four. If you are a firm, the applicant must be in
the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used. If an applicant’s identity
document contains both an English and Chinese name, both English and Chinese names must be used.
Otherwise, either English or Chinese names will be accepted. The order of priority of the applicant’s
identity document type must be strictly followed and where an individual applicant has a valid HKID
card, the HKID number must be used when making an application to subscribe for shares in a public
offer. Similarly for corporate applicants, a LEI number must be used if an entity has a LEI certificate.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 480 ---
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
4. The maximum number of joint account holders on FINI is capped at 4 in accordance with market
practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and (ii),
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any
other stock exchange. “Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or
capital).
For those applying through HKSCC EIPO channel , and making an application under a
power of attorney, we and the Overall Coordinators, as our agent, have discretion to consider
whether to accept it on any conditions we think fit, including evidence of the attorney’s
authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 200
Permitted number of Hong
Kong Public /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
: Hong Kong Offer Shares are available for application in specified
board lot sizes only. Please refer to the amount payable associated
with each specified board lot size in the table below.
Offer Shares for
application
and amount payable on
application/successful
allotment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
: The maximum Offer Price is HK$20.20 per Share.
If you are applying through the HKSCC EIPO channel , you are
required to pre-fund your application based on the amount
specified by your broker or custodian, as determined based on the
applicable laws and regulations in Hong Kong.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 481 ---
By instructing your broker or custodian to apply for the Hong
Kong Offer Shares on your behalf through the HKSCC EIPO
Channel , you (and, if you are joint applicants, each of you jointly
and severally) are deemed to have instructed and authorized
HKSCC to cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of the final
Offer Price, brokerage, SFC transaction levy, the Stock Exchange
trading fee and the AFRC transaction levy by debiting the
relevant nominee bank account at the Designated Bank for your
broker or custodian.
If you are applying through the HK eIPO White Form service,
you may refer to the table below for the amount payable for the
number of Shares you have selected. Y ou must pay the respective
maximum amount payable on application in full upon application
for Hong Kong Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
200 4,080.75 4,000 81,614.87 60,000 1,224,223.02 800,000 16,322,973.60
400 8,161.49 5,000 102,018.59 70,000 1,428,260.19 900,000 18,363,345.30
600 12,242.23 6,000 122,422.30 80,000 1,632,297.35 1,000,000 20,403,717.00
800 16,322.97 7,000 142,826.02 90,000 1,836,334.54 1,200,000 24,484,460.40
1,000 20,403.72 8,000 163,229.73 100,000 2,040,371.70 1,400,000 28,565,203.80
1,200 24,484.46 9,000 183,633.45 200,000 4,080,743.40 1,600,000 32,645,947.20
1,400 28,565.20 10,000 204,037.16 300,000 6,121,115.10 1,800,000 36,726,690.60
1,600 32,645.95 20,000 408,074.35 400,000 8,161,486.80 1,959,400
(1) 39,979,043.09
1,800 36,726.68 30,000 612,111.51 500,000 10,201,858.50
2,000 40,807.43 40,000 816,148.68 600,000 12,242,230.20
3,000 61,211.15 50,000 1,020,185.86 700,000 14,282,601.90
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is approximately 50% of the
Hong Kong Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and
AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for
applications made through the application channel of the HK eIPO White Form Service 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.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 482 ---
5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying investor
in your application as required under the paragraph headed “—A. Applications for Hong Kong
Offer Shares—3. Information Required to Apply” in this section. If you are suspected of
submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the HK eIPO White Form service, (ii)
HKSCC EIPO channel , or (iii) both channels concurrently are prohibited and will be rejected.
If you have made an application through the HK eIPO White Form service or HKSCC EIPO
channel , you or the person(s) for whose benefit you have made the application shall not apply
for any Global Offer Shares.
The H Share Registrar would record all applications into its system and identify suspected
multiple applications with identical names and identification document numbers according to
the Best Practice Note on Treatment of Multiple/Suspected Multiple Applications (“Best
Practice Note”) issued by the Federation of Share Registrars Limited.
Since applications are subject to personal information collection statements,
identification document numbers displayed are redacted.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the HK eIPO White Form service or
HKSCC EIPO channel , you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us and/or the
Overall Coordinators, as our agents, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Offer Shares allocated
to you in your name or in the name of HKSCC Nominees as required by the Articles
of Association, and (if you are applying through the HKSCC EIPO channel )t o
deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of
your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the HK eIPO
White Form service (or as the case may be, the agreement you entered into with
your broker or custodian), and agree to be bound by them;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 483 ---
(iii) (if you are applying through the HKSCC EIPO channel ) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(vi) agree that 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. Publication of Results” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed
“—C. Circumstances In Which You Will Not Be Allocated Hong Kong Public Offer
Shares ” in this section;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 484 ---
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither we nor the
Relevant Persons will breach any law inside and/or outside Hong Kong as a result
of the acceptance of your offer to purchase, or any action arising from your rights
and obligations under the terms and conditions contained in this prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, supervisors, substantial Shareholder(s) or existing shareholder(s) of the
Company or any of its subsidiaries or any of their respective close associates; and
(b) you are not accustomed or will not be accustomed to taking instructions from the
Company, any of the directors, chief executives, supervisors, substantial
shareholder(s) or existing shareholder(s) of the Company or any of its subsidiaries
or any of their respective close associates in relation to the acquisition, disposal,
voting or other disposition of the Shares registered in your name or otherwise held
by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong
Kong Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel of
the H Share Registrar or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC or to the
HK eIPO White Form Service Provider and (2) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 485 ---
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel :
Website /H1118/H1118From the “Allotment Results” page at
www.tricor.com.hk/ipo/result or www.hkeipo.hk/IPOResult
with a “search by ID Number” function.
The full list of (i) wholly or partially successful applicants using
the HK eIPO White Form service and HKSCC EIPO channel ,
and (ii) the number of Hong Kong Offer Shares conditionally
allotted to them, among other things, will be displayed at
www.tricor.com.hk/ipo/result or www.hkeipo.hk/IPOResult
24 hours, from 11:00 p.m. on
Tuesday, December 24, 2024
to 12:00 midnight on
Monday, December 30, 2024
(Hong Kong time)
The Stock Exchange’s website at www.hkexnews.hk and our
website at www.minieye.cc which will provide links to the
above mentioned websites of the H Share Registrar.
No later than 11:00 p.m. on
Tuesday, December 24, 2024
(Hong Kong time).
Telephone /H1118+852 3691 8488 — the allocation results telephone enquiry line
provided by the H Share Registrar
between 9:00 a.m. and 6:00
p.m., from Friday,
December 27, 2024 to
Thursday, January 2, 2025
(Hong Kong time) on a
business day
For those applying through HKSCC EIPO channel , you may also check with your broker
or custodian from 6:00 p.m. on Monday, December 23, 2024 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Monday, December 23, 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 final Offer Price, the level of indications of
interest in the Global Offer, the level of applications in the Hong Kong Public Offering and the
basis of allocations of Hong Kong Offer Shares on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.minieye.cc by no later than 11:00 p.m. on
Tuesday, December 24, 2024 (Hong Kong time).
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 486 ---
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
PUBLIC OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
the paragraph headed “ — A. Applications for Hong Kong Offer Shares—5. Multiple
Applications Prohibited ” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 487 ---
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Public Offering Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the Global Offer. Hong Kong Offer Shares
applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are
not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one H Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary evidence of title will be issued in respect of the Shares. No receipt will be
issued for sums paid on application.
H Share certificates will only become valid at 8:00 a.m. on Friday, December 27, 2024
(Hong Kong time), provided that the Global Offer has become unconditional and the right of
termination described in the section headed “Underwriting” has not been exercised. Investors
who trade Shares prior to the receipt of H Share certificates or the H Share certificates
becoming valid do so entirely at their own risk.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 488 ---
The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Despatch/collection of H Share certificate 1
For application of
1,000,000 Hong Kong
Offer Shares or more /H1118
Collection in person at the H Share Registrar, Tricor
Investor Services Limited, at 17/F, Far East Finance
Centre, 16 Harcourt Road, Hong Kong
Time : 9:00 a.m. to 1:00 p.m. on Friday,
December 27, 2024 (Hong Kong time)
If you are an individual, you must not authorise any
other person to collect for you. If you are a
corporate applicant, your authorised representative
must bear a letter of authorization from your
corporation stamped with your corporation’s chop.
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 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
H Share certificate(s) will
be issued in the name of
HKSCC Nominees,
deposited into CCASS
and credited to your
designated HKSCC
Participant’s stock
account
No action by you is
required
For application of less
than 1,000,000 Hong
Kong Offer Shares /H1118/H1118
Y our H Share certificate(s) will be sent to the address
specified in your application instructions by
ordinary post at your own risk
Date : Tuesday, December 24, 2024
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Friday, December 27, 2024 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118/H1118/H1118/H1118H Share Registrar Y our broker or custodian
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 489 ---
HK eIPO White Form service HKSCC EIPO channel
Application monies paid
through single bank
account /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
e-Auto Refund payment instructions to your
designated bank account
Y our broker or custodian
will arrange refund to
your designated bank
account subject to the
arrangement between
you and it
Application monies paid
through multiple
bank accounts /H1118/H1118/H1118/H1118
Refund check(s) will be despatched to the address as
specified in your application instructions by
ordinary post at your own risk
1 Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning
and/or an “extreme conditions” as announced by the government of Hong Kong in the morning on
Tuesday, December 24, 2024 rendering it impossible for the relevant H Share certificates to be
dispatched to HKSCC in a timely manner, the Company shall procure the Share Registrar to arrange for
delivery of the supporting documents and H Share certificates in accordance with the contingency
arrangements as agreed between them. Y ou may refer to “ — E. Bad Weather Arrangements ” in this
section.
E. BAD WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Friday, December 20, 2024 if, there is:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions, (collectively, “ Bad Weather Signals ”), in force in Hong Kong
at any time between 9:00 a.m. and 12:00 noon on Friday, December 20, 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 Bad Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.minieye.cc of the revised timetable.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 490 ---
If a Bad Weather Signal is hoisted on Tuesday, December 24, 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 Friday,
December 27, 2024.
If a Bad Weather Signal is hoisted on Tuesday, December 24, 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 Bad Weather Signal is lowered
or cancelled (e.g. in the afternoon of Tuesday, December 24, 2024 or on Friday, December 27,
2024).
If a Bad Weather Signal is hoisted on Friday, December 27, 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 Bad Weather Signal is
lowered or cancelled (e.g. in the afternoon of Friday, December 27, 2024 or on Monday,
December 30, 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 SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the Shares
will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in
CCASS with effect from the date of commencement of dealings in the Shares or any other date
HKSCC chooses. Settlement of transactions between Exchange Participants is required to take
place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 491 ---
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have
read, understood and agree to all of the terms of the Personal Information Collection Statement
below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the 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 the Company or its agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the despatch of H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund check and e-Auto Refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of
allocation of Hong Kong Offer Shares;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 492 ---
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the Shares and identifying any
duplicate applications for the Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the Shares and/or regulators and/or any other purposes to which
applicants and holders of the Shares may from time to time agree.
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants
for and holders of Hong Kong Offer Shares will be kept confidential but the Company and the
H Share Registrar may, to the extent necessary for achieving any of the above purposes,
disclose, obtain or transfer (whether within or outside Hong Kong) the personal data to, from
or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving 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, by each case for the purposes of providing
its services or facilities or performing its functions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong Offer Shares request a deposit into CCASS);
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 493 ---
 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;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfill the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed
or dealt with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the
Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the H Share Registrar hold their personal data, to obtain a copy of that data,
and to correct any data that is inaccurate. The Company and the H Share Registrar have the
right to charge a reasonable fee for the processing of such requests. All requests for access to
data or correction of data should be addressed to the Company and the H Share Registrar, at
their registered address disclosed in the section headed “Corporate information” in this
prospectus or as notified from time to time, for the attention of the company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 494 ---
The following is the text of a report set out on pages I-1 to I-3, received from the
Company’ s reporting accountant, PricewaterhouseCoopers, Certified Public Accountants,
Hong Kong, for the purpose of incorporation in this prospectus. It is prepared and addressed
to the directors of the Company and to the Joint Sponsors pursuant to the requirements of
HKSIR 200 Accountants’ Reports on Historical Financial Information in Investment Circulars
issued by the Hong Kong Institute of Certified Public Accountants.
ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF MINIEYE TECHNOLOGY CO., LTD AND CITIC SECURITIES
(HONG KONG) LIMITED AND CHINA INTERNATIONAL CAPITAL CORPORATION
HONG KONG SECURITIES LIMITED
Introduction
We report on the historical financial information of Minieye Technology Co., Ltd (the
“Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to I-92, which
comprises the consolidated statements of balance sheets as at December 31, 2021, 2022 and
2023 and June 30, 2024, the Company statements of balance sheets as at December 31, 2021,
2022 and 2023 and June 30, 2024, and the consolidated statements of comprehensive loss, the
consolidated statements of changes in equity and the consolidated statements of cash flows for
each of the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30,
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-92 forms an integral part of this report, which
has been prepared for inclusion in the prospectus of the Company dated December 17, 2024
(the “Prospectus”) in connection with the initial listing of H Shares of the Company on the
Main Board of The Stock Exchange of Hong Kong Limited.
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation set out
in Note 2.1 to the Historical Financial Information, and for such internal control as the
directors determine is necessary to enable the preparation of Historical Financial Information
that is free from material misstatement, whether due to fraud or error.
APPENDIX I ACCOUNTANT’S REPORT
– I-1 –


--- page 495 ---
Reporting accountant’s responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200, Accountants’ Reports on Historical
Financial Information in Investment Circulars issued by the Hong Kong Institute of Certified
Public Accountants (“HKICPA”). This standard requires that we comply with ethical standards
and plan and perform our work to obtain reasonable assurance about whether the Historical
Financial Information is free from material misstatement.
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountant’s judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountant considers internal control relevant to the entity’s
preparation of Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation set out in Note 2.1 to the Historical Financial Information in order
to design procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of
the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountant’s report, a true and fair view of the financial position of the Company as at
December 31, 2021 , 2022 and 2023 and June 30, 2024 and the consolidated financial position
of the Group as at December 31, 2021, 2022 and 2023 and June 30, 2024 and of its consolidated
financial performance and its consolidated cash flows for the Track Record Period in
accordance with the basis of preparation set out in Note 2.1 to the Historical Financial
Information.
APPENDIX I ACCOUNTANT’S REPORT
– I-2 –


--- page 496 ---
Review of stub period comparative financial information
We have reviewed the stub period comparative financial information of the Group which
comprises the consolidated statement of comprehensive loss, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the six months ended 30
June 2023 and other explanatory information (the “Stub Period Comparative Financial
Information”). The directors of the Company are responsible for the preparation of the Stub
Period Comparative Financial Information in accordance with the basis of preparation set out
in Note 2.1 to the Historical Financial Information. Our responsibility is to express a
conclusion on the Stub Period Comparative Financial Information based on our review. We
conducted our review in accordance with International Standard on Review Engagements 2410,
Review of Interim Financial Information Performed by the Independent Auditor of the Entity
issued by the International Auditing and Assurance Standards Board (“IAASB”). A review
consists of making inquiries, 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 International Standards on Auditing and
consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion. Based on our review, nothing has come to our attention that causes us to believe that
the Stub Period Comparative Financial Information, for the purposes of the accountant’s report,
is not prepared, in all material respects, in accordance with the basis of preparation set out in
Note 2.1 to the Historical Financial Information.
Report on matters under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and the Companies (Winding Up
and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to Note 40 to the Historical Financial Information which states that no dividend
has been paid by Minieye Technology Co., Ltd in respect of the Track Record Period.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong
December 17, 2024
APPENDIX I ACCOUNTANT’S REPORT
– I-3 –


--- page 497 ---
I HISTORICAL FINANCIAL INFORMATION OF THE GROUP
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountant’s report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, were audited by PricewaterhouseCoopers in
accordance with International Standards on Auditing (“ISAs”) issued by the International
Auditing and Assurance Board (“IAASB”) (the “Underlying Financial Statements”).
The Historical Financial Information is presented in Renminbi (“RMB”) and all values
are rounded to the nearest thousand of RMB (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 498 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Y ear ended December 31, Six months ended June 30,
Note 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 175,174 279,358 476,206 163,834 236,675
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 (158,173) (245,788) (408,184) (150,173) (203,254)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,001 33,570 68,022 13,661 33,421
Selling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 (51,717) (63,374) (72,735) (33,118) (32,015)
General and administrative expenses /H1118/H11188 (45,454) (54,769) (74,294) (30,836) (50,196)
Research and development expenses /H1118/H11188 (82,201) (139,349) (149,826) (81,389) (63,310)
Net impairment losses on financial
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 (2,196) (7,517) (6,116) (4,603) (6,595)
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 23,908 4,734 27,922 3,160 6,259
Other gains – net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 2,016 6,334 1,338 822 2,501
Operating loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(138,643) (220,371) (205,689) (132,303) (109,935)
Finance income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 212 1,234 1,967 1,014 1,669
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 (916) (1,521) (3,373) (1,510) (3,782)
Finance costs – net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(704) (287) (1,406) (496) (2,113)
Loss before income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(139,347) (220,658) (207,095) (132,799) (112,048)
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 (450) (172) (60) (33) –
Loss for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(139,797) (220,830) (207,155) (132,832) (112,048)
Loss for the year/period
attributable to:
Owners of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(132,220) (214,864) (197,238) (125,830) (108,135)
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,577) (5,966) (9,917) (7,002) (3,913)
(139,797) (220,830) (207,155) (132,832) (112,048)
Other comprehensive loss for
the year/period, net of tax /H1118/H1118/H1118/H1118/H1118/H1118 –––––
Total comprehensive loss for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(139,797) (220,830) (207,155) (132,832) (112,048)
Total comprehensive loss for
the year/period attributable to:
Owners of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(132,220) (214,864) (197,238) (125,830) (108,135)
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,577) (5,966) (9,917) (7,002) (3,913)
(139,797) (220,830) (207,155) (132,832) (112,048)
Loss per share attributable to the
owners of the Company (in RMB)
Basic and diluted loss per share /H1118/H1118/H1118/H1118/H111813 (0.48) (0.66) (0.59) (0.38) (0.31)
APPENDIX I ACCOUNTANT’S REPORT
– I-5 –


--- page 499 ---
CONSOLIDATED STATEMENTS OF BALANCE SHEETS
As at December 31,
As at
June 30,
Note 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
ASSETS
Non-current assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 14,152 24,984 35,697 40,510
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 14,682 13,899 32,535 50,829
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 3,778 9,161 10,340 15,883
Investment properties /H1118/H1118/H1118/H1118/H1118/H111818 – 5,013 4,771 4,650
Other non-current assets /H1118/H1118/H1118/H111819 7,927 5,028 12,358 28,994
40,539 58,085 95,701 140,866
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 122,770 168,485 144,961 129,595
Trade and notes receivables /H1118/H111821 100,890 217,670 333,585 398,360
Other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 35,037 40,833 66,878 69,214
Financial assets at fair value
through other
comprehensive income /H1118/H1118/H1118/H111823 38,438 23,558 36,462 7,008
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H111824 135,187 44,581 210,597 120,901
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 – 20,010 1,690 1,690
Cash and cash equivalents /H1118/H1118/H111825 272,824 243,785 197,934 220,125
705,146 758,922 992,107 946,893
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118745,685 817,007 1,087,808 1,087,759
EQUITY
Equity attributable to
owners of the Company
Paid-in capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 32,162 36,139 – –
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 – – 360,000 360,000
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 791,919 1,105,785 780,675 795,986
Accumulated losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(397,478) (612,342) (407,175) (515,310)
426,603 529,582 733,500 640,676
Non-controlling interests /H1118/H1118/H1118 (9,543) 14,491 19,574 15,661
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118417,060 544,073 753,074 656,337
LIABILITIES
Non-current liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 6,569 6,143 19,095 12,243
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 3,888 14,870 12,885 11,876
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831, 36 – – 18,800 45,031
10,457 21,013 50,780 69,150
Current liabilities
Trade and notes payables /H1118/H1118/H1118/H111834
32,186 111,196 130,098 149,505
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 3,928 24,029 5,405 3,210
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831, 36 26,600 55,560 77,860 137,221
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 8,898 7,997 15,196 15,773
Other payables and accruals /H1118 35 246,556 53,139 55,395 56,563
318,168 251,921 283,954 362,272
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118328,625 272,934 334,734 431,422
Total equity and liabilities /H1118/H1118 745,685 817,007 1,087,808 1,087,759
APPENDIX I ACCOUNTANT’S REPORT
– I-6 –


--- page 500 ---
THE COMPANY STATEMENTS OF BALANCE SHEETS
As at December 31,
As at
June 30,
Note 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
ASSETS
Non-current assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 9,318 20,651 23,071 26,531
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 10,329 8,071 23,812 18,491
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 3,778 9,161 9,810 15,282
Investments in subsidiaries /H1118/H111814 33,227 241,474 236,283 201,518
Investment properties /H1118/H1118/H1118/H1118/H1118/H111818 – 5,013 4,771 4,650
Other non-current assets /H1118/H1118/H1118/H111819 7,490 4,638 10,280 8,112
64,142 289,008 308,027 274,584
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 99,280 102,142 116,343 108,420
Trade and notes receivables /H1118/H111821 116,508 260,112 376,716 473,213
Other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 65,176 94,065 130,048 187,949
Financial assets at fair value
through other
comprehensive income /H1118/H1118/H1118/H111823 35,231 17,403 18,165 1,849
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H111824 135,187 44,581 210,597 80,049
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 – 20,010 10 10
Cash and cash equivalents /H1118/H1118/H111825 260,995 153,271 78,249 148,113
712,377 691,584 930,128 999,603
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118776,519 980,592 1,238,155 1,274,187
EQUITY
Paid-in capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 32,162 36,139 – –
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 – – 360,000 360,000
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 790,652 1,103,958 743,296 757,291
Accumulated losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(374,370) (568,330) (345,104) (430,676)
Total Equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118448,444 571,767 758,192 686,615
LIABILITIES
Non-current liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 4,256 4,201 14,755 9,078
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 3,087 13,721 12,387 11,378
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831, 36 – – 18,800 45,031
7,343 17,922 45,942 65,487
Current liabilities
Trade and notes payables /H1118/H1118/H1118/H111834 23,166 81,665 97,617 136,019
Contract liabilities
/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 1,940 1,005 973 714
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831, 36 26,600 52,560 77,860 137,221
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 6,832 4,535 10,847 11,448
Other payables and accruals /H1118 35 262,194 251,138 246,724 236,683
320,732 390,903 434,021 522,085
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118328,075 408,825 479,963 587,572
Total equity and liabilities /H1118/H1118 776,519 980,592 1,238,155 1,274,187
APPENDIX I ACCOUNTANT’S REPORT
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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the Company
Note
Paid-in
capital
Share
capital Reserves
Accumulated
losses Total
Non-controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118 27,871 – 461,408 (265,258) 224,021 (1,966) 222,055
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – (132,220) (132,220) (7,577) (139,797)
Total comprehensive loss /H1118/H1118/H1118 – – – (132,220) (132,220) (7,577) (139,797)
Capital contributions from
owners of the Company /H1118/H1118/H1118 4,291 – 321,709 – 326,000 – 326,000
Share-based payment /H1118/H1118/H1118/H1118/H111829 – – 8,802 – 8,802 – 8,802
As at December 31, 2021 /H1118/H1118/H1118 32,162 – 791,919 (397,478) 426,603 (9,543) 417,060
As at January 1, 2022 /H1118/H1118/H1118/H1118 32,162 – 791,919 (397,478) 426,603 (9,543) 417,060
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – (214,864) (214,864) (5,966) (220,830)
Total comprehensive loss /H1118/H1118/H1118 – – – (214,864) (214,864) (5,966) (220,830)
Capital contributions from
owners of the Company /H1118/H1118/H1118 3,977 – 301,906 – 305,883 – 305,883
Capital injection by a
non-controlling shareholder /H1118 – – – – – 30,000 30,000
Share-based payment /H1118/H1118/H1118/H1118/H111829 – – 14,960 – 14,960 – 14,960
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (3,000) – (3,000) – (3,000)
As at December 31, 2022 /H1118/H1118/H1118 36,139 – 1,105,785 (612,342) 529,582 14,491 544,073
As at January 1, 2023 /H1118/H1118/H1118/H1118 36,139 – 1,105,785 (612,342) 529,582 14,491 544,073
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – (197,238) (197,238) (9,917) (207,155)
Total comprehensive loss /H1118/H1118/H1118 – – – (197,238) (197,238) (9,917) (207,155)
Conversion into a joint stock
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(36,139) 36,139 (402,405) 402,405 – – –
Capital contributions from
owners of the Company /H1118/H1118/H1118 – 2,519 345,961 – 348,480 – 348,480
Capital injection by a
non-controlling shareholder /H1118 – – 35,000 – 35,000 15,000 50,000
Share-based payment /H1118/H1118/H1118/H1118/H111829 – – 22,401 – 22,401 – 22,401
Conversion of capital reserves
into share capital /H1118/H1118/H1118/H1118/H1118/H1118 – 321,342 (321,342) – – – –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (4,725) – (4,725) – (4,725)
As at December 31, 2023 /H1118/H1118/H1118 – 360,000 780,675 (407,175) 733,500 19,574 753,074
APPENDIX I ACCOUNTANT’S REPORT
– I-8 –


--- page 502 ---
Attributable to owners of the Company
Note
Paid-in
capital
Share
capital Reserves
Accumulated
losses Total
Non-controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at January 1, 2024 /H1118/H1118/H1118/H1118 – 360,000 780,675 (407,175) 733,500 19,574 753,074
Loss for the period /H1118/H1118/H1118/H1118/H1118/H1118 – – – (108,135) (108,135) (3,913) (112,048)
Total comprehensive loss /H1118/H1118/H1118 – – – (108,135) (108,135) (3,913) (112,048)
Share-based payment /H1118/H1118/H1118/H1118/H111829 – – 15,311 – 15,311 – 15,311
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118 – 360,000 795,986 (515,310) 640,676 15,661 656,337
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118 36,139 – 1,105,785 (612,342) 529,582 14,491 544,073
Loss for the period /H1118/H1118/H1118/H1118/H1118/H1118 – – – (125,830) (125,830) (7,002) (132,832)
Total comprehensive loss /H1118/H1118/H1118 – – – (125,830) (125,830) (7,002) (132,832)
Conversion into a joint stock
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(36,139) 36,139 – – – – –
Capital injection by a
non-controlling shareholder /H1118 – – 35,000 – 35,000 15,000 50,000
Share-based payment /H1118/H1118/H1118/H1118/H111829 – – 11,200 – 11,200 – 11,200
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118 – 36,139 1,151,985 (738,172) 449,952 22,489 472,441
APPENDIX I ACCOUNTANT’S REPORT
– I-9 –


--- page 503 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended December 31, Six months ended June 30,
Note 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Cash flows from operating activities
Cash used in operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836(a) (251,843) (256,222) (278,245) (115,387) (86,233)
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213 1,234 1,967 1,015 1,669
Income taxes paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(450) (172) (60) (60) (15)
Net cash used in operating activities /H1118 (252,080) (255,160) (276,338) (114,432) (84,579)
Cash flows from investing activities
Purchase of financial assets at fair
value through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118(485,500) (2,040,800) (1,652,200) (712,600) (1,054,300)
Purchase of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,942) (17,151) (24,540) (6,832) (11,145)
Purchase of land use rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– (42,017)
Purchase of Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,350) (6,098) (2,648) (824) (6,518)
Proceeds from disposal of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836 – 1,061 298 252
Proceeds from disposal of financial
assets at fair value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118444,351 2,139,460 1,489,970 671,983 1,146,381
Net cash (used in)/generated from
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(55,405) 75,411 (188,357) (47,975) 32,653
Cash flows from financing activities
Receipt of share capital from ordinary
shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118526,000 105,883 348,480 – –
Proceeds from contributions of
non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 30,000 50,000 50,000 –
Proceeds from bank borrowings /H1118/H1118/H1118/H1118/H1118 32,900 57,000 104,760 53,000 168,504
Repayment of bank borrowings /H1118/H1118/H1118/H1118/H1118 (17,660) (28,040) (63,660) (52,930) (82,912)
Payment of transaction costs related to
equity financing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (3,000) (4,725) – –
Principal elements and interest
elements of lease payments /H1118/H1118/H1118/H1118/H1118/H1118(5,432) (10,396) (13,846) (4,530) (7,541)
Interest paid for borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118(472) (858) (2,139) (1,082) (3,039)
Payment of listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– (907)
Net cash generated from financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118535,336 150,589 418,870 44,458 74,105
Net increase/(decrease) in cash and
cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118227,851 (29,160) (45,825) (117,949) 22,179
APPENDIX I ACCOUNTANT’S REPORT
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--- page 504 ---
Y ear ended December 31, Six months ended June 30,
Note 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Cash and cash equivalents at the
beginning of the year/period /H1118/H1118/H1118/H1118/H1118/H111845,001 272,824 243,785 243,785 197,934
Effects of foreign exchange rate
changes on cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28) 121 (26) 68 12
Cash and cash equivalents at the end
of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 272,824 243,785 197,934 125,904 220,125
APPENDIX I ACCOUNTANT’S REPORT
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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. GENERAL INFORMATION
Minieye Technology Co., Ltd (“Minieye”, or the “Company”) was incorporated in Shenzhen on December 10,
2014 as a limited liability company. The address of the Company’s registered office is Floor 25, 9285 Binhe Avenue,
Futian District, Shenzhen, Guangdong Province, the People’s Republic of China (the “PRC”).
Upon approval by the shareholders’ general meeting held in April 2023, the Company was converted into a
joint stock company with limited liability under the Company Law of the PRC and changed its registered name from
“Minieye Technology Co., Ltd. (ʮ̡)” to “Minieye Technology Co., Ltd (Ҧ
ʮ̡)” on June 7, 2023.
The Company and its subsidiaries (together, “the Group”) are principally engaged in the development,
manufacture and sales of intelligent driving products and solutions in the PRC.
The Historical Financial Information is presented in Renminbi (“RMB”) unless otherwise stated.
2. BASIS OF PREPARATION AND CHANGES IN ACCOUNTING POLICIES
2.1 Basis of preparation
The Historical Financial Information of the Group have been prepared in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting
Standards”).
The Historical Financial Information have been prepared on a historical cost basis, except for the certain
financial assets and liabilities that are measured at fair value.
The preparation of the Historical Financial Information in conformity with IFRS Accounting Standards
requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the
process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity,
or areas where assumptions and estimates are significant to the Historical Financial Information are disclosed in
Note 4.
The accounting policies applied in the preparation of the Historical Financial Information have been
consistently applied to all the years presented, unless otherwise stated.
Other than those material accounting policies information as disclosed elsewhere in this Historical Financial
Information, a summary of the other accounting policies information has been set out in Note 43 to this Historical
Financial Information.
2.2 New and amended standards adopted by the Group
A number of new or amended standards and interpretation became applicable for the Track Record Period. The
Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these
standards.
Standards and amendments
Effective for accounting periods
beginning on or after
Amendments to IA S 1 – Non-current Liabilities with Covenants /H1118/H1118/H1118/H1118/H11181 January 2024
Amendments to IA S 1 – Classification of Liabilities as Current
or Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1 January 2024
Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback /H1118/H1118/H11181 January 2024
Amendments to IFRS 7 and IA S 7 – Supplier Finance Arrangements /H1118/H11181 January 2024
The amendments listed above did not have any material impact on the amounts recognised in prior periods and
are not expected to significantly affect the current or future periods.
APPENDIX I ACCOUNTANT’S REPORT
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2.3 New and amended standards not yet adopted
New and amended standards have been published that are not mandatory for the Track Record Period and have
not been early adopted by the Group. These standards, amendments or interpretations are not expected to have a
material impact on the Group in the current or future reporting periods and on foreseeable future transactions.
The following new standards and amendments to existing standards have been issued but are not effective for
the Track Record Period and have not been early adopted by the Group. The Group plans to adopt these new standards
and amendments when they become effective:
Standards and amendments
Effective for accounting periods
beginning on or after
Amendments to IAS 21 – Lack of Exchangeability /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 1, 2025
Amendments to IFRS 7 and IFRS 9 – Amendments to the Classification
and Measurement of Financial Instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
January 1, 2026
Annual improvements to IFRS – Annual improvements to IFRS
Accounting Standards – volumes 11 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
January 1, 2026
IFRS 19 – Subsidiaries without public accountability: disclosures /H1118/H1118/H1118/H1118January 1, 2027
IFRS 18 – Presentation and Disclosure in Financial Statements /H1118/H1118/H1118/H1118/H1118/H1118January 1, 2027
Amendments to IFRS 10 and IAS 28 – Sale or contribution of Assets
between an Investor and its Associate or Joint V enture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
To be determined
The Group has already commenced an assessment of the impact of these new and amended standards and has
concluded on a preliminary basis that adoption of these new and amended standards is not expected to have a
significant impact on the financial performance and positions of the Group when they become effective.
3. FINANCIAL RISK MANAGEMENT
3.1 Financial risk factors
The Group’s risk management is predominantly controlled by the treasury department under policies approved
by the Board of Directors of the Company (the “Board of Directors”). The Group’s treasury department identifies,
evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides
written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange
risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments,
and investment of excess liquidity.
(a) Market risk
(i) Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities
denominated in a currency that is not the functional currency of the relevant group entity. The Company and
its primary subsidiaries were incorporated in the PRC and considered RMB as their functional currency.
The Group is primarily exposed to changes in RMB/USD exchange rates. As at December 31, 2021,
2022 and 2023 and June 30, 2024, if the USD strengthened/weakened by 10% against the RMB, with all other
variables held constant, the gains/losses before income tax for the year/period then ended would have been
RMB72,000, RMB(356,000), RMB(513,000) and RMB(914,000) lower/higher respectively as a result of
foreign exchange gains/losses on translation of USD denominated cash and cash equivalents.
(ii) Cash flow and fair value interest rate risk
Except for cash and cash equivalents and restricted cash, the Group has no significant interest-bearing
assets. The Group’s income and operating cash flows are substantially independent of changes in market
interest rates.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 507 ---
The Group’s interest-rate risk mainly arises from borrowings. Borrowings obtained at variable rates
expose the Group to cash flow interest-rate risk. Borrowings obtained at fixed rates expose the Group to fair
value interest-rate risk. The interest rates and terms of repayments of borrowings are disclosed in Note 31. The
Group did not use any interest rate swap contracts or other financial instruments to hedge against its interest
rate risk for the reporting period.
As at December 31, 2021, 2022 and 2023 and June 30, 2024, if the Group’s interest rates on borrowings
obtained at variable rates had been 100 basis points higher/lower, the loss before income tax for the year/period
then ended would have been approximately RMB39,000, RMB49,000, RMB168,000 and RMB114,000
higher/lower respectively.
(iii) Price risk
The Group is exposed to price risk in respect of financial assets at fair value through profit or loss
(“FVPL”), which mainly include investments in structured deposits and wealth management products. The
Group is not exposed to commodity price risk. See Note 3.3 for details.
(b) Credit risk
Credit risk arises from cash and cash equivalents, restricted cash, trade and notes receivables, other
receivables, financial assets at fair value through other comprehensive income (“FVOCI”) and other non-current
assets. The carrying amount of each class of the above financial assets represents the Group’s maximum exposure to
credit risk in relation to the corresponding class of financial assets.
Risk management
To manage this risk, cash and cash equivalents and restricted cash is mainly placed with state-owned or
reputable financial institutions in Mainland China which are all high-credit-quality financial institutions.
To manage risk arising from trade and notes receivables and financial assets at FVOCI, the Group has
policies in place to ensure that credit terms are made to counterparties with an appropriate credit history and
management performs ongoing credit evaluations of the counterparties. Trade and notes receivables have been
grouped based on shared credit risk characteristics and aging to measure the expected credit losses. Trade and
notes receivables are written off when there is no reasonable expectation of recovery. Impairment losses on
trade and notes receivables are presented as net impairment losses within operating profit. Subsequent
recoveries of amounts previously written off are credited against the same line item.
For other receivables, management makes periodic collective assessments as well as individual
assessment on the recoverability of other receivables based on historical settlement records, past experiences,
and forward-looking information.
Impairment of financial assets
The Group has four types of financial assets that are subject to the expected credit loss model: (i) cash
and cash equivalents and restricted cash; (ii) trade and notes receivables and financial assets at FVOCI; (iii)
other receivables; and (iv) other non-current assets.
(i) Cash and cash equivalents and restricted cash
To manage risk arising from cash and cash equivalents and restricted cash, the Group only transacts with
state-owned or reputable financial institutions in Mainland China. There has been no recent history of default
in relation to these financial institutions. These instruments are considered to have low credit risk because they
have a low risk of default and the counterparty has a strong capacity to meet its contractual cash flow
obligations in the near term. Cash and cash equivalents and restricted cash are also subject to the impairment
requirements of IFRS 9, while the identified credit loss was immaterial.
(ii) Trade receivables, notes receivables and financial assets at FVOCI
The Group applies the IFRS 9 simplified approach to measure expected credit losses which uses a
lifetime expected loss allowance for all trade and notes receivables. To measure the expected credit losses,
trade and notes receivables have been grouped based on shared credit risk characteristics and aging.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 508 ---
The expected loss rates are based on the credit rating of counter parties and the payment profiles of sales
and probability of default of counter parties on an ongoing basis throughout each Track Record Period. The
historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables. The Group has identified the Gross Domestic
Product (“GDP”) to be the most relevant factor, and accordingly adjusts the historical loss rates based on
expected changes in these factors.
Individually impaired trade receivables are related to customers who are experiencing unexpected
economic difficulties. The Group expects that the amounts of the receivables will partially or entirely have
difficulty to be recovered and has recognized impairment losses.
The Group’s trade receivables mainly represented receivables received from the sales of products and
providing solutions and services to customers as described in Note 21. The Group’s credit period to its
customers was typically within one year.
Trade receivables
Individually impairment trade receivables include:
Category 1: customers who are the listed companies with a relatively low credit risk and no
default history.
Category 2: customers who are insolvent or in operating difficulty with a relatively higher
credit risk.
Category 3: customers who are neither listed nor included in category 2.
With different types of customers, the Group calculated the expected credit loss rates respectively.
As of December 31, 2021, 2022 and 2023 and June 30, 2024, the loss allowance provision for the trade
receivables was determined as follows.
As at December 31, 2021
Gross carrying
amount
Expected credit
loss rate Loss allowance
RMB’000 RMB’000 RMB’000
Categor y 1 – individual basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,833 0.67% (366)
Categor y 2 – individual basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,937 100.00% (1,937)
Categor y 3 – collective basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,097 6.83% (2,055)
86,867 5.02% (4,358)
As at December 31, 2022
Gross carrying
amount
Expected credit
loss rate Loss allowance
RMB’000 RMB’000 RMB’000
Categor y 1 – individual basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,136 1.59% (1,307)
Categor y 2 – individual basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,458 100.00% (4,458)
Categor y 3 – collective basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118114,552 3.38% (3,869)
201,146 4.79% (9,634)
As at December 31, 2023
Gross carrying
amount
Expected credit
loss rate Loss allowance
RMB’000 RMB’000 RMB’000
Categor y 1 – individual basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118146,036 1.77% (2,588)
Categor y 2 – individual basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,823 100.00% (5,823)
Categor y 3 – collective basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118157,185 3.50% (5,494)
309,044 4.50% (13,905)
APPENDIX I ACCOUNTANT’S REPORT
– I-15 –


--- page 509 ---
As at June 30, 2024
Gross carrying
amount
Expected credit
loss rate Loss allowance
RMB’000 RMB’000 RMB’000
Categor y 1 – individual basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,006 3.11% (5,287)
Categor y 2 – individual basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,468 100.00% (5,468)
Categor y 3 – collective basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118208,387 4.18% (8,710)
383,861 5.07% (19,465)
Notes receivables and financial assets at FVOCI
As at December 31, 2021, 2022 and 2023 and June 30, 2024 the loss allowance of notes receivables and
financial assets at FVOCI are determined as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Expected loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 0.51% – –
Notes receivables (Note 21) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,381 26,414 38,446 33,964
Financial assets at FVOCI (Note 23) /H1118/H1118/H1118 38,438 23,558 36,462 7,008
56,819 49,972 74,908 40,972
Loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (257) – –
(iii) Other receivables
Other receivables that are not credit-impaired on initial recognition are classified in stage 1 and the
expected credit losses are measured as 12-month expected credit losses. If a significant increase in credit risk
of other receivable has occurred since initial recognition, the financial asset is moved to ‘stage 2’ but is not
yet deemed to be credit impaired. The expected credit losses are measured as lifetime expected credit loss. If
any financial asset is credit-impaired, it is then moved to ‘stage 3’ and the expected credit loss is measured
as lifetime expected credit loss.
Management considers the probability of default upon initial recognition of asset and whether there has
been significant increase in credit risk on an ongoing basis during the Track Record Period. To assess whether
there is a significant increase in credit risk, the Group compares risk of a default occurring on the assets as
at the reporting date with the risk of default as at the date of initial recognition. Especially the following
indicators are incorporated:
Transfer between stage 1, stage 2 or stage 3 due to other receivables experiencing significant increases
(or decreases) of credit risk in the period, and the subsequent “step up” (or “step down”) between 12-month
and lifetime ECL.
Other receivables derecognized and write-offs of allowance related to assets that were written off during
the year.
The Group considers counter – parties as follows:
‘Stage 1’ – Counter-parties who have a low risk of default and a strong capacity to meet
contractual cash flows;
‘Stage 2’ – Counter-parties whose repayments are past due but with reasonable expectation of
recovery;
‘Stage 3’ – Counter-parties whose repayments are past due and with low reasonable
expectation of recovery.
APPENDIX I ACCOUNTANT’S REPORT
– I-16 –


--- page 510 ---
As at December 31, 2021, 2022 and 2023 and June 30, 2024 the loss allowance of other receivables are
determined as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Expected loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.69% 6.29% 9.21% 8.20%
Gross carrying amounts – other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,688 4,879 7,815 9,918
Loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(126) (307) (720) (813)
Other receivables mainly include deposits, advance to staff and others. All of the Group’s financial
assets at amortized cost are measured as either 12-month expected credit losses or lifetime expected credit
losses, depending on whether there has been a significant increase in credit risk since initial recognition as
described in Note 22. As there has been no significant increase in credit risk since initial recognition, all of
the Group’s other receivables as at December 31, 2021, 2022 and 2023 and June 30, 2024 were classified in
Stage 1 and their expected credit losses were measured on a 12-month basis. Other receivables are written off
when there is no reasonable expectation of recovery.
(iv) Other non-current assets
The Group’s other non-current assets include long-term receivables, which are sales proceeds collected
over a three-year period.
The Group chooses to apply the simplified approach (that is, to measure the loss allowance at an amount
equal to lifetime ECL at initial recognition and throughout its life) for long-term receivables which contain a
significant financing component.
As at December 31, 2021, 2022 and 2023 and June 30, 2024, the loss allowance of non-current assets
are determined as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Expected loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 39.05% 100.00% 50.80%
Gross carrying amounts –
other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,283 4,435 3,420 6,305
Loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,732) (3,420) (3,203)
(v) Summary of impairment of financial assets
Impairment losses on the above mentioned trade related receivables and other receivables are presented
as net impairment losses within operating loss. Subsequent recoveries of amounts previously written off are
credited against the same line item.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 511 ---
The movement of loss allowance for trade, notes receivables and financial assets at FVOCI, other
receivables and other non-current assets during the years ended December 31, 2021, 2022 and 2023 and the
six months ended June 30, 2023 and 2024 is as follows:
Trade, notes
receivables and
financial assets
at FVOCI Other receivables
Other
non-current
assets Total
RMB’000 RMB’000 RMB’000 RMB’000
Opening loss allowance as at
January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,587) (30) – (2,617)
Increase in loss allowance
recognized in profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,097) (99) – (2,196)
Written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118326 3 – 329
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,358) (126) – (4,484)
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,358) (126) – (4,484)
Increase in loss allowance
recognized in profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,601) (184) (1,732) (7,517)
Written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 93– 7 2
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,890) (307) (1,732) (11,929)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,890) (307) (1,732) (11,929)
Increase in loss allowance
recognized in profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,015) (413) (1,688) (6,116)
Written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,905) (720) (3,420) (18,045)
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,905) (720) (3,420) (18,045)
Increase in loss allowance
recognized in profit or loss
during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,719) (93) 217 (6,595)
Written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,159 – – 1,159
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(19,465) (813) (3,203) (23,481)
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,890) (307) (1,732) (11,929)
Increase in loss allowance
recognized in profit or loss
during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,237) (134) (1,232) (4,603)
Written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,127) (441) (2,964) (16,532)
APPENDIX I ACCOUNTANT’S REPORT
– I-18 –


--- page 512 ---
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents. Due to the
dynamic nature of the underlying businesses, the policy of the Group is to regularly monitor the Group’s liquidity
risk and to maintain adequate cash and cash equivalents to meet the Group’s liquidity requirements.
Maturities of financial liabilities
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on their
contractual maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12
months equal their carrying balances as the impact of discounting is not significant.
Less than 1 year
Between 1
and 2 years
Between 2
and 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2021
Borrowings (including interest
payables) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,941 – – 27,941
Trade payables and notes
payables (Note 34) /H1118/H1118/H1118/H1118/H1118/H111832,186 – – 32,186
Other payables and accruals
(excluding payroll and
welfare payables, V A T and
other taxes payables and
warranty provision) /H1118/H1118/H1118/H1118/H1118214,123 – – 214,123
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,520 5,042 1,710 16,272
283,770 5,042 1,710 290,522
Less than 1 year
Between 1
and 2 years
Between 2
and 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2022
Borrowings (including interest
payables) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,595 – – 56,595
Trade payables and notes
payables (Note 34) /H1118/H1118/H1118/H1118/H1118/H1118111,196 – – 111,196
Other payables and accruals
(excluding payroll and
welfare payables, V A T and
other taxes payables and
warranty provision) /H1118/H1118/H1118/H1118/H111813,819 – – 13,819
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,463 4,345 2,063 14,871
190,073 4,345 2,063 196,481
APPENDIX I ACCOUNTANT’S REPORT
– I-19 –


--- page 513 ---
Less than 1 year
Between 1 and
2 years
Between 2 and
5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2023
Borrowings (including interest
payables) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,545 19,118 – 97,663
Trade payables and notes
payables (Note 34) /H1118/H1118/H1118/H1118/H1118/H1118130,098 – – 130,098
Other payables and accruals
(excluding salaries and
welfare payables, V A T and
other taxes payables and
warranty provision) /H1118/H1118/H1118/H1118/H111816,565 – – 16,565
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,485 14,831 4,915 36,231
241,693 33,949 4,915 280,557
Less than 1 year
Between 1 and
2 years
Between 2 and
5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
As at June 30, 2024
Borrowings (including interest
payables) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,983 47,460 – 186,443
Trade payables and notes
payables (Note 34) /H1118/H1118/H1118/H1118/H1118/H1118149,505 – – 149,505
Other payables and accruals
(excluding salaries and
welfare payables, V A T and
other taxes payables and
warranty provision) /H1118/H1118/H1118/H1118/H111826,430 – – 26,430
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,742 11,960 552 29,254
331,660 59,420 552 391,632
3.2 Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for equity holders and to maintain an optimal capital structure to reduce the cost
of capital.
The Group monitors capital by regularly reviewing the capital structure. As a part of this review, management
of the Company considers the cost of capital and the risks associated with the issued share capital. The Group may
adjust the amounts of dividends paid to equity holders, return capital to equity holders, issue new shares or repurchase
the Company’s shares. In the opinion of the management of the Company, the Group’s capital risk is low. As a result,
capital risk is not significant for the Group and measurement of capital management is not a tool currently used in
the internal management reporting procedures of the Group.
As at December 31, 2021, 2022 and 2023 and June 30, 2024, the liability-to-asset ratios were as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118328,625 272,934 334,734 431,422
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118745,685 817,007 1,087,808 1,087,759
Liability-to-asset ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844.07% 33.41% 30.77% 39.66%
APPENDIX I ACCOUNTANT’S REPORT
– I-20 –


--- page 514 ---
3.3 Fair value estimation
(a) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are recognized and measured at fair value in the statements of balance sheets. To provide an
indication about the reliability of the inputs used in determining fair value, the Group has classified its financial
instruments into the three levels prescribed under the accounting standards.
 Level 1: The fair value of financial instruments traded in active markets (such as publicly traded
derivatives, and equity securities) is based on quoted market prices at the end of the Track Record
Period. The quoted market price used for financial assets held by the Group is the current bid price.
These instruments are included in level 1.
 Level 2: The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined using valuation techniques which maximize the use of
observable market data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2.
 Level 3: If one or more of the significant inputs is not based on observable market data, the instrument
is included in level 3. This is the case for unlisted equity securities.
The following table presents the Group’s assets and liabilities that are measured at fair value as at December
31, 2021, 2022 and 2023 and June 30, 2024:
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2021
Assets
Financial assets at FVOCI (Note 23) /H1118/H1118 – – 38,438 38,438
Financial assets at FVPL (Note 24) /H1118/H1118/H1118 – – 135,187 135,187
– – 173,625 173,625
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2022
Assets
Financial assets at FVOCI (Note 23) /H1118/H1118 – – 23,558 23,558
Financial assets at FVPL (Note 24) /H1118/H1118/H1118 – – 44,581 44,581
– – 68,139 68,139
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2023
Assets
Financial assets at FVOCI (Note 23) /H1118/H1118 – – 36,462 36,462
Financial assets at FVPL (Note 24) /H1118/H1118/H1118 – – 210,597 210,597
– – 247,059 247,059
APPENDIX I ACCOUNTANT’S REPORT
– I-21 –


--- page 515 ---
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
As at June 30, 2024
Assets
Financial assets at FVOCI (Note 23) /H1118/H1118 – – 7,008 7,008
Financial assets at FVPL (Note 24) /H1118/H1118/H1118 – – 120,901 120,901
– – 127,909 127,909
The Group’s policy is to recognize transfers into and out of fair value hierarchy levels as at the end of each
Track Record Period.
(b) V aluation process and technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
 Quoted market prices or dealer quotes for similar instruments; and
 Other techniques, such as discounted cash flow analysis, are used to determine fair value for the
remaining financial instruments.
There were no changes in valuation techniques during the Track Record Period.
The fair value of trade and notes receivables, other receivables, cash and cash equivalents, trade payables,
other payables and accruals (excluding salaries and welfare payables, V A T and other taxes payables and warranty
provision), current borrowings, and lease liabilities approximated their carrying amounts due to their short maturities
or interest bearing.
(c) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the years ended December 31, 2021, 2022 and
2023 and the six months ended June 30, 2023 and 2024:
Financial assets at
FVOCI
RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,225
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,170
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(74,957)
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,438
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,438
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,344
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(74,224)
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,558
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,558
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,438
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(95,534)
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,462
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,462
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,374
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(86,828)
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,008
APPENDIX I ACCOUNTANT’S REPORT
– I-22 –


--- page 516 ---
Financial assets at
FVOCI
RMB’000
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,558
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,113
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(47,943)
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,728
Financial assets at
FVPL
RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,349
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118485,500
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(444,351)
Fair value gains (Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,689
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,187
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,187
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,040,800
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,139,460)
Fair value gains (Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,054
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,581
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,581
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,652,200
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,489,970)
Fair value gains (Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,786
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,597
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,597
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,054,300
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,146,381)
Fair value gains (Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,385
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,901
(Unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,581
Acquisitions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118712,600
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(671,983)
Fair value gains (Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,414
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,612
The changes of financial assets at FVOCI for the years ended December 31, 2021, 2022 and 2023 and the six
months ended June 30, 2023 and 2024 have been presented in Note 23. The changes of financial assets at FVPL for
the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024 have been
presented in Note 24.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 517 ---
(d) There were no transfers between levels 1, 2 and 3 for recurring fair value measurements during the Track
Record Period.
(e) V aluation inputs and relationships to fair value
The following table summarizes the quantitative information about the significant unobservable inputs used in
recurring level 3 fair value measurements.
As at December 31, 2021
Description Fair value Unobservable inputs Range of inputs
Relationship of unobservable
inputs to fair value
RMB’000
Structured deposits and
wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
135,187 Expected rate of
return
1.6%-3.55% The higher the expected
rate of return, the
higher the fair value
Financial assets at FVOCI
– Notes receivables /H1118/H1118/H1118/H1118
38,438 Discounted rate 1.29%-1.66% The higher the
discounted rate, the
lower the fair value
As at December 31, 2022
Description Fair value Unobservable inputs Range of inputs
Relationship of unobservable
inputs to fair value
RMB’000
Structured deposits and
wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
44,581 Expected rate of
return
1.88%-3.94% The higher the expected
rate of return, the
higher the fair value
Financial assets at FVOCI
– Notes receivables /H1118/H1118/H1118/H1118
23,558 Discounted rate 1.56%-1.62% The higher the
discounted rate, the
lower the fair value
As at December 31, 2023
Description Fair value Unobservable inputs Range of inputs
Relationship of unobservable
inputs to fair value
RMB’000
Structured deposits and
wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
210,597 Expected rate of
return
1%-2.8% The higher the expected
rate of return, the
higher the fair value
Financial assets at FVOCI
– Notes receivable /H1118/H1118/H1118/H1118
36,462 Discounted rate 1.03%-1.7% The higher the
discounted rate, the
lower the fair value
As at June 30, 2024
Description Fair value Unobservable inputs Range of inputs
Relationship of unobservable
inputs to fair value
RMB’000
Structured deposits and
wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
120,901 Expected rate of
return
1%-2.8% The higher the expected
rate of return, the
higher the fair value
Financial assets at FVOCI
– Notes receivables /H1118/H1118/H1118/H1118
7,008 Discounted rate 1.29%-1.5% The higher the
discounted rate, the
lower the fair value
There were no significant inter-relationships between unobservable inputs that materially affect fair values.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 518 ---
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of Historical Financial Information requires the use of accounting estimates which, by
definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the
Group’s accounting policies.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
(a) Impairment of financial assets
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates.
The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based
on the Group’s past history, existing market conditions, as well as forward-looking estimates at the end of each Track
Record Period. Details of the key assumptions and inputs used are disclosed in the tables in Note 3.1.
(b) Inventory provision
Inventories are stated at the lower of cost and net realizable value. The net realizable value is the estimated
selling price in the ordinary course of business less the estimated costs of completion and the estimated costs
necessary to make the sale. Even though the management of the Group has made the best estimate about the inventory
write-down loss predicted to occur and provided allowance for write-down, the write-down assessment may still be
significantly changed due to the change of market situations.
(c) Fair value of financial assets at FVPL
The fair value of financial assets that are not traded in an active market is determined by using valuation
techniques. The Group uses its judgment to select a variety of methods and make assumptions that are mainly based
on market conditions existing at the end of each Track Record Period. Changes in these assumptions and estimates
could materially affect the respective fair value of these investments. Details of the assumptions and estimates in
determination of the fair value are disclosed in Note 3.3.
(d) Income taxes and deferred taxations
There are many transactions and events for which the ultimate tax determination is uncertain during the
ordinary course of business. Significant judgments are required from the Group in determining the provisions for
income taxes. Where the final tax outcome of these matters is different from the amounts that were initially recorded,
such differences will impact the income tax and deferred income tax provisions in the period in which such
determination is made.
The Group recognizes deferred income tax assets based on estimates that it is probable to generate sufficient
taxable profits in the foreseeable future against which the deductible losses will be utilized. The recognition of
deferred income tax assets mainly involves management’s judgments and estimations about the timing and the
amount of taxable profits of the companies who has tax losses.
(e) Recognition of share-based payment expenses
As disclosed in Note 29, the Group granted shares to the Group’s employees, which are viewed as share-based
payment transaction in substance. These transactions resulted in the recognition of share-based payment expenses.
The directors of the Company calculate the fair value of each awarded restricted shares based on the most recent
transaction price of the Company’s shares at the grant date. Significant estimate on assumptions are made based on
management’s best estimates.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 519 ---
(f) Estimation of provision for warranty claims
Provision for product warranties granted by the Group in respect of certain products are recognized based on
sales volume and past experience of the level of repair. The Group accrues a warranty reserve for the goods sold by
multiplying the expected unit costs for warranty services by the sales volume, which includes the best estimate of
projected costs to repair or replace items under warranties. Factors that affect the Group’s warranty liability include
the number of products sold under warranty, historical and anticipated rates of warranty claim on those products, and
cost per claim to satisfy the warranty obligation. The estimation basis is reviewed on an on-going basis and revised
where appropriate.
(g) Impairment of non-financial assets
Assets that are subject to amortization or depreciation are tested for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized in profit
or loss for the amount by which the carrying amount of an asset exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are
largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
The Group mainly focuses on intelligent driving and cabin solutions. During the Track Record Period, the
Group’s products are mainly manufactured by external factories. As of December 31, 2021, 2022 and 2023 and June
30, 2024, non-financial assets of the Group mainly include leased buildings, equipment and software held for the
overall R&D activities and daily operations, which are identified as one single cash generating unit (“CGU”) for
impairment testing purpose. The recoverable amount of the CGU at the end of the reporting period had been
determined based on value in use calculations, using cash flow projections based on management’s approved
financial forecasts. Key assumptions applied in preparing the cash flow projections included revenue growth rate and
gross profit rate. Based on the result of the assessment, the recoverable amount exceeded the carrying amount of the
CGU with sufficient headroom. Hence, no impairment of non-financial assets was recognized during the years ended
December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024.
5. REVENUE AND SEGMENT INFORMATION
(a) Description of segments and principal activities
During the Track Record Period, the Group is engaged in the development, manufacture and sales of intelligent
driving products and solutions. The executive directors of the Company review the operating results of the business
as one operating segment to make strategic decisions and resources allocation. Therefore, the Group regards that there
is only one business segment which is used to make strategic decisions.
Geographical information
Majority of the group’s business and operations are conducted in Mainland China and currently, the
Group’s principal market, majority of revenue, operating loss and non-current assets are derived from/located
in the PRC. Accordingly, no geographical segment information is presented.
(b) Revenue during the Track Record Period
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Sales of products /H1118/H1118/H1118/H1118/H1118/H1118171,778 251,001 356,356 132,521 199,958
Services and V ehicle
infrastructure
cooperative systems /H1118/H1118/H1118 1,937 18,598 119,594 31,195 36,487
Others (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,459 9,759 256 118 230
175,174 279,358 476,206 163,834 236,675
All the Group’s revenue is recognized at a point in time.
(i) Others mainly refer to revenue generated from sales of spare parts and rendering maintenance services.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 520 ---
(c) Contract liabilities
The Group recognized the following contract liabilities related to the contracts with customers:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,928 24,029 5,405 3,210
Contract liabilities of the Group mainly arise from the advance payments made by customers while the
underlying services or goods are yet to be provided.
The Company has recognized the following contract liabilities related to contracts with customers:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,940 1,005 973 714
Revenue recognized in relation to contract liabilities
The following table shows how much of the revenue recognized during the Track Record Periods relates to
carried-forward contract liabilities.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue recognized that
was included in the
contract liabilities
balance at the beginning
of the year/period /H1118/H1118/H1118/H1118/H11182,709 2,230 21,678 7,565 3,605
(i) Assets recognized from costs to fulfill contracts
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Assets recognized from costs incurred
to fulfill contracts (Note 20) /H1118/H1118/H1118/H1118/H1118/H111823,976 72,002 26,732 26,867
Impairment loss recognized as cost of
providing services during the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (731) (2,247) (2,330)
23,976 71,271 24,485 24,537
There were no unsatisfied performance obligations to which the transaction price should be allocated as at
December 31, 2021, 2022 and 2023 and June 30, 2024.
APPENDIX I ACCOUNTANT’S REPORT
– I-27 –


--- page 521 ---
(d) Information about major customers
For the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024,
revenue derived from customers who accounted for more than 10% of total revenue were set out below:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Customer 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831.74% N/A N/A N/A N/A
Customer 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.93% N/A N/A N/A 10.47%
Customer 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813.70% 16.57% 11.36% N/A N/A
N/A: The customer contributed less than 10% of total revenue for the corresponding year/period.
(e) Revenue recognition
Revenue is recognized when or as the control of the goods or services is transferred to a customer. A customer
is the party that contracts with the Group to purchase goods or services which are the output of the Group’s ordinary
activities in exchange for consideration.
Contracts with customers may include multiple performance obligations. For such arrangements, the Group
allocates revenue to each performance obligation based on its relative standalone selling price. The Group generally
determines standalone selling prices based on the prices charged to customers. If the standalone selling price is not
directly observable, it is estimated using expected cost plus a margin or adjusted market assessment approach,
depending on the availability of observable information. Assumptions and estimations have been made in estimating
the relative selling price of each distinct performance obligation, and changes in judgments on these assumptions and
estimates may impact the revenue recognition.
When either party to a contract has performed, the Group presents the contract on the consolidated statements
of balance sheets as a contract asset or a contract liability, depending on the relationship between the entity’s
performance and the customer’s payment.
If a customer pays consideration or the Group has a right to an amount of consideration that is unconditional,
before the Group transfers a good or service to the customer, the Group presents the contract liability when the
payment is made or a receivable is recorded (whichever is earlier). A contract liability is the Group’s obligation to
transfer goods or services to a customer for which the Group has received consideration (or an amount of
consideration is due) from the customer.
The revenue is measured at the transaction price agreed under the contract. Amounts disclosed as revenue are
net of return, trade allowances and amounts collected on behalf of third parties.
The accounting policies for the Group’s principal revenue sources are as follows:
(i) Sales of products
The Group manufactures and sells intelligent driving products in the market, and generates revenue from sales
of driving assistance products (iSafety), intelligent navigation assistance products (iPilot), intelligent cabin products
(iCabin) and other related products.
The revenue for sales of products mentioned above is recognized at a point in time when the control of the
products mentioned above are transferred to the customer. Specifically, sales are recognized when the products have
been shipped to the specific location in accordance with the sales contract and the customers have inspected and
accepted the products.
APPENDIX I ACCOUNTANT’S REPORT
– I-28 –


--- page 522 ---
(ii) Services and V ehicle infrastructure cooperative systems
The Group provides services and vehicle infrastructure cooperative systems to customers. The Group
recognizes revenue at a point in time when performance obligations are satisfied as well as the agreed deliverables
are accepted by customers. The Group does not have any enforceable right to payment before the agreed deliverables
are accepted by customers.
(iii) Others
Others mainly refer to revenue generated from sales of spare parts and rendering maintenance services. The
revenue is recognized at a point in time.
6. OTHER INCOME
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Government grants /H1118/H1118/H1118/H1118/H111820,381 4,734 21,370 2,532 3,214
V alue added tax (“V A T”)
refund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,527 – 6,552 628 3,045
23,908 4,734 27,922 3,160 6,259
During the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024,
the government grants mainly include financial subsidies from local government authorities with certain specified
conditions, as well as the amortization of deferred government grants. There are no unfulfilled conditions or other
contingencies attaching to the grants recognized.
7. OTHER GAINS – NET
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Net fair value gains on
financial assets at FVPL
(Note 24) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,689 8,054 3,786 1,414 2,385
Net foreign exchange
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(174) (96) (198) (148) (204)
Donation expenditure /H1118/H1118/H1118/H1118(118) (175) (50) – –
Net gains on disposals of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2) (47) (2) (54)
Net gains/(losses) from
termination of leases /H1118/H1118/H1118 8 61 (13) 22 –
Overdue fine /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7) (29) – (2) (1)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(382) (1,479) (2,140) (462) 375
2,016 6,334 1,338 822 2,501
APPENDIX I ACCOUNTANT’S REPORT
– I-29 –


--- page 523 ---
8. EXPENSES BY NATURE
The detailed analysis of cost of sales, selling expenses, general and administrative expenses and research and
development expenses is as follow:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Changes in inventories of
finished goods and
working in progress
(Note 20) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,886 (1,886) (25,616) (14,497) 5,501
Raw materials and
consumables used
(Note 20) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,815 212,662 379,514 138,794 160,660
Employee benefit expenses
(Note 9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107,858 166,395 180,703 90,052 86,751
Services fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,863 30,926 50,206 27,295 18,940
Share-based payment (Note
9,29) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,802 14,960 22,401 11,200 15,311
Office and travel expenses /H1118 15,590 18,785 22,033 10,366 7,562
Depreciation of right-of-
use assets (Note 16) /H1118/H1118/H1118 5,400 9,608 14,588 6,989 7,626
Depreciation and
amortization
(Notes 15,17,18) /H1118/H1118/H1118/H1118/H11183,793 8,107 12,033 5,886 7,121
Advertising and publicity
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,892 5,386 6,949 3,316 1,029
Provision for impairment
of inventories
(Note 20) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,494 5,347 6,235 4,747 9,119
Processing expenses /H1118/H1118/H1118/H1118/H11185,024 2,543 4,969 2,295 3,133
Warranty costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,270 2,451 4,417 1,756 1,712
Outsourced installation
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,337 8,082 4,087 1,109 1,466
Testing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11184,900 5,010 2,242 317 362
Legal and professional
fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,866 5,060 3,945 1,300 532
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 14,298
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,755 9,844 16,333 4,591 7,652
337,545 503,280 705,039 295,516 348,775
APPENDIX I ACCOUNTANT’S REPORT
– I-30 –


--- page 524 ---
9. EMPLOYEE BENEFIT EXPENSES
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Wages, salaries and
bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,457 147,217 157,566 79,461 75,339
Share-based payment
expenses (Note 29) /H1118/H1118/H1118/H11188,802 14,960 22,401 11,200 15,311
Pension obligations,
housing funds, medical
insurances and other
social insurances (a) /H1118/H1118/H1118 9,218 14,028 16,691 8,062 7,962
Other employee benefits
(b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,183 5,150 6,446 2,529 3,450
116,660 181,355 203,104 101,252 102,062
(a) Pension obligations, housing funds, medical insurances and other social insurances
Full time employees of the Group in the PRC are members of a state-managed retirement benefit schemes
operated by the PRC government. The Group is required to contribute a specified percentage of payroll costs, subject
to certain ceiling, as determined by local government authority to the pension obligations, housing funds, medical
insurances and other social insurances to fund the benefits. The Group’s liabilities in respect of benefits schemes are
limited to the contribution payable in each year.
No forfeited contributions were utilized during the reporting period to offset the Group’s contribution to the
above mentioned retirement benefit schemes.
(b) Other employee benefits
Other employee benefits mainly include termination benefits and employee welfare expenses.
(c) Five highest paid employees
The five individuals whose emoluments were the highest in the Group for the years ended December 31, 2021,
2022 and 2023 and the six months ended June 30, 2023 and 2024 include no director, whose emoluments are disclosed
in the Note 37. The emoluments payable to the 5 highest paid individuals during the Track Record Period are as
follows:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Wages, salaries and
bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,033 4,537 3,631 1,835 2,033
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,264 5,339 7,730 3,866 4,980
Pension obligations,
housing funds, medical
insurances and other
social insurances /H1118/H1118/H1118/H1118/H1118186 232 182 90 101
8,483 10,108 11,543 5,791 7,114
APPENDIX I ACCOUNTANT’S REPORT
– I-31 –


--- page 525 ---
The emoluments fell within the following bands:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Emolument bands
(in Hong Kong dollars)
HKD500,001-
HKD1,000,000 /H1118/H1118/H1118/H1118/H1118/H11182––2–
HKD1,000,001-
HKD1,500,000 /H1118/H1118/H1118/H1118/H1118/H111822122
HKD1,500,001-
HKD2,000,000 /H1118/H1118/H1118/H1118/H1118/H1118–2213
HKD2,000,001-
HKD2,500,000 /H1118/H1118/H1118/H1118/H1118/H1118––1––
HKD2,500,001-
HKD3,000,000 /H1118/H1118/H1118/H1118/H1118/H1118111––
55555
10. FINANCE COSTS – NET
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Finance income
Interest income from cash
and cash equivalents /H1118/H1118/H1118 65 909 1,760 890 1,606
Other interest income /H1118/H1118/H1118/H1118147 325 207 124 63
Total finance income /H1118/H1118/H1118/H1118212 1,234 1,967 1,014 1,669
Finance costs
Interest expenses on bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(472) (858) (2,139) (1,082) (3,039)
Interest expenses on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(444) (663) (1,234) (428) (743)
Total finance costs /H1118/H1118/H1118/H1118/H1118(916) (1,521) (3,373) (1,510) (3,782)
Finance costs – net /H1118/H1118/H1118/H1118/H1118(704) (287) (1,406) (496) (2,113)
APPENDIX I ACCOUNTANT’S REPORT
– I-32 –


--- page 526 ---
11. NET IMPAIRMENT LOSSES ON FINANCIAL ASSETS
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Impairment losses – net:
– trade and notes
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,097) (5,601) (4,015) (3,237) (6,719)
– other non-current assets /H1118 – (1,732) (1,688) (1,232) 217
– other receivables /H1118/H1118/H1118/H1118/H1118(99) (184) (413) (134) (93)
(2,196) (7,517) (6,116) (4,603) (6,595)
12. INCOME TAX EXPENSE
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current income tax
expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118450 172 60 33 –
Deferred income tax
expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
450 172 60 33 –
Taxes on profits assessable have been calculated at the rates of tax prevailing in the jurisdictions in which
relevant entities operate.
(i) PRC corporate income tax (“PRC CIT”)
The Company and its subsidiaries in the PRC are subject to PRC CIT which is calculated based on the
applicable tax rate of 25% on the assessable profits of the subsidiaries in accordance with PRC tax laws and
regulations for the Track Record Period, except for disclosed below.
The Company obtained its High and New Technology Enterprises (“HNTE”) status in year 2017 and hence is
entitled to a preferential tax rate of 15% for a three-year period commencing 2017. In 2020 and 2023, the Company
succeeded the qualification for HNTE and is therefore subject to a preferential income tax rate of 15% for a three-year
period commencing 2020 and 2023. In addition, the Group’s subsidiary, Nanjing Y oujia Technology Co., Ltd. (ԯ
ʮ̡) was qualified as HNTE in year 2020 and succeeded the qualification for HNTE in 2023 and the
approval was obtained in 2023.
According to a policy promulgated by the State Tax Bureau of the PRC and effective from 2018 onwards,
enterprises engaged in R&D activities are entitled to claim an additional tax deduction amounting to 75% of the
qualified R&D expenses incurred in determining its tax assessable profits for that year (“Super Deduction”). Starting
from March 2021, the additional deduction ratio increased to 100% for manufacturing industry. Starting from October
1, 2022, the additional deduction ratio was increased to 100% for other industries.
During the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024,
certain subsidiaries in mainland China qualified as “small low-profit enterprises” under the Enterprise Income Tax
Law of the PRC and enjoyed a preferential income tax rate of 20%.
APPENDIX I ACCOUNTANT’S REPORT
– I-33 –


--- page 527 ---
The difference between the actual income tax expense charged to the consolidated statements of
comprehensive loss and the amounts which would result from applying the enacted tax rates to loss before income
tax can be reconciled as follows:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Loss before income tax /H1118/H1118/H1118(139,347) (220,658) (207,095) (132,799) (112,048)
Income tax credit
computed at the
applicable income tax
rate of 25% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(34,837) (55,164) (51,774) (33,200) (28,012)
Tax effects of Preferential
tax rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,879 19,830 19,831 11,853 11,804
Tax losses for which no
deferred tax asset was
recognized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,403 48,655 50,358 31,244 22,100
Super deduction in respect
of R&D expenditures /H1118/H1118 (12,222) (21,447) (25,690) (13,354) (10,775)
Expenses not deductible
for taxation purposes /H1118/H1118/H1118 974 1,003 654 342 307
Temporary differences for
which no deferred
income tax asset was
recognized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,253 7,295 6,681 3,148 4,576
Income tax expense /H1118/H1118/H1118/H1118/H1118450 172 60 33 –
The Group principally conducted its business in Mainland China, where the accumulated tax losses will
normally expire within 5 years. Pursuant to the relevant regulations on extension for expiries of unused tax losses
of HNTE issued in August 2017, the expiry period of the accumulated unexpired tax losses of the Company, which
is qualified as HNTE, from 2017 had been extended from 5 years to 10 years. The Company re-applied for HNTE
status in 2020 and 2023 and the approval was obtained in 2020 and 2023. The expiry period of the accumulated
unexpired tax losses of Group’s subsidiary, Nanjing Y oujia Technology Co., Ltd. (ʮ̡) which is
qualified as HNTE, from 2020 had been extended from 5 years to 10 years. Nanjing Y oujia re-applied for HNTE
status in 2023.
Deductible losses that are not recognized for deferred income tax assets will expire as follows:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 6 3 8 6 3–––
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,459 4,459 4,459 4,459 –
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,136 9,136 9,136 9,136 9,136
2026 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,649 37,649 37,649 37,649 37,649
2027 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,153 64,928 64,928 64,928 64,928
2028 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,320 58,320 143,869 94,351 143,869
2029 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,233 62,233 62,233 62,233 104,699
2030 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,980 125,980 125,980 125,980 125,980
2031 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118181,539 181,539 181,539 181,539 181,539
2032 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 279,394 279,394 279,394 279,394
2033 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 248,832 154,382 248,832
2034 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 99,837
507,332 824,501 1,158,019 1,014,051 1,295,863
APPENDIX I ACCOUNTANT’S REPORT
– I-34 –


--- page 528 ---
13. LOSS PER SHARE
(a) Basic loss per share
Basic loss per share for the years ended December 31, 2021, 2022 and 2023 and the six months ended June
30, 2023 and 2024 are calculated by dividing the loss attributable to the owners of the Company by the weighted
average number of ordinary shares in issue during the year.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Loss attributable to owners
of the Company /H1118/H1118/H1118/H1118/H1118(132,220) (214,864) (197,238) (125,830) (108,135)
Weighted average number
of ordinary shares in
issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118274,816 323,294 332,252 327,821 351,277
Basic loss per share /H1118/H1118/H1118/H1118/H1118(0.48) (0.66) (0.59) (0.38) (0.31)
(b) Diluted loss per share
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding
to assume conversion of all dilutive potential ordinary shares. During the Track Record Period, as the Group incurred
losses for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024,
any potential ordinary shares included in the calculation of diluted loss per share would be anti-dilutive. Accordingly,
diluted loss per share for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023
and 2024 are the same as basic loss per share of the respective year.
APPENDIX I ACCOUNTANT’S REPORT
– I-35 –


--- page 529 ---
14. SUBSIDIARIES
(a) Subsidiaries of the Company
As at the date of this report, the Company has direct or indirect interests in the following subsidiaries:
Name of entity
Date of
incorporation
Place of
incorporation/
operation
Registered share
capital
Effective interest held by the Group
Principal activities
As at December 31,
As at
June 30,
As at the date
of this report2021 2022 2023 2024
Directly held:
Shanghai Y oujia Zhixing
Electronic Technology
Co., Ltd. ɪऎСྗ౽Б
ʮ̡ (vi) /H1118
September 27,
2023
Shanghai,
China
RMB10,000,000 N/A N/A 100% 100% 100% Research and
development
Tongxiang Wuzhen
Y oujia Intelligent
Automobile Co., Ltd.
ඊढᕄСቷ౽ঐӛԓ
ʮ̡ (vi) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
September 25,
2023
Zhejiang,
China
RMB5,000,000 N/A N/A 100% 100% 100% Manufacturing
and
assembly of
products
Guangzhou Y oujia
Innovation Technology
Co., Ltd. ᄿψСቷ௴อ
ʮ̡ (vi) /H1118/H1118/H1118/H1118
May 18, 2023 Guangdong,
China
RMB100,000,000 N/A N/A 100% 100% 100% Manufacturing
and
assembly of
products
Wuhan Y oujia Innovation
Technology Co., Ltd.
ࠢ
ʮ̡ (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
August 16,
2022
Hubei, China RMB80,000,000 N/A 100% 100% 100% 100% Research and
development
Nanjing Kaiyun
Shuchuang Technology
Co., Ltd.ԯකථᅰ௴
ʮ̡ (iii) /H1118/H1118/H1118/H1118
August 09,
2022
Jiangsu,
China
RMB75,000,000 N/A 100% 100% 100% 100% Research and
development
Y oujia Innovation
(Beijing) Technology
Co., Ltd. Сቷ௴อ(̏
ԯ)ʮ̡ (ii) /H1118/H1118
December 14,
2020
Beijing,
China
RMB1,000,000 100% 100% 100% 100% 100% Research and
development
APPENDIX I ACCOUNTANT’S REPORT
– I-36 –


--- page 530 ---
Name of entity
Date of
incorporation
Place of
incorporation/
operation
Registered share
capital
Effective interest held by the Group
Principal activities
As at December 31,
As at
June 30,
As at the date
of this report2021 2022 2023 2024
Hunan Y ouxiang
Wanglian Intelligent
Technology Co., Ltd. ಳ
ҦϞ
ʮ̡ (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
November 16,
2020
Hunan,
China
RMB30,000,000 100% 100% 100% 100% 100% Sales of
products
Shenzhen Y oujia Data
Technology Co., Ltd.
ࠢ
ʮ̡ (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
April 16,
2020
Guangdong,
China
RMB30,000,000 100% 100% 100% N/A,
deregistered
N/A,
deregistered
Research and
development
Xuzhou Y oujia Electronic
Technology Co., Ltd.
ࠢ
ʮ̡/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
March 29,
2019
Jiangsu,
China
RMB30,000,000 N/A,
deregistered
N/A,
deregistered
N/A,
deregistered
N/A,
deregistered
N/A,
deregistered
Research and
development
Nanjing Y oujia
Technology Co., Ltd.ی
ʮ̡
(ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
February 24,
2018
Jiangsu,
China
RMB30,000,000 100% 100% 100% 100% 100% Research and
development;
Sales of
products
Hubei Y oujia Technology
Co., Ltd.Ҧ
ʮ̡ (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
December 22,
2017
Hubei, China RMB10,000,000 100% 100% 100% 100% 100% Sales of
products
Hangzhou Ruijian
Zhixing Technology
Co., Ltd.ψቚԈ౽Б
ʮ̡ (iii) /H1118/H1118/H1118/H1118
November 17,
2022
Zhejiang,
China
RMB13,333,333 N/A 75% 75% 75% 75% Research and
Development;
Sales of
products
Shanghai Y ouqu
Information
Technology Co., Ltd.
ࠢ
ʮ̡ (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
June 30, 2020 Shanghai,
China
RMB30,000,000 60% 60% 60% 60% 60% Sales of
products
Shanghai Y ouxing
Automotive Electronics
Co., Ltd. ɪऎСБӛԓ
ʮ̡ (ii) /H1118/H1118/H1118/H1118
October 14,
2020
Shanghai,
China
RMB20,000,000 55% 55% 55% 55% 55% Research and
Development;
Sales of
products
APPENDIX I ACCOUNTANT’S REPORT
– I-37 –


--- page 531 ---
Name of entity
Date of
incorporation
Place of
incorporation/
operation
Registered share
capital
Effective interest held by the Group
Principal activities
As at December 31,
As at
June 30,
As at the date
of this report2021 2022 2023 2024
Jiangsu Y uanshi
Technology Co., Ltd. Ϫ
ʮ̡
(iv) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
June 17, 2022 Jiangsu,
China
RMB62,000,000 N/A 51.61% 51.61% 51.61% 51.61% Research and
Development;
Sales of
products
Zhongyan Y oujia
Intelligent Technology
(Shanghai) Co., Ltd. ʕ
Ҧ(ɪऎ)
ʮ̡/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
January 25,
2022
Shanghai,
China
RMB11,000,000 N/A 51% 51% 51% 51% Sales of
products
Chongqing Y ongnuo
Xincheng Technology
Service Co., Ltd.ᅅ
ࠢ
ʮ̡ (v) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
April 25,
2021
Chongqing,
China
RMB2,000,000 51% 51% 51% N/A,
deregistered
N/A,
deregistered
Sales of
products
Chongqing Y oujia
Innovation Technology
Co., Ltd.ᅅСቷ௴อ
ப΂ʮ̡ (ii) /H1118
March 14,
2019
Chongqing,
China
RMB1,000,000 51% 51% 51% 51% 51% Sales of
products
Shaanxi Y oujia Zhixing
Technology Co., Ltd.
ࠢ
ʮ̡ (viii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
March 01,
2024
Shaanxi,
China
RMB3,000,000 N/A N/A N/A 60% 60% Research and
development
Guangzhou Y oujia
Intelligent Technology
Co., Ltd. ᄿψСቷ౽ঐ
ʮ̡ (viii) /H1118/H1118/H1118
June 14, 2024 Guangdong,
China
RMB3,000,000 N/A N/A N/A 55% 55% Research and
development
Indirectly Held:
MINSIGHT PTE. LTD.
Ҧ(อ̋ս)
ʮ̡ (ix) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
November 20,
2023
Singapore Singapore
Dollars 100,000
N/A N/A 75% 75% 75% Sales of
products
APPENDIX I ACCOUNTANT’S REPORT
– I-38 –


--- page 532 ---
(i) The English name of the subsidiaries with Chinese names represents the best effort by the management of the Group in translating their Chinese name s as they do not have
an official English name.
(ii) The financial statements were audited by Shenzhen Huicheng Certified Public Accountants (General Partnership) for the years ended December 31 , 2021, 2022 and 2023.
(iii) The financial statements were audited by Shenzhen Huicheng Certified Public Accountants (General Partnership) for the years ended December 3 1, 2022 and 2023.
(iv) The financial statements were audited by Shenzhen Huicheng Certified Public Accountants (General Partnership) and Nanjing Zhenghe Certified Public Accountants (General
Partnership) for the years ended December 31, 2022 and 2023.
(v) The financial statements were audited by Shenzhen Huicheng Certified Public Accountants (General Partnership) for the years ended December 31, 2021, and 2022. And
Chongqing Y ongnuo Xincheng Technology Service Co., Ltd. was deregistered on April 17, 2024.
(vi) The financial statements were audited by Shenzhen Huicheng Certified Public Accountants (General Partnership) for the year ended December 31, 2023.
(vii) Shenzhen Y oujia Data Technology Co., Ltd. was deregistered on April 9, 2024.
(viii) No audited financial statements were issued for these companies as they are either newly incorporated or not required to issue audited financi al statements under the statutory
requirements.
(ix) Minsight Pte. Ltd. is 100% directly held by Hangzhou Ruijian Zhixing Technology Co., Ltd.
(x) All the principal subsidiaries presented are limited liability companies.
APPENDIX I ACCOUNTANT’S REPORT
– I-39 –


--- page 533 ---
(b) Investments in subsidiaries – the Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,740 262,740 267,840 237,840
Deemed investment arising from share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,227 4,211 5,220 5,053
Provision for impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22,740) (25,477) (36,777) (41,375)
33,227 241,474 236,283 201,518
15. PROPERTY, PLANT AND EQUIPMENT
The Group
Machinery
and molds Transportation
Computers
and electronic
equipment
Other
equipment
Leasehold
improvements
Construction
in progress
(“CIP”) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at January 1, 2021
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,310 1,370 2,968 111 551 349 8,659
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(924) (309) (1,829) (44) – – (3,106)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,386 1,061 1,139 67 551 349 5,553
Y ear ended December 31, 2021
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,386 1,061 1,139 67 551 349 5,553
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 1 0––– 3,205 10,288 14,403
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(31) – (5) – – – (36)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,080) (292) (807) (29) (1,210) – (3,418)
Reclassification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,913 1,786 2,287 28 – (8,014) –
Transfer (Note 17) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– (2,350) (2,350)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,098 2,555 2,614 66 2,546 273 14,152
APPENDIX I ACCOUNTANT’S REPORT
– I-40 –


--- page 534 ---
Machinery
and molds Transportation
Computers
and electronic
equipment
Other
equipment
Leasehold
improvements
Construction
in progress
(“CIP”) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2021
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,102 3,156 5,250 139 3,756 273 20,676
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,004) (601) (2,636) (73) (1,210) – (6,524)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,098 2,555 2,614 66 2,546 273 14,152
Y ear ended December 31, 2022
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,098 2,555 2,614 66 2,546 273 14,152
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,663 – 14 – 2,632 17,935 24,244
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (3) – – – (3)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,051) (688) (1,533) (53) (1,986) – (7,311)
Reclassification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,129 1,466 2550 381 – (11,526) –
Transfer (Note 17) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– (6,098) (6,098)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,839 3,333 3,642 394 3,192 584 24,984
As at December 31, 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,894 4,622 7,811 520 6,388 584 38,819
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,055) (1,289) (4,169) (126) (3,196) – (13,835)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,839 3,333 3,642 394 3,192 584 24,984
Y ear ended December 31, 2023
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,839 3,333 3,642 394 3,192 584 24,984
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,075 56 10 – 1,549 19,869 24,559
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(195) (191) (302) (16) – – (704)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,257) (890) (1,879) (190) (2,463) – (10,679)
Reclassification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,438 882 1,784 508 – (9,612) –
Transfer (Note 17) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– (2,463) (2,463)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,900 3,190 3,255 696 2,278 8,378 35,697
As at December 31, 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,212 5,369 9,303 1,012 7,937 8,378 60,211
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,312) (2,179) (6,048) (316) (5,659) – (24,514)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,900 3,190 3,255 696 2,278 8,378 35,697
APPENDIX I ACCOUNTANT’S REPORT
– I-41 –


--- page 535 ---
Machinery
and molds Transportation
Computers
and electronic
equipment
Other
equipment
Leasehold
improvements
Construction
in progress
(“CIP”) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Six months ended June 30, 2024
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,900 3,190 3,255 696 2,278 8,378 35,697
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 8 7––– 1,367 15,309 17,663
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(120) (79) (44) (18) – – (261)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,297) (454) (972) (123) (1,225) – (6,071)
Reclassification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,406 352 309 47 – (6,114) –
Transfer (Note 17) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– (6,518) (6,518)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,876 3,009 2,548 602 2,420 11,055 40,510
As at June 30, 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,485 5,642 9,568 1,041 9,304 11,055 71,095
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,609) (2,633) (7,020) (439) (6,884) – (30,585)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,876 3,009 2,548 602 2,420 11,055 40,510
APPENDIX I ACCOUNTANT’S REPORT
– I-42 –


--- page 536 ---
(a) Depreciation expenses
Depreciation expenses have been charged to the consolidated statements of comprehensive loss as follows:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118516 1,639 3,038 1,919 2,334
General and administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,765 3,366 2,833 1,214 1,497
Selling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111871 398 572 305 165
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,066 1,908 4,236 1,801 2,075
3,418 7,311 10,679 5,239 6,071
(b) Depreciation methods and useful lives
All property, plant and equipment are stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated using the straight-line method to allocate their costs to their residual values over
their estimated useful lives as follows:
Machinery and molds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
Transportation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184-10 years
Computers and electronic
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2-5 years
Other equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Estimated useful lives or remaining lease terms, whichever is
shorter
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each Track
Record Period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
recognized within “other gains – net” included in the consolidated statements of comprehensive loss.
APPENDIX I ACCOUNTANT’S REPORT
– I-43 –


--- page 537 ---
The Company
Machinery
and molds Transportation
Computers and
electronic
equipment
Other
equipment
Leasehold
improvements
Construction in
progress
(“CIP”) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at January 1, 2021
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,233 127 2,774 59 412 349 6,954
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(900) (75) (1,754) (25) – – (2,754)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,333 52 1,020 34 412 349 4,200
Y ear ended December 31, 2021
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,333 52 1,020 34 412 349 4,200
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 0 9––– 1 7 0 8,639 9,718
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1) – – – (1)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,062) (32) (688) (18) (449) – (2,249)
Reclassification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,830 666 1,855 14 – (6,365) –
Transfer (Note 17) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– (2,350) (2,350)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,010 686 2,186 30 133 273 9,318
As at December 31, 2021
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,972 793 4,628 73 582 273 14,321
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,962) (107) (2,442) (43) (449) – (5,003)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,010 686 2,186 30 133 273 9,318
Y ear ended December 31, 2022
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,010 686 2,186 30 133 273 9,318
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,66 3––– 1,741 17,016 22,420
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (4) – – – (4)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,018) (217) (1,321) (36) (393) – (4,985)
Reclassification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,057 934 2,257 359 – (10,607) –
Transfer (Note 17) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– (6,098) (6,098)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,712 1,403 3,118 353 1,481 584 20,651
As at December 31, 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,692 1,727 6,881 432 2,323 584 30,639
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,980) (324) (3,763) (79) (842) – (9,988)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,712 1,403 3,118 353 1,481 584 20,651
APPENDIX I ACCOUNTANT’S REPORT
– I-44 –


--- page 538 ---
Machinery
and molds Transportation
Computers and
electronic
equipment
Other
equipment
Leasehold
improvements
Construction in
progress
(“CIP”) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended December 31, 2023
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,712 1,403 3,118 353 1,481 584 20,651
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,963 56 – – 1,233 9,000 13,252
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(154) (34) (222) (6) – – (416)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,110) (313) (1,457) (119) (1,311) – (8,310)
Reclassification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,595 336 813 254 – (6,998) –
Transfer (Note 17) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– (2,106) (2,106)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,006 1,448 2,252 482 1403 480 23,071
As at December 31, 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,096 2,085 7,472 680 3,556 480 41,369
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,090) (637) (5,220) (198) (2,153) – (18,298)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,006 1,448 2,252 482 1,403 480 23,071
Six months ended June 30, 2024
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,006 1,448 2,252 482 1,403 480 23,071
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 8 7–––– 13,607 14,594
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(68) (32) (42) (14) – – (156)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,987) (192) (672) (78) (717) – (4,646)
Reclassification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 201 180 15 – (401) –
Transfer (Note 17) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– (6,332) (6,332)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,943 1,425 1,718 405 686 7,354 26,531
As at June 30, 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,020 2,254 7,610 681 3,556 7,354 49,475
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,077) (829) (5,892) (276) (2,870) – (22,944)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,943 1,425 1,718 405 686 7,354 26,531
APPENDIX I ACCOUNTANT’S REPORT
– I-45 –


--- page 539 ---
16. LEASES
The Group
(a) Amounts recognized in the consolidated balance sheets
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Right-of-use assets
Offices and factories /H1118/H1118/H1118/H1118/H1118/H111814,682 13,899 32,535 25,432
Land use right (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 25,397
14,682 13,899 32,535 50,829
Lease liabilities
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,898 7,997 15,196 15,773
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,569 6,143 19,095 12,243
15,467 14,140 34,291 28,016
(i) In June 2024, the Group acquired land use rights to build factories for manufacture and sales of
intelligent driving products and solutions in Guangzhou, Guangdong Province, the PRC.
Additions to land use rights during the years ended 31 December 2021, 2022 and 2023 and the
six months ended 30 June 2024 were nil, nil, nil and approximately RMB25,397,000 respectively.
Additions to the right-of-use assets during the years ended December 31, 2021, 2022 and 2023 and the
six months ended June 30, 2023 and 2024 were approximately RMB15,501,000, RMB10,380,000,
RMB33,643,000, RMB27,523,000, and RMB25,920,000 respectively.
(b) Amounts recognized in the consolidated statements of comprehensive loss
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Depreciation charge
of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,400 9,608 14,588 6,989 7,626
Interest expenses
(included in
finance costs) /H1118/H1118/H1118 444 663 1,234 428 743
Expense relating to
short-term leases
(included in cost
of sales, research
and development
expenses, selling
expenses, and
general and
administrative
expenses) /H1118/H1118/H1118/H1118/H1118/H11181,196 1,529 1,500 107 508
7,040 11,800 17,322 7,524 8,877
The total cash outflows for leases payments for the years ended December 31, 2021, 2022 and 2023 and
the six months ended June 30, 2023 and 2024 were approximately RMB6,628,000, RMB12,283,000,
RMB15,820,000, RMB5,078,000 and RMB8,049,000 respectively.
APPENDIX I ACCOUNTANT’S REPORT
– I-46 –


--- page 540 ---
(c) The Group’s leasing activities and how they are accounted for
The Group leases various buildings, factories and warehouses. Rental contracts are typically made for
fixed periods of one year to four years but may have extension options as described in (d) below.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and
conditions. The lease agreements do not impose any covenants other than the security interests in the leased
assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate
is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security
and conditions.
To determine the incremental borrowing rate, the Group:
 where possible, uses recent third-party financing received by the individual lessee as a starting
point, adjusted to reflect changes in financing conditions since third party financing was received;
 uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases
held by the Group, which does not have recent third-party financing, and
 makes adjustments specific to the lease, e.g. term, country, currency and security.
If a readily observable amortizing loan rate is available to the individual lessee (through recent
financing or market data) which has a similar payment profile to the lease, then the Group entities use that rate
as a starting point to determine the incremental borrowing rate.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term
on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset
is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases of building are recognized on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less without a purchase
option.
See Note 43.19 for the other accounting policies relevant to leases.
(d) Extension and termination options
Extension and termination options are included in a number of leases of buildings across the Group.
These are used to maximize operational flexibility in terms of managing the assets used in the Group’s
operations. The majority of extension and termination options held are exercisable only by the Group and not
by the respective lessor.
The Company
(a) Amounts recognized in the company balance sheets
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Right-of-use assets
Offices and factories /H1118/H1118/H1118/H1118/H1118/H111810,329 8,071 23,812 18,491
Lease liabilities
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,832 4,535 10,847 11,448
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,256 4,201 14,755 9,078
11,088 8,736 25,602 20,526
APPENDIX I ACCOUNTANT’S REPORT
– I-47 –


--- page 541 ---
17. INTANGIBLE ASSETS
The Group
Software
RMB’000
As at January 1, 2021
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,858
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(55)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,803
Y ear ended December 31, 2021
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,803
Transfer (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,350
Amortisation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(375)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,778
As at December 31, 2021
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,208
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(430)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,778
Y ear ended December 31, 2022
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,778
Transfer (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,098
Amortisation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(715)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,161
As at December 31, 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,306
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,145)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,161
Y ear ended December 31, 2023
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,161
Transfer (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,463
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118185
Amortization charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,112)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(357)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,340
As at December 31, 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,597
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,257)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,340
Six months ended June 30, 2024
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,340
Transfer (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,518
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Amortization charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(929)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(46)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,883
As at June 30, 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,069
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,186)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,883
APPENDIX I ACCOUNTANT’S REPORT
– I-48 –


--- page 542 ---
(a) Amortization methods and periods
The Group amortizes intangible assets with a limited useful life using the straight-line method over the
following periods:
Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 years
(b) Amortization expenses
Amounts recognized in the consolidated statements of comprehensive loss:
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 3 65 3 1
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118286 695 981 481 766
General and administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889 20 95 40 132
375 715 1,112 526 929
The Company
Software
RMB’000
As at January 1, 2021
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,858
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(55)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,803
Y ear ended December 31, 2021
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,803
Transfer (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,350
Amortization charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(375)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,778
As at December 31, 2021
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,208
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(430)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,778
Y ear ended December 31, 2022
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,778
Transfer (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,098
Amortization charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(715)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,161
As at December 31, 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,306
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,145)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,161
APPENDIX I ACCOUNTANT’S REPORT
– I-49 –


--- page 543 ---
Software
RMB’000
Y ear ended December 31, 2023
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,161
Transfer (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106
Amortization charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,100)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(357)
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,810
As at December 31, 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,055
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,245)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,810
Six months ended June 30, 2024
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,810
Transfer (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,332
Amortization charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(860)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,282
As at June 30, 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,388
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,106)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,282
18. INVESTMENT PROPERTIES
The Group and the Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118– – 5,013 4,771
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,094 – –
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (81) (242) (121)
Closing net book value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,013 4,771 4,650
At end of the period
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,094 5,094 5,094
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (81) (323) (444)
Net book value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,013 4,771 4,650
The investment properties are stated at cost less depreciation.
The fair values of the Group’s and the Company’s investment properties are close to the book value.
APPENDIX I ACCOUNTANT’S REPORT
– I-50 –


--- page 544 ---
19. OTHER NON-CURRENT ASSETS
The Group
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Long-term receivables (a) /H1118/H1118/H1118/H1118/H1118/H1118/H11185,283 2,703 – 3,102
Non-current rental deposits /H1118/H1118/H1118/H1118/H1118/H11181,952 1,572 7,100 4,244
Prepayment for purchase of
property, plant and equipment /H1118/H1118/H1118 692 753 5,258 5,028
Prepayment for land use right /H1118/H1118/H1118/H1118/H1118 – – – 16,620
7,927 5,028 12,358 28,994
(a) Long-term receivables are sales proceeds collected over a three-year period.
The Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Long-term receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,283 2,703 – –
Non-current rental deposits /H1118/H1118/H1118/H1118/H1118/H11181,515 1,245 5,902 3,959
Prepayment for purchase of
property, plant and equipment /H1118/H1118/H1118 692 690 4,378 4,153
7,490 4,638 10,280 8,112
20. INVENTORIES
The Group
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,202 62,353 64,718 60,832
Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,795 7,887 6,799 8,450
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,984 40,682 64,944 52,540
Contract fulfillment costs /H1118/H1118/H1118/H1118/H1118/H1118/H111823,976 72,002 26,732 26,867
134,957 182,924 163,193 148,689
Less: provision of inventories
– Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,487) (5,079) (3,773) (10,087)
– Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(333) (357) (34) (445)
– Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,367) (8,272) (12,178) (6,232)
– Contract fulfillment costs /H1118/H1118/H1118/H1118/H1118 – (731) (2,247) (2,330)
(12,187) (14,439) (18,232) (19,094)
122,770 168,485 144,961 129,595
Raw materials primarily consist of materials for volume production and research and development, which will
be transferred into production cost and research and development expenses respectively when incurred.
Semi-finished goods and finished goods include products prepared for sale at production plants or in transit
to fulfill customer orders.
APPENDIX I ACCOUNTANT’S REPORT
– I-51 –


--- page 545 ---
Provision of inventories are recognized at the amount by which the carrying amount of inventories exceeds the
net recoverable amount. All these expenses and impairment charge have been included in “cost of sales” in the
consolidated statements of comprehensive loss. The provision for inventories recognized for the years ended
December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024 was approximately
RMB4,494,000, RMB5,347,000, RMB6,235,000, RMB4,747,000 and RMB9,119,000 respectively.
Raw materials and consumables used and recorded as cost of sales during the years ended December 31, 2021,
2022 and 2023 and the six months ended June 30, 2023 and 2024 were RMB102,815,000, RMB212,662,000,
RMB379,514,000, RMB138,794,000 and RMB160,660,000 respectively.
The Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,236 61,452 64,606 60,815
Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,180 6,426 6,732 8,444
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,736 32,187 49,078 35,698
Contract fulfillment costs /H1118/H1118/H1118/H1118/H1118/H1118/H11189,448 15,336 13,410 21,569
109,600 115,401 133,826 126,526
Less: provision of inventories
– Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,440) (5,070) (3,757) (10,373)
– Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(333) (340) (34) (445)
– Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,547) (7,118) (11,445) (4,959)
– Contract fulfillment costs /H1118/H1118/H1118/H1118/H1118 – (731) (2,247) (2,329)
(10,320) (13,259) (17,483) (18,106)
99,280 102,142 116,343 108,420
21. TRADE AND NOTES RECEIV ABLES
The Group
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Notes receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,381 26,414 38,446 33,964
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,867 201,146 309,044 383,861
105,248 227,560 347,490 417,825
Less: provision for impairment /H1118/H1118/H1118/H1118(4,358) (9,890) (13,905) (19,465)
100,890 217,670 333,585 398,360
The Group’s credit period to its customers was typically within one year. As at December 31, 2021, 2022 and
2023 and June 30, 2024, the aging analysis of the trade and notes receivables based on recognized date is as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Up to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,833 214,510 323,236 390,402
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,011 9,333 16,704 18,792
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,404 2,714 4,662 4,827
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,003 2,888 3,804
105,248 227,560 347,490 417,825
APPENDIX I ACCOUNTANT’S REPORT
– I-52 –


--- page 546 ---
Trade and notes receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. They are generally due for settlement within 1 year and therefore all classified as current.
Trade and notes receivables are recognized initially at the amount of consideration that is unconditional unless they
contain significant financing components, when they are recognized at fair value. The Group holds the trade and notes
receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at
amortized cost using the effective interest method. See Note 3.1 for a description of the Group’s impairment policies.
The Group applies the simplified approach under IFRS 9, which requires lifetime expected losses to be
recognized from initial recognition of the assets. Information about the impairment of trade and notes receivables and
the Group’s exposure to credit risk is described in Note 3.1.
The carrying amounts of the Group’s trade and notes receivables approximated their fair values as at the
balance sheet dates.
(a) The secured trade receivable
As at December 31, 2021, the secured short-term bank borrowings of RMB9,550,000 were secured by trade
receivables. The security was released when the short-term bank borrowings were repaid in year 2022.
As at December 31, 2022, the secured short-term bank borrowings of RMB40,000,000 were pledged by trade
receivables. The security was released when the short-term bank borrowings were repaid in year 2023.
The Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Notes receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,871 21,397 27,335 31,516
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113,980 255,037 368,314 463,628
123,851 276,434 395,649 495,144
Less: provision for impairment /H1118/H1118/H1118/H1118(7,343) (16,322) (18,933) (21,931)
116,508 260,112 376,716 473,213
As at December 31, 2021, 2022 and 2023 and June 30, 2024, the aging analysis of the trade and notes
receivables based on recognized date is as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Up to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118117,401 249,566 306,097 412,911
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,584 22,967 66,809 50,845
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118866 3,143 18,870 14,446
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 758 3,873 16,942
123,851 276,434 395,649 495,144
APPENDIX I ACCOUNTANT’S REPORT
– I-53 –


--- page 547 ---
22. OTHER CURRENT ASSETS
The Group
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Other receivables
– Advance to staff /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118791 982 961 1,351
– Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118701 2,246 4,712 6,607
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,196 1,651 2,142 1,960
2,688 4,879 7,815 9,918
Less: provision for impairment /H1118/H1118/H1118/H1118 (126) (307) (720) (813)
2,562 4,572 7,095 9,105
Prepayment
– Products and services
procurement /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,924 13,490 32,918 35,303
Prepaid listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,019
V alue-added tax (“V A T”)
recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,088 20,191 24,163 20,023
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,463 2,580 2,702 2,764
35,037 40,833 66,878 69,214
As at December 31, 2021, 2022 and 2023 and June 30, 2024, the fair values of other current assets of the
Group, except for the prepayments and V A T recoverable to be deducted which are not financial assets, approximated
their carrying amounts.
The carrying amounts of the Group’s other current assets are all denominated in RMB.
The Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Other receivables
– Due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H111850,379 81,819 103,446 160,199
– Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118651 2,061 3,179 4,204
– Advance to staff /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118395 798 432 383
– Interest receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,353 3,973 8,803 10,872
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118570 769 1,239 604
53,348 89,420 117,099 176,262
Less: provision for impairment /H1118/H1118/H1118 (16,049) (24,653) (36,167) (38,776)
37,299 64,767 80,932 137,486
Prepayments
– Products and services
procurement /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,169 12,276 28,805 31,753
Prepaid listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,019
V alue-added tax (“V A T”)
recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,244 14,441 17,608 13,925
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,464 2,581 2,703 2,766
65,176 94,065 130,048 187,949
APPENDIX I ACCOUNTANT’S REPORT
– I-54 –


--- page 548 ---
23. FINANCIAL ASSETS AT FAIR V ALUE THROUGH OTHER COMPREHENSIVE INCOME
The Group
The Group’s financial assets measured at FVOCI include the following:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Notes receivables classified as
financial assets at FVOCI /H1118/H1118/H1118/H1118/H111838,438 23,558 36,462 7,008
Notes receivables held both by collecting contractual cash flows and selling of these assets are classified as
FVOCI. All the aging of notes receivable is within one year.
As at December 31, 2021, bills payables of RMB907,000 were pledged by note receivables of RMB3,000,000.
The security was released when the bills payables were repaid in year 2022.
The Company
The Company’s financial assets measured at FVOCI include the following:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Notes receivables classified as
financial assets at FVOCI /H1118/H1118/H1118/H1118/H1118/H111835,231 17,403 18,165 1,849
24. FINANCIAL ASSETS AT FAIR V ALUE THROUGH PROFIT OR LOSS
The Group
(a) Classification of financial assets at FVPL
The Group classifies the followings as financial assets at FVPL:
 debt investments that do not qualify for measurement at either amortized cost or FVOCI
 equity investments that are held for trading, and
 equity investments for which the Group has not elected to recognize fair value gains and losses
through FVOCI.
The Group’s financial assets measured at FVPL include the following:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Investment in structured
deposits and wealth
management products
issued by banks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,187 44,581 210,597 120,901
APPENDIX I ACCOUNTANT’S REPORT
– I-55 –


--- page 549 ---
The principal and return of the structured deposits and wealth management products is not guaranteed,
hence their contractual cash flows do not qualify for solely payments of principal and interest. Therefore, the
structured deposits and wealth management products issued by banks are measured at FVPL.
Information about the Group’s exposure to financial risk and information about the methods and
assumptions used in determining fair value of these financial assets at FVPL are set out in Note 3.3.
(b) Amounts recognized in profit or loss
During the year, the following net fair value gains were recognized in the consolidated statements of
comprehensive loss:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Net fair value gains on
financial assets at FVPL
recognized in other gains –
net (Note 7)
– realized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,502 7,910 3,189 2,282
– unrealized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118187 144 597 103
2,689 8,054 3,786 2,385
The Company
The Company’s financial assets measured at FVPL include the following:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Investment in structured deposits
and wealth management products
issued by banks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,187 44,581 210,597 80,049
25. CASH AND CASH EQUIV ALENTS
The Group
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272,824 263,795 199,624 221,815
Less: restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (20,010) (1,690) (1,690)
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118272,824 243,785 197,934 220,125
APPENDIX I ACCOUNTANT’S REPORT
– I-56 –


--- page 550 ---
Cash and cash equivalents are denominated in the following currencies:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
– RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118270,969 243,271 197,865 220,125
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,855 507 69 –
– HKD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–7––
272,824 243,785 197,934 220,125
As of December 31, 2022, the restricted cash in the amount of RMB10,000 was used as frozen funds for
electronic toll collection, and the restricted funds in the amount of RMB20,000,000 were used for the purchase of
structured deposits. As of December 31, 2023, restricted cash in the amount of RMB10,000 is the frozen funds used
for electronic toll collection, and RMB1,680,000 is the frozen funds for litigation. As of June 30, 2024, restricted cash
in the amount of RMB10,000 is the frozen funds used for electronic toll collection, and RMB1,680,000 is the frozen
funds for litigation.
The Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118260,995 173,281 78,259 148,123
Less: restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (20,010) (10) (10)
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118260,995 153,271 78,249 148,113
Cash and cash equivalents are denominated in the following currencies:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
– RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118259,140 152,757 78,180 148,113
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,855 507 69 –
– HKD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–7––
260,995 153,271 78,249 148,113
APPENDIX I ACCOUNTANT’S REPORT
– I-57 –


--- page 551 ---
26. PAID-IN CAPITAL
The Group and the Company
Total
RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,871
Capital contributions from series D-1 investors (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,415
Capital contributions from series D-2 investors (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,876
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,162
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,162
Capital contributions from series D-2+ investors (c) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,207
Capital contributions from ESOP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118936
Capital contributions from series D-3 investors (d) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118834
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,139
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,139
Conversion into a joint stock company (Note 27(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(36,139)
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Conversion into a joint stock company (Note 27(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,139
Conversion into a joint stock company (Note 27(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(36,139)
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
(a) In March 2021, the Company entered into an investment agreement with series D-1 investors, pursuant
to which total capital of RMB156,000,000 was contributed into the Company. The proceeds of
RMB106,000,000 were received by the Company in April 2021. The remaining proceeds of
RMB50,000,000 were received by the Company in May 2021, with RMB2,415,488 (approximately
6.68% of total paid-in capital before the Company’s conversion into a joint stock company (Note 27(a)))
and RMB153,584,512 credited to the Company’s paid-in capital and capital reserves, respectively (Note
28).
(b) In December 2021, the Company entered into an investment agreement with series D-2 investor,
pursuant to which total capital of RMB170,000,000 was contributed into the Company. The proceeds of
RMB170,000,000 were received by the Company in December 2021, with RMB1,875,598
(approximately 5.19% of total paid-in capital before the Company’s conversion into a joint stock
company (Note 27(a))) and RMB168,124,402 credited to the Company’s paid-in capital and capital
reserves, respectively (Note 28).
(c) In February 2022, the Company entered into capital contribution agreement with series D-2+ investors,
pursuant to which total capital of RMB200,000,000 was contributed into the Company. The proceeds of
RMB200,000,000 were received by the Company in December 2021, with approximately
RMB2,206,586 (approximately 6.11% of total paid-in capital before the Company’s conversion into a
joint stock company (Note 27(a))) and RMB197,793,414 credited to the Company’s paid-in capital and
capital reserves, respectively (Note 28).
(d) In May 2022, the Company entered into capital contribution agreement with series D-3 investors,
pursuant to which total capital of RMB104,947,045 was contributed into the Company. The proceeds of
RMB104,947,045 were received by the Company in May 2022, with approximately RMB833,930
(approximately 2.3% of total paid-in capital before the Company’s conversion into a joint stock
company (Note 27(a))) and RMB104,113,115 credited to the Company’s paid-in capital and capital
reserves, respectively (Note 28).
APPENDIX I ACCOUNTANT’S REPORT
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27. SHARE CAPITAL
The Group and the Company
A summary of movements in the Company’s authorized, issued and fully paid share capital is as follows:
Number of shares Share capital
RMB’000
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––
Conversion into a joint stock limited company (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,139 36,139
Capital contributions from series Pre-IPO investors (b) /H1118/H1118/H1118/H1118/H1118 2,519 2,519
Conversion of capital reserves into share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,342 321,342
As at 31 December 2023 and 30 June 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,000 360,000
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––
Conversion into a joint stock limited company (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,139 36,139
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,139 36,139
(a) In April 2023, the Company was converted into a joint stock company with limited liability under the
Company Law of the PRC. The net assets of the Company as at the conversion date were converted into
approximately 36,139,300 ordinary shares at RMB1 each. The excess of net assets converted over
nominal value of the ordinary shares was credited to the Company’s share capital reserves (Note 28).
(b) In October 2023, the Company entered into capital contribution agreement with series Pre-IPO
investors, pursuant to which total capital of RMB348,480,000 was contributed into the Company. The
proceeds of RMB258,480,000 were received by the Company in September 2023. The remaining
proceeds of RMB90,000,000 were received by the Company in October 2023, with RMB2,518,764
(approximately 6.68% of total share capital and RMB345,961,236 credited to the Company’s share
capital and share capital reserves, respectively (Note 28)).
28. RESERVES
The following table shows a breakdown of the statements of balance sheets line items “reserves” and their
movements during the respective years. A description of the nature and purpose of each reserve is provided below
the table.
The Group
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118442,237 19,171 461,408
Capital contributions from series D-1 investors /H1118/H1118 153,585 – 153,585
Capital contributions from series D-2 investors /H1118/H1118 168,124 – 168,124
Share-based payment (Note 29) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 8,802 8,802
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118763,946 27,973 791,919
APPENDIX I ACCOUNTANT’S REPORT
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--- page 553 ---
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118763,946 27,973 791,919
Capital contributions from series D-2+ investors /H1118 197,793 – 197,793
Capital contributions from series D-3 investors /H1118/H1118 104,113 – 104,113
Share-based payment (Note 29) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,960 14,960
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,000) – (3,000)
Conversion of capital reserves into share capital /H1118 –––
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,062,852 42,933 1,105,785
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,062,852 42,933 1,105,785
Capital contributions from series Pre-IPO
investors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118345,961 – 345,961
Capital injection by a
non-controlling shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,000 – 35,000
Share-based payment (Note 29) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 22,401 22,401
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,725) – (4,725)
Conversion into a joint stock company /H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,405) – (402,405)
Conversion of capital reserves into share capital /H1118 (321,342) – (321,342)
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118715,341 65,334 780,675
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118715,341 65,334 780,675
Share-based payment (Note 29) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 15,311 15,311
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118715,341 80,645 795,986
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,062,852 42,933 1,105,785
Capital injection by a non-controlling
shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,000 – 35,000
Share-based payment (Note 29) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,200 11,200
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,097,852 54,133 1,151,985
APPENDIX I ACCOUNTANT’S REPORT
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--- page 554 ---
The Company
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118442,237 18,262 460,499
Capital contributions from series D-1 investors /H1118/H1118 153,585 – 153,585
Capital contributions from series D-2 investors /H1118/H1118 168,124 – 168,124
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 8,444 8,444
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118763,946 26,706 790,652
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118763,946 26,706 790,652
Capital contributions from series D-2+ investors /H1118 197,793 – 197,793
Capital contributions from series D-3 investors /H1118/H1118 104,113 – 104,113
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,400 14,400
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,000) – (3,000)
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,062,852 41,106 1,103,958
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,062,852 41,106 1,103,958
Capital contributions from series Pre-IPO
investors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118345,961 – 345,961
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 21,849 21,849
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,725) – (4,725)
Conversion into a joint stock company /H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,405) – (402,405)
Conversion of capital reserves into share capital /H1118 (321,342) – (321,342)
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118680,341 62,955 743,296
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118680,341 62,955 743,296
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,995 13,995
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118680,341 76,950 757,291
APPENDIX I ACCOUNTANT’S REPORT
– I-61 –


--- page 555 ---
Reserves
Capital reserves
Share-based
payment reserves Total
RMB’000 RMB’000 RMB’000
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,062,852 41,106 1,103,958
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,923 10,923
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,062,852 52,029 1,114,881
29. SHARE-BASED PAYMENT
(a) Share award schemes
(i) In March 2016, the shareholders approved an Employee Share Ownership Plan (ESOP A Plan) which proposes
to grant certain incentive shares of the Company to certain executives and employees at a later date by way
of transfer of shares held by Dr. Liu Guoqing, in order to attract and retain the talents and to provide incentives
that align the interests of Shareholders, the Company and employees, for long-term development of the
Company.
In August 2016, 77,855 equity shares were granted to an employee under the ESOP A Plan through an equity
transfer with a vesting commencement date of August 2016. These awards did not include a service period
condition and were made at a consideration of RMB1 per share as rewards for his services, full time devotion
and professional expertise to the Group.
In December 2020, Shenzhen Y oujia Qingcheng Investment L.P . ( ଉέСቷ૶ϓҳ༟Άุ(Υྫ)) was
incorporated in the PRC under the Company Law of the PRC as a vehicle for holding ordinary shares
(“Restricted Shares”) for the remaining employees of the Company, other than those mentioned above,
pursuant to ESOP A Plan.
From 2016 to 2023, pursuant to the ESOP A Plan, certain directors, management and employees (the
“Grantees”) were granted 11,954,979 Restricted Shares through Shenzhen Y oujia Qingcheng Investment L.P .
(ଉέСቷ૶ϓҳ༟Άุ(Υྫ)) at a consideration of RMB0.01 per share as an incentive for their services,
full-time commitment and expertise to the Group.
All Restricted Shares granted vest as follows: 4 years of service from the date of commencement for employees
granted shares from 2016 to 2020; 4 years of service from the date of grant for employees granted shares from
2021 to October 2023; 3 years of service from the date of successful listing for employees granted shares after
October 2023.
In May 2024, for employees granted shares after 2020, the vesting periods have been modified as follows: 1
year of service from the date of successful listing for half of the restricted shares; 3 years of service from the
date of successful listing for the other half of the restricted shares.
If the employee ceases to be employed by the Group during that period, the awarded shares will be forfeited
and the forfeited shares will be repurchased by Dr. Liu Guoqing at the subscribed share of the contributed
capital at grant date together with the contractually agreed interest price and reallocated in subsequent grants
(if any) at the discretion of Dr. Liu Guoqing.
Set out below are the movement in the number of awarded restricted shares under the ESOP A Plan:
Number of total
equity awards
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,327,966
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118223,760
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118227,400
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,324,326
APPENDIX I ACCOUNTANT’S REPORT
– I-62 –


--- page 556 ---
Number of total
equity awards
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,324,326
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118105,321
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,219,005
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,219,005
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118610,985
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118546,222
Capitalization Issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,671,211
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,954,979
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,954,979
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118520,169
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888,967
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,386,181
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,219,005
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118460,337
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118467,050
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,212,292
The fair value of each awarded restricted shares was calculated based on the most recent transaction price of
the Company’s shares at the grant date.
(ii) In March 2022, the shareholders approved an employee stock ownership plan (ESOP B Plan), which proposes
to grant certain incentive shares of the Company to certain executives and employees in the form of a capital
increase, in order to attract and retain the talents and to provide incentives that align the interests of
Shareholders, the Company and employees, for long-term development of the Company.
In April and May 2021, Shenzhen Y oujia Licheng L.P . ( ଉέСቷᘥϓΆุ(Υྫ)) and Shenzhen Y oujia
Zhongcheng Investment L.P . ( ଉέСቷ଺ϓҳ༟Άุ(Υྫ)) were incorporated in the PRC under the PRC
Company Law as a vehicle to hold ordinary shares (“Restricted Shares”) for the benefit of the employees of
the Company under the ESOP B Plan.
Pursuant to ESOP B Plan, certain directors, management and employees (the “Grantees”) were granted
8,722,901 Restricted Shares through Shenzhen Y oujia Zhongcheng Investment L.P . ( ଉέСቷ଺ϓҳ༟Άุ(Ϟ
Υྫ)) and Shenzhen Y oujia Licheng L.P . ( ଉέСቷᘥϓΆุ(Υྫ)) at a consideration of RMB0.01 per
share as an incentive for their services, full-time commitment and expertise to the Group.
All Restricted Shares granted vest as follows: for employees who are granted shares from 2018 to September
2023, four years from the date of grant of the shares; and for employees who are granted shares after October
2023, three years from the date of the successful IPO.
In May 2024, for employees granted shares after 2020, the vesting periods have been modified as follows: 1
year of service from the date of successful listing for half of the restricted shares; 3 years of service from the
date of successful listing for the other half of the restricted shares.
If the employee ceases to be employed by the Group during that period, the awarded shares will be forfeited
and the forfeited shares will be repurchased by Dr. Liu Guoqing at the subscribed share of the contributed
capital at grant date together with a contractually agreed interest price and reallocated in subsequent grants,
if any, at the discretion of Dr. Liu Guoqing.
APPENDIX I ACCOUNTANT’S REPORT
– I-63 –


--- page 557 ---
Set out below are the movement in the number of awarded restricted shares under the ESOP B Plan:
Number of total
equity awards
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118329,732
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,982
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332,714
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332,714
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118585,027
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118917,741
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118917,741
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,068,851
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,049,896
Capitalization issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,786,205
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,722,901
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,722,901
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118597,512
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118597,512
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,722,901
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118917,741
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118918,399
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118920,361
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118915,779
The fair value of each awarded restricted shares was calculated based on the most recent transaction price of
the Company’s shares at the grant date.
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognized during the year as part of employee
benefit expense were as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Share-based payment expenses /H1118/H1118/H1118/H11188,802 14,960 22,401 15,311
APPENDIX I ACCOUNTANT’S REPORT
– I-64 –


--- page 558 ---
30. FINANCIAL INSTRUMENTS BY CATEGORY
The Group
As at December 31, As at June 30,
Note 2021 2022 2023 2024
Financial Assets RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at FVPL /H1118/H1118/H1118/H111824 135,187 44,581 210,597 120,901
Financial assets at FVOCI /H1118/H1118/H111823 38,438 23,558 36,462 7,008
Financial assets at amortized
cost:
– Trade and notes
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 100,890 217,670 333,585 398,360
– Other receivables /H1118/H1118/H1118/H1118/H1118/H111822 2,562 4,572 7,095 9,105
– Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H111825 – 20,010 1,690 1,690
– Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 272,824 243,785 197,934 220,125
549,901 554,176 787,363 757,189
As at December 31, As at June 30,
Note 2021 2022 2023 2024
Financial Liabilities RMB’000 RMB’000 RMB’000 RMB’000
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 26,600 55,560 96,660 182,252
Financial liabilities at
amortized cost:
– Trade and notes payables /H1118 34 32,186 111,196 130,098 149,505
– Other payables and
accruals (excluding
salaries and welfare
payables, V A T and other
taxes payables and
warranty provision) /H1118/H1118/H1118/H111835 214,123 13,819 16,565 26,430
– Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111816 15,467 14,140 34,291 28,016
288,376 194,715 277,614 386,203
The Group’s exposure to various risks associated with the financial instruments is discussed in Note 3. The
maximum exposure to credit risk at end of the Track Record Period is the carrying amount of each class of financial
assets mentioned above.
31. BORROWINGS
The Group
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Bank borrowings included in non-
current liabilities
Bank Borrowings – unsecured and
guaranteed (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 20,000 65,631
Less: long-term borrowings due
within one year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,200) (20,600)
– – 18,800 45,031
APPENDIX I ACCOUNTANT’S REPORT
– I-65 –


--- page 559 ---
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Bank borrowings included in
current liabilities
Long-term borrowings due within
one year – unsecured and
guaranteed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,200 20,600
Bank Borrowings – unsecured and
guaranteed (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,050 9,560 76,660 66,237
Bank Borrowings – secured and
guaranteed (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,550 40,000 – –
Bank Borrowings – unsecured and
unguaranteed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 30,384
Borrowings – secured and
guaranteed (c) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6,000 – 20,000
26,600 55,560 77,860 137,221
(a) As at December 31, 2021, the guaranteed short-term bank borrowings were guaranteed by Dr. Liu
Guoqing to the extent of RMB2,400,000. The guaranteed short-term bank borrowings were guaranteed
by Dr. Liu Guoqing, Zhou Xiang and Nanjing Y oujia Technology Co., Ltd. (ʮ̡)t o
the extent of RMB9,900,000. The guaranteed short-term bank borrowings were guaranteed by the third
party to the extent of RMB2,850,000. The guaranteed short-term bank borrowings were guaranteed by
Dr. Liu Guoqing and the third party to the extent of RMB1,900,000. As at December 31, 2022, the
guaranteed short-term bank borrowings were guaranteed by Dr. Liu Guoqing to the extent of
RMB6,560,000. The guaranteed short-term bank borrowings were guaranteed by Dr. Liu Guoqing and
Zhou Xiang to the extent of RMB3,000,000. As at December 31, 2023, the guaranteed long-term bank
borrowings were guaranteed by Dr. Liu Guoqing to the extent of RMB20,000,000. The guaranteed
short-term bank borrowings were guaranteed by Dr. Liu Guoqing to the extent of RMB46,660,000. The
guaranteed short-term bank borrowings were guaranteed by Dr. Liu Guoqing and Mr. Y ang Guang to the
extent of RMB30,000,000.
As at June 30, 2024, the guaranteed long-term bank borrowings were guaranteed by Dr. Liu Guoqing
to the extent of RMB49,100,000. The guaranteed long-term bank borrowings were guaranteed by Dr. Liu
Guoqing and Mr. Y ang Guang to the extent of RMB16,531,000. The guaranteed short-term bank
borrowings were guaranteed by Dr. Liu Guoqing to the extent of RMB66,237,000. All the borrowings
above were denominated in RMB with an effective interest rate from 3.0% to 4.9% per annum.
(b) As at 31 December 2021, the Group borrowed one short-term loan of RMB5,000,000 at an effective
interest rate of 4.5% from Pudong Development Silicon V alley Bank, which was secured by Dr. Liu
Guoqing and Mr. Y ang Guang. As at 31 December 2021, the Group borrowed another short-term loan
of RMB4,550,000 at an effective interest rate of 4.35% from Bank of China, which was secured by Dr.
Liu Guoqing. As at 31 December 2022, the Group borrowed a short-term loan of RMB40,000,000 at an
effective interest rate of 4.2% from Pudong Development Silicon V alley Bank, which was secured by
Dr. Liu Guoqing and Mr. Y ang Guang. All the borrowings above were secured by the Group’s trade
receivables.
(c) As at December 31, 2022, the Group borrowed one short-term secured and guaranteed loan of
RMB6,000,000 at an annualized interest rate of 4.9% from the third party, secured by intellectual
property rights and guaranteed by Dr. Liu Guoqing, Mr. Wang Qicheng and Mr. Y ang Guang.
As at June 30, 2024, the Group borrowed one short-term secured and guaranteed loan of
RMB20,000,000 at an annualized interest rate of 4.9% from the third party, secured by intellectual
property rights and guaranteed by Dr. Liu Guoqing, Mr. Wang Qicheng and Mr. Y ang Guang.
(d) The personal guarantees provided by related parties will be released upon listing.
APPENDIX I ACCOUNTANT’S REPORT
– I-66 –


--- page 560 ---
The Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Bank borrowings included in
non-current liabilities
Bank Borrowings – unsecured and
guaranteed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 20,000 65,631
Less: long-term borrowings due
within one year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,200) (20,600)
– – 18,800 45,031
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Bank borrowings included in
current liabilities
Long-term borrowings due within
one year – unsecured and
guaranteed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,200 20,600
Bank Borrowings – unsecured and
guaranteed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,050 6,560 76,660 66,237
Bank Borrowings – secured and
guaranteed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,550 40,000 – –
Bank Borrowings – unsecured and
unguaranteed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 30,384
Borrowings – secured and
guaranteed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6,000 – 20,000
26,600 52,560 77,860 137,221
32. DEFERRED INCOME
The Group
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,888 14,870 12,885 11,876
The Group received government grants for R&D projects and talent subsidies. The government grants were
recorded as deferred income and credited to profit or loss according to the use progress of subsidies.
The Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,087 13,721 12,387 11,378
APPENDIX I ACCOUNTANT’S REPORT
– I-67 –


--- page 561 ---
33. DEFERRED INCOME TAXES
The Group
The analysis of deferred income tax assets and deferred income tax liabilities are as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Total deferred income tax assets: /H1118/H1118/H1118 2,625 2,613 5,753 3,655
Set-off of deferred tax liabilities
pursuant to set-off provisions (a) /H1118 (2,625) (2,613) (5,753) (3,655)
Net deferred income tax assets /H1118/H1118/H1118/H1118 ––––
Deferred income tax assets:
– to be recovered within 1 year /H1118/H1118 1,531 1,488 2,731 2,373
– to be recovered more than 1
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,094 1,125 3,022 1,282
2,625 2,613 5,753 3,655
Total deferred income tax liabilities /H1118 2,625 2,613 5,753 3,655
Set-off of deferred tax assets
pursuant to set-off provisions (a) /H1118 (2,625) (2,613) (5,753) (3,655)
Net deferred income tax liabilities /H1118/H1118 ––––
Deferred income tax liabilities:
– to be recovered within 1 year /H1118/H1118 1,531 1,488 2,731 2,373
– to be recovered more than 1
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,094 1,125 3,022 1,282
2,625 2,613 5,753 3,655
(a) The Group offset deferred tax assets and deferred tax liabilities for presentation purposes only if the
deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same tax authority
on same tax payee.
The movement in deferred income tax assets are as follows:
Deferred income tax assets Lease liabilities Total
RMB’000 RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,023 1,023
Credit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,602 1,602
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,625 2,625
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,625 2,625
Credit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12) (12)
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,613 2,613
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,613 2,613
Credit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,140 3,140
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,753 5,753
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,753 5,753
Credit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,098) (2,098)
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,655 3,655
APPENDIX I ACCOUNTANT’S REPORT
– I-68 –


--- page 562 ---
Deferred income tax liabilities Right-of-use assets Total
RMB’000 RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,023 1,023
Debit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,602 1,602
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,625 2,625
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,625 2,625
Debit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12) (12)
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,613 2,613
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,613 2,613
Debit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,140 3,140
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,753 5,753
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,753 5,753
Debit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,098) (2,098)
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,655 3,655
The Company
The analysis of deferred income tax assets and deferred income tax liabilities are as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Total deferred income tax assets: /H1118/H1118/H1118 1,549 1,211 3,572 2,774
Set-off of deferred tax liabilities
pursuant to set-off provisions (a) /H1118 (1,549) (1,211) (3,572) (2,774)
Net deferred income tax assets /H1118/H1118/H1118/H1118 ––––
Deferred income tax assets:
– to be recovered within 1 year /H1118/H1118/H1118 1,025 680 1,627 1,717
– to be recovered more than 1 year /H1118 524 531 1,945 1,057
1,549 1,211 3,572 2,774
Total deferred income tax liabilities /H1118 1,549 1,211 3,572 2,774
Set-off of deferred tax assets
pursuant to set-off provisions (a) /H1118 (1,549) (1,211) (3,572) (2,774)
Net deferred income tax liabilities /H1118/H1118 ––––
Deferred income tax liabilities:
– to be recovered within 1 year /H1118/H1118/H1118 1,025 680 1,627 1,717
– to be recovered more than 1 year /H1118 524 531 1,945 1,057
1,549 1,211 3,572 2,774
(a) The Company offset deferred tax assets and deferred tax liabilities for presentation purposes only if the
deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same tax authority
on same tax payee.
APPENDIX I ACCOUNTANT’S REPORT
– I-69 –


--- page 563 ---
The movement in deferred income tax assets are as follows:
Deferred income tax assets Lease liabilities Total
RMB’000 RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,023 1,023
Credit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118526 526
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,549 1,549
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,550 1,550
Credit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(339) (339)
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,211 1,211
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,211 1,211
Credit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,361 2,361
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,572 3,572
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,572 3,572
Credit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(798) (798)
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,774 2,774
Deferred income tax liabilities Right-of-use assets Total
RMB’000 RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,023 1,023
Debit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118526 526
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,549 1,549
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,550 1,550
Debit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(339) (339)
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,211 1,211
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,211 1,211
Debit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,361 2,361
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,572 3,572
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,572 3,572
Debit to profit or loss (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(798) (798)
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,774 2,774
34. TRADE AND NOTES PAYABLES
The Group
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables
– payables for raw materials /H1118/H1118/H1118/H111831,279 111,196 130,098 149,505
Notes payables
– payables for raw materials /H1118/H1118/H1118/H1118 9 0 7–––
32,186 111,196 130,098 149,505
(a) The carrying amounts of trade payables approximated their fair values due to their short-term maturity in
nature.
APPENDIX I ACCOUNTANT’S REPORT
– I-70 –


--- page 564 ---
(b) As at December 31, 2021, 2022 and 2023 and June 30, 2024, the aging analysis of the trade and notes payables
based on recognized date is as follows:
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,695 105,913 100,802 121,188
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118482 5,281 26,539 24,966
Over 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 2 2,757 3,351
32,186 111,196 130,098 149,505
(c) The maturity term of the notes payables is within 3 months.
As at December 31, 2021, 2022 and 2023 and June 30, 2024, the Company had guaranteed notes payables from
a PRC bank with amounts totaling RMB907,000, nil, nil, and nil respectively.
The Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables
– payables for materials /H1118/H1118/H1118/H1118/H1118/H1118/H111822,259 81,665 97,617 136,019
Notes payables
– payables for materials /H1118/H1118/H1118/H1118/H1118/H1118/H11189 0 7–––
23,166 81,665 97,617 136,019
35. OTHER PAYABLES AND ACCRUALS
The Group
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Payroll and welfare payables /H1118/H1118/H1118/H1118/H111824,740 29,131 24,507 15,383
V A T and other taxes payables /H1118/H1118/H1118/H1118/H11184,175 4,584 5,026 3,985
Accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,129 10,950 7,900 7,485
Payable for long-term assets /H1118/H1118/H1118/H1118/H1118359 1,412 3,520 6,186
Advance receipts of financing (a) /H1118/H1118 200,000 – – –
Warranty provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,518 5,605 9,297 10,765
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 7,799
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,635 1,457 5,145 4,960
246,556 53,139 55,395 56,563
APPENDIX I ACCOUNTANT’S REPORT
– I-71 –


--- page 565 ---
The Company
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Payroll and welfare payables /H1118/H1118/H1118/H1118/H111819,003 23,745 17,014 10,370
Amount due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H111827,047 206,633 196,646 180,978
V A T and other taxes payables /H1118/H1118/H1118/H1118/H1118881 1,295 1,101 1,256
Interest payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,722 5,278 12,452 11,024
Accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,444 6,775 6,011 5,687
Payable for long-term assets /H1118/H1118/H1118/H1118/H1118 9 635 445 4,144
Advance receipts of financing (a) /H1118/H1118 200,000 – – –
Warranty provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,518 5,605 9,297 10,765
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 7,799
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,570 1,172 3,758 4,660
262,194 251,138 246,724 236,683
(a) Minieye Technology Co., Ltd (ʮ̡) received the prepayment of equity
investment from Guokai Zhizao Transformation and Upgrading Fund (Limited Partnership) ( ਷කႡி
ږ(Υྫ)) and recorded it as other payables due to the transaction that had not been
completed as at December 31, 2021.
As at December 31, 2021, 2022 and 2023 and June 30, 2024, the carrying amount of the Group’s and the
Company’s other payables and accruals were primarily denominated in RMB.
36. CASH FLOW INFORMATION
(a) Cash used in operations
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited))
Cash flows from operating
activities
Loss before income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(139,347) (220,658) (207,095) (132,799) (112,048)
Adjustments for:
Depreciation of property, plant and
equipment (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,418 7,311 10,679 5,239 6,071
Amortization of intangible assets
(Note 17) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118375 715 1,112 526 929
Depreciation of right-of-use assets
(Note 16) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,400 9,608 14,588 6,989 7,626
Depreciation of investment
properties (Note 18) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 81 242 121 121
Inventory provision (Note 20) /H1118/H1118/H1118/H11184,494 5,347 6,235 4,747 9,119
Net (Gains)/losses of disposal of
long-term assets (Note 7) /H1118/H1118/H1118/H1118/H1118(8) (59) 60 (20) 54
Amortization of deferred income /H1118/H1118 (4,846) (3,634) (1,985) (960) (1,009)
Net impairment losses on
financial assets (Note 11) /H1118/H1118/H1118/H1118/H11182,196 7,517 6,116 4,603 6,595
Net foreign exchange losses
(Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118174 96 198 148 204
APPENDIX I ACCOUNTANT’S REPORT
– I-72 –


--- page 566 ---
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited))
Share-based payment expenses
(Note 29) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,802 14,960 22,401 11,200 15,311
Rent concessions from lessors /H1118/H1118/H1118 – (359) (473) (441) –
Finance costs – net (Note 10) /H1118/H1118/H1118/H1118704 287 1,406 496 2,113
Fair value gains on financial assets
at FVPL (Note 24) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,689) (8,054) (3,786) (1,414) (2,385)
Operating loss before changes in
working capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(121,327) (186,842) (150,302) (101,565) (67,299)
(Increase)/decrease in inventories /H1118 (82,242) (51,062) 17,289 (26,758) 6,247
(Increase)/decrease in trade and
notes receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(27,626) (127,692) (120,102) 33,863 (68,209)
Increase in other current assets /H1118/H1118/H1118(14,708) (5,980) (26,458) (49,475) (1,522)
(Increase)/decrease
in restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (20,010) 18,320 18,320 –
(Increase)/decrease in other non-
current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,927) 1,228 (4,513) (1,321) 201
(Increase)/decrease in financial
assets at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(35,213) 14,880 (12,904) 1,830 29,454
Increase in trade payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,446 79,010 18,902 6,613 19,407
Increase in deferred income /H1118/H1118/H1118/H1118/H11182,157 14,61 6–––
Increase/(decrease) in contract
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,198 20,101 (18,624) 1,294 (2,195)
Increase in other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,399 5,529 147 1,812 (2,317)
Net cash used in operations /H1118/H1118/H1118/H1118/H1118(251,843) (256,222) (278,245) (115,387) (86,233)
(b) Net cash reconciliation
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118272,824 243,785 197,934 220,125
Financial assets at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,187 44,581 210,597 120,901
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26,600) (55,560) (96,660) (182,252)
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,467) (14,140) (34,291) (28,016)
Net cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118365,944 218,666 277,580 130,758
APPENDIX I ACCOUNTANT’S REPORT
– I-73 –


--- page 567 ---
(c) Reconciliation of liabilities from financing activities
Borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
As at January 1, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,360) (7,203) (18,563)
Cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,768) 5,432 (9,336)
Lease addition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (15,501) (15,501)
Interest expenses (Note 10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(472) (444) (916)
Lease termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,249 2,249
As at December 31, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26,600) (15,467) (42,067)
As at January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26,600) (15,467) (42,067)
Cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,102) 10,396 (17,706)
Lease addition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (10,380) (10,380)
Interest expenses (Note 10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(858) (663) (1,521)
Lease termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,974 1,974
As at December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(55,560) (14,140) (69,700)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(55,560) (14,140) (69,700)
Cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(38,961) 13,846 (25,115)
Lease addition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (33,643) (33,643)
Interest expenses (Note 10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,139) (1,234) (3,373)
Lease termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 880 880
As at December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(96,660) (34,291) (130,951)
As at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(96,660) (34,291) (130,951)
Cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(82,553) 7,541 (75,012)
Lease addition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (523) (523)
Interest expenses (Note 10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,039) (743) (3,782)
Lease termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
As at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(182,252) (28,016) (210,268)
(Unaudited)
As at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(55,560) (14,140) (69,700)
Cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,012 4,530 5,542
Lease addition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (27,523) (27,523)
Interest expenses (Note 10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,082) (428) (1,510)
Lease termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 104 104
As at June 30, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(55,630) (37,457) (93,087)
(d) Major non-cash investing and financing activities
Major non-cash investing and financing activities disclosed in other notes are as follows:
 additions to right-of-use assets in respect of leased buildings – Note 16
37. RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party
or exercise significant influence over the other party in making financial and operational decisions. Parties are also
considered to be related if they are subject to common control or common significant influence.
Members of key management and their close family members of the Group are also considered as related
parties.
The following significant transactions were carried out between the Group and its related parties during the
periods presented. In the opinion of the directors of the Company, the related party transactions were carried out in
the normal course of business and at terms negotiated between the Group and the respective related parties.
APPENDIX I ACCOUNTANT’S REPORT
– I-74 –


--- page 568 ---
(a) Names and relationships with related parties
The table set forth below summaries the names of the related parties and nature of their relationship with the
Group.
Name of related party Relationship with the Group
NavInfo Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Indirect non-controlling shareholder
of the Company
China Design Group Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Non-controlling shareholder of the
subsidiary
Zhongyan Zhike Data Technology (Shanghai) Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118Non-controlling shareholder of the
subsidiary
Shanghai Tian Qu Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Non-controlling shareholder of the
subsidiary
China Satellite Navigation and Communication Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Fellow subsidiary of NavInfo Co.,
Ltd.
Jiangsu Zhonghuan satellite navigation communication
Co., Ltd. (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fellow subsidiary of NavInfo Co.,
Ltd.
Jiangsu Xintong Intelligent transportation Technology
Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fellow subsidiary of China Design
Group Co., Ltd.
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Founding shareholder
Mr. Y ang Guang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Founding shareholder
Mr. Zhou Xiang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Founding shareholder
Mr. Wang Qicheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Founding shareholder
(i) Jiangsu Zhonghuan satellite navigation communication Co., Ltd. was the fellow subsidiary of NavInfo
Co., Ltd. in 2021 and 2022.
In the opinion of the management of the Company, the related party transactions were carried out in the normal
course of business and at terms negotiated between the Group and the respective parties.
(b) Transactions with related parties
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Sales of goods or service
NavInfo Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,773 30,260 5,340 –
China Design Group Co., Ltd. /H1118/H1118/H1118 – – 19,133 1,707 1,370
China Satellite Navigation and
Communication Co., Ltd. /H1118/H1118/H1118/H1118/H111816 376 7,455 4,668 2,588
Zhongyan Zhike Data Technology
(Shanghai)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 7,075 – –
Shanghai Tian Qu Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118221 1,21 4–––
Jiangsu Xintong Intelligent
transportation Technology
Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118–– 1 6 6––
Jiangsu Zhonghuan satellite
navigation communication Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821–––
239 22,364 64,089 11,715 3,958
APPENDIX I ACCOUNTANT’S REPORT
– I-75 –


--- page 569 ---
(c) Balance with related parties
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade and notes receivables (trade
in nature)
NavInfo Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,418 32,918 459
China Design Group Co., Ltd. /H1118/H1118/H1118/H1118 – – 9,389 8,564
China Satellite Navigation and
Communication Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118– 425 7,998 9,662
Zhongyan Zhike Data Technology
(Shanghai) Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,000 4,000
Shanghai Tian Qu Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,051 2,422 622 622
Jiangsu Xintong Intelligent
transportation Technology
Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 188 –
1,051 20,265 55,115 23,307
Other receivables (non-trade in
nature)
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118203 262 479 512
The non-trade balance was settled before the prospectus date.
Contract liabilities (trade
in nature)
NavInfo Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 8–––
China Satellite Navigation and
Communication Co., Ltd. /H1118/H1118/H1118/H1118/H1118 1–––
1 0 9–––
(d) Guarantees
As at December 31, As at June 30,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Guarantees provided by Dr. Liu
Guoqing for the Group’s bank
borrowings (Notes 31(a), (b)) /H1118/H1118/H1118 8,850 6,560 66,660 115,337
Guarantees provided by Dr. Liu
Guoqing and Mr. Y ang Guang for
the Group’s bank borrowings
(Notes 31(a), (b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,000 40,000 30,000 16,531
Guarantees provided by Dr. Liu
Guoqing and Mr. Zhou Xiang for
the Group’s bank borrowings
(Notes 31(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,900 3,000 – –
Guarantees provided by Dr. Liu
Guoqing, Mr. Y ang Guang and
Mr. Wang Qi Cheng for the
Group’s borrowings (Notes 31(c)) /H1118 – 6,000 – 20,000
23,750 55,560 96,660 151,868
APPENDIX I ACCOUNTANT’S REPORT
– I-76 –


--- page 570 ---
(e) Key management compensation
Key management includes directors (executive and non-executive) and the senior management of the Group.
The compensation paid or payable to key management for employee services is shown below:
Y ear ended December 31,
Six months
ended June 30,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Wages, salaries and
bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,364 1,406 3,480 2,706 2,625
Pension obligations,
housing funds, medical
insurances and other
social insurances /H1118/H1118/H1118/H1118/H111872 84 193 135 161
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,491 2,321 3,324
2,436 1,490 8,164 5,162 6,110
38. BENEFITS AND INTERESTS OF DIRECTORS AND SUPERVISORS
(a) Directors and supervisors’ emoluments
The remuneration paid or payable to the directors and supervisors of the Company (including emoluments for
services as employee/directors/supervisors of the group entities prior to becoming the directors of the Company)
during the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024 was
as follows.
Y ear ended December 31, 2021
Name Fees
Wages and
salaries
Discretionary
bonuses
Social security
costs, housing
benefits and
employee welfare
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors:
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 400 19 – 659
Mr. Wang Qicheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 102 400 18 – 520
Mr. Y ang Guang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 242 400 19 – 661
Mr. Zhou Xiang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 100 16 – 356
Mr. Wu Jianxin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 – – – 240
Mr. Y an Shengye /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Non-executive directors:
Mr. Bi Lei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Liu Xin (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Zhou Wei (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Chi Ke (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Huang Hui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Liu Yiran (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. WU YONGMING (i) /H1118/H1118/H1118––– –– –
Mr. Jiang Chun (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Wang Jia (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Supervisors:
Mr. Y uan Y akang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Zhong Liruo (i) /H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Zhou Lu (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Feng Xiaoyong (i) /H1118/H1118/H1118/H1118––– –– –
Mr. Y u Lijie (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. He Shiying (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Liao Diguang (i) /H1118/H1118/H1118/H1118/H1118– 118 31 6 22 177
Mr. Wan Hao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 256 66 52 113 487
– 1,438 1,397 130 135 3,100
APPENDIX I ACCOUNTANT’S REPORT
– I-77 –


--- page 571 ---
Y ear ended December 31, 2022
Name Fees
Wages and
salaries
Discretionary
bonuses
Social security
costs, housing
benefits and
employee welfare
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors:
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 80 20 – 340
Mr. Wang Qicheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 102 80 20 – 202
Mr. Y ang Guang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 264 80 20 – 364
Mr. Zhou Xiang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 80 23 – 343
Mr. Wu Jianxin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 – – – 240
Mr. Y an Shengye /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Non-executive directors:
Mr. Bi Lei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Liu Xin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Zhou Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Liu Yiran /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Huang Hui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Chi Ke (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Supervisors:
Mr. Y uan Y akang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Zhong Liruo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. He Shiying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Liao Diguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 406 120 21 – 547
Mr. Wan Hao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 299 60 53 177 589
– 1,791 500 157 177 2,625
Y ear ended December 31, 2023
Name Fees
Wages and
salaries
Discretionary
bonuses
Social security
costs, housing
benefits and
employee welfare
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors:
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 400 20 – 660
Mr. Wang Qicheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 102 80 19 – 201
Mr. Y ang Guang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 248 100 20 – 368
Mr. Zhou Xiang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 240 200 23 – 463
Mr. Wu Jianxin (iii) /H1118/H1118/H1118/H1118/H1118/H1118– 120 – – – 120
Mr. Y an Shengye (iii) /H1118/H1118/H1118/H1118/H1118––– –– –
Non-executive directors:
Mr. Bi Lei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Liu Yiran /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Liu Xin (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Zhou Wei (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Huang Hui (iii) /H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Independent directors:
Mr. Tan Kaiguo (iii) /H1118/H1118/H1118/H1118/H1118/H11181 0 0–– –– 1 0 0
Mr. Xiang Y ang (iii) /H1118/H1118/H1118/H1118/H1118/H11181 0 0–– –– 1 0 0
Mr. Tan Mingkui (iii) /H1118/H1118/H1118/H1118/H11181 0 0–– –– 1 0 0
APPENDIX I ACCOUNTANT’S REPORT
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Y ear ended December 31, 2023
Name Fees
Wages and
salaries
Discretionary
bonuses
Social security
costs, housing
benefits and
employee welfare
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Supervisors:
Mr. Liao Diguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 416 130 20 – 566
Mr. Wan Hao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 291 60 53 177 581
Mr. Ao Zhengguang (iii) /H1118/H1118/H1118– 360 111 34 50 555
Mr. Y uan Y akang (iii) /H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Zhong Liruo (iii) /H1118/H1118/H1118/H1118/H1118––– –– –
Ms. He Shiying (iii) /H1118/H1118/H1118/H1118/H1118/H1118––– –– –
300 2,017 1,081 189 227 3,814
Six months ended June 30, 2024
Name Fees
Wages and
salaries
Discretionary
bonuses
Social security
costs, housing
benefits and
employee welfare
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors:
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 120 200 24 – 344
Mr. Wang Qicheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118–5 14 0 9 – 1 0 0
Mr. Y ang Guang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 120 50 24 – 194
Mr. Zhou Xiang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 138 100 11 – 249
Non-executive directors:
Mr. Bi Lei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Liu Yiran /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Independent directors:
Mr. Tan Kaiguo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 0–– –– 5 0
Mr. Xiang Y ang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 0–– –– 5 0
Mr. Tan Mingkui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 0–– –– 5 0
Supervisors:
Mr. Liao Diguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 217 65 10 – 292
Mr. Wan Hao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 151 30 26 88 295
Mr. Ao Zhengguang /H1118/H1118/H1118/H1118/H1118/H1118– 318 95 29 25 467
150 1,115 580 133 113 2,091
Six months ended June 30, 2023
Name Fees
Wages and
salaries
Discretionary
bonuses
Social security
costs, housing
benefits and
employee welfare
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors:
Dr. Liu Guoqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 120 200 10 – 330
Mr. Wang Qicheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118–5 14 0 1 0 – 1 0 1
Mr. Y ang Guang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 128 50 10 – 188
Mr. Zhou Xiang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 138 100 11 – 249
APPENDIX I ACCOUNTANT’S REPORT
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Six months ended June 30, 2023
Name Fees
Wages and
salaries
Discretionary
bonuses
Social security
costs, housing
benefits and
employee welfare
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Non-executive directors:
Mr. Bi Lei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Liu Yiran /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Liu Xin (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Zhou Wei (iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Mr. Huang Hui (iii) /H1118/H1118/H1118/H1118/H1118/H1118––– –– –
Independent directors:
Mr. Tan Kaiguo (iii) /H1118/H1118/H1118/H1118/H1118/H11185 0–– –– 5 0
Mr. Xiang Y ang (iii) /H1118/H1118/H1118/H1118/H1118/H11185 0–– –– 5 0
Mr. Tan Mingkui (iii) /H1118/H1118/H1118/H1118/H11185 0–– –– 5 0
Supervisors:
Mr. Liao Diguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 208 65 10 – 283
Mr. Wan Hao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 151 30 27 88 296
Mr. Ao Zhengguang (iii) /H1118/H1118/H1118– 310 95 30 25 460
Mr. Y uan Y akang (iii) /H1118/H1118/H1118/H1118/H1118––– –– –
Ms. Zhong Liruo (iii) /H1118/H1118/H1118/H1118/H1118––– –– –
Ms. He Shiying (iii) /H1118/H1118/H1118/H1118/H1118/H1118––– –– –
150 1,106 580 108 113 2,057
(i) Mr. Liu Xin was appointed as a non-executive director in September 2021.
Mr. Zhou Wei was appointed as a non-executive director in December 2021.
Mr. Chi Ke was appointed as a non-executive director in May 2021.
Ms. Liu Yiran was appointed as a non-executive director in December 2021.
Mr. Wu Y ongming resigned from the position of a non-executive director in October 2021.
Mr. Jiang Chun resigned from the position of a non-executive director in December 2021.
Mr. Wang Jia resigned from the position of a non-executive director in September 2021.
Ms. Zhong Liruo was appointed as a supervisor in December 2021.
Ms. Zhou Lu resigned from the position of a supervisor in September 2021.
Mr. Feng Xiaoyong resigned from the position of a supervisor in September 2021.
Mr. Y u Lijie resigned from the position of a supervisor in December 2021.
Mr. Liao Diguang was appointed as a supervisor in May 2021.
Ms. He Shiying was appointed as a supervisor in May 2021.
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(ii) Mr. Chi Ke resigned from the position of a non-executive director in January 2022.
(iii) Mr. Wu Jianxin resigned from the position of an executive director in June 2023.
Mr. Y an Shengye resigned from the position of an executive director in June 2023.
Mr. Liu Xin resigned from the position of a non-executive director in June 2023.
Mr. Zhou Wei resigned from the position of a non-executive director in January 2023.
Mr. Huang Hui resigned from the position of a non-executive director in June 2023.
Mr. Tan Kaiguo was appointed as an independent director in April 2023.
Mr. Xiang Y ang was appointed as an independent director in April 2023.
Mr. Tan Mingkui was appointed as an independent director in April 2023.
Mr. Ao Zhengguang was appointed as a supervisor in April 2023.
Mr. Y uan Y akang resigned from the position of a supervisor in June 2023.
Ms. Zhong Liruo resigned from the position of a supervisor in June 2023.
Ms. He Shiying resigned from the position of a supervisor in June 2023.
(b) Directors’ retirement and termination benefits
During the Track Record Period, there were neither termination benefit and nor additional retirement benefit
received by the directors except for the attributions to a retirement benefit scheme in accordance with the rules and
regulations in the PRC.
(c) Consideration provided to the third parties for making available directors’ services
During the Track Record Period, the Group did not pay consideration to any third parties for making available
directors’ services.
(d) Information about loans, quasi-loans and other dealings in favor of directors, controlled bodies
corporate by and connected entities with such directors
During the Track Record Period, there were no loans, quasi-loans and other dealings entered into by the
Company or subsidiaries undertaking of the Company, where applicable, in favor of director.
(e) Directors and supervisors’ material interests in transactions, arrangements or contracts
No significant transactions, arrangements and contracts in relation to the Group’s business to which the
Company was a party and in which a director or supervisor of the Company had a material interest, whether directly
or indirectly, subsisted at the end of the years or at any time during the Track Record Period.
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39. COMMITMENTS
(a) Capital commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognized as liabilities
is as follows:
As at December 31 As at June 30
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Property, plant and equipment /H1118/H1118/H1118/H1118 – 67 9,416 4,606
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,000 1,008
– 67 10,416 5,614
40. DIVIDENDS
No dividend has been paid or declared by the Company or the subsidiaries of the Company during each of the
years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024.
41. CONTINGENCIES
As at December 31, 2021, 2022 and 2023 and June 30, 2024, there were no significant contingencies items for
the Group and the Company.
42. SUBSEQUENT EVENTS
There are no material subsequent events undertaken by or impacted on the Company or the Group subsequent
to June 30, 2024 and up the date of this report.
43. SUMMARY OF OTHER ACCOUNTING POLICIES
43.1 Principles of consolidation and equity accounting
The principal accounting policies applied in the preparation of the Historical Financial Information are set out
below. These policies have been consistently applied throughout the Track Record Period, unless otherwise stated.
(a) Subsidiaries
Subsidiaries are all entities (including a structured entity) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated fully from
the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealized gains on transactions between group companies are
eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statements of comprehensive loss, consolidated statements of changes in equity and consolidated balance sheets,
respectively.
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43.2 Business combination
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary
comprises the:
 fair values of the assets transferred
 liabilities incurred to the former owners of the acquired business
 equity interests issued by the Group
 fair value of any asset or liability resulting from a contingent consideration arrangement, and
 fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are,
with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes any
non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the
non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
 consideration transferred,
 amount of any non-controlling interest in the acquired entity, and
 acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss
as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental
borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under
comparable terms and conditions. Contingent consideration is classified either as equity or a financial liability.
Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value
recognized in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses
arising from such remeasurement are recognized in profit or loss.
43.3 Separate financial statements
Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct attributable costs
of investment. The results of subsidiaries are accounted for by the Company on the basis of dividend received and
receivable.
Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these
investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is
declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount
in the consolidated financial statements of the investee’s net assets including goodwill.
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43.4 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (the “functional currency”). The Company and its
primary subsidiaries are incorporated in the PRC and consider RMB as their functional currency. The Group
determined to present its Historical Financial Information in RMB.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
generally recognized in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and
qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the consolidated statements of
comprehensive loss, within finance costs. All other foreign exchange gains and losses are presented in the
consolidated statements of comprehensive loss on a net basis within other gains – net.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets
and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the
fair value gain or loss and translation differences on non-monetary assets such as equities classified as fair value
through other comprehensive income are recognized in other comprehensive income.
43.5 Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the financial
period in which they are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each Track
Record Period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognized within “other gains – net” in the consolidated statements of comprehensive loss.
Construction in progress represents unfinished construction and equipment under construction or pending for
installation and is stated at cost less impairment losses. Cost comprises direct costs of construction including
borrowing costs attributable to the construction during the period of construction. No provision for depreciation is
made on construction in progress until such time as the relevant assets are completed and ready for intended use.
APPENDIX I ACCOUNTANT’S REPORT
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43.6 Intangible assets
(a) Software
Computer software are initially recognized and measured at costs incurred to acquire and bring them to use,
amortized on a straight-line basis over their estimated useful lives, and recorded in amortization within operating
expenses in the consolidated statements of comprehensive loss.
(b) Research and development (“R&D”)
Research expenditure is recognized as an expense as incurred. Costs incurred on research and development
projects are recognized as intangible assets when the following criteria are met:
 it is technically feasible to complete the research and development project so that it will be available
for us;
 management intends to complete the research and development project and use or sell it;
 there is an ability to use or sell the research and development project;
 it can be demonstrated how the research and development project will generate probable future
economic benefits;
 adequate technical, financial and other resources to complete the development and to use or sell the
research and development project are available; and
 the expenditure attributable to the research and development project during its development can be
reliably measured.
Directly attributable costs which are eligible to be capitalized as part of the research and development project
may include employee costs and an appropriate portion of relevant overheads.
Other development expenditures that do not meet these criteria are recognized as an expense as incurred.
Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
43.7 Impairment of non-financial assets
Intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value
in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each Track Record Period.
43.8 Financial assets
(a) Classification
The Group classifies its financial assets in the following measurement categories:
 those to be measured subsequently at fair value (either through OCI or through profit or loss); and
 those to be measured at amortized cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual
terms of the cash flows.
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For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For
investments in equity instruments that are not held for trading, this will depend on whether the Group has made an
irrevocable election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets
changes.
(b) Recognition and derecognition
Regular way purchases and sales of financial assets are recognized on trade-date, the date on which the Group
commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and
rewards of ownership.
(c) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset
not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs
of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the
asset and the cash flow characteristics of the asset. There are three measurement categories into which the
Group classifies its debt instruments:
 Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortized cost. Interest income from
these financial assets is included in finance income using the effective interest rate method. Any gain
or loss arising on derecognition is recognized directly in profit or loss and presented in “other gains –
net.” Impairment losses are presented as separate line item in the consolidated statements of
comprehensive loss.
 FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI.
Movements in the carrying amount are taken through OCI, except for the recognition of impairment
gains or losses, interest income and foreign exchange gains and losses which are recognized in profit
or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in
OCI is reclassified from equity to profit or loss and recognized in “other gains – net.” Interest income
from these financial assets is included in finance income using the effective interest rate method.
Foreign exchange gains and losses are presented in “other gains – net” and impairment expenses are
presented as separate line item in the consolidated statements of comprehensive loss.
 FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain
or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and
presented net within in “other gains – net” in the period in which it arises.
APPENDIX I ACCOUNTANT’S REPORT
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--- page 580 ---
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management
has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent
reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s
right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognized in profit or loss and presented in
“other gains – net” in the consolidated statements of comprehensive loss as applicable. Impairment losses (and
reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from
other changes in fair value.
(d) Impairment
The Group assesses on a forward-looking basis the expected credit loss associated with its debt instruments
carried at amortized cost. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For cash and cash equivalents, restricted cash and long-term bank time deposits, the expected credit loss risk
is considered immaterial.
For trade and notes receivables, the Group applies the simplified approach permitted by IFRS 9, which requires
expected lifetime losses to be recognized from initial recognition of the assets. The provision matrix is determined
based on historical observed default rates over the expected life of the trade and notes receivables with similar credit
risk characteristics and is adjusted for forward-looking estimates. At every reporting date, the historical observed
default rates are updated and changes in the forward-looking estimates are analyzed.
Impairment on other receivables is measured as either 12-month expected credit losses or lifetime expected
credit loss, depending on whether there has been a significant increase in credit risk since initial recognition. If a
significant increase in credit risk of a receivable has occurred since initial recognition, then impairment is measured
as lifetime expected credit losses.
43.9 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheets where the entity
currently has a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net
basis or realize the asset and settle the liability simultaneously.
43.10 Cash and cash equivalents
For the purpose of presentation in the consolidated statements of cash flows, cash and cash equivalents
includes cash on hand, deposits held at call with financial institutions, other short-term highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
43.11 Inventories
Raw materials, work-in-progress and finished goods are stated at the lower of cost and net realizable value.
Cost comprises direct materials, direct labor and an appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual
items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after
deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business
less the estimated costs of completion and the estimated costs necessary to make the sale.
43.12 Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial
year which are unpaid. The amounts are unsecured. Trade and other payables are presented as current liabilities unless
payment is not due within 12 months after the Track Record Period. They are recognized initially at their fair value
and subsequently measured at amortized cost using the effective interest method.
APPENDIX I ACCOUNTANT’S REPORT
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43.13 Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the
redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest
method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent
that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the
draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn
down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to
which it relates.
Borrowings are removed from the consolidated balance sheets when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognized in profit or loss as finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the Track Record Period.
43.14 Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production
of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for
its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready
for their intended use or sale.
All other borrowing costs are expensed in the period in which they are incurred.
43.15 Current and deferred income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred income tax assets and
liabilities attributable to temporary differences and to unused tax losses.
(a) Current income tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the Track Record Period in the countries where the Company and its subsidiaries operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will
accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the
expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
(b) Deferred income tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the Historical Financial Information. However,
deferred income tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred
income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the
end of the Track Record Period and are expected to apply when the related deferred income tax asset is realized, or
the deferred income tax liability is settled.
Deferred income tax assets are recognized only if it is probable that future taxable amounts will be available
to utilize those temporary differences and losses.
APPENDIX I ACCOUNTANT’S REPORT
– I-88 –


--- page 582 ---
Deferred income tax liabilities and assets are not recognized for temporary differences between the carrying
amount and tax bases of investments in foreign operations where the Group is able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset where there is a legally enforceable right to offset current
income tax assets and liabilities and where the deferred income tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred income tax is recognized in profit or loss, except to the extent that it relates to items
recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other
comprehensive income or directly in equity respectively.
43.16 Employee benefits
(a) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are
expected to be settled wholly within 12 months after the end of the period in which the employees render the related
service are recognized in respect of employees’ services up to the end of the Track Record Period and are measured
at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee
benefit obligations in the consolidated statements of balance sheets.
(b) Pension obligations
In accordance with the rules and regulations in the PRC, the employees of the Group participate in various
defined contribution retirement benefit plans organized by the relevant municipal and provincial governments in the
PRC under which the Group and the employees are required to make monthly contributions to these plans calculated
as a percentage of the employees’ salaries, subject to certain ceiling. Other than the monthly contributions, the Group
has no further obligation for the payment of retirement and other post-retirement benefits of its employees. The assets
of these plans are held separately from those of the Group in an independent fund managed by the PRC government.
The Group’s contributions to these plans are expensed as incurred.
(c) Housing funds, medical insurances and other social insurances
The employees of the Group are entitled to participate in various government-supervised housing funds,
medical insurance and other employee social insurance plan. The Group contributes on a monthly basis to these funds
based on certain percentages of the salaries of the employees, subject to certain ceiling. The Group’s liability in
respect of these funds is limited to the contributions payable in each period.
(d) Bonus plan
The expected cost of bonuses is recognized as a liability when the Group has a present legal or constructive
obligation for payment of bonus as a result of services rendered by employees and a reliable estimate of the obligation
can be made. Liabilities for bonus plans are expected to be settled within 1 year and are measured at the amounts
expected to be paid when they are settled.
(e) Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement
date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes
termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of
those benefits; and (b) when the entity recognizes costs for a restructuring that is within the scope of IAS 37 and
involves the payment of terminations benefits. In the case of an offer made to encourage voluntary redundancy, the
termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling
due more than 12 months after the end of the Track Record Period are discounted to present value.
APPENDIX I ACCOUNTANT’S REPORT
– I-89 –


--- page 583 ---
43.17 Share-based payment
The Group operates an equity-settled share-based payment plan, under which the Group receives services from
eligible employees as consideration for equity instruments of the Company. The fair value of the employee services
received in exchange for the grant of equity instruments is recognized as an expense on the Historical Financial
Information. The total amount to be expensed is determined by reference to the fair value of the equity instruments
granted:
 including any market performance conditions;
 excluding the impact of any service and non-market performance vesting conditions; and
 including the impact of any non-vesting conditions.
The total expense is recognized over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each Track Record Period, the Group revises its estimates of the
number of shares that are expected to vest based on the non-marketing performance and service conditions. It
recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment
to equity.
Where there is any modification of terms and conditions which increases the fair value of the equity
instruments granted, the Group includes the incremental fair value granted in the measurement of the amount
recognized for the services received over the remainder of the vesting period. The incremental fair value is the
difference between the fair value of the modified equity instrument and that of the original equity instrument, both
estimated as at the date of the modification. An expense based on the incremental fair value is recognized over the
period from the modification date to the date when the modified equity instruments vest in addition to any amount
in respect of the original instrument, which should continue to be recognized over the remainder of the original
vesting period.
43.18 Provisions
Provisions for legal claims, warranties and make good obligations are recognized when the Group has a present
legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required
to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating
losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of
an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to
settle the present obligation at the end of the Track Record Period. The discount rate used to determine the present
value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to
the liability. The increase in the provision due to the passage of time is recognized as interest expense.
43.19 Leases
Lease as lessee
The Group leases various offices and factories. Leases are initially recognized as a right-of-use asset and
corresponding liability at the date when the leased asset is available for use by the Group. Each lease payment
is allocated between the principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period. The right-of-use asset is depreciated on a straight-line basis over the shorter of the asset’s estimated
useful life and the lease term.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments (if applicable):
 fixed payments (including in-substance fixed payments), less any lease incentives receivable;
 variable lease payment that are based on an index or a rate, initially measured using the index or
rate as of the commencement date;
APPENDIX I ACCOUNTANT’S REPORT
– I-90 –


--- page 584 ---
 amounts expected to be payable by the lessee under residual value guarantees;
 the exercise price of a purchase option if the lessee is reasonably certain to exercise that option;
and
 payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.
Lease payments to be made under reasonably certain extension options are also included in the
measurement of lease liabilities.
The lease payments are discounted using the interest rate implicit in the lease, if that rate can be
determined, or the Group’s incremental borrowing rate, being the rate that the individual lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under comparable terms and conditions.
If a readily observable amortizing loan rate is available to the individual lessee (through recent
financing or market data) which has a similar payment profile to the lease, then the Group use that rate as a
starting point to determine the incremental borrowing rate.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit
or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of
the liability for each reporting period.
Right-of-use assets are measured at cost comprising the following (if applicable):
 the amount of the initial measurement of lease liabilities;
 any lease payments made at or before the commencement date, less any lease incentive received;
 any initial direct costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term
on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset
is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases are recognized on a straight-line basis as an expense.
Short-term leases are leases with a lease term of 12 months or less without a purchase option.
43.20 Loss per share
(a) Basic loss per share
Basic loss per share is calculated by dividing:
 the loss attributable to equity holders of the Company, excluding any costs of servicing equity other than
ordinary shares
 by the weighted average number of ordinary shares outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the year and excluding treasury stock.
APPENDIX I ACCOUNTANT’S REPORT
– I-91 –


--- page 585 ---
(b) Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to take into account:
 the after-income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares, and
 the weighted average number of additional ordinary shares that would have been outstanding assuming
the conversion of all dilutive potential ordinary shares.
43.21 Government grants
Grants from the government are recognized at their fair value where there is a reasonable assurance that the
grant will be received and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognized in profit or loss over the period necessary to
match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in non-current
liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the
related assets.
43.22 Interest income
Interest income from financial assets at FVPL is included in the net fair value gains/(losses) on these assets,
see Note 7 below.
Interest income on financial assets at amortized cost and financial assets at FVOCI calculated using the
effective interest method is recognized in profit or loss as part of other income.
Interest income is presented as finance income where it is earned from financial assets that are held for cash
management purposes, see Note 10 below. Any other interest income is included in other income.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial
asset except for financial assets that subsequently become credit impaired. For credit-impaired financial assets the
effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss
allowance).
III SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company or any of the
subsidiaries now comprising the Group in respect of any period subsequent to June 30, 2024.
No dividend or distribution has been declared, made or paid by the Company or any of its
subsidiaries now comprising the Group in respect of any period subsequent to June 30, 2024.
APPENDIX I ACCOUNTANT’S REPORT
– I-92 –


--- page 586 ---
The information set out in this Appendix does not form part of the Accountant’ s Report
from PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, the reporting
accountant of the Company, as set out in Appendix I in this prospectus, and is included herein
for illustrative purposes only. The unaudited pro forma financial information should be read
in conjunction with the section headed “Financial Information” in this prospectus and the
Accountant’ s Report set out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE
ASSETS OF THE GROUP
The following unaudited pro forma statement of adjusted net tangible assets of the Group
prepared in accordance with Rule 4.29 of the Listing Rules is set out below to illustrate the
effect of the Global Offering on the net tangible assets of the Group attributable to the owners
of the Company as at June 30, 2024 as if the Global Offering had taken place on that date.
The unaudited pro forma statement of adjusted 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 consolidated net tangible assets of the Group attributable to the owners of the Company
as at June 30, 2024 or at any future dates following the Global Offering.
Audited
consolidated
net tangible
assets of the
Group
attributable to
owners of the
Company as at
June 30, 2024
(Note 1)
Estimated net
proceeds from
the Global
Offering
(Note 2)
Unaudited pro
forma adjusted
net tangible
assets of the
Group
attributable to
owners of the
Company as at
June 30, 2024
Unaudited pro forma
adjusted net tangible
assets per Share
(Notes 3 and 4)
RMB’000 RMB’000 RMB’000 RMB HK$
Based on an Offer
Price of
HK$17.00 per
Offer Share /H1118/H1118/H1118/H1118624,793 579,049 1,203,842 3.02 3.23
Based on an Offer
Price of
HK$20.20 per
Offer Share /H1118/H1118/H1118/H1118624,793 691,540 1,316,333 3.30 3.54
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 587 ---
Notes:
(1) The audited consolidated net tangible assets of the Group attributable to the owners of the Company as
at June 30, 2024 is extracted from the Accountant’s Report set out in Appendix I to this prospectus,
which is based on the audited consolidated net assets of the Group attributable to the owners of the
Company as at June 30, 2024 of approximately RMB640,676,000 with adjustments for intangible assets
attributable to the owners of the Company as at June 30, 2024 of approximately RMB15,883,000.
(2) The estimated net proceeds from the Global Offering are based on the indicative Offer Price of
HK$17.00 and HK$20.20 per Offer Share, being the low and high end of the indicative Offer Price range
respectively, after deduction of the estimated underwriting fees and other related expenses (excluding
the listing expenses of approximately RMB14,298,000 which have been accounted for in the Group’s
consolidated statement of profit or loss prior to June 30, 2024) and takes no account of any Shares which
may be allotted and issued upon the exercise of the Over-allotment Option.
(3) The unaudited pro forma net tangible assets per Share is arrived at after the adjustments referred to in
the preceding paragraphs and on the basis that 399,190,000 Shares were in issue assuming that the
Global Offering have been completed on June 30, 2024 but takes no account of any Shares which may
be allotted and issued upon the exercise of the Over-allotment Option.
(4) For the purpose of this unaudited pro forma adjusted net tangible assets per Share, the amounts stated
in Renminbi are converted into Hong Kong dollars at the rate of HK$1.00 to RMB0.9325. No
representation is made that Renminbi has been, could have been or may be converted to Hong Kong
dollars, or vice versa, at that rate.
(5) Except as disclosed above, no adjustment has been made to reflect any trading results or other
transactions of the Group entered into subsequent to June 30, 2024.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 588 ---
B. REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from PricewaterhouseCoopers, Certified
Public Accountants, Hong Kong, for the purpose of incorporation in this prospectus.
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of Minieye Technology Co., Ltd
We have completed our assurance engagement to report on the compilation of unaudited
pro forma financial information of Minieye Technology Co., Ltd (the “Company”) and its
subsidiaries (collectively the “Group”) by the directors of the Company (the “Directors”) for
illustrative purposes only. The unaudited pro forma financial information consists of the
unaudited pro forma statement of adjusted consolidated net tangible assets of the Group as at
June 30, 2024, and related notes (the “Unaudited Pro Forma Financial Information”) as set out
on pages II-1 to II-2 of the Company’s prospectus dated December 17, 2024, in connection with
the proposed initial public offering of the H shares of the Company (the “Prospectus”). The
applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma
Financial Information are described on pages II-1 to II-2 of the Prospectus.
The Unaudited Pro Forma Financial Information has been compiled by the Directors to
illustrate the impact of the proposed initial public offering on the Group’s financial position as
at June 30, 2024 as if the proposed initial public offering had taken place at June 30, 2024. As
part of this process, information about the Group’s financial position has been extracted by the
Directors from the Group’s financial information for the period ended June 30, 2024, on which
an accountant’s report has been published.
Directors’ Responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial
Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to
Accounting Guideline 7, Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars (“AG 7”) issued by the Hong Kong Institute of Certified Public
Accountants (“HKICPA”).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 589 ---
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour.
Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1, Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or Other
Assurance or Related Services Engagements , issued by the HKICPA, which requires the firm
to design, implement and operate a system of quality management including policies or
procedures regarding compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Reporting Accountant’s Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to
you. We do not accept any responsibility for any reports previously given by us on any
financial information used in the compilation of the Unaudited Pro Forma Financial
Information beyond that owed to those to whom those reports were addressed by us at the dates
of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus , issued by the HKICPA. This standard requires
that the reporting accountant plans and performs procedures to obtain reasonable assurance
about whether the Directors have compiled the Unaudited Pro Forma Financial Information in
accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the
HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Unaudited Pro
Forma Financial Information, nor have we, in the course of this engagement, performed an
audit or review of the financial information used in compiling the Unaudited Pro Forma
Financial Information.
The purpose of unaudited pro forma financial information included in a prospectus is
solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the entity as if the event had occurred or the transaction had been undertaken
at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of the proposed initial public offering at June 30, 2024 would
have been as presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 590 ---
A reasonable assurance engagement to report on whether the unaudited pro forma
financial information has been properly compiled on the basis of the applicable criteria
involves performing procedures to assess whether the applicable criteria used by the directors
in the compilation of the unaudited pro forma financial information provide a reasonable basis
for presenting the significant effects directly attributable to the event or transaction, and to
obtain sufficient appropriate evidence about whether:
 The related pro forma adjustments give appropriate effect to those criteria; and
 The unaudited pro forma financial information reflects the proper application of
those adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountant’s judgment, having regard to
the reporting accountant’s understanding of the nature of the company, the event or transaction
in respect of which the unaudited pro forma financial information has been compiled, and other
relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the unaudited pro
forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our work has not been carried out in accordance with auditing standards or other
standards and practices generally accepted in the United States of America or auditing
standards of the Public Company Accounting Oversight Board (United States) or standards and
practices of any professional body in any other overseas jurisdiction and accordingly should
not be relied upon as if it had been carried out in accordance with those standards and practices.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled by the
Directors on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma
Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing
Rules.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, December 17, 2024
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 591 ---
1. TAXES FOR SECURITIES HOLDERS
The income tax and the tax on capital gains for holders of H Shares shall be subject to
the laws and practices of PRC and the jurisdictions in which the holders of H Shares are
residents or subject to taxes for other reasons. The following summary of certain relevant tax
provisions is based on current laws and practices, subject to change and not intended to be legal
or tax advice. The discussion is not intended to cover all the possible tax consequences of the
investment in H Shares, nor does it take into account the particular circumstances of any
individual investor, some of which may be subject to special rules. Therefore, you should
consult a tax advisor for advice on the tax consequences of the investment in H Shares. The
discussion is based on the laws and related interpretations in force as of the date of this
document, which are subject to change and may have retroactive effect.
The discussion does not address any PRC tax issues other than income tax, capital tax,
value-added tax, stamp duty and estate duty. Prospective investors are advised to consult their
financial advisers regarding the PRC and other tax consequences of owning and disposing of
H Shares.
(1) Taxation Regarding Dividends
Individual investor
Pursuant to the latest amended Individual Income Tax Law of the People’s Republic of
China (the “ Individual Income Tax Law ”) on August 31, 2018 and the latest Regulations for
the Implementation of the Individual Income Tax Law of the People’s Republic of China
amended on December 18, 2018, dividend distributions by Chinese enterprises are subject to
a PRC withholding tax at a flat rate of 20%. For foreign individuals who are not Chinese
residents, dividends received from Chinese enterprises are generally subject to a tax rate of
20%, unless specifically exempted by the tax authorities of the State Council or exempted or
reduced under an applicable tax treaty.
According to the Circular of State Administration of Taxation on Matters Concerning the
Levy and Administration of Individual Income Tax After the Repeal of Guo Shui Fa [1993] No.
045 issued by State Administration of Taxation (the “ SAT”) on June 28, 2011, domestic
non-foreign invested enterprises with shares issued in Hong Kong are allowed to withhold
individual income tax at a rate of 10% on dividend distributions. For individual holders of H
shares who receive dividends and are residents of countries with which the PRC has entered
into tax treaties with a tax rate of less than 10%, a non-foreign invested enterprise whose shares
are listed in Hong Kong may apply on behalf of such holders for the right to enjoy the
preferential treatment of lower tax rate, and once approved by the tax authorities, any
over-payment of the withholding tax will be refunded. For individual holders of H shares who
receive dividends and are residents of countries with which China has entered into a tax treaty
with a tax rate higher than 10% but lower than 20%, the non-foreign invested enterprises are
required to withhold tax according to the agreed tax rate of the treaty without the need to file
an application. For individual holders of H shares who receive dividends and are residents of
countries with which China has not entered into a tax treaty, the non-foreign invested
enterprises are required to withhold tax at a rate of 20%.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-1 –


--- page 592 ---
Corporate investor
Pursuant to the Enterprise Income Tax Law promulgated by the National People’s
Congress on March 16, 2007 and last amended on December 29, 2018 and the Regulations for
the Implementation of the Enterprise Income Tax Law of the People’s Republic of China
promulgated by the State Council on December 6, 2007, which became effective on January 1,
2008, and was amended on April 23, 2019, the enterprise income tax rate will be 25%. A
non-resident enterprise that does not have an establishment or premise in China, or that has an
establishment or premise in China but its income from sources in China is not physically
connected with its establishment or premise, is generally subject to an enterprise income tax
rate of 10% on its income from sources in China (including dividends received from a PRC
resident enterprise). The foregoing income tax payable by non-resident enterprises is subject
to withholding at source, in which the payer of the income is required to withhold it from
payments due to the non-resident enterprise.
As further clarified in the Circular of the State Administration of Taxation on Issues
Relating to the Withholding and Payment of the Enterprise Income Tax on Dividends
Distributed by Chinese Resident Enterprises to Overseas Non-Resident Enterprise
Shareholders of H Shares issued and implemented by the SA T on November 6, 2008, Chinese
resident enterprises shall withhold and pay the enterprise income tax at a uniform rate of 10%
on behalf of the overseas non-resident enterprise holders of H shares when distributing
dividends for 2008 and subsequent years. According to the Official Reply of the State
Administration of Taxation on Imposition of Enterprise Income Tax on B-share Dividends of
Non-resident Enterprises (Guo Shui Han [2009] No. 394) issued by the SA T on July 24, 2009,
any Chinese resident enterprise that publicly lists its shares on overseas stock exchange shall
uniformly withhold 10% of the dividends distributed to non-resident enterprise shareholders as
enterprise income tax for any such distributions made in and after 2008. The above tax rates
may be further changed in accordance with tax treaties or agreements entered into between the
PRC and the relevant jurisdictions, as applicable.
According to the Arrangement between the Mainland of China and the Hong Kong
Special Administrative Region for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with respect to Taxes on Income signed on August 21, 2006 (the
“Arrangement ”), the Chinese government shall have the right to impose a tax on dividends
payable by a Chinese resident company to a Hong Kong resident (including the natural person
and legal entity), but such tax shall not exceed 10% of the total dividends payable. However,
if a Hong Kong resident directly holds 25% or more of the equity interest in a Chinese resident
company, the tax levied shall not exceed 5% of the total dividends payable by the Chinese
resident company. Pursuant to the Fourth Protocol to the Arrangement between the Mainland
of China and the Hong Kong Special Administrative Region for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, which came
into effect on December 29, 2015, the above provisions do not apply to any arrangement made
with the primary purpose of obtaining the above tax benefits. The implementation of the
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-2 –


--- page 593 ---
dividend provisions under the tax treaties shall be subject to the Circular of the State
Administration of Taxation on Relevant Issues relating to the Implementation of Dividend
Clauses in Tax Treaty Agreements (Guo Shui Han [2009] No. 81) and other Chinese tax laws
and regulations.
Tax treaty
Non-resident investors living in jurisdictions that have entered into treaties with China on
the avoidance of double taxation or made relevant adjustments shall be entitled to the relief
from the enterprise income tax on dividends received from Chinese resident companies. China
has entered into treaties or arrangements on the avoidance of double taxation with a number
of countries and regions, including Hong Kong, the Macao Special Administrative Region,
Australia, Canada, France, Germany, Japan, Malaysia, the Netherlands, Singapore, the United
Kingdom, and the United States. Non-Chinese resident enterprises entitled to preferential tax
rates under the relevant tax treaties or arrangements shall apply to the Chinese tax authorities
for a refund of the enterprise income tax in excess of the agreed rate, and the refund application
shall be approved by the Chinese tax authorities.
(2) Taxation Regarding Share Transfer
V alue added tax and local surtax
Pursuant to the Circular on Comprehensive Launch of Pilot Replacement of Business Tax
with V alue-added Tax (“ Circular 36 ”), which was implemented on May 1, 2016, entities and
individuals engaging in the sale of services within the PRC are subject to V A T, and “engaging
in the sale of services within the PRC” means that the seller or buyer of taxable services is
located in China. Circular 36 also provides that, for general or foreign V A T payers, transfers
of financial products (including transfers of ownership of marketable securities) are subject to
6% V A T on the taxable income (i.e., the balance of the sale price less the purchase price).
However, the transfer of financial products by individuals is exempted from V A T, as stipulated
in the Circular of the Ministry of Finance and the State Administration of Taxation on Certain
Exemptions from Business Tax on the Sale and Purchase of Financial Commodities by
Individuals, which came into effect on January 1, 2009, and the Provisions on Transitional
Policies of the Pilot Program for the Change from Business Tax to V alue-added Tax, which was
promulgated by the Ministry of Finance and the State Administration of Taxation and came into
effect on May 1, 2016. Pursuant to these provisions, the sale or disposal of H Shares is exempt
from PRC value-added tax if the holder is a non-resident individual.
In addition, V A T payers are also subject to urban maintenance and construction tax,
education surtax and local education surtax (collectively the “ local surtax ”), which is usually
12% of the actual V A T, business tax and consumption tax (if any) payable in urban areas in
China.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-3 –


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Income Tax
Individual investor
Under the Individual Income Tax Law, gains from the transfer of equity interests in
Chinese resident enterprises shall be subject to a 20% individual income tax. According to the
Circular on Continued Temporary Exemption of Individual Income Tax on Income from
Transfer of Stocks promulgated by the Ministry of Finance (the “MOF”) and the SA T on March
30, 1998, individuals shall continue to be temporarily exempted from the individual income tax
on the income from the transfer of shares in listed companies from January 1, 1997.
According to the Circular on the Issues Relating to the Collection of Individual Income
Tax on Individuals’ Income from the Transfer of Restricted Shares of Listed Companies jointly
promulgated by the MOF, the SA T and the CSRC on December 31, 2009, which came into
effect on the same date, individuals shall continue to be exempted from the individual income
tax on the income from the transfer of listed shares acquired from the public offering of listed
companies and the transfer market on the Shanghai Stock Exchange and the Shenzhen Stock
Exchange, with the exception of the relevant restricted shares as defined in the above Circular
and the Supplementary Circular on the Issues Relating to the Collection of Individual Income
Tax on Individuals’ Income from the Transfer of Restricted Shares of Listed Companies, which
was jointly promulgated and enforced by the MOF, the SA T and the CSRC on November 10,
2010. As of the Latest Practicable Date, the above provisions did not expressly provide for
imposition of the individual income tax on the transfer of shares of Chinese resident enterprises
listed on overseas stock exchanges by non-Chinese resident individuals.
Corporate investor
According to the Enterprise Income Tax Law, if a non-resident enterprise does not have
an institution or premise in China, or has an institution or premise in China but its income
derived from China is not actually related to the above-mentioned Chinese institution or
premise, it is generally required to pay a 10% enterprise income tax on its income derived from
China (including proceeds from sales of equity interest of a Chinese resident enterprise). The
enterprise income tax payable by a non-resident enterprise shall be withheld at source, and the
payer of the income shall withhold the income tax from the amount to be paid to the
non-resident enterprise. The tax may be reduced or exempted under tax treaties or
arrangements for the avoidance of double taxation.
Stamp duty
According to the Stamp Tax Law of the People’s Republic of China, which was
promulgated on June 10, 2021 and became effective on July 1, 2022, all the entities and
individuals that enter into taxable documents and engage in securities transactions within
China shall be taxpayers of stamp duty and shall pay stamp duty in accordance with the
provisions of the Stamp Duty Law of the People’s Republic of China. Therefore, the provisions
on the stamp duty levied on the transfer of shares of listed companies in China do not apply
to the purchase and disposal of H shares by non-Chinese investors outside China.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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Estate duty
As of the date of this document, no estate duty has been imposed on the Company in the
PRC under PRC law.
2. MAIN TAXES OF THE COMPANY IN CHINA
Please refer to the chapter titled “Regulatory Overview” of this Prospectus.
3. FOREIGN EXCHANGE
Renminbi (“RMB”), the legal tender of China, is subject to foreign exchange control and
cannot be freely convertible into foreign currencies. The State Administration of Foreign
Exchange (the “SAFE”) under the People’s Bank of China (the “ PBOC ”) is responsible for all
matters related to foreign exchange, including the implementation of foreign exchange control
regulations.
According to the Regulations on Foreign Exchange Control of the People’s Republic of
China promulgated by the State Council on January 29, 1996, implemented on April 1, 1996,
and last revised on August 5, 2008 (the “ Regulations on Foreign Exchange Control ”), all
international payments and transfers shall be classified into the current account and capital
account. The current account shall be subject to the reasonable examination of the authenticity
of transaction documents and their consistency with foreign exchange receipts and payments
by the financial institutions engaging in the business of foreign exchange settlement and sales,
and shall be subject to the supervision and inspection by the foreign exchange administrative
authorities. With regard to the capital account, foreign organizations and individuals making
direct investments in China shall, upon approval by the competent authorities concerned,
register with the foreign exchange administrative authorities. The foreign exchange income
obtained from abroad may be repatriated or deposited abroad. Foreign exchange funds and
foreign exchange settlement funds under the capital account shall be used for the purposes
approved by the relevant competent authorities and the foreign exchange administrative
authorities. When there is or may be a serious imbalance in the balance of payments, or when
there is or may be a serious crisis in the national economy, the State may take measures
necessary to guarantee and control the balance of payments.
The Regulations on Administration of Settlement, Sale and Payment of Foreign
Exchange, promulgated by the PBOC on June 20, 1996 and implemented on July 1, 1996, have
abrogated other restrictions on foreign exchange under the current account, but imposed
existing restrictions on foreign exchange transactions under the capital account.
According to the Announcement on Improving the Reform of the RMB Exchange Rate
Formation Mechanism promulgated and implemented by the PBOC on July 21, 2005, China
began to implement a managed floating exchange rate system, with the exchange rate adjusted
according to market supply and demand and with reference to a basket of currencies on July
21, 2005. Therefore, the RMB exchange rate is no longer linked to the US dollar. The PBOC
shall announce, after the market closes on each working day, the closing price of the exchange
rate of the US dollar and other currencies traded in the interbank foreign exchange market
against RMB on that day, which serves as the median price for transactions of that currency
against RMB on the following working day.
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According to China’s relevant laws and regulations, when Chinese enterprises (including
foreign-invested enterprises) require foreign exchange for current account transactions, they
may make payments through foreign exchange accounts opened in designated foreign exchange
banks without the approval of foreign exchange control agencies, but valid transaction receipts
and vouchers shall be provided. If a foreign-invested enterprise needs to distribute profits to
its shareholders through foreign exchange, and a Chinese enterprise (such as the Company)
needs to pay dividends to its shareholders through foreign exchange according to relevant
regulations, it may make payments from the foreign exchange account of a designated foreign
exchange bank or make exchanges and payments at a designated foreign exchange bank
according to the resolution of the Board or the general meeting on profit distribution.
According to the Decision of the State Council on the Cancellation and Adjustment of a
Batch of Items Requiring Government Review and Approval issued by the State Council on
October 23, 2014, it decided to cancel the examination and approval requirements of the SAFE
and its branches for the remittance and settlement of proceeds raised from the overseas listing
of overseas shares into domestic accounts in RMB.
According to the Circular of the State Administration of Foreign Exchange on Issues
Relating to Foreign Exchange Administration of Overseas Listing issued and implemented by
the SAFE on December 26, 2014, a domestic company shall, within 15 business days from the
date of closing of overseas listing, apply for the registration of overseas listing with the local
branch of the SAFE at the place of its incorporation. Proceeds from the overseas listing of the
domestic company may be repatriated to a domestic account or deposited in an overseas
account, provided that the use of the proceeds is consistent with the contents set out in this
document and other disclosure documents.
Pursuant to the Provisions on Foreign Exchange Administration for Direct Investment by
Foreign Investors in China, which were promulgated on May 10, 2013, became effective on
May 13, 2013, were amended on October 10, 2018 and were partially repealed on December
30, 2019, the administration of direct investment by foreign investors in the PRC by the SAFE
or its local branches is required to be carried out by means of registration, and banks are
required to process foreign exchange transactions relating to direct investment in the PRC on
the basis of the registration information provided by the SAFE and its branches.
In accordance with the Circular of the State Administration of Foreign Exchange on
Further Simplifying and Improving the Policy on Foreign Exchange Management of Direct
Investment, which was promulgated by the SAFE on February 13, 2015, came into effect on
June 1, 2015 and was partially repealed on December 30, 2019, foreign exchange registration
for domestic direct investment and overseas direct investment will be directly reviewed and
processed by banks, while the SAFE and its branches shall indirectly supervise the foreign
exchange registration through banks.
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A foreign-funded enterprise may, based on its operating needs, voluntarily settle the
foreign exchange capital, pursuant to the Circular of the State Administration of Foreign
Exchange Concerning Reform of the Administrative Approaches to Settlement of Foreign
Exchange Capital of Foreign-invested Enterprises, which was promulgated on March 30, 2015,
validated on June 1, 2015 and abolished in part on December 30, 2019). Foreign-invested
enterprises shall not use foreign exchange capital funds settled in RMB for (a) any expenditure
outside the scope of business of the foreign-invested enterprise or prohibited by laws and
regulations; (b) direct or indirect investment in securities; (c) issuance of entrusted loans
(except for those permitted by the scope of business), repayment of inter-enterprise loans
(including advances by third parties) or repayment of RMB bank loans that have been
transferred to third parties; and (d) purchase of real estate that is not for its own use (except
for real estate enterprises).
According to the Circular of the State Administration of Foreign Exchange on Reforming
and Standardizing the Policy on Settlement Management of Capital Accounts promulgated and
implemented by the SAFE on June 9, 2016, relevant policies have made it clear that domestic
institutions may settle their foreign exchange incomes under the capital account (including
funds raised from the overseas listing), which are subject to discretional settlement, with banks
as actually needed for business operation. The proportion of foreign exchange income under
capital account that domestic institutions intend to settle is tentatively set at 100%, provided
that the SAFE may adjust the relevant proportion according to the international payment
balance status in good time.
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1. PRC LEGAL SYSTEM
The PRC legal system is based on the Constitution of the PRC (the “ Constitution ”) and
is made up of written laws, administrative regulations, local regulations, separate regulations,
autonomous regulations, rules and regulations of departments, rules and regulations of local
governments, international treaties of which the PRC government is a signatory, and other
regulatory documents. Court verdicts do not constitute binding precedents but they may be
used as judicial reference and guidance.
According to the Constitution, and the Legislation Law of the PRC (the “ Legislation
Law”) which was amended in 2023, the NPC and the Standing Committee of the NPC are
empowered to exercise the legislative power of the State. The NPC has the power to enact and
amend basic laws governing civil and criminal matters, state organs and other matters. The
Standing Committee of the NPC is empowered to enact and amend laws other than those
required to be enacted by the NPC and to supplement and amend any parts of laws enacted by
the NPC during the adjournment of the NPC, provided that such supplements and amendments
are not in conflict with the basic principles of such laws.
The State Council is the highest organ of the PRC administration and has the power to
enact administrative regulations based on the Constitution and laws.
The people’s congresses of provinces, autonomous regions and municipalities and their
respective standing committees may enact local regulations based on the specific
circumstances and actual requirements of their own respective administrative areas, provided
that such local regulations do not contravene any provision of the Constitution, laws or
administrative regulations.
The ministries and commissions of the State Council, PBOC, the National Audit Office
as well as the other organs endowed with administrative functions directly under the State
Council may, in accordance with the laws as well as the administrative regulations, decisions
and orders of the State Council and within the limits of their power, enact rules.
The people’s congresses and their respective standing committees of cities with
subordinate districts may, in the areas of urban and rural development and management,
ecological civilization construction and the preservation of history and culture, enact local
regulations based on the specific circumstances and actual requirements, which shall become
enforceable after being reported to and approved by the standing committees of the people’s
congresses of the relevant provinces or autonomous regions, but such local regulations shall
conform with the Constitution, laws, administrative regulations, and the relevant local
regulations of the relevant provinces or autonomous regions. The people’s congresses of
national autonomous areas have the power to enact autonomous regulations and separate
regulations in light of the political, economic and cultural characteristics of the nationality
(nationalities) in the areas concerned.
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The people’s governments of the provinces, autonomous regions, municipalities and cities
with subordinate districts may enact rules in accordance with laws, administrative regulations
and the local regulations of their respective provinces, autonomous regions or municipalities.
The Constitution has supreme legal authority and no laws, administrative regulations,
local regulations, autonomous regulations or separate regulations may contravene the
Constitution. The authority of laws is greater than that of administrative regulations, local
regulations and rules. The authority of administrative regulations is greater than that of local
regulations and rules. The authority of local regulations is greater than that of the rules of the
local governments at or below the corresponding level. The authority of the rules enacted by
the people’s governments of the provinces or autonomous regions is greater than that of the
rules enacted by the people’s governments of the cities with subordinate districts or
autonomous prefectures within the administrative areas of the provinces and the autonomous
regions.
The NPC has the power to alter or annul any inappropriate laws enacted by its Standing
Committee, and to annul any autonomous regulations or separate regulations which have been
approved by its Standing Committee but contravene the Constitution or the Legislation Law.
The Standing Committee of the NPC has the power to annul any administrative regulations that
contravene the Constitution and laws, to annul any local regulations that contravene the
Constitution, laws or administrative regulations, and to annul any autonomous regulations or
local regulations which have been approved by the standing committees of the people’s
congresses of the relevant provinces, autonomous regions or municipalities, but which
contravene the Constitution and the Legislation Law. The State Council has the power to alter
or annul any inappropriate ministerial rules and rules of local governments. The people’s
congresses of provinces, autonomous regions or municipalities have the power to alter or annul
any inappropriate local regulations enacted or approved by their respective standing
committees. The people’s governments of provinces and autonomous regions have the power
to alter or annul any inappropriate rules enacted by the people’s governments at a lower level.
According to the Constitution and the Legislation Law, the power to interpret laws is
vested in the Standing Committee of the NPC. According to the Decision of the Standing
Committee of the NPC Regarding the Strengthening of Interpretation of Laws adopted on June
10, 1981, the Supreme People’s Court of the PRC (the “ Supreme People’s Court ”) has the
power to give general interpretation on questions involving the specific application of laws and
decrees in court trials. The State Council and its ministries and commissions are also vested
with the power to give interpretation of the administrative regulations and department rules
which they have promulgated. At the regional level, the power to give interpretations of the
local regulations and administrative rules is vested in the regional legislative and
administrative organs which promulgate such regulations and rules.
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2. PRC JUDICIAL SYSTEM
Under the Constitution and the Organic Law of the People’s Courts of the People’s
Republic of China amended in 2018, the PRC judicial system is made up of the Supreme
People’s Court, the local people’s courts, and other special people’s courts.
The local people’s courts are comprised of the primary people’s courts, the intermediate
people’s courts and the higher people’s courts. The higher people’ courts supervise the primary
and intermediate people’s courts. The people’s procuratorates also have the right to exercise
legal supervision over the civil proceedings of people’s courts of the same level and lower
levels. The Supreme People’s Court is the highest judicial body in the PRC. It supervises the
adjudication work of the people’s courts at all levels.
The Civil Procedure Law of the People’s Republic of China (2023 Revision) (the “ Civil
Procedure Law ”), which was adopted in 1991, amended in 2007, 2012, 2017, 2021 and 2023,
sets forth the criteria for instituting a civil action, the jurisdiction of the people’s courts, the
procedures to be followed for conducting a civil action and the procedures for enforcement of
a civil judgment or order. All parties to a civil action conducted within the PRC must comply
with the Civil Procedure Law. Generally, a civil case is initially heard by a local court of the
municipality or province in which the defendant resides. The parties to a contract may, by
express agreement, select a judicial court where civil actions may be brought, provided that the
judicial court is either located at the plaintiff’s or the defendant’s place of domicile, the place
of execution or implementation of the contract or the place of the object of the action, provided
that the provisions regarding the level of jurisdiction and exclusive jurisdiction shall not be
violated.
A foreign national or enterprise generally has the same litigation rights and obligations as
a citizen or legal person of the PRC. If a foreign country’s judicial system limits the litigation
rights of PRC citizens and enterprises, the PRC courts may apply the same limitations to the
citizens and enterprises of that foreign country within the PRC.
If any party to a civil action refuses to comply with a judgment or ruling made by a
people’s court or an award made by an arbitration panel in the PRC, the other party may apply
to the people’s court for the enforcement of the same. There are time limits of two years
imposed on the right to apply for such enforcement. If a person fails to satisfy a judgment made
by the court within the stipulated time, the court will, upon application by either party, enforce
the judgment in accordance with the law.
A party seeking to enforce a judgment or ruling of a people’s court against a party who
is not personally and whose property is not within the PRC may apply to a foreign court with
jurisdiction over the case for recognition and enforcement of the judgment or ruling. A foreign
judgment or ruling may also be recognized and enforced by the people’s court according to
PRC enforcement procedures if the PRC has entered into or acceded to an international treaty
with the relevant foreign country, which provides for such recognition and enforcement, or if
the judgment or ruling satisfies the court’s examination according to the principle of
reciprocity, unless the people’s court finds that the recognition or enforcement of such
judgment or ruling will result in a violation of the basic legal principles of the PRC, its
sovereignty or security or against social and public interest.
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3. THE COMPANY LA W AND TRIAL MEASURES AND ARTICLES OF
ASSOCIATION GUIDELINES FOR OVERSEAS LISTING
A joint stock limited company incorporated in the PRC and seeking a listing on the Hong
Kong Stock Exchange is mainly subject to the following laws and regulations in the PRC:
 The Company Law of the People’s Republic of China (2023 Revision), which was
promulgated by the Standing Committee of the National People’s Congress on
December 29, 1993, became effective on July 1, 1994 and was amended on
December 25, 1999, August 28, 2004, October 27, 2005, December 28, 2013,
October 26, 2018 and December 29, 2023, respectively, as well as the latest revision
implemented on July 1, 2024. The version currently in force was revised in October
2018 and will be replaced on July 1, 2024 by the December 2023 revision;
 The Trial Measures for the Administration of Overseas Issuance and Listing of
Securities by Domestic Enterprises (the “Trial Measures for Overseas Listing”) and
five related guidelines, which were promulgated by the CSRC on February 17, 2023
under the Securities Law of the PRC, came into effect on March 31, 2023, and are
applicable to domestic enterprises that issue or list, directly or indirectly, their
securities offshore or trade their securities offshore.
 Guidelines on the Articles of Association of Listed Companies (the “Articles of
Association Guidelines”), which were last amended on December 15, 2023 by the
CSRC. The relevant Articles of Association Guidelines are contained in the
Company’s Articles of Association, a summary of which is set out in the section
titled “Appendix V—Summary of Articles of Association” to this document.
What is set out below is a summary of the major provisions of the Company Law, the Trial
Measures for Overseas Listing and Articles of Association Guidelines applicable to the
Company.
(1) General
A joint stock limited company refers to an enterprise legal person incorporated under the
Company Law with its registered capital divided into shares of equal par value. The liability
of its shareholders is limited to the amount of shares held by them and the company is liable
for its debts with all its property.
A joint stock limited company shall conduct its business in accordance with laws and
administrative regulations. It may invest in other limited liability companies and joint stock
limited companies and its liabilities with respect to such invested companies are limited to the
amount invested. Unless otherwise provided by law, the joint stock limited company may not
be a contributor that undertakes joint and several liabilities for the debts of the invested
companies.
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(2) Incorporation
A joint stock limited company may be incorporated by promotion or public subscription.
A joint stock limited company may be incorporated by a minimum of two but not more
than 200 promoters, and at least half of the promoters must have residence within the PRC. The
promoters must convene an inaugural meeting within 30 days after the issued shares have been
fully paid up, and must give notice to all subscribers or make an announcement of the date of
the inaugural meeting 15 days before the meeting. The inaugural meeting may be convened
only with the presence of promoters or subscribers representing at least half of the shares in
the company. At the inaugural meeting, matters including the adoption of articles of association
and the election of members of the board of directors and members of the Supervisory
Committee of the company will be dealt with. All resolutions of the meeting require the
approval of subscribers with more than half of the voting rights present at the meeting.
Within 30 days after the conclusion of the inaugural meeting, the board of directors must
apply to the registration authority for registration of the establishment of the joint stock limited
company. A company is formally established, and has the status of a legal person, after the
business license has been issued by the relevant registration authority. A joint stock limited
company established by means of fund-raising to offer and issue shares to the public shall
submit to the company registration authority the approval documents issued by the securities
regulatory authorities under the State Council.
A joint stock limited company’s promoters shall be liable for: (i) the payment of all
expenses and debts incurred in the incorporation process jointly and severally if the company
cannot be incorporated; (ii) the refund of subscription monies to the subscribers, together with
interest, at bank rates for a deposit of the same term jointly and severally if the company cannot
be incorporated; and (iii) damages suffered by the company as a result of the default of the
promoters in the course of incorporation of the company. According to the Interim Regulations
on the Administration of Share Issuance and Trading promulgated by the State Council on April
22, 1993 (which is only applicable to the issuance and trading of shares in the PRC and their
related activities), if a company is established by means of public offering, the promoters of
such company are required to sign on the prospectus to ensure that the prospectus does not
contain any misrepresentation, serious misleading statements or material omissions, and
assume joint and several responsibility for it.
(3) Share capital
The promoters of a company may make contributions in cash or in kind denominated in
money and transferable under the law at their valuation (e.g., intellectual property or land use
rights, etc.).
In the case of contributions other than cash, the property injected must be valued and
verified and converted into shares.
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A company may issue registered or bearer share. However, shares issued to promoter(s)
or legal person(s) shall be in the form of registered share and shall be registered under the
name(s) of such promoter(s) or legal person(s) and shall not be registered under a different
name or the name of a representative.
The Trial Measures for Overseas Listing stipulates that the domestic enterprises that
engage in the overseas issuance and listing of securities may raise funds and pay dividends in
foreign currencies or in RMB.
According to the Trial Measures for Overseas Listing, in case of direct overseas issuance
and listing by domestic enterprises, shareholders holding unlisted shares in China shall apply
for converting such shares into overseas listed shares and listing them on overseas trading
venues for circulation in accordance with the relevant provisions of the CSRC, and entrust the
domestic enterprises to file the application with the CSRC. Domestic unlisted shares as
mentioned in the preceding paragraph refer to shares issued by domestic enterprises but not
listed or traded on domestic trading venues. Domestic unlisted shares shall be registered and
deposited with domestic securities registration and clearing institutions in a centralized
manner. The registration and settlement arrangements for overseas listed shares shall be
governed by the rules of the overseas places where shares are listed.
Shares may be offered at a price equal to or greater than, but not less than, par value.
The transfer of shares by shareholders should be conducted via the legally established
stock exchange or in accordance with other methods as stipulated by the State Council.
Transfer of registered shares by a shareholder must be made by means of an endorsement or
by other means stipulated by laws or administrative regulations. Bearer shares are transferred
by delivery of the share certificates to the transferee.
Shares held by a promoter of a company shall not be transferred within one year after the
date of the company’s incorporation. Shares issued by a company prior to the public offering
of its shares shall not be transferred within one year from the date of listing of the shares of
the company on a stock exchange. Directors, supervisors and senior officers of a company shall
not transfer over 25% of the shares held by each of them in the company each year during their
term of office and shall not transfer any share of the company held by each of them within one
year after the listing date. There is no restriction under the PRC Company Law as to the
percentage of shareholding a single shareholder may hold in a company.
No transfer of shares may be registered in the register of shareholders during the 20 days
preceding the date of the general meeting or during the five days preceding the record date set
for the distribution of the dividend.
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(4) Allocation and issuance of shares
All issue of shares of a joint stock limited company shall be based on the principles of
equality and fairness. The same class of shares must carry equal rights. Shares issued at the
same time and within the same class must be issued on the same conditions and at the same
price. It may issue shares at par value or at a premium, but it may not issue shares below the
par value.
The domestic enterprises that engage in the overseas issuance and listing of securities
shall, in accordance with the Trial Measures for Overseas Listing, submit to the CSRC a filing
report, legal opinions and other relevant materials that truly, accurately and completely
describe shareholder information and other circumstances for the record. In case of the direct
overseas issuance and listing of domestic enterprises, the issuer shall report the matter to the
CSRC for the record. In case of the indirect overseas issuance and listing of domestic
enterprises, the issuer shall designate a major domestic operating entity as the domestic
responsible person to report the matter to the CSRC for the record.
(5) Registered shares
According to the Company Law, shareholders may make capital contributions in cash, or
in kind, intellectual property rights, land use rights and other non-monetary property that can
be valued in money and can be transferred in accordance with the law. According to the Trial
Measures for Overseas Listing, the domestic enterprises that engage in the overseas issuance
and listing of securities may raise funds and pay dividends in foreign currencies or in RMB.
Under the Company Law, when the company issues shares in registered form, it shall
maintain a register of shareholders, stating the following matters:
 the name and domicile of each shareholder;
 the number of shares held by each shareholder;
 the serial numbers of shares held by each shareholder; and
 the date on which each shareholder acquired the shares.
(6) Increase of share capital
According to the Companies Law, if a joint stock limited company issues new shares, the
general meeting shall pass a resolution on the class and amount of new shares, the issuance
price of the new shares, the commencement and termination dates of the issuance of the new
shares and the class and amount of new shares to be issued to existing shareholders. When a
company is approved by the securities supervision and administration department under the
State Council to issue new shares to the public, it shall publish the prospectus, its financial and
accounting statements, and shall prepare the subscription form. Upon full receipt of the
proceeds from the company’s newly issued shares, the company shall carry out alteration
registration with the company registration authority and shall make a public announcement.
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(7) Reduction of share capital
A company may reduce its registered capital in accordance with the following procedures
prescribed by the Company Law:
 it shall prepare a balance sheet and a list of property;
 The reduction of registered capital shall be approved by a shareholders’ general
meeting;
 it shall inform its creditors of the reduction in registered capital within 10 days and
publish an announcement of the reduction in the newspaper within 30 days after the
resolution approving the reduction has been adopted;
 creditors may, within 30 days after receiving the notice, or within 45 days of the
public announcement if no notice has been received, require the company to pay its
debts or provide guarantees covering the debts;
 it shall apply to the relevant registration administration for the registration of the
reduction in registered capital.
(8) Repurchase of shares
According to the Company Law, a joint stock limited company may not repurchase its
own shares other than for one of the following purposes: (i) to reduce its registered capital; (ii)
to merge with another company that holds its shares; (iii) to grant its shares to its employees
for the purpose of implementing the employee stock ownership plan or share incentive scheme;
(iv) to repurchase its shares from shareholders who are against the resolution regarding the
merger or division with other companies at the general meeting; (v) to use for the conversion
of the convertible corporate bonds issued by the listed company; and (vi) to protect the value
of the company and the rights and interests of shareholders of the listed company as required.
The acquisition of shares on the grounds set out in (i) to (ii) above shall be approved by
the resolution of general meeting. The repurchase of its shares in cases (iii), (v) or (vi) above
shall require a resolution of the board of directors by two-thirds of the directors present at the
board meeting, in accordance with the provisions of the articles of association of the company
or as authorized by the general meeting.
Following the repurchase of its shares in accordance with (i) above, such shares shall be
canceled within 10 days from the date of repurchase; the shares repurchased in the case of (ii)
or (iv) above shall be transferred or canceled within six months. The total number of shares
held by the company after share repurchase under the circumstances in (iii), (v) or (vi) above
shall not exceed 10% of the total number of the company’s issued shares, and shall be
transferred or canceled within three years.
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A listed company that repurchases its own shares shall fulfill its disclosure obligations in
accordance with the provisions of the Securities Law. If a share repurchase is made pursuant
to (iii), (v) or (vi) above, it shall be publicly traded in a centralized manner.
(9) Share Transfer
Shares held by shareholders may be transferred in accordance with the relevant laws and
regulations. Pursuant to the Company Law, transfer of shares by shareholders shall be carried
out at a legally established securities exchange or in other ways stipulated by the State Council.
No modifications of registration in the share register caused by transfer of registered shares
shall be carried out within 20 days prior to the convening of shareholder’s general meeting or
five days prior to the base date for determination of dividend distributions. However, where
there are separate provisions by law on alternation of registration in the share register of listed
companies, those provisions shall prevail.
Under the Company law, shares issued prior to the public issuance of shares shall not be
transferred within one year from the date of the joint stock limited company’s listing on a stock
exchange. Directors, supervisors and senior officers shall declare to the company their
shareholdings in the Company and any changes of such shareholdings. They shall not transfer
more than 25% of all the shares they hold in the Company annually during their tenure. They
shall not transfer the shares they hold within one year from the date on which the Company’s
shares are listed and commenced trading on a stock exchange, nor within six months after their
resignation from their positions with the Company.
(10) Shareholders
Under the Company Law and the Articles of Association Guidelines, the rights of holders
of ordinary shares of a joint stock limited company include:
 the right to attend or appoint a proxy to attend general meetings and to vote thereat;
 the right to transfer shares in accordance with laws, administrative regulations and
provisions of the articles of association;
 the right to inspect the Company’s articles of association, share register, counterfoil
of Company debentures, minutes of general meetings, resolutions of meetings of the
board of directors, resolutions of meetings of the Supervisory Committee and
financial and accounting reports and to make proposals or enquiries on the
Company’s operations;
 the right to bring an action in the people’s court to rescind resolutions passed by
general meetings and board of directors where the articles of association is violated
by the above resolutions;
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 the right to receive dividends and other forms of profit distribution according to the
proportion of shares they hold;
 in the event of the termination or liquidation of the Company, the right to participate
in the distribution of the residual properties of the Company in proportion to the
number of shares held; and
 other rights granted by laws, administrative regulations, other regulatory documents
and the Company’s articles of association.
The obligations of a shareholder include the obligation to abide by the Company’s articles
of association, to pay the subscription moneys in respect of the shares subscribed for and in
accordance with the form of making capital contributions, to be liable for the Company’s debts
and liabilities to the extent of the amount of his or her subscribed shares and any other
shareholders’ obligation specified in the Company’s articles of association.
(11) General Meeting
The general meeting is the organ of authority of the company, which exercises its powers
in accordance with the Company Law. Under the Company Law, the general meeting exercises
the following powers and functions:
 to decide on the Company’s operational policies and investment plans;
 to elect or replace the directors and supervisors (other than the supervisor
representative of the employees) and to decide on matters relating to the
remuneration of directors and supervisors;
 to examine and approve reports of the Board;
 to examine and approve reports of the Supervisory Committee;
 to examine and approve annual financial budgets and final accounts of the
Company;
 to examine and approve profit distribution plans and loss recovery plans of the
Company;
 to make resolutions concerning the increase or reduction of the Company’s
registered capital;
 to resolve on issuance of bonds of the Company;
 to decide on issues such as merger, division, dissolution, liquidation and structure
change of the Company;
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 to modify the articles of association of the Company; and
 other powers and functions stipulated by the articles of association.
The annual general meeting is required to be convened once a year. Under the Company
Law, an extraordinary general meeting is required to be held within two months after the
occurrence of any of the following:
 the number of directors is less than the number stipulated by the law or less than two
thirds of the number specified in the articles of association;
 the aggregate losses of the company which are not recovered reach one-third of the
company’s total paid-in share capital;
 shareholders alone or in aggregate holding 10% or more of the Company’s shares
request for the convening of an extraordinary general meeting;
 the Board considers it necessary;
 the Supervisory Committee proposes such a meeting be held; or
 other circumstances stipulated by the articles of association.
Under the Company Law, general meetings shall be convened by the Board, and presided
over by the chairman of the Board. In the event that the chairman is incapable of performing
or does not perform his duties, the meeting shall be presided over by the vice chairman. In the
event that the vice chairman is incapable of performing or does not perform his duties, a
director nominated by more than half of directors shall preside over the meeting.
Where the Board of Directors is incapable of performing or does not perform its duties
of convening the general meetings, the supervisory committee shall convene and preside over
such meetings in a timely manner. In case the supervisory committee fails to convene and
preside over such meetings, shareholders alone or in aggregate holding more than 10% of the
company’s shares for 90 days consecutively may unilaterally convene and preside over such
meetings.
Under the Company Law, notice of general meetings shall state the time and venue of and
matters to be considered at the meeting and shall be given to all shareholders 20 days before
the meeting. Notice of extraordinary general meeting shall be given to all shareholders 15 days
prior to the meeting. According to the Articles of Association Guidelines, after the notice of
the General Meeting is given, without cogent reason, the general meeting shall not be
postponed or canceled, and the proposals set out in the notice shall not be canceled. Once the
general meeting is adjourned or canceled, the convener shall make public announcement and
explain the reasons at least 2 working days before the original holding date.
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There is no specific provision in the PRC Company Law regarding the number of
shareholders constituting a quorum in Shareholders’ meetings. According to the Articles of
Association Guidelines, The Board of Directors and the Board Secretary shall cooperate for the
general meeting convened by the Supervisory Committee or the Shareholders on their own. The
Board shall provide the register of shareholders as at the Record Date. When the general
meeting is held, all the directors, supervisors and Board secretary of the Company shall attend
the meeting, while the general manager and other senior officers shall attend as a nonvoting
delegate.
According to the Articles of Association Guidelines, the shareholders holding more than
3% of the shares of the Company separately or jointly may raise temporary proposal and submit
it to the convener in writing 10 days before the general meeting is held. The convener shall
supplement the notice of general meeting in 2 days after receiving the proposal and publicize
the content of the temporary proposal.
Under the Company Law, shareholders present at general meetings have one vote for each
share they hold, save that shares held by the company are not entitled to any voting rights.
Pursuant to the provisions of the articles of association or a resolution of the general
meeting, the accumulative voting system may be adopted for the election of directors and
supervisors at the general meeting. Under the accumulative voting system, each share shall be
entitled to vote equivalent to the number of directors or supervisors to be elected at the general
meetings and shareholders may consolidate their voting rights when casting a vote.
Pursuant to the Company Law and the Articles of Association Guidelines, resolutions of
the general meeting shall be adopted by more than half of the voting rights held by the
shareholders present at the meeting. However, resolutions of the general meeting regarding the
following matters shall be adopted by more than two-thirds of the voting rights held by the
shareholders present at the meeting: (i) amendments to the articles of association; (ii) the
increase or decrease of registered capital; (iii) the equity incentive plans; (iv) the amount of
purchase or disposal of major assets or guarantee of the company within one year exceeding
thirty percent of the company’s total audited assets for the most recent period; (v) the merger,
division, dissolution, liquidation or change in the form of the company; (vi) other matters
considered by the general meeting, by way of an ordinary resolution, to be of a nature which
may have a material impact on the company and should be adopted by a special resolution,
according to the laws, administrative regulations or the articles of association.
Under the Company Law, meeting minutes shall be prepared in respect of decisions on
matters discussed at the general meetings. 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.
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(12) Board of Directors
Under the Company Law, a joint stock limited company shall have a board of directors,
which shall be composed of 5 to 19 members. Members of the board of directors may include
representatives of the employees of the company, who shall be democratically elected by the
company’s staff at the staff representative assembly, general staff meeting or otherwise. The
term of the directors shall be prescribed by the articles of association, provided that each term
may not exceed 3 years. Upon the expiration of the term, the Directors may be re-elected and
serve consecutive terms. A director shall continue to perform his duties in accordance with the
laws, administrative regulations and articles of association until a duly re-elected director takes
office, if re-election is not conducted in a timely manner upon the expiry of his term of office,
or if the resignation of directors results in the number of directors being less than the quorum.
Under the Company Law, the board of directors mainly exercises the following powers
and functions:
 to convene the general meetings and report on its work to the general meetings;
 to implement the resolutions of general meetings;
 to decide on the company’s business plans and investment proposals;
 to formulate the annual financial budgets and final accounting plans of the
Company;
 to formulate the profit distribution plan and loss recovery plan of the Company;
 to formulate proposals for the increase or reduction of the Company’s registered
capital and the issuance of corporate bonds;
 to develop the scheme on the merger, separation, dissolution and change of company
form of the Company;
 to formulate the basic management system of the Company; and
 any other powers and functions stipulated by the articles of association.
(13) Board meetings
Under the Company Law, meetings of the board of directors of a joint stock limited
company shall be convened at least twice a year. Notice of meeting shall be given to all
directors and supervisors 10 days before the meeting. Interim board meetings may be proposed
to be convened by shareholders representing more than 10% of voting rights, more than
one-third of the directors or the supervisory committee. The Chairman of the Board shall
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--- page 611 ---
convene and preside over a Board meeting within ten days after receiving the proposal. A board
meeting not be held unless half or more of the directors are present. Resolutions of the board
of directors shall be passed by more than half of all directors. In the voting process, one
director shall represent one vote. Directors shall attend board meetings in person. If a director
is unable to attend a board meeting, he may appoint another director by a written power of
attorney specifying the scope of the authorization to attend the meeting on his behalf.
If a resolution of the board of directors violates the laws, administrative regulations or the
articles of association, and as a result of which the company sustains serious losses, the
directors participating in the resolution are liable to compensate the company. However, if it
can be proved that a director expressly objected to the resolution when the resolution was voted
on, and that such objection was recorded in the minutes of the meeting, such director may be
released from that liability.
(14) Board chairman
Under the Company Law, the board of directors shall appoint a chairman and may appoint
a vice chairman. The chairman and the vice chairman are elected with approval of more than
half of all the directors. The chairman shall convene and preside over board meetings and
examine the implementation of board resolutions. The vice chairman shall assist the work of
the chairman. In the event that the chairman is incapable of performing or not performing his
duties, the duties shall be performed by the vice chairman. In the event that the vice chairman
is incapable of performing or not performing his duties, a director nominated by more than half
of the directors shall perform his duties.
(15) Qualifications of directors
The Company Law provides that the following persons may not serve as a director:
 a person who is unable or has limited ability to undertake any civil liabilities;
 a person who has been convicted of an offense of bribery, corruption, embezzlement
or misappropriation of property, or the destruction of socialist market economy
order; or who has been deprived of his political rights due to his crimes, in each case
where less than five years have elapsed since the date of completion of the sentence;
 a person who has been a former director, factory manager or manager of a company
or an enterprise that has entered into insolvent liquidation and who was personally
liable for the insolvency of such company or enterprise, where less than three years
have elapsed since the date of the completion of the bankruptcy and liquidation of
the company or enterprise;
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 a person who has been a legal representative of a company or an enterprise that has
had its business license revoked due to violations of the law and has been ordered
to close down by law and the person was personally responsible, where less than
three years have elapsed since the date of such revocation; or
 a person who is liable for a relatively large amount of debts that are overdue.
Other unsuitable circumstances for directorships are detailed in the Articles of
Association Guidelines.
(16) Supervisory Committee
A joint stock limited company shall have a supervisory committee composed of not less
than three members. The supervisory committee is made up of representatives of the
shareholders and an appropriate proportion of representatives of the employees of the
company. The actual proportion shall be stipulated in the articles of association, provided that
the proportion of representatives of the employees shall not be less than one third of the
supervisors. Representatives of the employees of the company in the supervisory committee
shall be democratically elected by the employees at the employees’ representative assembly,
employees’ general meeting or otherwise. A director and a senior officer of the company shall
not serve concurrently as a supervisor.
The supervisory committee shall have a chairman and may have a vice chairman. The
chairman and deputy chairman of the supervisory committee shall be elected by more than half
of all supervisors. The chairman of the supervisory committee shall convene and preside over
the meetings of the supervisory committee. In the event that the chairman of the supervisory
committee is unable or fails to perform his/her duties, the vice chairman of the supervisory
committee shall convene and preside over the meetings of the supervisory committee. In the
event that the vice chairman is unable or fails to perform his/her duties, the meetings shall be
convened and presided over by a supervisor jointly nominated by more than half of all the
supervisors.
Each term of a supervisor shall be three years, and a supervisor may continue to serve his
post if he is re-elected. A supervisor shall continue to perform his duties in accordance with the
laws, administrative regulations and articles of association until a duly re-elected director takes
office, if re-election is not conducted in a timely manner upon the expiry of his term of office,
or if the resignation of supervisors results in the number of supervisors being less than the
quorum.
The supervisory committee shall convene a meeting at least every six months. According
to the Company Law, the supervisory committee shall make resolutions with the consent of a
majority of all supervisors.
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The supervisory committee exercises the following functions and power:
 to review the Company’s financial position;
 to supervise the directors and senior officers in the performance of their duties and
to propose the removal of directors or senior officers who violate laws, regulations,
the articles of association or resolutions of the general meeting;
 when the acts of directors and senior officers are harmful to the company’s interests,
to require correction of those acts;
 to propose the convening of extraordinary general meetings and to convene and
preside over general meetings when the board of directors fails to perform the duty
of convening and presiding over general meetings under the law;
 to initiate proposals for resolutions to general meetings;
 to initiate proceedings against directors and senior officers;
 other powers and functions stipulated by the articles of association; and
 The supervisors may attend the meetings of the Board, and may inquire about or put
forth proposals on matters covered by resolutions of the Board. The supervisory
committee may initiate investigations into any irregularities identified in the
operation of the Company and, where necessary, may engage an accounting firm to
assist their work at the Company’s expense.
(17) Manager and senior officers
Under the Company Law, a company shall have a manager who shall be appointed or
removed by the board of directors. The manager shall report to the board of directors and may
exercise the following powers and functions:
 to supervise the business and administration of the Company and arrange for the
implementation of resolutions of the board of directors;
 to arrange for the implementation of the Company’s annual business plans and
investment proposals;
 to formulate the general administration system of the Company;
 to formulate the specific rules of the Company;
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--- page 614 ---
 to recommend the appointment and dismissal of deputy managers and person in
charge of finance;
 to appoint or dismiss other administration officers (other than those required to be
appointed or dismissed by the board of directors); and
 other powers conferred by the board of directors or the articles of association.
The manager shall comply with other provisions of the articles of association concerning
his/her powers. The manager shall attend board meetings.
According to the Company Law, senior officers shall mean the manager, deputy
manager(s), person-in-charge of finance, board secretary (in case of a listed company) of a
company and other personnel as stipulated in the articles of association.
(18) Duties of the Directors, Supervisors and Senior Officers
Directors, supervisors and senior officers of the Company are required under the
Company Law to comply with the relevant laws, regulations and the articles of association, and
have fiduciary and diligent duties to the Company. The directors, supervisors and senior
officers shall not take advantage of their authority to accept bribes or other illegal income, and
shall not misappropriate the property of the Company. Directors and senior officers are
prohibited from:
 misappropriating the funds of the Company;
 depositing the Company’s capital into accounts under his own name or the name of
other individuals;
 lending the company funds to others or providing guarantees in favor of others with
the company’s assets in violation of the articles of association or without prior
approval of the general meetings or board of directors;
 entering into contracts or deals with the company in violation of the articles of
association or without prior approval of the general meetings;
 using their position and powers to procure business opportunities for themselves or
others that should have otherwise been available to the company or operating for
their own benefits or managing on behalf of others businesses similar to that of the
Company without prior approval of the general meeting;
 accepting and possessing commissions paid by a third party for transactions
conducted with the Company;
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 unauthorized divulgence of confidential business information of the Company; or
 other acts in violation of the duty of loyalty to the company.
A director, supervisor or senior officer who contravenes any law, regulation or the
Company’s articles of association in the performance of his duties and result in any loss to the
Company shall be personally liable to the Company.
(19) Finance and Accounting
Under the Company Law, a company shall establish financial and accounting systems
according to laws, administrative regulations and the regulations of the financial department of
the State Council. The Company shall at the end of each financial year prepare a financial and
accounting report which shall be audited by an accounting firm as required by law. The
Company’s financial and accounting report shall be prepared in accordance with provisions of
the laws, administrative regulations and the regulations of the financial department of the State
Council.
Pursuant to the Company Law, the Company shall deliver its financial and accounting
reports to all shareholders within the time limit stipulated in the articles of association and
make its financial and accounting reports available at the Company for inspection by the
shareholders at least 20 days before the convening annual general meeting. The joint stock
limited company that has publicly issued its shares shall also publish its financial and
accounting reports.
When distributing each year’s after-tax profits, the company shall set aside 10% of its
after-tax profits into a statutory common reserve fund (except where the fund has reached 50%
of its registered capital).
If its statutory common reserve fund is not sufficient to make up losses of the previous
year, profits of the current year shall be applied to make up losses before allocation is made
to the statutory common reserve fund pursuant to the above provisions.
After making allocation to the statutory common reserve fund of the Company from its
after-tax profits, the Company may, subject to resolutions adopted at a Shareholders’ meeting,
allocate funds from the after-tax profits to the discretionary common reserve fund.
The remaining after-tax profits after making up losses and allocation of common reserve
fund shall be distributed in proportion to the number of shares held by the shareholders, unless
otherwise stipulated in the articles of association. Shares held by the Company shall not be
entitled to any distribution of profit.
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--- page 616 ---
The premium received through issuance of shares at prices above par value and other
incomes required by the financial department of the State Council to be allocated to the capital
reserve fund shall be allocated to the company’s capital reserve fund.
The Company’s reserve fund shall be applied to make up losses of the Company, expand
its business operations or be converted to increase the registered capital of the company.
However, the capital reserve fund may not be applied to make up the company’s losses. Upon
the conversion of statutory common reserve fund into capital, the balance of the statutory
common reserve fund shall not be less than 25% of the registered capital of the company before
such conversion.
The Company shall have no other accounting books except the statutory accounting
books. Its assets shall not be deposited in any accounts opened in the name of any individual.
(20) Employment and Retirement of Accounting Firms
According to the Company Law, the appointment or dismissal of accounting firms
responsible for the auditing of a company shall be determined by the general meeting or board
of directors in accordance with the articles of association. The accounting firm should be
allowed to make representations when the shareholders’ general meeting or board of directors
conducts a vote on the dismissal of the accounting firm. The company shall provide true and
complete accounting vouchers, accounting books, financial accounting reports and other
accounting materials to the hired accounting firm, and shall not refuse, conceal or make false
reports.
According to the Articles of Association Guidelines, the Company shall guarantee to
provide true and complete accounting vouchers, accounting books, financial accounting reports
and other accounting materials to the hired accounting firm, and shall not refuse, conceal or
make false reports. The audit fee of an accounting firm shall be decided by the general meeting.
(21) Profit distribution
According to the Company Law, the Company shall not distribute profits before losses are
covered and the statutory common reserve is drawn.
(22) Revision of the articles of association
Any amendments to the company’s articles of association must be made in accordance
with the procedures set out in the company’s articles of association. In the event of a company
registration, the amendments to the articles of association shall be registered with the relevant
registration authorities.
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--- page 617 ---
(23) Dissolution and Liquidation
According to the Company Law, a company shall be dissolved by reason of the following:
(i) the term of its operations set down in the Articles of Association has expired or other
events of dissolution specified in the Articles of Association have occurred; (ii) the general
meeting has resolved to dissolve the company; (iii) the company is dissolved by reason of
merger or division; (iv) the business license is revoked; the company is ordered to close down
or be dissolved; or (v) the company is dissolved by the people’s court in response to the request
of shareholders holding shares that represent more than 10% of the voting rights of all its
shareholders, on the grounds that the company suffers significant hardship in its operation and
management that cannot be resolved through other means, and the ongoing existence of the
company would bring significant losses to shareholders.
In the event of (i) above, the company may carry on its existence by amending its articles
of association. The amendment of the articles of association in accordance with provisions set
out above shall require approval of more than two thirds of voting rights of shareholders
attending the general meeting.
Where the company is dissolved in the circumstances described in subparagraphs (i), (ii),
(iv), or (v) above, a liquidation committee shall be established and the liquidation process shall
commence within 15 days after the occurrence of an event of dissolution.
The members of the company’s liquidation committee shall be composed of its directors
or the personnel appointed by the shareholders’ general meeting. If a liquidation committee is
not established within the stipulated period, creditors may apply to the people’s court and
request the court to appoint relevant personnel to form the liquidation committee. The people’s
court should accept such application and form a liquidation committee to conduct liquidation
in a timely manner.
The liquidation committee shall exercise the following functions and power during
liquidation:
 to liquidate the company’s assets and to prepare a balance sheet and an inventory of
the assets;
 to notify creditors through notice or public announcement;
 to deal with the outstanding business of the Company in connection with liquidation;
 to settle all outstanding tax payment and the tax payment which arise in the course
of the liquidation process;
 to claim credits and pay off debts;
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--- page 618 ---
 to handle the company’s remaining assets after its debts have been paid off; and
 to represent the company in civil lawsuits.
The liquidation committee shall notify the company’s creditors within 10 days after its
establishment and issue public notices in newspapers within 60 days. A creditor shall lodge his
claim with the liquidation committee within 30 days after receiving notification, or within 45
days of the public notice if he/she did not receive any notification. A creditor shall state all
matters relevant to his creditor rights in making his/her claim and furnish evidence. The
liquidation committee shall register such claims. The liquidation committee shall not make any
debt settlement to creditors during the period of claim.
Upon liquidation of properties and the preparation of the balance sheet and inventory of
assets, the liquidation committee shall draw up a liquidation plan to be submitted to the general
meeting or people’s court for confirmation.
The company’s remaining assets after payment of liquidation expenses, wages, social
insurance expenses and statutory compensation, outstanding taxes and debts shall be
distributed to shareholders according to their shareholding proportion. It shall continue to exist
during the liquidation period, although it can only engage in any operating activities that are
related to the liquidation. The company’s properties shall not be distributed to the shareholders
before repayments are made in accordance to the foregoing provisions.
Upon liquidation of the company’s properties and the preparation of the balance sheet and
inventory of assets, if the liquidation committee becomes aware that the company does not
have sufficient assets to meet its liabilities, it must apply to the people’s court for a declaration
for bankruptcy.
Following such declaration, the liquidation committee shall hand over all matters relating
to the liquidation to the people’s court.
Upon completion of the liquidation, the liquidation committee shall submit a liquidation
report to the shareholders’ general meeting or the people’s court for verification. Thereafter,
the report shall be submitted to the registration authority of the company in order to cancel the
company’s registration, and a public notice of its termination shall be issued. Members of the
liquidation committee are required to discharge their duties honestly and in compliance with
the relevant laws. Members of the liquidation committee shall be prohibited from abusing their
powers to accept bribes or other unlawful income and from misappropriating the company’s
properties.
A member of the liquidation committee is liable to indemnify the company and its
creditors in respect of any loss arising from his intentional or gross negligence.
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--- page 619 ---
(24) Overseas listing
According to the Trial Measures for Overseas Listing, the issuer’s initial public offering
or listing overseas shall be filed with the CSRC within three working days after the issuer
submits the listing application documents overseas. Where the issuer issues securities in the
same overseas market following the overseas issuance and listing, it shall be filed with the
CSRC within three working days upon the completion of the issuance. Where the issuer issues
securities in other overseas markets following the overseas issuance and listing, it shall be filed
in accordance with the provisions of the first paragraph of this Article. If the filing materials
are complete and in compliance with the regulations, the CSRC shall complete the filing within
20 working days from the date of receipt of the filing materials, and publicize the filing
information through its website. Otherwise, the CSRC shall inform the issuer of the materials
to be supplemented within five working days after receiving the filing materials. The issuer
shall supplement the materials within 30 working days.
(25) Loss of share certificates
In the event that a registered share certificate is lost, stolen or destroyed, the shareholder
concerned may apply to the People’s Court to declare the certificate null and void in
accordance with the relevant provisions of the Civil Procedure Law. After the people’s court
has invalidated such share certificate through the public notice procedure, the shareholder may
apply to the company for re-issuance of a certificate for the share.
(26) Suspension and termination of listing
Provisions relating to suspension and termination of listing have been removed from the
Company Law. The provisions relating to suspension of listing have also been removed from
the Securities Law of the People’s Republic of China (2019 Revision). Where there are
circumstances that necessitate the delisting as stipulated by a stock exchange, the stock
exchange shall terminate the listing and trading of the relevant securities according to business
rules.
According to the Trial Measures for Overseas Listing, if an issuer voluntarily or
compulsorily terminates its listing, it shall report the particulars to the CSRC within three
working days from the date of occurrence and announcement of the relevant matters.
(27) Merger and Division
Companies may merge through merger by absorption or through the establishment of a
newly merged entity. If it merges by absorption, the company which is absorbed shall be
dissolved. If it merges by forming a new corporation, both companies will be dissolved.
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--- page 620 ---
4. SECURITIES LA W AND REGULATIONS
The PRC has promulgated a number of regulations that relate to the issue and trading of
shares and disclosure of information. In October 1992, the State Council established the
Securities Committee and the CSRC. The Securities Committee is responsible for coordinating
the drafting of securities regulations, formulating securities-related policies, planning the
development of securities markets, directing, coordinating and supervising all securities-
related institutions in the PRC and administering the CSRC. The CSRC is the regulatory arm
of the Securities Committee and is responsible for the drafting of regulatory provisions of
securities markets, supervising securities companies, regulating public offers of securities by
PRC companies in the PRC or overseas, regulating the trading of securities, compiling
securities related statistics and undertaking relevant research and analysis. In April 1998, the
State Council consolidated the two departments and reformed the CSRC.
The Interim Provisional Regulations on the Administration of Share Issuance and Trading
deals with the application and approval procedures for public offerings of equity securities,
trading in equity securities, the acquisition of listed companies, deposit, clearing and transfer
of listed equity securities, the disclosure of information with respect to a listed company,
investigation, penalties and dispute settlement.
The PRC Securities Law took effect on July 1, 1999 and was revised on August 28, 2004,
October 27, 2005, June 29, 2013, August 31, 2014 and December 28, 2019, respectively. This
is the first national securities law in the PRC, which is divided into 14 chapters and 226 articles
regulating, among other things, the issue and trading of securities, takeovers by listed
companies, securities exchanges, securities companies and the duties and responsibilities of the
State Council’s securities regulatory authorities. The PRC Securities Law comprehensively
regulates activities in the PRC securities market. Article 224 of the PRC Securities Law
provides that a domestic enterprise must comply with the relevant provisions of the State
Council in order to list its shares outside the PRC. Currently, the issuance and trading of
foreign issued shares are mainly governed by the rules and regulations promulgated by the
State Council and the CSRC.
5. ARBITRATION AND ENFORCEMENT OF ARBITRAL A W ARDS
On August 31, 1994, the Standing Committee of the National People’s Congress adopted
the Arbitration Law of the People’s Republic of China (the “ Arbitration Law ”), which became
effective on September 1, 1995 and was amended on August 27, 2009 and September 1, 2017,
respectively. According to the Arbitration Law, the Arbitration Commission may formulate
provisional rules for arbitration in accordance with the Arbitration Law and the Civil Procedure
Law prior to the promulgation of arbitration regulations by the China Arbitration Association.
If the parties specify by agreement that arbitration is the method of dispute settlement, the
people’s court will refuse to accept the case unless the arbitration agreement is found to be
invalid.
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According to the Arbitration Law and Civil Procedure Law, the arbitration award shall be
final and binding on both parties. If one party to the arbitration fails to comply with the arbitral
award, the other party to the arbitral award may apply to the People’s Court for enforcement
of the award. The people’s court may refuse to enforce an arbitral award made by an arbitration
commission if the procedures of the arbitration or the composition of the arbitral tribunal are
in violation of the statutory procedures, or if the award is outside the scope of the arbitration
agreement or outside the jurisdiction of the arbitration commission.
A party seeking to enforce an arbitral award made by a Chinese arbitral tribunal in respect
of a party that is not physically present or whose property is not located in China may apply
for enforcement to a foreign court having jurisdiction over the case. Similarly, arbitral awards
made by foreign arbitral institutions may be recognized and enforced by Chinese courts in
accordance with the principle of reciprocity or any international treaty signed or recognized by
China. China recognized the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (“ New Y ork Convention ”), adopted on June 10, 1958, pursuant to a resolution
of the Standing Committee of the National People’s Congress adopted on December 2, 1986.
The New Y ork Convention provides that all arbitral awards made by a member state of the New
Y ork Convention are subject to recognition and enforcement by all other member states of the
New Y ork Convention, but that a member state of the New Y ork Convention has the right of
refusal of enforcement in certain circumstances, including where enforcement of the arbitral
award conflicts with the public policy of the state in which the application for enforcement of
the arbitral award has been made. Upon China’s accession to the New Y ork Convention, the
Standing Committee of the National People’s Congress declared that (i) China would recognize
and enforce foreign arbitral awards only on the basis of the principle of reciprocity, and (ii)
China would apply the New Y ork Convention only in respect of disputes arising from
contractual and non-contractual commercial legal relationships, as determined in accordance
with Chinese law.
An arrangement has been reached between Hong Kong and the Supreme People’s Court
on the issue of mutual enforcement of arbitral awards. On June 18, 1999, the Supreme People’s
Court adopted the Arrangement Concerning Reciprocal Enforcement of Arbitral Awards
between the Mainland and the Hong Kong Special Administrative Region, which came into
effect on February 1, 2000. Under the Arrangement, awards made by Mainland China’s arbitral
institutions under the Arbitration Law may be enforced in Hong Kong, and Hong Kong arbitral
awards may also be enforced in Mainland China.
6. JUDICIAL DECISION AND ENFORCEMENT
According to the Arrangement of the Supreme People’s Court on Reciprocal Recognition
and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland
and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements
Between Parties Concerned promulgated by the Supreme People’s Court on 3 July 2008 and
implemented on 1 August 2008 (the “ Arrangement ”), a party with a final court judgment
rendered by a Hong Kong court and a PRC court requiring payment of money in a civil or
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--- page 622 ---
commercial case pursuant to a choice of court agreement in writing may apply to the PRC court
or Hong Kong court for recognition and enforcement of the judgment according to the
Arrangement. “A choice of court agreement in writing” is defined as any agreement in writing
entered into between parties for the purpose of resolving a dispute that has arisen or is likely
to arise in connection with a particular legal relationship, in which a PRC court or a Hong Kong
court is expressly designated as the court having sole jurisdiction for the dispute. Accordingly,
the final court judgment satisfying the aforesaid conditions of the Arrangement may be
recognized and enforced by the PRC court or Hong Kong court upon the application by the
parties concerned.
On January 18, 2019, the Supreme People’s Court of PRC and the Hong Kong
Government signed the Arrangement on Mutual Recognition and Enforcement of Judgments in
Civil and Commercial Cases between the Courts of the Mainland and the Hong Kong Special
Administrative Region (the “ New Arrangement ”), which aims to establish a clearer and
definitive mechanism for the recognition and enforcement of judgments in a wider range of
civil and commercial cases between Hong Kong and Mainland China. The new arrangement
terminates the requirement to enter into jurisdictional agreements for the mutual recognition
and enforcement of judgments. The new arrangement came into effect on January 29, 2024
after the promulgation of the judicial interpretation by the Supreme People’s Court and the
completion of the relevant legislative procedures in Hong Kong. The New Arrangement has
replaced the Arrangement upon its entry into force.
7. SHANGHAI-HONG KONG STOCK CONNECT
On April 10, 2014, the CSRC and the SFC issued the “Joint Communiqué of China
Securities Regulatory Commission and Hong Kong Securities and Futures Commission —
Principles to be Observed in the Expected Implementation of the Pilot Operation of
Shanghai-Hong Kong Stock Market Transaction Interconnection and Interworking Mechanism,
base on which approval was given in principle for the Shanghai Stock Exchange (“ SSE”),
HKEX, China Securities Depository and Clearing Corporation (“ CSDCC ”) and HKSCC to
carry out a pilot run of the Shanghai-Hong Kong stock market trading interconnection
mechanism (“ Shanghai-Hong Kong Stock Connect ”). The Shanghai-Hong Kong Stock
Connect includes both the Shanghai Stock Connect and the Hong Kong Stock Connect. The
Hong Kong Stock Connect refers to Chinese investors entrusting Chinese securities companies
to make declarations to the HKEX through the securities trading service companies established
by the SSE to buy and sell stocks listed on the HKEX within the prescribed scope. At the initial
stage of the pilot operation, the scope of stocks under the Hong Kong Stock Connect will be
the constituent stocks of the Hang Seng Composite LargeCap Index and the Hang Seng
Composite MidCap Index of the HKEX, and the stocks of A+H-share companies that are listed
on both the HKEX and the Shanghai Stock Exchange. The total quota for Hong Kong Stock
Connect will be RMB250 billion, with a daily quota of RMB10.5 billion. At the initial stage
of the pilot operation, the SFC will require that Chinese investors participating in the Hong
Kong Stock Connect be limited to institutional investors and individual investors with a
combined securities account and fund account balance of not less than RMB500,000.
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On November 10, 2014, the CSRC and the SFC issued a joint announcement approving
the official launch of the Shanghai-Hong Kong Stock Connect by SSE, HKEX, CSDCC and
HKSCC. Stock trading under the Shanghai-Hong Kong Stock Connect commenced on
November 17, 2014, according to the Joint Announcement.
On September 30, 2016, the CSRC amended the “Recordal Requirements on the Placing
of Shares by Hong Kong Listed Companies to Original Domestic Shareholders under the Hong
Kong Stock Connect”, which became effective on the same date. The placing of shares by Hong
Kong listed companies to original domestic shareholders under the Hong Kong Stock Connect
shall be filed with the CSRC. After obtaining the approval of the HKEX, applications for share
placements by Hong Kong listed companies should be submitted to the CSRC with the
application materials and approval documents. The CSRC will conduct supervision based on
the approval opinions and conclusions of the Hong Kong side.
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--- page 624 ---
This appendix contains a summary of the principal provisions of the Articles of
Association adopted on 2024, which will become effective on the date of listing of the H Shares
on the HKEX. This Appendix is mainly designed to provide potential investors with an
overview of the Articles of Association of the Company, therefore, it may not contain the
information that is important to potential investors. As discussed in “Appendix VII—
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG AND
A V AILABLE ON DISPLAY”, the full Chinese version of the Articles of Association is
available for inspection.
1. SHARES, REGISTERED CAPITAL AND TRANSFER OF SHARES
Shares of the company are represented by share certificates.
The shares of the Company shall be issued based on the principle of openness, fairness
and impartiality and shall rank pari passu in all respects with the shares of the same class.
Shares of the same class issued at the same time shall be issued under the same condition
and at the same price. The same price shall be paid for each of the shares subscribed for by all
entities or individuals.
The Company shall not provide grants, loans, guarantees and other financial assistance
for others to acquire shares of the Company or its parent company, except for the Company’s
implementation of the Employee Stock Ownership Plan.
The Company may, for the benefit of the Company, provide financial assistance to others
for the acquisition of shares of the Company upon a resolution of the general meeting, or a
resolution of the board of directors in accordance with the articles of association or the
authorization of the general meeting, provided that the total amount of financial assistance
shall not exceed 10% of the total issued share capital. Resolutions of the Board of Directors
shall be passed by at least two-thirds of all directors.
2. INCREASE AND REDUCTION IN CAPITAL AND REPURCHASE OF SHARES
Based on the needs of operation and development, the Company may increase capital by
the following means in accordance with the provisions of the laws, regulations and securities
regulatory rules of the premise where the Company’s shares are listed stipulate otherwise upon
resolution of the general meeting:
 public offering of Shares;
 non-public offering of Shares;
 distributing bonus shares to its existing Shareholders;
 conversion of capital reserve into share capital;
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--- page 625 ---
 other methods specified by the laws and administrative regulations, securities
regulatory rules of the place where the Company’s shares are listed and approved by
the Securities Regulatory Commission of the People’s Republic of China (the
“CSRC”).
The Company may reduce its registered capital. Such reduction shall be made in
accordance with the procedures set out in the Company Law, Hong Kong Listing Rules and
other relevant requirements and the Articles of Association.
The Company shall not purchase its own shares, except in any of the following
circumstances:
 To reduce the registered capital of the Company;
 to merge with another company that holds its shares;
 To use the shares in the employee share ownership plan or for share incentive;
 The shareholders disagreeing with the merger or division resolution made by the
general meeting ask the Company to acquire their shares;
 to use the shares in the conversion of the convertible corporate bonds issued by the
Company;
 Necessary for the Company to protect its value and the shareholders’ equity;
 any other circumstances permitted by the laws, administrative regulations, securities
regulatory rules of the place where the Company’s shares are listed.
3. SHARE TRANSFER
The Company shall not accept its own shares status of as collateral.
Shares that have been issued before the public offering shall not be transferred for a
period of one year commencing from the date of trading of the company’s shares on a stock
exchange. Where laws, administrative regulations or the securities regulatory authorities under
the State Council otherwise provide for the transfer of shares of the Company held by
shareholders or actual controllers of a listed company, such provisions shall prevail.
The directors, supervisors, senior officers of the Company shall regularly declare the
number of shares held by them and the relevant changes. The number of shares transferred each
year during their term of office shall not exceed 25% of the total number of shares of the
Company in the same class held by them. The shares of the Company held by them shall not
be transferred within 1 year as of the listing date of the shares of the Company. These people
shall not transfer the shares of the company held by them within half of the year from their
departure from the company.
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--- page 626 ---
For shareholders holding more than 5% of the Company’s shares, directors, supervisors
and senior officers, if they have sold the shares of the Company or other securities with equity
nature held by them within six months after purchasing, or if they have purchased such shares
or securities again within six months after selling them, the gains obtained therefrom shall be
attributed to the Company and be forfeited by the Board of Directors of the Company.
However, securities companies holding more than 5% of the shares due to the purchase of the
remaining shares after underwriting, and other circumstances stipulated by the CSRC are
excluded.
The shares or other securities with an equity nature held by directors, supervisors, senior
officers and natural person shareholders as mentioned in the preceding paragraph shall include
the shares or other securities with an equity nature held by their spouses, parents, children, and
those held in the accounts of others.
4. RIGHTS AND OBLIGATIONS OF SHAREHOLDERS
The Company shall make a register of shareholders based on the vouchers provided by
securities registries. The register of shareholders shall be the sufficient evidence proving the
shareholders’ holding of the Company’s shares. Shareholders shall enjoy the rights and assume
the obligations according to the class of the shares they hold. Shareholders holding the same
class of shares shall enjoy the same rights and assume the same obligations.
When the Company convenes a general meeting, distributes dividends, executes clearing
or makes other conducts that require confirmation of equities, the Board of Directors or the
convener of the general meeting shall determine the Record Date. Shareholders included in the
register of shareholders at the close of business on the Record Date shall be the entitled
shareholders.
Shareholders of the Company shall enjoy the following rights:
 to receive dividends and other distributions in proportion to the number of shares
held;
 to request, convene, chair, attend and vote in person or appoint a proxy to attend and
vote on his behalf at the general meetings in proportion to the number of shares held
in accordance with laws;
 to supervise the Company’s operations, and to put forward proposals and raise
inquiries;
 to transfer, bestow or pledge the shares they hold according to laws, administrative
regulations and the Articles of Association;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 627 ---
 to consult or copy the Articles of Association, the register of shareholders, the
Company’s bond stubs, minutes of general meetings, resolutions of the Board
meetings and meetings of the supervisory committee, and financial and accounting
reports;
 to participate in the distribution of the remaining assets of the Company according
to the number of Shares held, in the event of the termination or liquidation of the
Company;
 The shareholders disagreeing with the merger or separation resolution made by the
general meeting are entitled to ask the Company to acquire their Shares;
 other rights stipulated by laws, administrative regulations, department rules or the
Articles of Association.
Shareholders of the Company shall assume the following obligations:
 To comply with the laws, administration regulations and the Articles of Association;
 to pay subscription moneys for the Shares subscribed in accordance with the agreed
manner of payment;
 no withdrawal from the Company except for the circumstances set out in the relevant
laws and administrative regulations;
 not to abuse shareholder’s rights to damage the interests of the Company or other
shareholders; not to abuse the independent legal person status of the Company and
the limited liability of shareholders to damage the interests of the creditors of the
Company;
 Other obligations to be assumed by the Shareholders according to the laws,
administration regulations and the Articles of Association.
Where the abuse of shareholders’ rights causes any loss to the company or other
shareholders, such abusive shareholder shall be liable for compensation in accordance with the
law. Where shareholders of a company take advantage of the company’s independent status or
the limited liability of shareholders to disregard debts and seriously injure the interests of the
company’s creditors, such shareholders shall bear joint and several liability for the debts of the
company.
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5. GENERAL MEETINGS
(1) General provisions
The general meeting shall be the organ of authority of the Company and shall exercise the
following functions and powers according to law:
 To elect and replace directors and supervisors and to decide matters relating to the
remuneration of directors and supervisors;
 to examine and approve reports of the Board;
 to examine and approve reports of the Supervisory Committee;
 To examine and approve profit distribution plans and loss recovery plans of the
Company;
 to make resolutions concerning the increase or reduction of the Company’s
registered capital;
 To make resolutions on the issuance of corporate bonds;
 to pass resolutions on matters such as the merger, division, dissolution, liquidation
or change in the organizational form of the Company;
 To amend the Articles of Association;
 To make resolution on the engagement or removal of the accounting firm;
 To review and approve the guarantee matters set out Article 39 of the Articles of
Association;
 to examine matters relating to the Company’s purchase and/or sale of major assets
within one year that exceed 30% of the audited total assets of the Company in the
most recent period;
 to examine and approve matters concerning changes in the use of proceeds;
 to consider the equity incentive scheme and Employee Stock Ownership Plan;
 To examine other matters that shall be decided by the general meeting as stipulated
by laws, administrative regulations, departmental rules, securities regulatory rules
of the place where the Company’s shares are listed or the Articles of Association.
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--- page 629 ---
The general meeting can authorize the board of directors to make resolutions on the
issuance of corporate bonds.
The general meetings shall be divided into the annual general meetings and the
extraordinary general meetings. The annual general meeting shall be convened once a year, and
shall be held within six months after the prior fiscal year ends.
The Company shall convene an Extraordinary General Meeting within two months of the
occurrence of any of the following circumstances:
 the number of directors is less than the number specified in the Company Law or
two-thirds of the number required by the Articles of Association;
 the uncovered loss of the Company reaches one-third of the total share capital of the
Company;
 Shareholders holding at least 10% of the company’s stocks make a request;
 the Board considers it necessary;
 the Supervisory Committee proposes such a meeting be held;
 any other circumstances stipulated by the laws, administrative regulations,
departmental rules, regulatory rules of the place where the Company’s shares are
listed and the Articles of Association.
(2) Convening of the General Meeting
Independent directors have the right to propose to the Board to convene an extraordinary
general meeting (EGM). For the proposal of independent directors of convening an EGM, the
Board of Directors shall, pursuant to the provisions of laws, administrative regulations and the
Articles of Association, give a written reply on whether to convene the EGM or not within ten
days upon receipt of the proposal. If agreeing to convene an EGM, the Board shall, within five
days after the Board resolution is made, issue a notice calling for the meeting. If the Board does
not agree to convene such meeting, the reasons shall be stated and announced.
The Supervisory Committee has the right to propose to the Board to convene an EGM,
and shall make such proposal in writing. The Board of Directors shall, pursuant to the
provisions of laws, administrative regulations and this Articles of Association, give a written
reply on whether to convene the EGM or not within ten days upon receipt of the proposal.
When the Board of Directors agrees to convene an EGM, the Board of Directors shall,
within 5 days after the Board resolution is made, issue a notice calling for the meeting.
Changes in the original proposal in the notice shall be subject to the approval of the
Supervisory Committee.
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--- page 630 ---
When the Board of Directors does not agree to convene an EGM, or does not provide
written feedback within 10 days upon receipt of the proposal, the Board of Directors shall be
considered to be unable or fail to perform the duty of convening an EGM. The Supervisory
Committee may convene and preside over the meeting on its own.
The shareholders who individually or jointly hold more than 10% of the shares of the
Company shall have the right to propose to the Board of Directors and the Supervisory
Committee for convening of an EGM, and shall make such request to the Board of Directors
and the Supervisory Committee in writing. The Board of Directors and the Supervisory
Committee shall, pursuant to the provisions of laws, administrative regulations and the Articles
of Association, make a decision on whether to convene the EGM or not within ten days upon
receipt of the request and provide a written reply to the shareholders.
When the Board of Directors and the Supervisory Committee agree to convene an
extraordinary general meeting, they shall, within five days after the Board resolution and the
resolution of Supervisory Committee are made, issue a notice calling for the meeting. Changes
in the original proposal in the notice shall be subject to the approval of the relevant
shareholders.
When the Board of Directors and the Supervisory Committee do not agree to convene an
extraordinary general meeting, or do not provide feedback within ten days upon receipts of the
request, shareholders who individually or collectively holding more than 10% of the
Company’s shares for 90 consecutive days, shall have the right to convene and preside over
such a meeting.
Where the laws, administrative regulations, departmental rules and securities regulatory
rules of the premise where the Company’s shares are listed stipulate otherwise, the relevant
provisions shall prevail.
(3) Proposals and Notices of General Meetings
When the Company convenes the general meeting, the Board of Directors, Supervisory
Committee and shareholders holding more than 1% of the shares of the Company separately or
jointly are entitled to submit proposals to the Company.
The shareholders holding more than 1% of the shares of the Company separately or
jointly may raise temporary proposal and submit it to the board of directors in writing 10 days
before the general meeting is held. The board of directors shall supplement the notice of
general meeting in 2 days after receiving the proposal and publicize the content of the
temporary proposal.
Save as specified above, the convener shall neither revise the proposals set out in the
notice of general meetings nor add new proposals after issuing the notice of general meeting.
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--- page 631 ---
The general meeting shall not vote or pass resolutions on proposals not listed in the notice
of the general meeting or resolutions not in conformity with Article 48 of the Articles of
Association.
(4) Holding of general meetings
All the shareholders recorded in the register as at the Record Date have the right to attend
the general meeting and exercise the voting rights in accordance with relevant laws, regulations
and the Articles of Association. Shareholders may attend the general meeting in person, and
also may appoint a proxy to attend and vote on his/her behalf.
The general meeting is presided over by the Chairman of the Board of Directors. If the
chairman of the Board of Directors is unable or fails to perform his/her duties, the deputy
chairman of the Board of Directors shall preside over the meeting (if the company has two or
more deputy chairmen, deputy chairmen is elected by more than half of the directors to preside
over the board.) If the company does not have a vice chairman or unable or fails to perform
his/her duties, a director elected by above half of the directors shall preside over the meeting.
A general meeting convened by the Supervisory Committee shall be presided over by the
chairman of the Supervisory Committee. If the chairman of the Supervisory Committee is
unable or fails to perform his/her duties, the deputy chairman of the Supervisory Committee
shall preside over the meeting. If the deputy chairman is unable or fails to perform his/her
duties, a Supervisor elected by more than half of the Supervisors shall preside over the
meeting.
If a General Meeting is convened by the shareholders, the convener shall elect a
representative to preside over the meeting.
During the course of a general meeting, if the meeting presider violates the procedural
rules such that the meeting cannot be continued, the shareholders in the general meeting may
elect one person to act as the meeting presider to continue the meeting as long as the proposed
chairman has the consent of more than half of the shareholders with voting rights who are
present at the meeting.
(5) Voting and Resolutions of General Meetings
The resolutions of a general meeting are classified into ordinary ones and special ones.
Ordinary resolutions of the general meeting shall be passed by more than half of the
voting rights held by the shareholders (including their proxies) present at the meeting.
Special resolutions of the general meeting shall be adopted by more than two-thirds of the
voting rights held by the shareholders (including proxies) present at the meeting.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 632 ---
The following matters shall be resolved by way of ordinary resolution of the general
meeting:
 reports of the Board of Directors and the Supervisory Committee;
 profit distribution proposals and proposals for making up losses formulated by the
Board of Directors;
 appointment, dismissal and remuneration of the members of the Board and the
Supervisory Committee and the method of payment of the remuneration;
 annual report of the Company;
 Other matters other than those that shall be resolved by special resolutions according
to laws, administrative regulations, regulatory rules of the place where the
Company’s shares are listed or the Articles of Association.
The following matters shall be resolved by way of special resolution of the general
meeting:
 Increase or reduction of the Company’s registered capital;
 separation, division, merger, dissolution and liquidation of the Company;
 amendment of the Articles of Association;
 the Company’s purchase or disposal of major assets within one year or guarantee
amount exceeding thirty percent of the latest audited total assets of the Company;
 The equity incentive scheme;
 other matters required to be resolved by way of a special resolution by the laws,
administrative regulations, regulatory rules of the place where the Company’s shares
are listed or the Articles of Association, and matters which, according to an ordinary
resolution of the general meeting, may have a significant impact on the Company
and shall be resolved by way of a special resolution.
6. DIRECTORS AND THE BOARD
(1) Directors
Directors shall be elected or replaced by the general meeting and may be removed from
office by the general meeting before the expiration of their term of office. The Directors have
a tenure of three years and can be reelected upon the expiry of the tenure.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 633 ---
The term of office of directors shall last from the date on which the directors take office
to the expiration of the term of office of the current Board of Directors. Where a new elect is
not yet available upon expiration of a director’s term, or the number of the directors on the
board is less than the quorum due to the resignation of a director within his term, such director,
before the new elect takes his office, shall continue the performance of his duties in accordance
with laws, administrative regulations, department rules, the articles or association and the
regulatory rules of the place where the Company’s shares are listed.
A director may be the general manager or other senior officer concurrently, provided that
the total number of directors who concurrently serve as the general manager or other senior
officers and directors who are employee representatives shall not exceed half of the total
number of directors of the Company.
(2) Board of Directors
The Board of Directors shall consist of nine directors, three of whom shall be independent
non-executive Directors. The Board of Directors shall have one chairman. The Board shall
exercise the following functions and powers:
 To convene general meetings and presenting reports thereto;
 To implement resolutions adopted by the general meeting;
 to resolve on the Company’s business plans and investment plans;
 to formulate the profit distribution plan and loss recovery plan of the Company;
 To formulate the plans of increasing or decreasing the Company’s registered capital,
issuing corporate bonds or other securities, and going public;
 To formulate the plans for merger, division, dissolution or change of corporate form
of the company;
 to determinate the setup of the Company’s internal management structure;
 to appoint or dismiss the general manager, board secretary and other senior officers
of the Company, and decide on matters of remuneration, rewards and punishments;
to appoint or dismiss senior officers such as deputy general manager and CFO
according to the nomination of the general manager, and decide on matters of
remuneration, rewards and punishments;
 to formulate plans for material assets acquisitions and the disposal and purchase of
Shares of the Company;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 634 ---
 to determine the outbound investment, acquisition and disposal of assets, asset
mortgage, external guarantee, consigned financial management, connected
transactions, and external donations of the Company within the authority granted by
the general meeting;
 to formulate the basic management system of the Company;
 to formulate proposals for any amendment to the Articles of Association;
 to manage the information disclosure of the Company;
 to request the general meeting to engage or replace the accounting firm that provides
audit for the Company;
 to debrief the work report of the general manager of the Company and check the
works of the general manager;
 To decide on the Company’s repurchase of its Shares under the circumstances
specified in items (III), (V) and (VI) of Article 24 of the Articles of Association on
the premise of complying with the securities regulatory rules of the place where the
company’s shares are listed;
 any other functions and powers granted by the laws, administrative regulations,
departmental rules, regulation rules of the place where the Company’s shares are
listed, the Articles of Association, and the general meeting.
The Board of Directors of the Company shall have the Audit Committee, Nomination
Committee, Remuneration and Appraisal Committee, and Strategy Committee. The special
committees shall be accountable to the Board of Directors and shall perform their duties in
accordance with the Articles of Association and the authorization of the Board of Directors.
Their proposals shall be submitted to the Board of Directors for deliberation and decision. All
special committees are comprised of directors. The majority of members of the Audit
Committee, the Nomination Committee, and the Remuneration and Appraisal Committee shall
be independent directors, who shall also be the conveners, provided that the convener of the
Audit Committee shall be an accounting professional. The members of the audit committee
should be directors who do not hold senior management positions within the company. The
Board of Directors shall be responsible for formulating the working rules of the special
committees and regulating their operation.
7. GENERAL MANAGER AND OTHER SENIOR OFFICERS
The Company shall have one general manager who shall be appointed or removed by the
Board.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 1–


--- page 635 ---
The Company shall have several deputy general managers who shall be appointed or
dismissed by the Board.
The general manager, deputy general manager, chief financial officer, board secretary and
other persons expressly appointed by the board as the senior officers shall be the senior officers
of the Company. The general manager shall be accountable to the Board and exercise the
following powers and functions:
 to be in charge of the Company’s production, operation and management, organize
the implementation of resolutions of the Board of Directors, and report to the Board
of Directors;
 to organize the implementation of the Company’s annual business plans and
investment plans;
 to prepare the proposal for the setup of the Company’s internal management
structure;
 to draft the Company’s basic management system;
 to formulate the detailed rules and regulations of the Company;
 To propose to the board of directors the appointment or dismissal of the deputy
general manager, chief financial officer and other senior officers;
 to decide to employ and dismiss the responsible management personnel other than
those to be employed and dismissed by the Board of Directors;
 other functions and powers granted by the Articles of Association or the Board of
Directors.
The general manager shall attend meetings of the Board as an observer.
8. SUPERVISORY COMMITTEE
The Company shall have a Supervisory Committee. The Supervisory Committee is
composed of three Supervisors. The Supervisory Committee shall have one chairman elected
by more than half of all the supervisors and may have the vice chairman. The meetings of the
Supervisory Committee shall be convened and presided over by the chairman of the
Supervisory Committee. In the event that the chairman of the Supervisory Committee is unable
or fails to perform his/her duties, the vice chairman of the Supervisory Committee shall
convene and preside over the meetings of the Supervisory Committee. In the event that the vice
chairman is unable or fails to perform his/her duties, the meetings shall be convened and
presided over by a supervisor jointly nominated by more than half of all the supervisors.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-12 –


--- page 636 ---
The Supervisory Committee shall be composed of shareholder representative Supervisors
and employee representative supervisors, and the employee representative supervisors shall be
not less than one-third of the members of the Supervisory Committee. The representatives of
the staff and workers on the Supervisory Committee shall be democratically elected by the staff
and workers through the congresses or assemblies of the workers and staff members or other
forms.
The Supervisory Committee shall exercise the following power:
 to examine the Company’s financial affairs;
 to monitor any acts of directors and senior officers of the Company in their
performance of duties, and to propose the removal of directors and senior officers
who have violated laws, administrative regulations, the securities regulatory rules of
the place where the Company’s shares are listed, the Articles of Association or
resolutions of the general meeting;
 when the acts of any Directors or senior officers are found to damage the interests
of the Company, to urge them to make correction;
 to propose the holding of EGMs and, in the event that the board of directors fails to
perform its duty of convening and presiding over a general meeting, to convene and
preside over such a meeting;
 to submit proposals to the general meeting;
 to review the periodical reports of the Company prepared by the Board of Directors
and to submit written review opinions thereon;
 to sue the director or senior officers in accordance with Article 33 of the Articles of
Association and the relevant provisions of the Company Law;
 to conduct investigation if there is any unusual circumstances in the Company’s
operations; and if necessary, to engage a law firm, accounting firm, or other
professional institutions to assist in their work with expenses borne by the
Company;
 other functions and powers specified in the Articles of Association.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-13 –


--- page 637 ---
9. QUALIFICATIONS OF DIRECTORS, SUPERVISORS AND SENIOR OFFICERS
The directors, supervisor, or the senior officers of the Company shall be natural persons.
A person in any of the following categories may not serve as a director, supervisor, or the
senior officer of the Company:
 Persons without capacity or with limited capacity for civil conduct;
 persons who were sentenced for crimes of corruption, bribery, encroachment or
embezzlement of property or disruption of the social and economic order, where five
years have not lapsed following the serving of the sentence, or persons who were
deprived of their political rights for committing a crime, where five years have not
lapsed following the serving of the sentence, or in case of a suspended sentence, not
more than two years have elapsed since the date of expiration of the probationary
period;
 persons who acted as directors, or factory managers or managers of bankrupt or
liquidated companies or enterprises who bear personal liability for the bankruptcy
or liquidation of such companies or enterprises, where three years have not lapsed
following the date of completion of such bankruptcy or liquidation;
 persons who were legal representatives of a company or enterprise, which had its
business license revoked due to a violation of the law and were ordered to close
down, and who were personally liable for the revocation of business license of such
company or enterprise, where less than three years have elapsed since the date of the
revocation of business license of such company or enterprise;
 persons who have been listed by the People’s Court as defaulter because they have
incurred debts of a large amount that have not been settled by the due date;
 Persons who are imposed by the CSRC a ban from entering into the securities
market for a period which has not yet expired;
 other requirements stipulated in the laws, administrative regulations, departmental
rules, securities regulatory rules of the place where the Company’s shares are listed.
Election, appointment or employment of Directors, Supervisors or senior officers in
violation of the above provisions shall be invalid. In the event that the circumstances as
stipulated in this Article arise during the term of office of any Director, Supervisor or senior
officer, the Company shall dismiss the relevant person.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-14 –


--- page 638 ---
10. FINANCIAL AND ACCOUNTING SYSTEMS
The Company shall formulate its own financial and accounting systems in accordance
with laws, administrative regulations, and rules of the relevant authorities of the state.
The Company shall have the annual report, interim report and other financial and
accounting reports prepared in accordance with relevant laws, administrative regulations,
requirements of the CSRC and rules of the stock exchanges where the company’s shares are
listed.
11. PROFIT DISTRIBUTION
When the Company distributes the after-tax profits of the current year, it shall allocate
10% of the profits into the statutory reserve fund. If the accumulated amount of the statutory
reserve fund reaches 50% of the registered capital, the Company is released from the obligation
of withholding statutory reserve fund.
Where the statutory common reserve fund of the company is not sufficient to recover its
losses in the previous years, the profits of the current year shall be used to make up the loss
before the withdrawing of the statutory common reserve fund in accordance with the above
provisions.
After making allocation to the statutory provident fund of the Company from its after-tax
profits, the Company may, subject to resolutions adopted at the general meeting, also allocate
funds from the after-tax profits to the discretionary provident fund.
The remaining after-tax profits of the Company after making up the losses and
withdrawing the reserve may be distributed according to the proportion of shares held by
shareholders, unless otherwise provided in the Articles of Association.
No profits shall be distributed in respect of the Company’s Shares held by the Company.
12. APPOINTMENT OF ACCOUNTING FIRMS
The Company shall employ an accounting firm that complies with the provisions of the
Securities Law to audit financial reports, verify net assets, and offer other relevant consulting
services. The term of employment of such accounting firm shall be one year, which is
renewable.
Employing an accounting firm for the Company shall be decided by the general meeting.
The Board shall not appoint an accounting firm before a general meeting is held.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-15 –


--- page 639 ---
13. DISSOLUTION AND LIQUIDATION
The Company shall be dissolved if:
 business term specified in the Articles of Association expires or other dissolution
reasons as stipulated in the Articles of Association arise;
 the general meeting resolves to dissolve the Company by means of special
resolution;
 a dissolution is required due to merger or division of the Company;
 the Company is revoked of business license according to law, ordered to close or
canceled;
 there is severe difficulty in the operation and management of the Company, and the
continued existence of the Company will have material prejudice to the interests of
the shareholders and there is no other way to resolve, shareholders who hold an
aggregate of over ten percent of the whole voting rights can make a petition to the
People’s Court to dissolve the Company.
If a company is in the situation of paragraphs 1 and 2 of the preceding article and has not
yet distributed its property to its shareholders, it may survive by amending its articles of
association or by a resolution of the general meeting. Amendments to the Articles of
Association or resolutions of general meeting made in accordance with the provisions of the
preceding paragraph shall be approved by more than 2/3 of the voting rights held by the
shareholders attending the general meeting.
After the liquidation committee has thoroughly examined the Company’s assets and
prepared a balance sheet and schedule of assets, it shall formulate a liquidation plan and submit
such plan to the general meeting or the people’s court for confirmation.
The remaining property of the Company after paying the liquidation expenses, wages
owed to employees of the Company, labor insurance fees and statutory compensation,
outstanding taxes and debts of the Company shall be distributed in proportion to the number
of shares held by shareholders.
During the liquidation period, the Company still exists but shall not carry out any
business activities not related to liquidation. The property of the Company shall not be
distributed to shareholders until all liabilities have been paid off in accordance with the
provisions of the preceding paragraph.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-16 –


--- page 640 ---
If the liquidation committee, having thoroughly examined the Company’s property and
prepared a balance sheet and schedule of assets, discovers that the Company’s property is
insufficient to pay its debts in full, it shall immediately apply to the People’s Court for
bankruptcy liquidation.
After the people’s court accepts the bankruptcy application, the liquidation committee
shall hand over the liquidation affairs to the bankruptcy administrator appointed by the
people’s court.
After the liquidation of a company is completed, the liquidation committee shall prepare
a liquidation report and submit the report to the general meeting or the people’s court for
confirmation, and shall submit it to the company registration authority to apply for cancellation
of the registration of the company.
14. AMENDMENT TO THE ARTICLES OF ASSOCIATION
The Company shall amend the Articles of Association under any of the following
circumstances:
 After the amendment of the Company Law or relevant laws and administrative
regulations, or the listing rules of the stock exchange where the Company’s share are
listed, the matters stipulated in the Articles of Association conflict with the
provisions of the amended laws, administrative regulations or listing rules of the
stock exchange where the Company’s share are listed;
 there has been a change to the Company, resulting in inconsistency with the content
in the Articles of Association;
 The General Meeting approves to amend the Articles of Association by a special
resolution.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-17 –


--- page 641 ---
A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation of our Company
Our Company was established as a limited liability company in the PRC on December 10,
2014 and was converted into a joint stock limited company on June 7, 2023 under the laws of
the PRC. As of the Latest Practicable Date, the registered share capital of our Company was
RMB360,000,000.
We have established a place of business in Hong Kong at 5/F, Manulife Place, 348 Kwun
Tong Road, Kowloon, Hong Kong. Our Company has been registered as a non-Hong Kong
company in Hong Kong under Part 16 of the Companies Ordinance on June 27, 2024 with the
Registrar of Companies in Hong Kong. Ms. Lam Wing Chi, one of our joint company
secretaries, has been appointed as our agent for the acceptance of service of process in Hong
Kong whose correspondence address is the same as our place of business in Hong Kong.
As we are established in the PRC, our corporate structure and Articles of Association are
subject to the relevant laws and regulations of the PRC. A summary of the relevant provisions
of our Articles of Association is set out in “Appendix V—Summary of Articles of Association.”
A summary of certain relevant aspects of the laws and regulations of the PRC is set out in
“Appendix IV—Summary of Principal Legal and Regulatory Provisions.”
2. Changes in Share Capital of our Company
On May 24, 2022, our Company completed the SAMR registration in respect of the
increase of its registered capital from RMB35,305,380 to RMB36,139,310.
On October 18, 2023, our Company completed the SAMR registration in respect of the
increase of its registered capital from RMB36,139,310 to RMB38,368,959.
On December 1, 2023, our Company completed the SAMR registration in respect of the
increase of its registered capital from RMB38,368,959 to RMB38,658,074.
Upon completion of the Global Offering, without taking into account any H Shares which
may be issued pursuant to the Over-allotment Option, our registered share capital will be
increased to RMB399,190,000, comprising 89,576,892 Unlisted Shares and 309,613,108 H
Shares to be issued under the Global Offering and to be converted from the Unlisted Shares
upon Listing, representing approximately 22.44% and 77.56% of our registered capital,
respectively.
See “History, Development and Corporate Structure—Major Shareholding Changes of
our Company” for further details. Save as disclosed above, there had been no other alteration
of the share capital of our Company within the two years immediately preceding the date of
this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 642 ---
3. Changes in Share Capital of our Subsidiaries
A summary of the corporate information and the particulars of our subsidiaries as of the
Latest Practicable Date are set out in Note 14 to the Accountant’s Report as set out in Appendix
I to this prospectus.
The following subsidiaries were incorporated during the two years immediately preceding
the date of this prospectus:
Name of subsidiary
Place of
incorporation Date of incorporation
Registered or
issued capital as
at the date of this
prospectus
Jiangsu Y uanshi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC June 17, 2022 RMB62,000,000
Nanjing Kaiyun /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC August 9, 2022 RMB75,000,000
Wuhan Y oujia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC August 16, 2022 RMB80,000,000
Ruijian Zhixing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC November 17, 2022 RMB13,333,333
Guangzhou Y oujia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC May 18, 2023 RMB100,000,000
Tongxiang Wuzhen Y oujia /H1118/H1118/H1118/H1118PRC September 25, 2023 RMB5,000,000
Y oujia Zhixing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC September 27, 2023 RMB10,000,000
Shaanxi Y oujia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC March 1, 2024 RMB3,000,000
Minsight SG /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Singapore November 20, 2023 SGD100,000
Guangzhou Y oujia Intelligent /H1118/H1118PRC June 14, 2024 RMB3,000,000
The following sets out the changes in the share capital of our subsidiaries during the two
years immediately preceding the date of this prospectus:
On December 8, 2022, Jiangsu Y uanshi completed the SAMR registration in respect of the
increase of its registered capital from RMB60,000,000 to RMB62,000,000.
On March 8, 2023, Shanghai Y ouqu completed the SAMR registration in respect of the
increase of its registered capital from RMB10,000,000 to RMB30,000,000.
On May 8, 2023, Ruijian Zhixing completed the SAMR registration in respect of the
increase of its registered capital from RMB10,000,000 to RMB13,333,333.
On August 20, 2024, Guangzhou Y oujia Intelligent was deregistered on a voluntary basis
as it had no substantial business operation.
Save as disclosed above and in the Accountant’s Report set out in Appendix I to this
prospectus, there had been no other alteration of the share capital of our subsidiaries within the
two years immediately preceding the date of this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 643 ---
4. Resolutions of our Shareholders
Pursuant to general meetings held on May 13, 2024, among other things, our Shareholders
resolved that:
(a) the issue by the Company of H Shares with a nominal value of RMB1.00 each and
such H Shares be listed on the Hong Kong Stock Exchange;
(b) the number of H Shares to be issued shall be no more than 120,000,000, representing
approximately 25% of the total issued share capital of our Company as enlarged by
the Global Offering before the exercise of the Over-allotment Option;
(c) subject to the filing with CSRC is completed, upon completion of the Global
Offering, 270,423,108 Unlisted Shares will be converted into H Shares on a
one-for-one basis;
(d) authorization of the Board or its authorized individual(s) to handle all matters
relating to, among other things, the Global Offering, the issue and the listing of H
Shares on the Hong Kong Stock Exchange; and
(e) 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.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within the two years immediately preceding the date of this
Prospectus that are or may be material:
(a) the capital increase agreement dated August 25, 2023 entered into among our
Company, Liu Guoqing ( ᄎ਷૶), Zhou Xiang ( մജ), Y ang Guang ( เᄿ), Wang
Qicheng ( ˮ઼೻), Y an Shengye ( ₢௷ุ), Wu Jianxin (㒥), WU YONGMING,
Shenzhen Zeyi Semiconductor Investment Partnership (Limited Partnership) ( ଉέ
̒ኬ᜗ҳ༟ΥྫΆุ(Υྫ)), Jinhua Puhua Tianqin Equity Investment
Fund Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Hangzhou Binjiang Puhua Tianqing Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Shenzhen
Hechuang Intelligent and Health V enture Capital Fund (Limited Partnership) ( ଉέ
ږ(Υྫ)), Qingdao Xinda Pu Chuang Investment
Center (Limited Partnership) (༺౷௴ҳ༟ʕː(Υྫ)), Shenzhen Jiaxin
Y uande Equity Investment Fund Partnership (Limited Partnership) (ʩᅃ
ΥྫΆุ(Υྫ)), Shanghai Ganche Intelligent Technology
Partnership (Limited Partnership) (ҦΥྫΆุ(Υྫ)), Harbin
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 644 ---
Xinrong Qihang V enture Capital Enterprise (Limited Partnership) (ဧᏵ㒥࿰઼ঘ
௴ุҳ༟Άุ(Υྫ)), Zhejiang Huihong Industrial Investment Co., Ltd. ( एϪ
ʮ̡), Hangzhou Fulin V enture Capital Partnership (Limited
Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)), Shanghai Hongjin Enterprise
Management Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ(ࠢ
Υྫ)), Beijing Siwei Internet Fund Management Center (Limited Partnership) ( ̏
၍ଣʕː(Υྫ)), Shenzhen Futian District Shanchuang Small,
Medium and Micro Equity Investment Fund Partnership (Limited Partnership) ( ଉέ
ΥྫΆุ(Υྫ)), Shanghai Moqin
Intelligent Technology Co., Ltd. (ʮ̡), Shenzhen
Kangchengheng Ruixiang Investment Partnership (Limited Partnership) ( ଉέ̹ੰ
ϓЖြԮҳ༟ΥྫΆุ(Υྫ)), SME Development Fund (Shenzhen Nanshan
Limited Partnership) (ږ(Υྫ)), Zhuhai Jiashi
Shengqi V enture Capital Fund Partnership (Limited Partnership) ( मऎྗྼସ઼௴ุ
ΥྫΆุ(Υྫ)), Zhuhai Jiashi Shengde V enture Capital Fund
Partnership (Limited Partnership) (ΥྫΆุ(Υ
ྫ)), Zhuhai Jiashi Shengxuan V enture Capital Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)), Hangzhou Y uanjing
Chuangheng Equity Investment Fund Partnership (Limited Partnership) (ψ෥ዽ
ΥྫΆุ(Υྫ)), Suzhou Y uanjing Equity Investment
Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Li Fan
(ҽɭ), Shenzhen Y oujia Qingcheng Investment Partnership (Limited Partnership)
(ଉέСቷ૶ϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Y oujia Zhongcheng Investment
Partnership (Limited Partnership) ( ଉέСቷ଺ϓҳ༟ΥྫΆุ(Υྫ)),
Shenzhen Y oujia Licheng Investment Partnership (Limited Partnership) ( ଉέСቷ
ᘥϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Qianhe Wanhe V enture Capital
Partnership (Limited Partnership) ( ଉέɷ൭ຬͫ௴ุҳ༟ΥྫΆุ(Υྫ)),
Qingdao CICC Alpha Intelligent Internet Industry Equity Investment Fund (Limited
Partnership) (ږ(Υྫ
)), Xinzhifeng
(Wuhan) Equity Investment Fund Partnership (Limited Partnership) (ࠬ(ဏ)
ΥྫΆุ(Υྫ)), Zhongjin (Changde) Emerging Industry V enture
Capital Partnership (Limited Partnership) (ږ(੬ᅃ)อጳପุ௴ุҳ༟ΥྫΆุ
(Υྫ)), Liantong Zhongjin Innovation Industry Equity Investment Fund
(Shenzhen) Partnership (Limited Partnership) (ږ(ଉ
έ)ΥྫΆุ(Υྫ)), Shenzhen Nanshan Dongfang Fuhai Small, Medium and
Micro V enture Capital Fund Partnership (Υ
ྫΆุ(Υྫ)), Shenzhen Fuhai Y ouxuan No. 2 High-tech V enture Capital
Partnership (Limited Partnership) (Ҧ௴ุҳ༟ΥྫΆุ
(Υྫ)), Chongqing Kexing Kechuang Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)),
Chongqing Shenghehui Enterprise Management Partnership (Limited Partnership)
(ᅅସͫිΆุ၍ଣΥྫΆุ(Υྫ)), Guokai Zhizao Transformation and
Upgrading Fund (Limited Partnership) (ږ(Υྫ)),
Hubei Cathay Car Tech Equity Investment Fund Partnership L.P . (Ϫӛ
ΥྫΆุ(Υྫ)), Shanghai Jipei Xinsheng Management
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 645 ---
Consulting Partnership (Limited Partnership) ( ɪऎΛԽอସ၍ଣፔ༔ΥྫΆุ(Ϟ
Υྫ)), Sichuan Shenwan Hongyuan Changhong Equity Investment Fund
Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Shenhong Huichuang Development (Foshan) Equity Investment Partnership
(Limited Partnership) (࢝(Нʆ)ᛆҳ༟ΥྫΆุ(Υྫ)), Jinning
Economic Development Industry Strong Chain Equity Investment (Hubei)
Partnership (Limited Partnership) (ᛆҳ༟(ಳ̏)ΥྫΆุ(Ϟ
Υྫ)), Guangzhou Science and Technology Industry Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)), Guangzhou
Kechuangzhihui No. 2 V enture Capital Partnership (Limited Partnership) (௴
౽ිɚ໮௴ุҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent
Manufacturing Equity Investment Partnership (Limited Partnership) ( ᄿψᐦක౽ி
ᛆҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent Manufacturing No. 2
Equity Investment Partnership (Limited Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)), Guangzhou Hehe Suikai Investment Partnership (Limited
Partnership) ( ᄿψձΥᐦකҳ༟ΥྫΆุ(Υྫ)), Chaogaoqing Video Industry
Investment Fund (Guangzhou) Partnership (Limited Partnership) ( ൴৷૶ൖ᎖ପุ
ږ(ᄿψ)ΥྫΆุ(Υྫ)), Suzhou Industrial Park Huazhi Xingrui
V enture Capital Partnership (Limited Partnership) ( ᘽψʈุ෤ਜശ౽ጳ๿௴ุҳ༟
ΥྫΆุ(Υྫ)), Shanghai Boyuan Hongcheng V enture Capital Partnership
(Limited Partnership) (ᒿϓ௴ุҳ༟ΥྫΆุ(Υྫ)), Suzhou
Xinjing Fuying V enture Capital Partnership (Limited Partnership) (௴
ุҳ༟ΥྫΆุ(Υྫ)), Tongxiang Wuzhen Puhua Fengqi V enture Capital
Partnership (Limited Partnership) (ඊढᕄ౷ശჾಐ௴ุҳ༟ΥྫΆุ(Υ
ྫ)), and Jiangmen Kexi Zhongke Selected No. 4 V enture Capital Partnership
(Limited Partnership) (त፯̬໮௴ุҳ༟ΥྫΆุ(Υྫ)), to
increase the registered capital of our Company;
(b) the shareholders’ agreement dated August 25, 2023 entered into among our
Company, Liu Guoqing ( ᄎ਷૶
), Zhou Xiang ( մജ), Y ang Guang ( เᄿ), Wang
Qicheng ( ˮ઼೻), Y an Shengye ( ₢௷ุ), Wu Jianxin (㒥), WU YONGMING,
Shenzhen Zeyi Semiconductor Investment Partnership (Limited Partnership) ( ଉέ
̒ኬ᜗ҳ༟ΥྫΆุ(Υྫ)), Jinhua Puhua Tianqin Equity Investment
Fund Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Hangzhou Binjiang Puhua Tianqing Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Shenzhen
Hechuang Intelligent and Health V enture Capital Fund (Limited Partnership) ( ଉέ
ږ(Υྫ)), Qingdao Xinda Pu Chuang Investment
Center (Limited Partnership) (༺౷௴ҳ༟ʕː(Υྫ)), Shenzhen Jiaxin
Y uande Equity Investment Fund Partnership (Limited Partnership) (ʩᅃ
ΥྫΆุ(Υྫ)), Shanghai Ganche Intelligent Technology
Partnership (Limited Partnership) (ҦΥྫΆุ(Υྫ)), Harbin
Xinrong Qihang V enture Capital Enterprise (Limited Partnership) (ဧᏵ㒥࿰઼ঘ
௴ุҳ༟Άุ(Υྫ)), Zhejiang Huihong Industrial Investment Co., Ltd. ( एϪ
ʮ̡), Hangzhou Fulin V enture Capital Partnership (Limited
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 646 ---
Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)), Shanghai Hongjin Enterprise
Management Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ(ࠢ
Υྫ)), Beijing Siwei Internet Fund Management Center (Limited Partnership) ( ̏
၍ଣʕː(Υྫ)), Shenzhen Futian District Shanchuang Small,
Medium and Micro Equity Investment Fund Partnership (Limited Partnership) ( ଉέ
ΥྫΆุ(Υྫ)), Shanghai Moqin
Intelligent Technology Co., Ltd. (ʮ̡), Shenzhen
Kangchengheng Ruixiang Investment Partnership (Limited Partnership) ( ଉέ̹ੰ
ϓЖြԮҳ༟ΥྫΆุ(Υྫ)), SME Development Fund (Shenzhen Nanshan
Limited Partnership) (ږ(Υྫ)), Zhuhai Jiashi
Shengqi V enture Capital Fund Partnership (Limited Partnership) ( मऎྗྼସ઼௴ุ
ΥྫΆุ(Υྫ)), Zhuhai Jiashi Shengde V enture Capital Fund
Partnership (Limited Partnership) (ΥྫΆุ(Υ
ྫ)), Zhuhai Jiashi Shengxuan V enture Capital Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)), Hangzhou Y uanjing
Chuangheng Equity Investment Fund Partnership (Limited Partnership) (ψ෥ዽ
ΥྫΆุ(Υྫ)), Suzhou Y uanjing Equity Investment
Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Li Fan
(ҽɭ), Shenzhen Y oujia Qingcheng Investment Partnership (Limited Partnership)
(ଉέСቷ૶ϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Y oujia Zhongcheng Investment
Partnership (Limited Partnership) ( ଉέСቷ଺ϓҳ༟ΥྫΆุ(Υྫ)),
Shenzhen Y oujia Licheng Investment Partnership (Limited Partnership) ( ଉέСቷ
ᘥϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Qianhe Wanhe V enture Capital
Partnership (Limited Partnership) ( ଉέɷ൭ຬͫ௴ุҳ༟ΥྫΆุ(Υྫ)),
Qingdao CICC Alpha Intelligent Internet Industry Equity Investment Fund (Limited
Partnership) (ږ(Υྫ)), Xinzhifeng
(Wuhan) Equity Investment Fund Partnership (Limited Partnership) (ࠬ(ဏ)
ΥྫΆุ(Υྫ
)), Zhongjin (Changde) Emerging Industry V enture
Capital Partnership (Limited Partnership) (ږ(੬ᅃ)อጳପุ௴ุҳ༟ΥྫΆุ
(Υྫ)), Liantong Zhongjin Innovation Industry Equity Investment Fund
(Shenzhen) Partnership (Limited Partnership) (ږ(ଉ
έ)ΥྫΆุ(Υྫ)), Shenzhen Nanshan Dongfang Fuhai Small, Medium and
Micro V enture Capital Fund Partnership (Υ
ྫΆุ(Υྫ)), Shenzhen Fuhai Y ouxuan No. 2 High-tech V enture Capital
Partnership (Limited Partnership) (Ҧ௴ุҳ༟ΥྫΆุ
(Υྫ)), Chongqing Kexing Kechuang Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)),
Chongqing Shenghehui Enterprise Management Partnership (Limited Partnership)
(ᅅସͫිΆุ၍ଣΥྫΆุ(Υྫ)), Guokai Zhizao Transformation and
Upgrading Fund (Limited Partnership) (ږ(Υྫ)),
Hubei Cathay Car Tech Equity Investment Fund Partnership L.P . (Ϫӛ
ΥྫΆุ(Υྫ)), Shanghai Jipei Xinsheng Management
Consulting Partnership (Limited Partnership) ( ɪऎΛԽอସ၍ଣፔ༔ΥྫΆุ(Ϟ
Υྫ)), Sichuan Shenwan Hongyuan Changhong Equity Investment Fund
Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 647 ---
Υྫ)), Shenhong Huichuang Development (Foshan) Equity Investment Partnership
(Limited Partnership) (࢝(Нʆ)ᛆҳ༟ΥྫΆุ(Υྫ)), Jinning
Economic Development Industry Strong Chain Equity Investment (Hubei)
Partnership (Limited Partnership) (ᛆҳ༟(ಳ̏)ΥྫΆุ(Ϟ
Υྫ)), Guangzhou Science and Technology Industry Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)), Guangzhou
Kechuangzhihui No. 2 V enture Capital Partnership (Limited Partnership) (௴
౽ිɚ໮௴ุҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent
Manufacturing Equity Investment Partnership (Limited Partnership) ( ᄿψᐦක౽ி
ᛆҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent Manufacturing No. 2
Equity Investment Partnership (Limited Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)), Guangzhou Hehe Suikai Investment Partnership (Limited
Partnership) ( ᄿψձΥᐦකҳ༟ΥྫΆุ(Υྫ)), Chaogaoqing Video Industry
Investment Fund (Guangzhou) Partnership (Limited Partnership) ( ൴৷૶ൖ᎖ପุ
ږ(ᄿψ)ΥྫΆุ(Υྫ)), Suzhou Industrial Park Huazhi Xingrui
V enture Capital Partnership (Limited Partnership) ( ᘽψʈุ෤ਜശ౽ጳ๿௴ุҳ༟
ΥྫΆุ(Υྫ)), Shanghai Boyuan Hongcheng V enture Capital Partnership
(Limited Partnership) (ᒿϓ௴ุҳ༟ΥྫΆุ(Υྫ)), Suzhou
Xinjing Fuying V enture Capital Partnership (Limited Partnership) (௴
ุҳ༟ΥྫΆุ(Υྫ)), Tongxiang Wuzhen Puhua Fengqi V enture Capital
Partnership (Limited Partnership) (ඊढᕄ౷ശჾಐ௴ุҳ༟ΥྫΆุ(Υ
ྫ)), and Jiangmen Kexi Zhongke Selected No. 4 V enture Capital Partnership
(Limited Partnership) (त፯̬໮௴ุҳ༟ΥྫΆุ(Υྫ)),
pursuant to which shareholders’ rights were agreed among the aforementioned
parties;
(c) the capital increase agreement dated November 17, 2023 entered into among our
Company, Liu Guoqing ( ᄎ਷૶), Zhou Xiang ( մജ), Y ang Guang ( เᄿ), Wang
Qicheng ( ˮ઼೻), Wu Jianxin (㒥), Y an Shengye (
₢௷ุ), WU YONGMING,
Shenzhen Zeyi Semiconductor Investment Partnership (Limited Partnership) ( ଉέ
̒ኬ᜗ҳ༟ΥྫΆุ(Υྫ)), Jinhua Puhua Tianqin Equity Investment
Fund Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Hangzhou Binjiang Puhua Tianqing Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Shenzhen
Hechuang Intelligent and Health V enture Capital Fund (Limited Partnership) ( ଉέ
ږ(Υྫ)), Qingdao Xinda Pu Chuang Investment
Center (Limited Partnership) (༺౷௴ҳ༟ʕː(Υྫ)), Shenzhen Jiaxin
Y uande Equity Investment Fund Partnership (Limited Partnership) (ʩᅃ
ΥྫΆุ(Υྫ)), Shanghai Ganche Intelligent Technology
Partnership (Limited Partnership) (ҦΥྫΆุ(Υྫ)), Harbin
Xinrong Qihang V enture Capital Enterprise (Limited Partnership) (ဧᏵ㒥࿰઼ঘ
௴ุҳ༟Άุ(Υྫ)), Zhejiang Huihong Industrial Investment Co., Ltd. ( एϪ
ʮ̡), Hangzhou Fulin V enture Capital Partnership (Limited
Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)), Shanghai Hongjin Enterprise
Management Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ(ࠢ
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 648 ---
Υྫ)), Beijing Siwei Internet Fund Management Center (Limited Partnership) ( ̏
၍ଣʕː(Υྫ)), Shenzhen Futian District Shanchuang Small,
Medium and Micro Equity Investment Fund Partnership (Limited Partnership) ( ଉέ
ΥྫΆุ(Υྫ)), Shanghai Moqin
Intelligent Technology Co., Ltd. (ʮ̡), Shenzhen
Kangchengheng Ruixiang Investment Partnership (Limited Partnership) ( ଉέ̹ੰ
ϓЖြԮҳ༟ΥྫΆุ(Υྫ)), SME Development Fund (Shenzhen Nanshan
Limited Partnership) (ږ(Υྫ)), Zhuhai Jiashi
Shengqi V enture Capital Fund Partnership (Limited Partnership) ( मऎྗྼସ઼௴ุ
ΥྫΆุ(Υྫ)), Zhuhai Jiashi Shengde V enture Capital Fund
Partnership (Limited Partnership) (ΥྫΆุ(Υ
ྫ)), Zhuhai Jiashi Shengxuan V enture Capital Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)), Hangzhou Y uanjing
Chuangheng Equity Investment Fund Partnership (Limited Partnership) (ψ෥ዽ
ΥྫΆุ(Υྫ)), Suzhou Y uanjing Equity Investment
Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Li Fan
(ҽɭ), Shenzhen Y oujia Qingcheng Investment Partnership (Limited Partnership)
(ଉέСቷ૶ϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Y oujia Zhongcheng Investment
Partnership (Limited Partnership) ( ଉέСቷ଺ϓҳ༟ΥྫΆุ(Υྫ)),
Shenzhen Y oujia Licheng Investment Partnership (Limited Partnership) ( ଉέСቷ
ᘥϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Qianhe Wanhe V enture Capital
Partnership (Limited Partnership) ( ଉέɷ൭ຬͫ௴ุҳ༟ΥྫΆุ(Υྫ)),
Qingdao CICC Alpha Intelligent Internet Industry Equity Investment Fund (Limited
Partnership) (ږ(Υྫ)), Xinzhifeng
(Wuhan) Equity Investment Fund Partnership (Limited Partnership) (ࠬ(ဏ)
ΥྫΆุ(Υྫ)), Zhongjin (Changde) Emerging Industry V enture
Capital Partnership (Limited Partnership) (ږ(੬ᅃ)อጳପุ௴ุҳ༟ΥྫΆุ
(Υྫ
)), Liantong Zhongjin Innovation Industry Equity Investment Fund
(Shenzhen) Partnership (Limited Partnership) (ږ(ଉ
έ)ΥྫΆุ(Υྫ)), Shenzhen Nanshan Dongfang Fuhai Small, Medium and
Micro V enture Capital Fund Partnership (Υ
ྫΆุ(Υྫ)), Shenzhen Fuhai Y ouxuan No. 2 High-tech V enture Capital
Partnership (Limited Partnership) (Ҧ௴ุҳ༟ΥྫΆุ
(Υྫ)), Chongqing Kexing Kechuang Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)),
Chongqing Shenghehui Enterprise Management Partnership (Limited Partnership)
(ᅅସͫිΆุ၍ଣΥྫΆุ(Υྫ)), Guokai Zhizao Transformation and
Upgrading Fund (Limited Partnership) (ږ(Υྫ)),
Hubei Cathay Car Tech Equity Investment Fund Partnership L.P . (Ϫӛ
ΥྫΆุ(Υྫ)), Shanghai Jipei Xinsheng Management
Consulting Partnership (Limited Partnership) ( ɪऎΛԽอସ၍ଣፔ༔ΥྫΆุ(Ϟ
Υྫ)), Sichuan Shenwan Hongyuan Changhong Equity Investment Fund
Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Shenhong Huichuang Development (Foshan) Equity Investment Partnership
(Limited Partnership) (࢝(Нʆ)ᛆҳ༟ΥྫΆุ(Υྫ)), Jinning
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 649 ---
Economic Development Industry Strong Chain Equity Investment (Hubei)
Partnership (Limited Partnership) (ᛆҳ༟(ಳ̏)ΥྫΆุ(Ϟ
Υྫ)), Guangzhou Science and Technology Industry Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)), Guangzhou
Kechuangzhihui No. 2 V enture Capital Partnership (Limited Partnership) (௴
౽ිɚ໮௴ุҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent
Manufacturing Equity Investment Partnership (Limited Partnership) ( ᄿψᐦක౽ி
ᛆҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent Manufacturing No. 2
Equity Investment Partnership (Limited Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)), Guangzhou Hehe Suikai Investment Partnership (Limited
Partnership) ( ᄿψձΥᐦකҳ༟ΥྫΆุ(Υྫ)), Chaogaoqing Video Industry
Investment Fund (Guangzhou) Partnership (Limited Partnership) ( ൴৷૶ൖ᎖ପุ
ږ(ᄿψ)ΥྫΆุ(Υྫ)), Suzhou Industrial Park Huazhi Xingrui
V enture Capital Partnership (Limited Partnership) ( ᘽψʈุ෤ਜശ౽ጳ๿௴ุҳ༟
ΥྫΆุ(Υྫ)), Shanghai Boyuan Hongcheng V enture Capital Partnership
(Limited Partnership) (ᒿϓ௴ุҳ༟ΥྫΆุ(Υྫ)), Suzhou
Xinjing Fuying V enture Capital Partnership (Limited Partnership) (௴
ุҳ༟ΥྫΆุ(Υྫ)), Tongxiang Wuzhen Puhua Fengqi V enture Capital
Partnership (Limited Partnership) (ඊढᕄ౷ശჾಐ௴ุҳ༟ΥྫΆุ(Υ
ྫ)), Jiangmen Kexi Zhongke Selected No. 4 V enture Capital Partnership (Limited
Partnership) (त፯̬໮௴ุҳ༟ΥྫΆุ(Υྫ)), and Hangzhou
Y uanjing Lechi Equity Investment Fund Partnership (Limited Partnership) (ψ෥
ΥྫΆุ(Υྫ)), to increase the registered capital of our
Company;
(d) the shareholders’ agreement dated November 17, 2023 entered into among our
Company, Liu Guoqing ( ᄎ਷૶), Zhou Xiang ( մജ), Y ang Guang ( เᄿ), Wang
Qicheng ( ˮ઼೻), Wu Jianxin (㒥), Y an Shengye ( ₢௷ุ), WU YONGMING,
Shenzhen Zeyi Semiconductor Investment Partnership (Limited Partnership) ( ଉέ
̒ኬ᜗ҳ༟ΥྫΆุ(Υྫ)), Jinhua Puhua Tianqin Equity Investment
Fund Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Hangzhou Binjiang Puhua Tianqing Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Shenzhen
Hechuang Intelligent and Health V enture Capital Fund (Limited Partnership) ( ଉέ
ږ(Υྫ)), Qingdao Xinda Pu Chuang Investment
Center (Limited Partnership) (༺౷௴ҳ༟ʕː(Υྫ)), Shenzhen Jiaxin
Y uande Equity Investment Fund Partnership (Limited Partnership) (ʩᅃ
ΥྫΆุ(Υྫ)), Shanghai Ganche Intelligent Technology
Partnership (Limited Partnership) (ҦΥྫΆุ(Υྫ)), Harbin
Xinrong Qihang V enture Capital Enterprise (Limited Partnership) (ဧᏵ㒥࿰઼ঘ
௴ุҳ༟Άุ(Υྫ)), Zhejiang Huihong Industrial Investment Co., Ltd. ( एϪ
ʮ̡), Hangzhou Fulin V enture Capital Partnership (Limited
Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)), Shanghai Hongjin Enterprise
Management Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ(ࠢ
Υྫ)), Beijing Siwei Internet Fund Management Center (Limited Partnership) ( ̏
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 650 ---
၍ଣʕː(Υྫ)), Shenzhen Futian District Shanchuang Small,
Medium and Micro Equity Investment Fund Partnership (Limited Partnership) ( ଉέ
ΥྫΆุ(Υྫ)), Shanghai Moqin
Intelligent Technology Co., Ltd. (ʮ̡), Shenzhen
Kangchengheng Ruixiang Investment Partnership (Limited Partnership) ( ଉέ̹ੰ
ϓЖြԮҳ༟ΥྫΆุ(Υྫ)), SME Development Fund (Shenzhen Nanshan
Limited Partnership) (ږ(Υྫ)), Zhuhai Jiashi
Shengqi V enture Capital Fund Partnership (Limited Partnership) ( मऎྗྼସ઼௴ุ
ΥྫΆุ(Υྫ)), Zhuhai Jiashi Shengde V enture Capital Fund
Partnership (Limited Partnership) (ΥྫΆุ(Υ
ྫ)), Zhuhai Jiashi Shengxuan V enture Capital Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)), Hangzhou Y uanjing
Chuangheng Equity Investment Fund Partnership (Limited Partnership) (ψ෥ዽ
ΥྫΆุ(Υྫ)), Suzhou Y uanjing Equity Investment
Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Li Fan
(ҽɭ), Shenzhen Y oujia Qingcheng Investment Partnership (Limited Partnership)
(ଉέСቷ૶ϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Y oujia Zhongcheng Investment
Partnership (Limited Partnership) ( ଉέСቷ଺ϓҳ༟ΥྫΆุ(Υྫ)),
Shenzhen Y oujia Licheng Investment Partnership (Limited Partnership) ( ଉέСቷ
ᘥϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Qianhe Wanhe V enture Capital
Partnership (Limited Partnership) ( ଉέɷ൭ຬͫ௴ุҳ༟ΥྫΆุ(Υྫ)),
Qingdao CICC Alpha Intelligent Internet Industry Equity Investment Fund (Limited
Partnership) (ږ(Υྫ)), Xinzhifeng
(Wuhan) Equity Investment Fund Partnership (Limited Partnership) (ࠬ(ဏ)
ΥྫΆุ(Υྫ)), Zhongjin (Changde) Emerging Industry V enture
Capital Partnership (Limited Partnership) (ږ(੬ᅃ)อጳପุ௴ุҳ༟ΥྫΆุ
(Υྫ)), Liantong Zhongjin Innovation Industry Equity Investment Fund
(Shenzhen) Partnership (Limited Partnership) (ږ
(ଉ
έ)ΥྫΆุ(Υྫ)), Shenzhen Nanshan Dongfang Fuhai Small, Medium and
Micro V enture Capital Fund Partnership (Υ
ྫΆุ(Υྫ)), Shenzhen Fuhai Y ouxuan No. 2 High-tech V enture Capital
Partnership (Limited Partnership) (Ҧ௴ุҳ༟ΥྫΆุ
(Υྫ)), Chongqing Kexing Kechuang Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)),
Chongqing Shenghehui Enterprise Management Partnership (Limited Partnership)
(ᅅସͫිΆุ၍ଣΥྫΆุ(Υྫ)), Guokai Zhizao Transformation and
Upgrading Fund (Limited Partnership) (ږ(Υྫ)),
Hubei Cathay Car Tech Equity Investment Fund Partnership L.P . (Ϫӛ
ΥྫΆุ(Υྫ)), Shanghai Jipei Xinsheng Management
Consulting Partnership (Limited Partnership) ( ɪऎΛԽอସ၍ଣፔ༔ΥྫΆุ(Ϟ
Υྫ)), Sichuan Shenwan Hongyuan Changhong Equity Investment Fund
Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Shenhong Huichuang Development (Foshan) Equity Investment Partnership
(Limited Partnership) (࢝(Нʆ)ᛆҳ༟ΥྫΆุ(Υྫ)), Jinning
Economic Development Industry Strong Chain Equity Investment (Hubei)
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-10 –


--- page 651 ---
Partnership (Limited Partnership) (ᛆҳ༟(ಳ̏)ΥྫΆุ(Ϟ
Υྫ)), Guangzhou Science and Technology Industry Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)), Guangzhou
Kechuangzhihui No. 2 V enture Capital Partnership (Limited Partnership) (௴
౽ිɚ໮௴ุҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent
Manufacturing Equity Investment Partnership (Limited Partnership) ( ᄿψᐦක౽ி
ᛆҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent Manufacturing No. 2
Equity Investment Partnership (Limited Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)), Guangzhou Hehe Suikai Investment Partnership (Limited
Partnership) ( ᄿψձΥᐦකҳ༟ΥྫΆุ(Υྫ)), Chaogaoqing Video Industry
Investment Fund (Guangzhou) Partnership (Limited Partnership) ( ൴৷૶ൖ᎖ପุ
ږ(ᄿψ)ΥྫΆุ(Υྫ)), Suzhou Industrial Park Huazhi Xingrui
V enture Capital Partnership (Limited Partnership) ( ᘽψʈุ෤ਜശ౽ጳ๿௴ุҳ༟
ΥྫΆุ(Υྫ)), Shanghai Boyuan Hongcheng V enture Capital Partnership
(Limited Partnership) (ᒿϓ௴ุҳ༟ΥྫΆุ(Υྫ)), Suzhou
Xinjing Fuying V enture Capital Partnership (Limited Partnership) (௴
ุҳ༟ΥྫΆุ(Υྫ)), Tongxiang Wuzhen Puhua Fengqi V enture Capital
Partnership (Limited Partnership) (ඊढᕄ౷ശჾಐ௴ุҳ༟ΥྫΆุ(Υ
ྫ)), Jiangmen Kexi Zhongke Selected No. 4 V enture Capital Partnership (Limited
Partnership) (त፯̬໮௴ุҳ༟ΥྫΆุ(Υྫ)), and Hangzhou
Y uanjing Lechi Equity Investment Fund Partnership (Limited Partnership) (ψ෥
ΥྫΆุ(Υྫ)), pursuant to which shareholders’ rights
were agreed among the aforementioned parties;
(e) the supplemental capital increase agreement dated May 13, 2024 entered into among
our Company, Liu Guoqing ( ᄎ਷૶), Zhou Xiang ( մജ), Y ang Guang ( เᄿ), Wang
Qicheng ( ˮ઼೻), Wu Jianxin (㒥), Y an Shengye ( ₢௷ุ), WU YONGMING,
Shenzhen Zeyi Semiconductor Investment Partnership (Limited Partnership) ( ଉέ
̒ኬ᜗ҳ༟ΥྫΆุ(Υྫ)), Jinhua Puhua Tianqin Equity Investment
Fund Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Hangzhou Binjiang Puhua Tianqing Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Shenzhen
Hechuang Intelligent and Health V enture Capital Fund (Limited Partnership) ( ଉέ
ږ(Υྫ)), Qingdao Xinda Pu Chuang Investment
Center (Limited Partnership) (༺౷௴ҳ༟ʕː(Υྫ)), Shenzhen Jiaxin
Y uande Equity Investment Fund Partnership (Limited Partnership) (ʩᅃ
ΥྫΆุ(Υྫ)), Shanghai Ganche Intelligent Technology
Partnership (Limited Partnership) (ҦΥྫΆุ(Υྫ)), Harbin
Xinrong Qihang V enture Capital Enterprise (Limited Partnership) (ဧᏵ㒥࿰઼ঘ
௴ุҳ༟Άุ(Υྫ)), Zhejiang Huihong Industrial Investment Co., Ltd. ( एϪ
ʮ̡), Hangzhou Fulin V enture Capital Partnership (Limited
Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)), Shanghai Hongjin Enterprise
Management Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ(ࠢ
Υྫ)), Beijing Siwei Internet Fund Management Center (Limited Partnership) ( ̏
၍ଣʕː(Υྫ)), Shenzhen Futian District Shanchuang Small,
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-11 –


--- page 652 ---
Medium and Micro Equity Investment Fund Partnership (Limited Partnership) ( ଉέ
ΥྫΆุ(Υྫ)), Shanghai Moqin
Intelligent Technology Co., Ltd. (ʮ̡), Shenzhen
Kangchengheng Ruixiang Investment Partnership (Limited Partnership) ( ଉέ̹ੰ
ϓЖြԮҳ༟ΥྫΆุ(Υྫ)), SME Development Fund (Shenzhen Nanshan
Limited Partnership) (ږ(Υྫ)), Zhuhai Jiashi
Shengqi V enture Capital Fund Partnership (Limited Partnership) ( मऎྗྼସ઼௴ุ
ΥྫΆุ(Υྫ)), ZhuhaiJiashi Shengde V enture Capital Fund
Partnership (Limited Partnership) (ΥྫΆุ(Υ
ྫ)), Zhuhai Jiashi Shengxuan V enture Capital Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)), Hangzhou Y uanjing
Chuangheng Equity Investment Fund Partnership (Limited Partnership) (ψ෥ዽ
ΥྫΆุ(Υྫ)), Suzhou Y uanjing Equity Investment
Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Li Fan
(ҽɭ), Shenzhen Y oujia Qingcheng Investment Partnership (Limited Partnership)
(ଉέСቷ૶ϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Y oujia Zhongcheng Investment
Partnership (Limited Partnership) ( ଉέСቷ଺ϓҳ༟ΥྫΆุ(Υྫ)),
Shenzhen Y oujia Licheng Investment Partnership (Limited Partnership) ( ଉέСቷ
ᘥϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Qianhe Wanhe V enture Capital
Partnership (Limited Partnership) ( ଉέɷ൭ຬͫ௴ุҳ༟ΥྫΆุ(Υྫ)),
Qingdao CICC Alpha Intelligent Internet Industry Equity Investment Fund (Limited
Partnership) (ږ(Υྫ)), Xinzhifeng
(Wuhan) Equity Investment Fund Partnership (Limited Partnership) (ࠬ(ဏ)
ΥྫΆุ(Υྫ)), Zhongjin (Changde) Emerging Industry V enture
Capital Partnership (Limited Partnership) (ږ(੬ᅃ)อጳପุ௴ุҳ༟ΥྫΆุ
(Υྫ)), Liantong Zhongjin Innovation Industry Equity Investment Fund
(Shenzhen) Partnership (Limited Partnership) (ږ(ଉ
έ)
ΥྫΆุ(Υྫ)), Shenzhen Nanshan Dongfang Fuhai Small, Medium and
Micro V enture Capital Fund Partnership (Υ
ྫΆุ(Υྫ)), Shenzhen Fuhai Y ouxuan No. 2 Hightech V enture Capital
Partnership (Limited Partnership) (Ҧ௴ุҳ༟ΥྫΆุ
(Υྫ)), Chongqing Kexing Kechuang Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)),
Chongqing Shenghehui Enterprise Management Partnership (Limited Partnership)
(ᅅସͫිΆุ၍ଣΥྫΆุ(Υྫ)), Guokai Zhizao Transformation and
Upgrading Fund (Limited Partnership) (ږ(Υྫ)),
Hubei Cathay Car Tech Equity Investment Fund Partnership L.P . (Ϫӛ
ΥྫΆุ(Υྫ)), Shanghai Jipei Xinsheng Management
Consulting Partnership (Limited Partnership) ( ɪऎΛԽอସ၍ଣፔ༔ΥྫΆุ(Ϟ
Υྫ)), Sichuan Shenwan Hongyuan Changhong Equity Investment Fund
Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Shenhong Huichuang Development (Foshan) Equity Investment Partnership
(Limited Partnership) (࢝(Нʆ)ᛆҳ༟ΥྫΆุ(Υྫ)), Jinning
Economic Development Industry Strong Chain Equity Investment (Hubei)
Partnership (Limited Partnership) (ᛆҳ༟(ಳ̏)ΥྫΆุ(Ϟ
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-12 –


--- page 653 ---
Υྫ)), Guangzhou Science and Technology Industry Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)), Guangzhou
Kechuangzhihui No. 2 V enture Capital Partnership (Limited Partnership) (௴
౽ිɚ໮௴ุҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent
Manufacturing Equity Investment Partnership (Limited Partnership) ( ᄿψᐦක౽ி
ᛆҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent Manufacturing No. 2
Equity Investment Partnership (Limited Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)), Guangzhou Hehe Suikai Investment Partnership (Limited
Partnership) ( ᄿψձΥᐦකҳ༟ΥྫΆุ(Υྫ)), Chaogaoqing Video Industry
Investment Fund (Guangzhou) Partnership (Limited Partnership) ( ൴৷૶ൖ᎖ପุ
ږ(ᄿψ)ΥྫΆุ(Υྫ)), Suzhou Industrial Park Huazhi Xingrui
V enture Capital Partnership (Limited Partnership) ( ᘽψʈุ෤ਜശ౽ጳ๿௴ุҳ༟
ΥྫΆุ(Υྫ)), Shanghai Boyuan Hongcheng V enture Capital Partnership
(Limited Partnership) (ᒿϓ௴ุҳ༟ΥྫΆุ(Υྫ)), Suzhou
Xinjing Fuying V enture Capital Partnership (Limited Partnership) (௴
ุҳ༟ΥྫΆุ(Υྫ)), Tongxiang Wuzhen Puhua Fengqi V enture Capital
Partnership (Limited Partnership) (ඊढᕄ౷ശჾಐ௴ุҳ༟ΥྫΆุ(Υ
ྫ)), Jiangmen Kexi Zhongke Selected No. 4 V enture Capital Partnership (Limited
Partnership) (त፯̬໮௴ุҳ༟ΥྫΆุ(Υྫ)), and Hangzhou
Y uanjing Lechi Equity Investment Fund Partnership (Limited Partnership) (ψ෥
ΥྫΆุ(Υྫ)), pursuant to which certain terms to the
capital increase agreement dated November 17, 2023 were agreed to be revised;
(f) the supplemental shareholders’ agreement dated May 13, 2024 entered into among
our Company, Liu Guoqing ( ᄎ਷૶), Zhou Xiang ( մജ), Y ang Guang ( เᄿ), Wang
Qicheng ( ˮ઼೻), Wu Jianxin (㒥), Y an Shengye ( ₢௷ุ), WU YONGMING,
Shenzhen Zeyi Semiconductor Investment Partnership (Limited Partnership) ( ଉέ
̒ኬ᜗ҳ༟ΥྫΆุ(Υྫ)), Jinhua Puhua Tianqin Equity Investment
Fund Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Hangzhou Binjiang Puhua Tianqing Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Shenzhen
Hechuang Intelligent and Health V enture Capital Fund (Limited Partnership) ( ଉέ
ږ(Υྫ)), Qingdao Xinda Pu Chuang Investment
Center (Limited Partnership) (༺౷௴ҳ༟ʕː(Υྫ)), Shenzhen Jiaxin
Y uande Equity Investment Fund Partnership (Limited Partnership) (ʩᅃ
ΥྫΆุ(Υྫ)), Shanghai Ganche Intelligent Technology
Partnership (Limited Partnership) (ҦΥྫΆุ(Υྫ)), Harbin
Xinrong Qihang V enture Capital Enterprise (Limited Partnership) (ဧᏵ㒥࿰઼ঘ
௴ุҳ༟Άุ(Υྫ)), Zhejiang Huihong Industrial Investment Co., Ltd. ( एϪ
ʮ̡), Hangzhou Fulin V enture Capital Partnership (Limited
Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)), Shanghai Hongjin Enterprise
Management Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ(ࠢ
Υྫ)), Beijing Siwei Internet Fund Management Center (Limited Partnership) ( ̏
၍ଣʕː(Υྫ)), Shenzhen Futian District Shanchuang Small,
Medium and Micro Equity Investment Fund Partnership (Limited Partnership) ( ଉέ
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-13 –


--- page 654 ---
ΥྫΆุ(Υྫ)), Shanghai Moqin
Intelligent Technology Co., Ltd. (ʮ̡), Shenzhen
Kangchengheng Ruixiang Investment Partnership (Limited Partnership) ( ଉέ̹ੰ
ϓЖြԮҳ༟ΥྫΆุ(Υྫ)), SME Development Fund (Shenzhen Nanshan
Limited Partnership) (ږ(Υྫ)), Zhuhai Jiashi
Shengqi V enture Capital Fund Partnership (Limited Partnership) ( मऎྗྼସ઼௴ุ
ΥྫΆุ(Υྫ)), ZhuhaiJiashi Shengde V enture Capital Fund
Partnership (Limited Partnership) (ΥྫΆุ(Υ
ྫ)), Zhuhai Jiashi Shengxuan V enture Capital Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)), Hangzhou Y uanjing
Chuangheng Equity Investment Fund Partnership (Limited Partnership) (ψ෥ዽ
ΥྫΆุ(Υྫ)), Suzhou Y uanjing Equity Investment
Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Li Fan
(ҽɭ), Shenzhen Y oujia Qingcheng Investment Partnership (Limited Partnership)
(ଉέСቷ૶ϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Y oujia Zhongcheng Investment
Partnership (Limited Partnership) ( ଉέСቷ଺ϓҳ༟ΥྫΆุ(Υྫ)),
Shenzhen Y oujia Licheng Investment Partnership (Limited Partnership) ( ଉέСቷ
ᘥϓҳ༟ΥྫΆุ(Υྫ)), Shenzhen Qianhe Wanhe V enture Capital
Partnership (Limited Partnership) ( ଉέɷ൭ຬͫ௴ุҳ༟ΥྫΆุ(Υྫ)),
Qingdao CICC Alpha Intelligent Internet Industry Equity Investment Fund (Limited
Partnership) (ږ(Υྫ)), Xinzhifeng
(Wuhan) Equity Investment Fund Partnership (Limited Partnership) (ࠬ(ဏ)
ΥྫΆุ(Υྫ)), Zhongjin (Changde) Emerging Industry V enture
Capital Partnership (Limited Partnership) (ږ(੬ᅃ)อጳପุ௴ุҳ༟ΥྫΆุ
(Υྫ)), Liantong Zhongjin Innovation Industry Equity Investment Fund
(Shenzhen) Partnership (Limited Partnership) (ږ(ଉ
έ)ΥྫΆุ(
Υྫ)), Shenzhen Nanshan Dongfang Fuhai Small, Medium and
Micro V enture Capital Fund Partnership (Υ
ྫΆุ(Υྫ)), Shenzhen Fuhai Y ouxuan No. 2 Hightech V enture Capital
Partnership (Limited Partnership) (Ҧ௴ุҳ༟ΥྫΆุ
(Υྫ)), Chongqing Kexing Kechuang Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)),
Chongqing Shenghehui Enterprise Management Partnership (Limited Partnership)
(ᅅସͫිΆุ၍ଣΥྫΆุ(Υྫ)), Guokai Zhizao Transformation and
Upgrading Fund (Limited Partnership) (ږ(Υྫ)),
Hubei Cathay Car Tech Equity Investment Fund Partnership L.P . (Ϫӛ
ΥྫΆุ(Υྫ)), Shanghai Jipei Xinsheng Management
Consulting Partnership (Limited Partnership) ( ɪऎΛԽอସ၍ଣፔ༔ΥྫΆุ(Ϟ
Υྫ)), Sichuan Shenwan Hongyuan Changhong Equity Investment Fund
Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)), Shenhong Huichuang Development (Foshan) Equity Investment Partnership
(Limited Partnership) (࢝(Нʆ)ᛆҳ༟ΥྫΆุ(Υྫ)), Jinning
Economic Development Industry Strong Chain Equity Investment (Hubei)
Partnership (Limited Partnership) (ᛆҳ༟(ಳ̏)ΥྫΆุ(Ϟ
Υྫ)), Guangzhou Science and Technology Industry Investment Fund Partnership
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-14 –


--- page 655 ---
(Limited Partnership) (ΥྫΆุ(Υྫ)), Guangzhou
Kechuangzhihui No. 2 V enture Capital Partnership (Limited Partnership) (௴
౽ිɚ໮௴ุҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent
Manufacturing Equity Investment Partnership (Limited Partnership) ( ᄿψᐦක౽ி
ᛆҳ༟ΥྫΆุ(Υྫ)), Guangzhou Suikai Intelligent Manufacturing No. 2
Equity Investment Partnership (Limited Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)), Guangzhou Hehe Suikai Investment Partnership (Limited
Partnership) ( ᄿψձΥᐦකҳ༟ΥྫΆุ(Υྫ)), Chaogaoqing Video Industry
Investment Fund (Guangzhou) Partnership (Limited Partnership) ( ൴৷૶ൖ᎖ପุ
ږ(ᄿψ)ΥྫΆุ(Υྫ)), Suzhou Industrial Park Huazhi Xingrui
V enture Capital Partnership (Limited Partnership) ( ᘽψʈุ෤ਜശ౽ጳ๿௴ุҳ༟
ΥྫΆุ(Υྫ)), Shanghai Boyuan Hongcheng V enture Capital Partnership
(Limited Partnership) (ᒿϓ௴ุҳ༟ΥྫΆุ(Υྫ)), Suzhou
Xinjing Fuying V enture Capital Partnership (Limited Partnership) (௴
ุҳ༟ΥྫΆุ(Υྫ)), Tongxiang Wuzhen Puhua Fengqi V enture Capital
Partnership (Limited Partnership) (ඊढᕄ౷ശჾಐ௴ุҳ༟ΥྫΆุ(Υ
ྫ)), Jiangmen Kexi Zhongke Selected No. 4 V enture Capital Partnership (Limited
Partnership) (त፯̬໮௴ุҳ༟ΥྫΆุ(Υྫ)), and Hangzhou
Y uanjing Lechi Equity Investment Fund Partnership (Limited Partnership) (ψ෥
ΥྫΆุ(Υྫ)), pursuant to which certain terms to the
shareholders agreement dated November 17, 2023 were agreed to be revised;
(g) the cornerstone investment agreement dated December 13, 2024 entered into among
our Company, Horizon Together Holding Ltd., CITIC Securities (Hong Kong)
Limited, CLSA Limited, China International Capital Corporation Hong Kong
Securities Limited, SBI China Capital Financial Services Limited, SDICS
International Securities (Hong Kong) Limited and Long Bridge HK Limited,
pursuant to which Horizon Together Holding Ltd. agreed to subscribe for such
number of H Shares at the Offer Price in an aggregate of such amount of Hong Kong
dollar equivalent of USD1,500,000 (excluding brokerage fee, the SFC transaction
levy, the Stock Exchange trading fee and the AFRC transaction levy in respect of
such number of H Shares);
(h) the cornerstone investment agreement dated December 13, 2024 entered into among
our Company, KCH International Investment Limited, Tianjin Kangchengheng
Enterprise Management Consultation Partnership (Limited Partnership) (̹ੰ
ϓЖΆุ၍ଣፔ༔ΥྫΆุ(Υྫ)), CITIC Securities (Hong Kong) Limited,
CLSA Limited, China International Capital Corporation Hong Kong Securities
Limited, SBI China Capital Financial Services Limited, SDICS International
Securities (Hong Kong) Limited and Long Bridge HK Limited, pursuant to which
KCH International Investment Limited agreed to subscribe for such number of H
Shares at the Offer Price in an aggregate of such amount of HKD528,580,636
(excluding brokerage fee, the SFC transaction levy, the Stock Exchange trading fee
and the AFRC transaction levy in respect of such number of H Shares); and
(i) the Hong Kong Underwriting Agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-15 –


--- page 656 ---
2. Intellectual Property Rights
(a) Trademarks
(i) Registered Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we
consider to be or may be material to our business:
No. Trademark
Place of
Registration Registered Owner Class Registered Number
Expiry Date
(yyyy/mm/dd)
1.
 PRC Our Company 9 53044407 2031/12/13
2.
 PRC Our Company 9 46989364 2031/12/13
3.
 PRC Our Company 9 41406982 2030/10/06
4.
 PRC Our Company 9 41399727 2030/09/06
5.
 PRC Our Company 9 19623819 2027/05/27
6.
 PRC Our Company 9 16281972 2027/02/20
7.
 PRC Our Company 42 63689363 2034/02/27
8.
 PRC Our Company 12 63694158 2034/02/27
9.
 PRC Our Company 38 63679606 2034/02/27
10.
 Hong
Kong
Our Company 9 306519385 2034/04/06
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-16 –


--- page 657 ---
(b) Copyrights
In accordance with the Copyright Law of the People’s Republic of China ( ʕശɛ͏΍ձ
جthe term of copyright owned by legal entities or other organizations is 50 years,
expiring on December 31 in the 50th year after its first publication. For copyrights that have
not been published within 50 years of registration, the term expires on the 50th anniversary of
the date of registration.
As of the Latest Practicable Date, we had registered the following copyrights which we
consider to be or may be material to our business:
No. Copyright
Place of
Registration
Registered
Owner
Registration
Number
Registration Date
(yyyy/mm/dd)
Date of First
Publication
(yyyy/mm/dd)
1. MINIEYE data
management platform
software (MINIEYE ᅰ
˒၌ழ΁)
PRC Our
Company
2024SR0471000 2024/04/08 /
2. MINIEYE intelligent driver
assistance system
(MINIEYE ౽ঐႾпቷት
ӻ୕)
PRC Our
Company
2024SR0213697 2024/02/01 2023/11/30
3. Y ouqu L4 data
management software
(СㄟL4ᅰኽ၍ଣழ΁)
PRC Shanghai
Y ouqu
2023SR0531773 2023/05/10 /
4. Y ouqu pure vision BEV
object detection
visualization software
(СㄟॱൖᙂBEVͦᅺᏨ
಻̙ൖʷழ΁)
PRC Shanghai
Y ouqu
2023SR0531783 2023/05/10 /
5. Multi-sensor fusion
positioning system
software ( εෂชኜፄΥ
Зӻ୕ழ΁)
PRC Shanghai
Y ouqu
2023SR0410791 2023/03/29 /
6. Autonomous driving lidar
to camera external
parameter calibration
software ( Іਗቷትlidar
Ցcameraழ΁)
PRC Our
Company
2023SR0342679 2023/03/16 /
7. Y uanshi road inspection
software ( ๕ት༸༩ԚᏨ
ழ΁)
PRC Jiangsu
Y uanshi
2023SR0344571 2023/03/16 /
8. Y uanshi parking space
inspection software ( ๕
ትԓЗԚᏨழ΁)
PRC Jiangsu
Y uanshi
2023SR0344570 2023/03/16 /
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-17 –


--- page 658 ---
No. Copyright
Place of
Registration
Registered
Owner
Registration
Number
Registration Date
(yyyy/mm/dd)
Date of First
Publication
(yyyy/mm/dd)
9. Y uanshi driving parking
information management
system (၍
ଣӻ୕)
PRC Jiangsu
Y uanshi
2023SR0344569 2023/03/16 /
10. 360-degree surround view
system for vehicle ( ԓ༱
ᐑൖ360ӻ୕)
PRC Our
Company
2023SR0319066 2023/03/13 /
11. Multi-object matching
software in a pair of
camera images in a
cross-view ( ʹɸൖԉɨ
ɓ࿁ᙲ྅᎘ྡ྅ʫε
ͦᅺʸৣழ΁)
PRC Hunan
Y ouxiang
2023SR0265946 2023/02/21 /
12. Selection and generation
software for planning
initial reference lines
based on high-precision
maps and strong
positioning (৷ၚή
֐ڋ
፯՟ၾ͛ϓழ
΁)
PRC Hunan
Y ouxiang
2023SR0250483 2023/02/16 /
13. Y oujia data cleaning tool
chain software ( Сቷॆ
ʈՈᗡ
ழ΁)
PRC Hunan
Y ouxiang
2023SR0228722 2023/02/13 2022/12/03
14. Lane centering software
(ʕ̌ঐழ΁)
PRC Our
Company
2022SR0953381 2022/07/20 /
15. MINIEYE cruise
visualization software
(MINIEYE Ԛঘ̙ൖʷழ
΁)
PRC Our
Company
2022SR0744769 2022/06/13 /
16. On-the-job status
monitoring platform for
the driver in the cabin
(࿒္
಻̨̻)
PRC Our
Company
2022SR0744650 2022/06/13 /
17. MINIEYE data cloud
platform storage
encryption management
software (MINIEYE ᅰ
ኽථ̨̻πᎷ̋੗၍ଣ
ழ΁)
PRC Our
Company
2022SR0744770 2022/06/13 /
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-18 –


--- page 659 ---
No. Copyright
Place of
Registration
Registered
Owner
Registration
Number
Registration Date
(yyyy/mm/dd)
Date of First
Publication
(yyyy/mm/dd)
18. Cabin pilot drinking water
status monitoring
platform (භ
࿒္಻̨̻)
PRC Our
Company
2022SR0744771 2022/06/13 /
19. Driver-on-mask status
monitoring platform in
the cabin (Խ
࿒္಻̨̻)
PRC Our
Company
2022SR0744819 2022/06/13 /
20. MINIEYE intelligent blind
spot monitoring and
early warning system
for truck turning
(MINIEYE ஬ԓᔷᛃ౽ঐ
ਜ္಻ཫᙆӻ୕)
PRC Our
Company
2022SR0732352 2022/06/10 2021/12/24
21. MINIEYE’s radar and
machine vision-based
obstacle detection
system in front of the
vehicle (MINIEYE׵
ԓሿ
Ꮸ಻ӻ୕)
PRC Our
Company
2022SR0736855 2022/06/10 2022/01/18
22. Smoking status monitoring
platform for the driver
in the cabin ( ጵʫቷት
࿒္಻̨̻)
PRC Ruijian
Zhixing
2024SR0715901 2024/05/27 /
23. MINIEYE vehicle visual
wireless positioning and
ranging system
(MINIEYE ԓሿൖᙂೌᇞ
Зၾ಻൷ӻ୕)
PRC Our
Company
2022SR0729957 2022/06/10 2022/01/08
24. MINIEYE Heavy-duty
Truck Exterior Blind
Spot Monitoring System
(MINIEYE̔஬ԓԓ̮
ਜ္಻ӻ୕)
PRC Our
Company
2022SR0736856 2022/06/10 2021/12/09
25. The driver’s head facing in
the cabin detection
platform (᎘
௅ಃΣᏨ಻̨̻)
PRC Ruijian
Zhixing
2024SR0715895 2024/05/27 /
26. In-cabin driver phone call
behavior monitoring
platform (͂
္಻̨̻)
PRC Ruijian
Zhixing
2024SR0715900 2024/05/27 /
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-19 –


--- page 660 ---
No. Copyright
Place of
Registration
Registered
Owner
Registration
Number
Registration Date
(yyyy/mm/dd)
Date of First
Publication
(yyyy/mm/dd)
27. Static gesture recognition
platform in the cabin
(ጵʫ᎑࿒˓ැᗆй̨̻)
PRC Ruijian
Zhixing
2024SR0715906 2024/05/27 /
28. In-cabin driver fatigue
grading system ( ጵʫቷ
ह௶ʱॴӻ୕)
PRC Ruijian
Zhixing
2024SR0715899 2024/05/27 /
29. MINIEYE database
integrated management
software (MINIEYE ᅰ
ၝΥ၍ଣழ΁)
PRC Our
Company
2022SR0701742 2022/06/06 /
30. Cabin driver seat belt
wearing status
monitoring platform ( ጵ
ً
࿒္಻̨̻)
PRC Ruijian
Zhixing
2024SR0715902 2024/05/27 /
31. MINIEYE gesture
recognition control
software (MINIEYE ˓
ැᗆйછՓழ΁)
PRC Ruijian
Zhixing
2024SR0715905 2024/05/27 /
32. MINIEYE hardware BOM
automatic generation
tool software
(MINIEYE ೷΁BOMІ
ਗʷ͛ϓʈՈழ΁)
PRC Our
Company
2022SR0647307 2022/05/26 2021/08/12
33. MINIEYE hardware design
automation inspection
tool software
(MINIEYEІਗ
ʈՈழ΁)
PRC Our
Company
2022SR0647312 2022/05/26 2021/08/28
34. MINIEYE data
visualization software
(MINIEYE ᅰኽ̙ൖʷழ
΁)
PRC Our
Company
2022SR0546033 2022/04/28 /
35. Y oujia minidnn deep neural
network inference
software ( Сቷminidnn
ग़຾ၣഖપଣழ΁)
PRC Our
Company
2022SR0539690 2022/04/28 /
36. Y oujia minicv computer
vision software ( Сቷ
minicvၑዚൖᙂழ΁)
PRC Our
Company
2022SR0539692 2022/04/28 /
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-20 –


--- page 661 ---
No. Copyright
Place of
Registration
Registered
Owner
Registration
Number
Registration Date
(yyyy/mm/dd)
Date of First
Publication
(yyyy/mm/dd)
37. Autonomous driving
perception data cleaning
and HIL simulation
system (ᅰ
ʿHILͷॆӻ୕)
PRC Our
Company
2022SR0542928 2022/04/28 /
38. Y oujia T1 platform OTA
upgrade software ( Сቷ
T1̨̻OTAʺॴழ΁)
PRC Our
Company
2022SR0542922 2022/04/28 /
39. Y oujia intelligent
transportation
monitoring and
management platform
(Сቷ౽ঐ༶፩္છ၍ଣ
̨̻)
PRC Nanjing
Y oujia
2022SR0492213 2022/04/20 /
40. Target ranging system for
underground parking
lots ( ήɨ৾ԓఙͦᅺ಻
൷ӻ୕)
PRC Nanjing
Y oujia
2021SR1761927 2021/11/17 /
41. Intelligent Automobile ( ౽
ঐӛԓ)
PRC Our
Company
Guozuo Dengzi
(਷Ъ೮ο)
-2021-F-
00156293
2021/07/12 /
42. Driver seatbelt detection
software (τΌ੭
Ꮸ಻ழ΁)
PRC Nanjing
Y oujia
2019SR1353602 2019/12/12 /
43. In-cabin human movement
recognition software ( ጵ
ʫɛ᜗ਗЪᗆйழ΁)
PRC Nanjing
Y oujia
2019SR1325452 2019/12/10 /
44. In-cabin attitude estimation
software (ࠇ
ழ΁)
PRC Nanjing
Y oujia
2019SR1326357 2019/12/10 /
45. Smart High Beam Control
Software ( ౽ঐჃΈዱછ
Փழ΁)
PRC Nanjing
Y oujia
2019SR1325460 2019/12/10 /
46. Hands off the steering
wheel detection
software ( ᕐ˓୭ᕎ˙Σ
ᆵᏨ಻ழ΁)
PRC Nanjing
Y oujia
2019SR1311047 2019/12/09 /
47/H1118Y oujia T1Q platform
driving and parking
switch management
software ( Сቷ52̨̻
ʲ౬၍ଣழ΁)
PRC Our
Company
2023SR0689311 2023/06/19 2022/10/30
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-21 –


--- page 662 ---
No. Copyright
Place of
Registration
Registered
Owner
Registration
Number
Registration Date
(yyyy/mm/dd)
Date of First
Publication
(yyyy/mm/dd)
48. Pedestrian collision
avoidance system ( Бɛ
ԣᅜӻ୕)
PRC Our
Company
2017SR340583 2017/07/04 /
49. Lane keeping system ( ԓ༸
ӻ୕)
PRC Our
Company
2017SR340560 2017/07/04 /
50. AEB automatic emergency
braking system (AEB І
ԓӻ୕)
PRC Our
Company
2017SR342653 2017/07/04 2016/12/20
51. Forward collision warning
system (ԓຠᅜཫᙆӻ
୕)
PRC Our
Company
2017SR342655 2017/07/04 2015/08/20
52. Traffic Sign Recognition
System ( ʹஷᅺႦᗆй
ӻ୕)
PRC Our
Company
2017SR324666 2017/06/29 /
53. Intelligent Automobile
illustration ( ౽ঐӛԓౢ
೥)
PRC Our
Company
2024-F-
00151885
2024/06/03 2024/05/20
(d) Patents
According to the Patent Law of the People’s Republic of China (ج,)
the validity period of an invention patent is twenty years, the validity period of a utility model
patent is ten years, the validity period of a design patent applied for before May 31, 2021
(inclusive) is ten years, and the validity period of a design patent applied for on or after
June 1, 2021 (inclusive) is fifteen years. All periods are calculated from the date of application.
As of the Latest Practicable Date, we have registered the following patents which we
considered to be or may be material to our business:
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
1. A method and
system for
generating
temporal action
nomination based
on coarse time
granularity ( ɓ၇
ٙܓ
ҏਗЪ౤Τ͛ϓ
ʿӻ୕)
PRC Invention
grant
Jiangsu
Y uanshi
2023115885897 2023/11/27
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-22 –


--- page 663 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
2. A method and
system for
generating
sequential action
nominations based
on multi-location
collaboration ( ɓ
εЗໄ՘Ъ
ҏਗЪ౤Τ͛
ʿӻ୕)
PRC Invention
grant
Jiangsu
Y uanshi
2023114651454 2023/11/07
3. A collaborative
saliency detection
method and
system fused with
image saliency
information ( ɓ၇
ڦ׌
Ꮸ
ʿӻ୕)
PRC Invention
grant
Jiangsu
Y uanshi
2023112549127 2023/09/27
4. A lightweight human
pose estimation
algorithm based
on structure-heavy
parameterization
(ࠠ
Ⴠඎॴɛ
ج)
PRC Invention
grant
Jiangsu
Y uanshi
2023110632134 2023/08/23
5. A three-dimensional
object detection
method and
system based on
virtual point cloud
(ൈᏝᓃ
ɧၪͦᅺᏨ಻
ձӻ୕)
PRC Invention
grant
Jiangsu
Y uanshi
2023110496394 2023/08/21
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-23 –


--- page 664 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
6. Object detection
model training
method, object
detection method
and device for
road information
(ͦᅺ
৅ᇖ˙
ج
ʿༀໄ)
PRC Invention
grant
Our
Company
2023104367038 2023/04/23
7. A 3D target tracking
method and
device ( ɓ၇3Dͦ
ʿༀ
ໄ)
PRC Invention
grant
Our
Company
2023104297961 2023/04/21
8. Method and device
for evaluating the
accuracy of
calibration of lidar
and camera
external
parameters ( ዧΈ
ዚ̮ਞᅺ
ʿ
ༀໄ)
PRC Invention
grant
Hunan
Y ouxiang
2023104371315 2023/04/21
9. A method and device
for establishing a
3D target
matching model
(ɓ၇3Dͦᅺʸৣ
ʿༀ
ໄ)
PRC Invention
grant
Our
Company
2023104182046 2023/04/19
10. Control method,
device, vehicle
and storage
medium of vehicle
(છՓ˙
eༀໄeԓሿձ
πᎷʧሯ)
PRC Invention
grant
Our
Company
2023104177033 2023/04/19
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-24 –


--- page 665 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
11. A brake pedal reset
mechanism, a
brake pedal
assembly and a
vehicle ( ɓ၇Փਗ
ልЗዚ࿴eՓ
ᐼϓʿԓ
ሿ)
PRC Invention
grant
Shanghai
Y ouxing
2023104103769 2023/04/17
12. Target perception
methods, devices,
computer
equipment, and
storage media ( ͦ
eༀ
ၑዚண௪e
πᎷʧሯ)
PRC Invention
grant
Our
Company
2023102958601 2023/03/24
13. Camera external
parameter
calibration
method, device
and vehicle (ዚ
eༀ
ໄձԓሿ)
PRC Invention
grant
Our
Company
2023102876828 2023/03/23
14. Target detection
methods, devices,
and vehicles ( ͦᅺ
eༀໄ˸
ʿԓሿ)
PRC Invention
grant
Our
Company
2023102901726 2023/03/23
15. Torque compensation
method, device,
computer
equipment,
medium for
steering wheel
dead zone ( ˙Σᆵ
ҩॉ໾Ꮅ˙
ၑዚ
ண௪eʧሯ)
PRC Invention
grant
Our
Company
2023102781832 2023/03/21
16. 3D image data
generation
method, apparatus,
apparatus and
storage medium
(3D͛
eༀໄeண
௪ʿπᎷʧሯ)
PRC Invention
grant
Our
Company
2023102147584 2023/03/08
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-25 –


--- page 666 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
17. A TJA guide line
generation method
and device based
on multi-factor
mixing (׵
ٙTJA
ʿ
ༀໄ)
PRC Invention
grant
Shanghai
Y ouqu
2023102245055 2023/03/07
18. Training method of
pedestrian
detection model
and device
thereof, pedestrian
detection method
(ٙۨ
ʿՉༀ
ໄeБɛᏨ಻˙
ج)
PRC Invention
grant
Our
Company
202310166416X 2023/02/27
19. 3D point cloud
generation
method, device,
equipment and
medium based on
simulation data
(ٙ
3Dᓃථ͛ϓ˙
eༀໄeண௪ʿ
ʧሯ)
PRC Invention
grant
Our
Company
2023101540453 2023/02/23
20. V ehicle trajectory
collision detection
method, device,
equipment and
storage medium
(༦ຠᅜᏨ
eༀໄeண
௪ʿπᎷʧሯ)
PRC Invention
grant
Our
Company
2023101540434 2023/02/23
21. Joint calibration
method of camera
and inertial
measurement unit
relative to vehicle
body mounting
attitude (ዚձ࿕
࿁ԓ
ᑌΥ
ج)
PRC Invention
grant
Our
Company
2023101202781 2023/02/16
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-26 –


--- page 667 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
22. A multi-camera
fusion perception
method and
device from a
bird’s-eye view
perspective ( ɓ၇
௢ᐚྡൖԉɨεᙲ
ج
ʿༀໄ)
PRC Invention
grant
Our
Company
2023100775837 2023/02/08
23. Fusion method of
image and multi-
frame millimeter-
wave radar target
based on image
features (ྡ྅
ྡ྅ձεహ
ٙ
ج)
PRC Invention
grant
Our
Company
2023100775841 2023/02/08
24. A matching method
for image and
single-frame
millimeter-wave
radar targets based
on image features
(ٙ
ت
ʸৣ˙
ج)
PRC Invention
grant
Our
Company
2023100511364 2023/02/02
25. A target matching
method, device
and storage
medium for
surround-view
camera group ( ɓ
ٙ
eༀ
ໄʿπᎷʧሯ)
PRC Invention
grant
Our
Company
2022116610562 2022/12/23
26. Matching method,
device, equipment
and storage
medium of image
target and radar
target ( ྡ྅ͦᅺၾ
ʸৣ˙
eༀໄeண௪ʿ
πᎷʧሯ)
PRC Invention
grant
Our
Company
2022116605723 2022/12/23
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-27 –


--- page 668 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
27. A modular hardware
system for
autonomous
driving ( ɓ၇ᅼ෯
ʷІਗቷት೷΁ӻ
୕)
PRC Invention
grant
Our
Company
2022115924100 2022/12/13
28. A rapid collision
hazard detection
method for VRU
traversal scenarios
(ɓ၇০࿁VRU߈
ຠᅜΚᎈ
ج)
PRC Invention
grant
Our
Company
2022101405601 2022/02/16
29. V ehicle anti-lock
braking
optimization
control method
and device ( ɓ၇
ϥᎴʷછ
ʿༀໄ)
PRC Invention
grant
Our
Company
2022101154995 2022/02/07
30. A schematic diagram
automatic drawing
method, device,
equipment,
medium and
product (ଣ
e
ༀໄeண௪eʧሯ
ۜ)
PRC Invention
grant
Our
Company
2022101170771 2022/02/07
31. A static target
tracking method,
device and storage
medium ( ɓ၇᎑
e
ༀໄʿπᎷʧሯ)
PRC Invention
grant
Our
Company
2022101036344 2022/01/28
32. Lane marking
recognition
method, device
and storage
medium ( ɓ၇ԓ
eༀ
ໄʿπᎷʧሯ)
PRC Invention
grant
Our
Company
2022100884401 2022/01/26
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-28 –


--- page 669 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
33. Method, equipment
and medium for
vehicle offset
alarm ( ɓ၇ԓሿ਋
eண
௪ʿʧሯ)
PRC Invention
grant
Our
Company
2022100516255 2022/01/18
34. A longitudinal
motion control
method and
device for electric
vehicle based on
speed bump
detection ( ɓ၇ਿ
ཥ
ਗӛԓᐽΣ༶ਗછ
ʿༀໄ)
PRC Invention
grant
Our
Company
2022100463915 2022/01/17
35. A key target
selection method
and device
suitable for
intelligent driving
vehicles ( ɓ၇ቇ
౽ঐቷትԓሿ
ᗫᒟͦᅺ፯኿˙
ʿༀໄ)
PRC Invention
grant
Our
Company
2022100342906 2022/01/13
36. Pedestrian detection
method, device,
equipment and
medium of
cascaded neural
network model
(ॴᑌग़຾ၣഖᅼ
БɛᏨ಻˙
eༀໄeண௪ʿ
ʧሯ)
PRC Invention
grant
Our
Company
2022100343716 2022/01/13
37. A camera pose
estimation
method, device,
device and storage
medium (޴
e
ༀໄeண௪ʿπᎷ
ʧሯ)
PRC Invention
grant
Our
Company
2022100293007 2022/01/12
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-29 –


--- page 670 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
38. A kind of in-vehicle
camera external
parameter
calibration method
and device ( ɓ၇
֛
ʿༀໄ)
PRC Invention
grant
Ruijian
Zhixing
2022100293191 2022/01/12
39. Test methods,
devices,
equipment, and
storage media for
autonomous
vehicles ( Іਗቷ
಻༊˙
eༀໄeண௪ʿ
πᎷʧሯ)
PRC Invention
grant
Our
Company
2022100240531 2022/01/11
40. Detection methods,
devices,
equipment, and
storage media for
road vanishing
points ( ༸༩๘ᓃ
eༀ
ໄeண௪ʿπᎷʧ
ሯ)
PRC Invention
grant
Our
Company
202210012039X 2022/01/07
41. A vehicle
acceleration
control method
and device based
on road traffic
characteristics ( ɓ
༸༩ʹஷत
છ
ʿༀໄ)
PRC Invention
grant
Our
Company
2022100124367 2022/01/07
42. A line-of-sight
measurement
method and
device based on
monocular camera
(ఊͦᙲ
ൖᇞ಻ඎ˙
ʿༀໄ)
PRC Invention
grant
Ruijian
Zhixing
2022100120402 2022/01/07
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-30 –


--- page 671 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
43. A gaze measurement
method and
device based on
binocular camera
(ᕐͦᙲ
ൖᇞ಻ඎ˙
ձༀໄ)
PRC Invention
grant
Ruijian
Zhixing
2022100075568 2022/01/06
44. Training methods for
multi-source and
cross-domain text
sentiment
classification
network ( ε๕༨
˖͉ઋชʱ
৅ᇖ˙
ج)
PRC Invention
grant
Our
Company
2022100009640 2022/01/04
45. A construction
method, device
and optical flow
estimation method
for optical flow
estimation models
(Пၑᅼ
eༀ
Пၑ˙
ج)
PRC Invention
grant
Our
Company
2021116358740 2021/12/30
46. Collision risk
prediction method
and device ( ɓ၇
ج
ʿༀໄ)
PRC Invention
grant
Our
Company
2021115932738 2021/12/24
47. An automatic driving
speed planning
method, device
and storage
medium ( ɓ၇І
஝ྌ˙
eༀໄʿπᎷʧ
ሯ)
PRC Invention
grant
Our
Company
2021115580175 2021/12/20
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-31 –


--- page 672 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
48. Driving assistance
takeover prompt
method, device,
terminal device
and storage
medium ( ɓ၇ቷ
ትႾпટ၍౤ͪ˙
eༀໄe୞၌ண
௪ʿπᎷʧሯ)
PRC Invention
grant
Our
Company
2021115457664 2021/12/17
49. Image semantic
segmentation
method and
computer-readable
storage medium
(ྡ྅Ⴇ່ʱ௲˙
ၑዚ̙ᛘπ
Ꮇʧሯ)
PRC Invention
grant
Our
Company
2021115460972 2021/12/17
50. A method, device,
and computer-
readable storage
medium for
target-tracking ( ɓ
e
ၑዚ̙ᛘ
πᎷʧሯ)
PRC Invention
grant
Our
Company
2021115362062 2021/12/16
51. V ehicle control
method and
system thereof in
vehicle blind spot
(ٙ
ʿՉ
ӻ୕eԓሿ)
PRC Invention
grant
Our
Company
2021115365164 2021/12/16
52. A method and device
for updating a
road model ( ɓ၇
һอ˙
ʿༀໄ)
PRC Invention
grant
Our
Company
2021115280236 2021/12/15
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-32 –


--- page 673 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
53. Detection methods,
devices,
equipment, and
storage media for
lost items (ي
eༀ
ໄeண௪ʿπᎷʧ
ሯ)
PRC Invention
grant
Ruijian
Zhixing
202111527304X 2021/12/15
54. V ehicle four-wheel
steering control
method and
device ( ɓ၇ԓሿ
ج
ʿༀໄ)
PRC Invention
grant
Our
Company
2021115137469 2021/12/13
55. A method, device,
electronic
equipment, and
storage medium
for automatic lane
change on
highway ( ɓ၇৷
஺ʮ༩Іਗᜊ༸˙
eༀໄeཥɿண
௪ʿπᎷʧሯ)
PRC Invention
grant
Our
Company
2021115039729 2021/12/10
56. V ehicle heading
angle detection
method, device,
equipment and
storage medium
(Ꮸ
eༀໄeண
௪ʿπᎷʧሯ)
PRC Invention
grant
Our
Company
2021114948349 2021/12/09
57. V ehicle road test
methods, devices,
electronic
equipment and
storage media ( ԓ
e
ༀໄeཥɿண௪ʿ
πᎷʧሯ)
PRC Invention
grant
Our
Company
2021114948724 2021/12/09
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-33 –


--- page 674 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
58. Lane marking
recognition
method and
device ( ԓ༸ᇞᗆ
ʿༀໄ)
PRC Invention
grant
Our
Company
2021114961911 2021/12/09
59. Efficient PCB layout
methods, devices,
devices, and
computer-readable
storage media ( ৷
ࣖPCBe
ၑ
ዚ̙ᛘπᎷʧሯ)
PRC Invention
grant
Our
Company
202111496981X 2021/12/09
60. Bifurcation point
detection methods,
devices, computer
equipment, and
storage media ( ʱ
eༀ
ၑዚண௪ձ
πᎷʧሯ)
PRC Invention
grant
Our
Company
2021114993096 2021/12/09
61. A drive-by-wire
system for
autonomous
vehicles ( ɓ၇І
ਗቷትԓሿᇞછӻ
୕)
PRC Invention
grant
Our
Company
2021114874148 2021/12/08
62. Parking method,
device and
terminal
equipment based
on charging pile
position
recognition ( ɓ၇
̂ཥᅸЗໄᗆ
eༀ
ໄʿ୞၌ண௪)
PRC Invention
grant
Our
Company
2021114874595 2021/12/08
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-34 –


--- page 675 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
63. Detection method,
device, equipment
and storage
medium of lane
marking ( ԓ༸ᇞ
eༀ
ໄeண௪ʿπᎷʧ
ሯ)
PRC Invention
grant
Our
Company
2021114878083 2021/12/08
64. A multi-extended
target radar
measurement set
division method
and device ( ɓ၇
ͦᅺཤ༺ඎ
ձༀ
ໄ)
PRC Invention
grant
Our
Company
2021114808837 2021/12/07
65. Eye attribute
classification
method, device
and storage
medium ( ɓ၇଻
e
ༀໄʿπᎷʧሯ)
PRC Invention
grant
Ruijian
Zhixing
2021114798464 2021/12/07
66. A method and device
for associating a
radar vehicle
target with a
visual vehicle
target ( ɓ၇ཤ༺ԓ
ሿͦᅺၾൖᙂԓሿ
ʿ
ༀໄ)
PRC Invention
grant
Our
Company
2021114607556 2021/12/03
67. Training method and
image
classification
method of image
classification
model ( ྡ྅ʱᗳ
ʿ
ج)
PRC Invention
grant
Hunan
Y ouxiang
2021114595239 2021/12/02
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-35 –


--- page 676 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
68. Data cleaning
methods and
computer-
readable storage
media (ݹ
ၑዚ̙ᛘ
πᎷʧሯ)
PRC Invention
grant
Hunan
Y ouxiang
202111444911X 2021/11/30
69. Object tracking
methods, devices,
computer
equipment, and
storage media ( ͦ
eༀ
ၑዚண௪ձ
πᎷʧሯ)
PRC Invention
grant
Our
Company
2021113524522 2021/11/16
70. A construction
method of multi-
target detection
and category
recognition model
based on YOLOv5
(׵YOLOv5ٙ
εͦᅺᏨ಻ʿᗳй
˙
ج)
PRC Invention
grant
Our
Company
2021113302067 2021/11/11
71. Method, apparatus
and computer
equipment for
raising points on
lane markings ( ԓ
e
ၑዚண
௪)
PRC Invention
grant
Our
Company
2021112911373 2021/11/03
72. Tail sequence scale
change prediction
method, device
and computer
equipment ( ԓ҈
ᜊʷཫ಻
ၑ
ዚண௪)
PRC Invention
grant
Our
Company
202111179136X 2021/10/11
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-36 –


--- page 677 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
73. Electromagnetic
compatibility
shielding devices
and electronic
equipment ( ཥှ
ᇱༀໄʿ
ཥɿண௪)
PRC Invention
grant
Our
Company
2021108147875 2021/07/19
74. Road vehicle driving
attitude
classification
method, device
and system ( ɓ၇
࿒
eༀໄʿ
Չӻ୕)
PRC Invention
grant
Nanjing
Y oujia
2021106198196 2021/06/03
75. A lightweight
multitask age
estimation method
based on facial
feature learning
(ɛᑕत
Ⴠඎॴε
ج)
PRC Invention
grant
Nanjing
Y oujia
202110620332X 2021/06/03
76. Traffic sign tracking
method, device,
device, and
storage medium
(ʹஷ೐༧ᔳ˙
eༀໄeண௪ձ
πᎷʧሯ)
PRC Invention
grant
Our
Company
2021104165041 2021/04/19
77. Lamp state
recognition
method, device,
terminal and
medium based on
attention
mechanism (׵
ԓዱ
eༀ
ໄe୞၌ձʧሯ)
PRC Invention
grant
Our
Company
2021103370763 2021/03/30
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-37 –


--- page 678 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
78. Parking control
method, device,
computer
equipment and
storage medium
(e
ၑዚண௪
ձπᎷʧሯ)
PRC Invention
grant
Our
Company
2021101882625 2021/02/19
79. Dynamic estimation
method, device,
and computer
equipment for
vehicle-mounted
camera external
parameter attitude
(۶
e
ၑዚண
௪)
PRC Invention
grant
Our
Company
2021100958186 2021/01/25
80. Gesture control
methods, devices,
computer
equipment, and
storage media ( ˓
eༀ
ၑዚண௪ձ
πᎷʧሯ)
PRC Invention
grant
Ruijian
Zhixing
2021100381906 2021/01/12
81. Parking space
identification
method, device,
vehicle-mounted
terminal and
storage medium
(e
ༀໄeԓ༱୞၌ձ
πᎷʧሯ)
PRC Invention
grant
Our
Company
2021100212537 2021/01/08
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-38 –


--- page 679 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
82. Processing method,
device, equipment
and storage
medium of ring
view parking
space detection
results ( ᐑൖྡԓ
ஈଣ
eༀໄeண௪
ձπᎷʧሯ)
PRC Invention
grant
Our
Company
2020115353853 2020/12/23
83. Parking space
detection method,
device, computer
equipment and
storage medium
(৾ԓЗᏨ಻˙
ၑዚ
ண௪ձπᎷʧሯ)
PRC Invention
grant
Our
Company
2020115284389 2020/12/22
84. Object detection
methods, devices,
devices, and
storage media for
fisheye images
(ٙ
eༀ
ໄeண௪ձπᎷʧ
ሯ)
PRC Invention
grant
Our
Company
2020113060701 2020/11/20
85. Method, apparatus,
computer
equipment, and
storage medium
for generating
occluded images
(ٙ
ၑ
ዚண௪ձπᎷʧ
ሯ)
PRC Invention
grant
Our
Company
2020111843266 2020/10/30
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-39 –


--- page 680 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
86. Lane line processing
method, device,
vehicle-mounted
terminal and
medium based on
feature space ( ਿ
ԓ༸
eༀ
ໄeԓ༱୞၌ձʧ
ሯ)
PRC Invention
grant
Our
Company
202011184329X 2020/10/30
87. Detection methods,
devices, devices,
and storage media
for areas occluded
by cameras ( ᙲ྅
Ꮸ಻
eༀໄeண௪
ձπᎷʧሯ)
PRC Invention
grant
Our
Company
2020110292938 2020/09/27
88. Neural network
accelerators ( ग़຾
ၣഖ̋஺ኜ)
PRC Invention
grant
Our
Company
2020110128505 2020/09/24
89. V ehicle blind spot
detection
processing
method, device,
vehicle-mounted
terminal and
storage medium
(ਜᏨ಻ஈ
eༀໄeԓ
༱୞၌ձπᎷʧ
ሯ)
PRC Invention
grant
Our
Company
2020110129480 2020/09/24
90. Method, device,
computer device,
and storage
medium for
identifying the
state of a vehicle
lamp (ً
eༀໄe
ၑዚண௪ձπᎷ
ʧሯ)
PRC Invention
grant
Our
Company
2020109982523 2020/09/22
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-40 –


--- page 681 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
91. Image data screening
methods, devices,
computer
equipment, and
storage media ( ྡ
e
ၑዚண௪
ձπᎷʧሯ)
PRC Invention
grant
Wuhan
Y oujia
2020100541987 2020/01/17
92. Visual perception
methods, devices,
computer
equipment, and
storage media for
autonomous
driving ( Іਗቷት
e
ၑዚண௪
ձπᎷʧሯ)
PRC Invention
grant
Y oujia
Beijing
2019113828291 2019/12/27
93. Lane marking
detection method,
device, computer
equipment and
storage medium
(ԓ༸ᇞᏨ಻˙
ၑዚ
ண௪ձπᎷʧሯ)
PRC Invention
grant
Y oujia
Beijing
2019113799443 2019/12/27
94. Control method,
device, vehicle
and storage
medium of vehicle
headlamp ( ʹஷʈ
છՓ˙
eༀໄeʹஷʈ
ՈʿπᎷʧሯ)
PRC Invention
grant
Our
Company
2018109486282 2018/08/20
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-41 –


--- page 682 ---
No. Patent Name
Place of
Registration
Patent
Type Patentee Patent number
Application Date
(yyyy/mm/dd)
95. Automatic braking
method and
system based on
image recognition
and millimeter-
wave radar fusion
(ྡ྅ᗆйձ
ٙ
ձӻ
୕)
PRC Invention
grant
Our
Company
2017103582385 2017/05/19
96. Pole recognition
system based on
vehicle driving
assistance (ԓ
૖᜗
ᗆйӻ୕)
PRC Invention
grant
Our
Company
2016100293711 2016/01/15
97. Automobile rearview
system and
method (ൖ
ج)
PRC Invention
grant
Our
Company
201511022736X 2015/12/30
98. Real-time warning
and reminder
methods for driver
assistance systems
and vehicles ( ቷት
Ⴞпӻ୕ʿԓሿྼ
ج)
PRC Invention
grant
Our
Company
2015109804652 2015/12/23
99. Real-time camera
calibration
methods, systems,
and devices ( ᙲ྅
e
ӻ୕ձༀໄ)
PRC Invention
grant
Our
Company
2015108642947 2015/11/30
100. In-cabin monitoring
graphical user
interface showing
screen panel ( ᜑͪ
ጵʫ္
ࠦޢ)
PRC Invention
grant
Our
Company
2023306935756 2023/10/25
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-42 –


--- page 683 ---
(e) Domain Names
As of the Latest Practicable Date, we had registered the following internet domain names
which we consider to be or may be material to our business:
No. Domain Name Registered Owner
Place of
Registration
Registration Date
(yyyy/mm/dd)
1. minieye.cc Our Company PRC 2015/01/22
2. minieye.tech Our Company PRC 2018/06/13
3. tascalibration.top Our Company PRC 2023/08/03
4. opendrive.cn Jiangsu Y uanshi PRC 2022/02/03
5. cqybxm.com Jiangsu Y uanshi PRC 2021/05/25
C. FURTHER INFORMATION ABOUT OUR DIRECTORS, SUPERVISORS,
MANAGEMENT AND SUBSTANTIAL SHAREHOLDERS
1. Disclosure of Interests of the Directors, Supervisors and Chief Executive of our
Company
Save as disclosed in this prospectus, immediately following the completion of the Global
Offering (assuming that the Over-allotment Option is not exercised), so far as our Directors are
aware, none of our Directors, Supervisors or chief executive has any interests or short positions
in our Shares, underlying shares and debentures of our Company or any associated corporations
(within the meaning of Part XV of the SFO) which will have to be notified to our Company
and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO
(including interests and short positions which they are taken or deemed to have under such
provisions of the SFO) or which will be required, pursuant to Section 352 of the SFO, to be
recorded in the register referred to therein or which will be required to be notified to our
Company and the Hong Kong Stock Exchange pursuant to the Model Code for Securities
Transactions by Directors of Listed Companies contained in the Listing Rules. For details, see
the sections headed “Substantial Shareholders” and “Appendix VI—Statutory and General
Information” in this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-43 –


--- page 684 ---
2. Disclosure of Interests of the Substantial Shareholders of our Company
For the information on the persons who will, immediately following the completion of the
Global Offering, have interests or short positions in our Shares or underlying Shares which
would be required to be disclosed to our Company and the Hong Kong Stock Exchange under
the provisions of Divisions 2 and 3 of Part XV of the SFO, or directly or indirectly be interested
in 10% or more of the nominal value of any class of share capital carrying voting rights in all
circumstances at general meetings of our Company, see the section headed “Substantial
Shareholders” in this prospectus.
So far as set out above, our Directors are not aware of any persons (other than our
Directors, Supervisors or chief executive) will, immediately following the completion of the
Global Offering, directly or indirectly, be interested in 10% or more of the nominal value of
any class of share capital carrying rights to vote in all circumstances at general meetings of any
other member of our Group.
3. Service Contracts
Pursuant to Rules 19A.54 and 19A.55 of the Listing Rules, we have entered into a
contract with each of our Directors and Supervisors in respect of, among other things,
compliance with the relevant laws and regulations, the Articles of Association and applicable
provisions on arbitration.
Each of our Directors has entered into service contracts with our Company. The principal
particulars of these service contracts comprise (a) a term of three years which is equivalent to
the term of the Board; and (b) termination provisions in accordance with their respective terms.
Our Directors may be re-appointed subject to Shareholders’ approval. The service contracts can
be renewed pursuant to our Articles of Association and applicable rules.
Each of our Supervisors has entered into a contract with our Company. Each contract
contains provisions relating to compliance with relevant laws and regulations, observation of
our Articles of Association and resolution of disputes by means of arbitration.
Save as disclosed above, we have not entered, and do not propose to enter, into any
service contracts with any of our Directors or Supervisors in their respective capacities as
Directors or Supervisors (other than contracts expiring or determinable by the employer within
one year without any payment of compensation (other than statutory compensation)).
4. Directors’ and Supervisors’ Remuneration
Save as disclosed in “Directors, Supervisors and Senior Management” and Note 38 to
“Appendix I—Accountant’s Report” for the three financial years ended December 31, 2021,
2022 and 2023 and six months ended June 30, 2024, none of our Directors or Supervisors
received other remunerations of benefits in kind from us.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-44 –


--- page 685 ---
5. Disclaimers
Save as disclosed in this prospectus:
(a) none of our Directors, Supervisors or any of the parties listed in “—E. Other
Information—4. Qualification and Consents of Experts” of this Appendix is:
(i) interested in our promotion, or in any assets which, within the two years
immediately preceding the date of this Prospectus, have been acquired or
disposed of by or leased to us, or are proposed to be acquired or disposed of
by or leased to our Company; or
(ii) materially interested in any contract or arrangement subsisting at the date of
this Prospectus which is significant in relation to our business;
(b) save in connection with the Hong Kong Underwriting Agreement and the
International Underwriting Agreement, none of our Directors, Supervisors or any of
the parties listed in “—E. Other Information—4. Qualification and Consents of
Experts “of this Appendix:
(i) is interested legally or beneficially in any shares in any member of our Group;
or
(ii) has any right (whether legally enforceable or not) to subscribe for or to
nominate persons to subscribe for any securities in any member of our Group;
(c) none of our Directors or Supervisors or their close associates or any shareholders of
our Company who to the knowledge of our Directors owns more than 5% of our
issued share capital has any interest in our top five customers or suppliers in each
financial year or stub period during the Track Record Period; and
(d) none of our Directors or Supervisors is a director or employee of a company that has
an interest in the share capital of our Company which, once the H Shares are listed
on the Hong Kong Stock Exchange, would have to be disclosed pursuant to
Divisions 2 and 3 of Part XV of the SFO.
D. EMPLOYEE INCENTIVE SCHEME
To attract and retain talents and to provide incentives to our employees for long-term
development of our Company, our Company adopted the Employee Incentive Scheme by way
of establishing ESOP Holding Entities, namely Y oujia Qingcheng, Y oujia Zhongcheng and
Y oujia Licheng. For details of the ESOP Holding Entities, see “History, Development and
Corporate Structure—Major Shareholding Changes of our Company—Establishment of the
ESOP Holding Entities.” and “History, Development and Corporate Structure—Employee
Ownership Platforms.”
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-45 –


--- page 686 ---
The Employee Incentive Scheme is not subject to the provisions of Chapter 17 of the
Listing Rules as it does not involve any grant of share options or awards or any issuance of new
Shares by our Company after Listing. Given the Shares under the Employee Incentive Scheme
have already been issued to Y oujia Qingcheng, Y oujia Zhongcheng and Y oujia Licheng as of
the Latest Practicable Date, there will not be any dilutive effect to the issued Shares as a result
of the operation of the Employee Incentive Scheme. The principal terms of the Employee
Incentive Scheme are set out in the partnership agreements of the ESOP Holding Entities as
summarized as follows.
(a) Administration
The general partner of each of the ESOP Holding Entities is Dr. Liu Guoqing, our
co-founder, chairman of the Board, executive Director and general manager (the
“Administrator ”). The Administrator is entitled to manage affairs concerning the ESOP
Holding Entities as the general partner.
(b) Shares under the Employee Incentive Scheme
As of the Latest Practicable Date, the ESOP Holding Entities collectively held 21,109,082
Shares, representing approximately 5.86% of the total issued share capital our Company.
Immediately upon completion of the Global Offering (assuming the Over-allotment Option is
not exercised), the ESOP Holding Entities will be interested in approximately 5.21% of the
total issued share capital of our Company.
(c) ESOP Holding Entities
Y oujia Qingcheng, Y oujia Zhongcheng, and Y oujia Licheng are limited partnerships
established on December 10, 2020, April 29, 2021, and May 28, 2021, respectively, as our
ESOP Holding Entities. Incentives are granted to eligible participants under the Employee
Incentive Scheme (the “ Participants ”) in the form of partnership interests in our ESOP
Holding Entities. Set out below is the holding structure of our ESOP Holding Entities as of the
Latest Practicable Date:
 Y oujia Qingcheng: As of the Latest Practicable Date, Y oujia Qingcheng held
12,386,181 Shares. The general partner of Y oujia Qingcheng is Dr. Liu Guoqing, our
co-founder, chairman of the Board, executive Director and general manager, who
holds approximately 0.10% partnership interests in Y oujia Qingcheng. The
remaining approximately 99.90% partnership interests in Y oujia Qingcheng are held
by 41 limited partners who are current employees of the Group, among whom, Mr.
Liao Diguang, Mr. Ao Zhengguang, and Mr. Wan Hao, each being a Supervisor,
holds approximately 0.60%, 16.73% and 2.75% partnership interests in Y oujia
Qingcheng, respectively. None of the limited partners of Y oujia Qingcheng holds
more than one third of the partnership interests in Y oujia Qingcheng.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-46 –


--- page 687 ---
 Y oujia Zhongcheng: As of the Latest Practicable Date, Y oujia Zhongcheng held
5,815,267 Shares. The general partner of Y oujia Zhongcheng is Dr. Liu Guoqing, our
co-founder, chairman of the Board, executive Director and general manager, who
holds approximately 0.23% partnership interests in Y oujia Zhongcheng. The
remaining approximately 99.77% partnership interests in Y oujia Zhongcheng are
held by 34 limited partners who are current employees of the Group. None of the
limited partners of Y oujia Zhongcheng holds more than one third of the partnership
interests in Y oujia Zhongcheng.
 Y oujia Licheng: As of the Latest Practicable Date, Y oujia Licheng held 2,907,634
Shares. The general partner of Y oujia Licheng is Dr. Liu Guoqing, our co-founder,
chairman of the Board, executive Director and general manager, who holds
approximately 0.36% partnership interests in Y oujia Licheng. The remaining
approximately 99.64% partnership interests in Y oujia Licheng are held by 39 limited
partners who are current employees of the Group. None of the limited partners of
Y oujia Licheng holds more than one third of the partnership interests in Y oujia
Licheng.
(d) Voting rights
The general partner of the ESOP Holding Entities is entitled to exercise the voting rights
attached to the Shares held by the ESOP Holding Entities on behalf of the ESOP Holding
Entities.
(e) Lock-up, Transferability and Repurchase of Partnership Interests
The partnership interests held by the Participants in the ESOP Holding Entities, which
represent the awards granted to the Participants under the Employee Incentive Scheme, are
subject to lock-up restrictions, whereby (i) 50% of the partnership interests held by each
Participant is subject to a lock-up restriction for a period commencing from the establishment
of the relevant ESOP Holding Entity until 12 months after the completion of the Proposed
Listing, and (ii) the remaining 50% of the partnership interests held by each Participant is
subject to a lock-up restriction for a period commencing from the establishment of the relevant
ESOP Holding Entity until 36 months after the completion of the Proposed Listing. Subject to
the provisions of the Employee Incentive Scheme, partnership interests granted to the
Participants may be repurchased by the ESOP Holding Entities by way of capital reduction or
by Dr. Liu Guoqing as the general partner of the ESOP Holding Entities in case of any disposal
of such partnership interests by the Participants during the lock-up period. In addition, during
the lock-up period, the partnership interests granted to the Participant may be repurchased by
the ESOP Holding Entities by way of capital reduction or by Dr. Liu Guoqing as the general
partner of the ESOP Holding Entities in the event of, including but not limited to (i)
termination of Participant’s employment relationship with the Group; (ii) death of the
Participant; and (iii) retirement of the Participant. Funding of any such repurchase will be
raised by Dr. Liu Guoqing as the general partner of the ESOP Holding Entities for the operation
and management of the Employee Incentive Scheme.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-47 –


--- page 688 ---
E. OTHER INFORMATION
1. Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to
impose on our Company or our subsidiary.
2. Litigation
Saved as disclosed in this prospectus, to the knowledge of our Directors, no member of
our Group has significant litigation or claims pending or threatened against any member of our
Group.
3. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Hong Kong Stock
Exchange for the listing of, and permission to deal in, (i) the H Shares to be converted from
our Unlisted Shares, and (ii) 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). All necessary arrangements have been made to enable the securities to be admitted
into CCASS.
CITIC Securities (Hong Kong) Limited satisfies the independence criteria applicable to
sponsor set out in Rule 3A.07 of the Listing Rules. As members of the sponsor group (as
defined in the Listing Rules) of China International Capital Corporation Hong Kong Securities
Limited collectively held or will hold, directly or indirectly, more than 5% of the number of
issued shares of our Company as of the Latest Practicable Date and up to the Listing Date,
China International Capital Corporation Hong Kong Securities Limited does not satisfy the
independence criteria applicable to sponsor set out in Rule 3A.07 of the Listing Rules. Pursuant
to the engagement letters entered into between the Company and each of the Joint Sponsors,
each of the Joint Sponsors will receive a sponsor fee of US$200,000 to each act as a sponsor
of our Company in connection with the Listing.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-48 –


--- page 689 ---
4. Qualification and Consents of Experts
The qualifications of the experts who have given opinions or advice in this prospectus are
as follows:
Name Qualification
CITIC Securities (Hong
Kong) Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO to conduct Type 4
(advising on securities) and Type 6 (advising on
corporate finance) regulated activities as defined under
the SFO
China International Capital
Corporation Hong Kong
Securities Limited /H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO to conduct Type 1
(dealing in securities), Type 2 (dealing in futures
contracts), Type 4 (advising on securities), Type 5
(advising on futures contracts) and Type 6 (advising on
corporate finance) regulated activities as defined under
the SFO
PricewaterhouseCoopers /H1118/H1118/H1118/H1118Certified Public Accountants under Professional
Accountant Ordinance (Chapter 50 of the Laws of
Hong Kong)
Registered Public Interest Entity Auditor under
Accounting and Financial Reporting Council Ordinance
(Chapter 588 of the Laws of Hong Kong)
AllBright Law Offices /H1118/H1118/H1118/H1118/H1118Legal advisor to our Company as to PRC laws
Hogan Lovells /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal advisor to our Company as to U.S. export control
laws
China Insights Industry
Consultancy Limited /H1118/H1118/H1118/H1118
Independent industry consultant
Each of the experts has given and has not withdrawn its written consents to the issue of
this prospectus with the inclusion of its reports, letters, opinions or summaries of opinions (as
the case may be) and the references to its names and logos included herein in the form and
context in which it is respectively included.
Save as disclosed in this prospectus, as of the Latest Practicable Date, none of the experts
named above has any of our shareholding interests in any member of our Group or rights
(whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for
our securities in any member of our Group.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-49 –


--- page 690 ---
5. Compliance Advisor
Our Company has appointed SBI China Capital Hong Kong Securities Limited as its
Compliance Advisor in compliance with Rule 3A.19 of the Listing Rules.
6. Taxation of Holders of H Shares
Hong Kong stamp duty, currently charged at the ad valorem rate of 0.10% on the higher
of the consideration for or the market value of the H Shares, will be payable by the purchaser
on every purchase and by the seller on every sale of any Hong Kong securities, including H
Shares (in other words, a total of 0.20% is currently payable on a typical sale and purchase
transaction involving H Shares). In addition, a fixed stamp duty of HK$5.00 is currently
payable on any instrument of transfer of H Shares. Where one of the parties is a resident
outside Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will be
assessed on the instrument of transfer (if any) and will be payable by the transferee. If no stamp
duty is paid on or before the due date, a penalty of up to ten times the duty payable may be
imposed.
7. Binding Effect
This prospectus shall have the effect, if any application is made pursuant hereto, of
rendering all persons concerned bound by all the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
8. Bilingual Prospectus
The English language and Chinese language 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).
9. Promoters
The promoters of our Company comprised all of the 47 then shareholders of our Company
as at June 7, 2023 before our conversion into a joint stock company with limited liability. Save
as disclosed in this prospectus, within the two years immediately preceding the date of this
prospectus, no cash, securities or benefits have been paid, allotted or given, or are proposed to
be paid, allotted or given to the promoters named above in connection with the Global Offering
or the related transactions described in this prospectus.
10. Preliminary Expenses
Our Company did not incur any material preliminary expenses.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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11. No Material Adverse Change
Our Directors confirm that, as of the date of this prospectus, there has been no material
adverse change in our financial position or prospects since June 30, 2024.
12. Miscellaneous
Save as disclosed in this prospectus:
(a) within the two years preceding the date of this prospectus: (i) we have not issued nor
agreed to issue any share or loan capital fully or partly paid either for cash or for
a consideration other than cash; and (ii) no commissions, discounts, brokerage fee
or other special terms have been granted in connection with the issue or sale of any
shares of our Company;
(b) no share or loan capital of our Company is under option or is agreed conditionally
or unconditionally to be put under option;
(c) we have not issued nor agreed to issue any founder shares, management shares or
deferred shares;
(d) there are no arrangements under which future dividends are waived or agreed to be
waived;
(e) there are no procedures for the exercise of any right of pre-emption or transferability
of subscription rights;
(f) there have been no interruptions in our business which may have or have had a
significant effect on our financial position in the last 12 months;
(g) there are no restrictions affecting the remittance of profits or repatriation of capital
by us into Hong Kong from outside Hong Kong;
(h) no part of the equity or debt securities of our Company, if any, is currently listed on
or dealt in on any stock exchange or trading system, and no such listing or
permission to list on any stock exchange other than the Hong Kong Stock Exchange
is currently being or agreed to be sought; and
(i) our Company has no outstanding convertible debt securities or debentures.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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1. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG
KONG
The documents attached to the copy of this prospectus delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) a copy of each of the material contracts referred to in “B. Further Information about
our Business—1. Summary of Material Contracts” in Appendix VI to this
prospectus; and
(b) the written consents referred to in “E. Other Information—4. Qualification and
Consents of Experts” in Appendix VI to this prospectus.
2. DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of our
Company at www.minieye.cc and on the website of the Hong Kong Stock Exchange at
www.hkexnews.hk up to and including the date which is 14 days from the date of this
prospectus:
(a) the Articles of Association;
(b) the Accountant’s Report from PricewaterhouseCoopers, in respect of the historical
financial information of our Group for the three years ended December 31, 2021,
2022 and 2023 and six months ended June 30, 2024, the text of which is set out in
Appendix I to this prospectus;
(c) the audited financial statements of our Group for the three years ended December
31, 2021, 2022 and 2023 and six months ended June 30, 2024;
(d) the report on unaudited pro forma financial information of our Group from
PricewaterhouseCoopers, the text of which is set out in Appendix II to this
prospectus;
(e) the material contracts referred to in “B. Further Information about our Business—
1. Summary of Material Contracts” in Appendix VI to this prospectus;
(f) the written consents referred to in “E. Other Information—4. Qualification and
Consents of Experts” in Appendix VI to this prospectus;
(g) the contracts referred to in “C. Further Information about our Directors, Supervisors,
Management and Substantial Shareholders—3. Service Contracts” in Appendix VI
to this prospectus;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
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(h) the legal opinions issued by AllBright Law Offices, our legal advisor as to PRC
laws, in respect of the general matters and property interests of our Group;
(i) the legal memorandum issued by Hogan Lovells, our legal advisor as to U.S. export
control laws;
(j) the PRC Company Law, the PRC Securities Law and Interim Measures for Overseas
Offering together with their unofficial English translations; and
(k) the industry report issued by China Insights Industry Consultancy Limited.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
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深圳佑駕創新科技股份有限公司
MINIEYE TECHNOLOGY CO., L TD
